By Christopher D. MaherAs technology transforms the financial services marketplace, one common misconception is that only fintech “disruptors” or the largest nationwide banks with vast resources and scale can compete effectively in the digital banking arena. The reality, however, is that millennials, Generation Z members and other digital banking users—including commercial customers—are motivated less by a devotion to the newest hot startup or traditional major brands than to which institution has the best digital solutions.
Our own digital transformation at OceanFirst Bank illustrates this important point: a community bank with a solid commitment to digital leadership—and a comprehensive strategy to provide a superior digital experience, delivered by well-trained and knowledgeable people—can compete with both fintech disruptors and big bank rivals.
Studies show that digital customers make banking choices based on which institution provides the best products for their needs, as well as transactional ease of use, convenient financial management tools, and benefits such as rewards programs. Whether they are opening a checking account, applying for a loan, saving for retirement, optimizing corporate cash management or conducting any other financial transaction, customers today expect and demand a best-in-class digital experience. A community bank that has made the investment required to deliver a superior digital experience is just as likely as a fintech firm or money center bank to capture and retain a customer’s business.
Transforming for a digital marketplace
Several years ago, OceanFirst Bank committed itself to delivering a second-to-none digital banking experience. Succeeding in this endeavor would entail a significant organizational transformation—requiring us to examine our approach to products, processes and systems. Most importantly, we realized that our success would require a digital mindset among our team members, including the training needed to help customers understand, adopt and benefit from our portfolio of digital services.
To lead the charge, we created a new position—president of digital strategy and innovation—and assembled a multi-disciplinary team to analyze our existing digital offerings and develop our overall digital platform. This team was tasked with benchmarking our digital products against those of our competitors and, most importantly, with respect to our customers’ needs and preferences.
Among our conclusions was that online banking solutions must be fully responsive regardless of the user’s computer, tablet or mobile device. Also, security would be paramount, including features such as facial and fingerprint recognition. And we recognized that we would have a higher likelihood of winning and retaining customers if our platform could enable them to manage accounts from other financial institutions, such as mortgages, brokerage accounts and credit cards.
Digital banking—delivered by ‘certified digital bankers’
We realized that the key to our digital transformation would be the ability of our employees to deliver an exceptional digital experience. Simply stated, a bank’s digital solutions must be delivered by bankers who are conversant in the new technologies, to help customers derive the most value from digital banking services. While millennials are often described as “digital natives,” born with a smartphone in their hands, not every customer fits that description. At OceanFirst, we often heard from customers who wanted to become digitally adept, but had questions about how to get there.
To maximize the overall user experience, OceanFirst created a proprietary Certified Digital Banker training program, which has been a requirement for retail banking staff since 2017. Every customer-facing branch and customer care center employee has completed this seven-week program, which prepares them to educate customers on the use of our digital banking tools, as well as third-party payment solutions such as Venmo and Apple Pay. The training program includes a test of digital banking mastery and is reinforced by a system of bonuses that incentivize employees to create more digital interactions with customers.
A portfolio of best-in-class digital tools
Over time, OceanFirst introduced a series of digital banking tools designed to offer customers ease-of-use, convenience and a broad range of products and services. We committed ourselves to delivering the same transactions as a big bank, with the speed and responsiveness of a community bank. Launching our new suite of solutions required us to redesign some of our traditional offerings to meet the expectations of a customer base that is accustomed to using advanced digital tools in all areas of their living and working environments.
Some of the key features of OceanFirst’s digital banking platform include the following:
- The account opening process was redesigned to work on a desktop, laptop, mobile or tablet. And we reduced the number of required steps to 10, which can be completed in about 10 minutes. This was based, in part, on the finding that many potential digital banking customers will abandon the sign-up process if it proves too time-consuming and tedious.
- We launched a digital transaction account specifically aimed at customers who typically do not use branches. The account, known as AmiGo by OceanFirst Bank, delivers a 24/7/365 banking experience that charges no fees, allows the free use of any ATM in the US, and pays above market rates of interest, for truly hassle-free banking on the go.
- Another feature that we determined was a must-have for our platform was the flexibility to accommodate the most commonly used mobile wallets, including Apple Pay, Samsung Pay and Android Pay.
- With the help of a technology partner, we created a comprehensive tool to manage virtually all of a customer’s accounts via our digital platform, including brokerage accounts, credit cards and even loans with other banks. The app is a one-stop destination for customers, allowing them to track spending and budgeting and even calculate their net worth on a daily basis.
- An important addition to our digital portfolio was Nest Egg, a hybrid robo-advisor that combines the best features of online solutions and personal advice. Nest Egg helps customers reach their financial goals through an easy-to-use, low-cost investment solution—the minimum account balance is only $1,000. Customers can use automated tools to guide their investing plans, consistent with their objectives and risk tolerance. Portfolios include equities, fixed income, alternative and cash, and range from ultra-conservative to ultra-aggressive, with several choices in between. These choices correspond with each client’s main goal, whether it’s retirement, saving for education or wealth-building. Customers also can receive assistance from an OceanFirst banker because, unlike other robo-advisers, Nest Egg provides an option for meaningful interactions between customer and their bankers.
- As customers increasingly adopt digital banking, unfortunately, the risks of cyber attacks against banks and customers also have increased and become more sophisticated. We have invested heavily in our security and information security teams to combat these efforts. Also, to help allay customers’ concerns about the security of their data and transactions, OceanFirst introduced a zero loss guarantee policy, under which we provide instant credit for any suspected fraud. It has become imperative to let our customers know that their data and online transactions are as safe as the cash in our vault.
As a result of our comprehensive approach to digital banking solutions as well as team member and customer training, OceanFirst’s mobile deposits have risen 134 percent over the past two years and 90-day mobile usage is up 93 percent.
Most importantly, we have found that engaging customers in digital banking drives higher satisfaction overall. Our investment in innovation—and our efforts to foster a digital mindset among our teammates—will help OceanFirst continue to deliver excellence in a technology-driven and continually disrupted banking marketplace.
Christopher D. Maher is chairman and CEO of OceanFirst Financial Corp. in Toms River, N.J.