Associates like it because they have a broader job description. They can learn more; they have greater opportunity to help customers. It creates a career path for associates that they may not have seen before. So we’ve seen greater job satisfaction, we’ve seen reduced turnover as a result of that and just an overall better outcomes and environments in the branches.Q If you have to hire someone who can do everything in the branch, does that require them to have a higher level of technological expertise or educational background? What are you doing to develop your workforce for the demands of both this job and what the banking job is going to look like in the future? A We’ve been investing in our teams to continue to attract the best talent. We’ve increased our starting wage to $15.00 and our 401(k) match to five percent. We have improved our family leave policies to ensure that we’re offering the most contemporary policies in our industry. Technology clearly is playing a bigger role in our branches and how we interact with customers, so it’s important that we hire bankers who can embrace technology, who want to learn and grow and develop in their jobs. And we think we’re continuing to do that, which improves the overall customer experience. Q On the tech front, what are you investing in and how is that changing your operations internally and improving the customer experience? A We’ll spend about $625 million in 2019 on technology; that’s about 11 percent of our revenue base. That’s 10 percent on cybersecurity, 48 percent, plus or minus, on maintaining our core business and technology, and then 42 percent on new capabilities and new offerings to our customers.
We think about how to improve the customer experience. Whether we’re working on a digital platform or we have a team working to automate the consumer-lending process, developing e-signature capabilities or online applications, we’re always thinking, “How do we improve the customer experience?”
We’re also investing in the use of data and analytics. “How do we personalize every interaction that we have with customers to ensure that we’re best meeting their particular needs?” We’re focused on how we use our technology spend to improve the use of artificial intelligence to again help us improve processes that impact customers in a positive way and also drive greater efficiency and effectiveness, reliability of processes.
Finally, we’re invested in developing technology capabilities, the use of the cloud, APIs and other things that we think will begin to help us reduce the cost of computing and over time allow us then to reinvest so that we have a continuous cycle of investment in technology.QWhere is your core system in terms of supporting your innovation efforts throughout the bank? A That’s one of the things we’re actually most excited about. I think people tend to dread replacing their core systems. We will replace our loan and deposit systems over the next five years and have a plan to begin doing that in a very organized and orderly fashion, and we think we can do it over that five-year period within our existing technology spend.
What this period of time allows us to do is embrace new technology to really transform the way we do our business and particularly to transform the operations parts of our business. The convergence of data, AI and process improvement will allow us to embrace new technology, embrace the opportunity to replace our cores, and really change both the customer experience and the way that we organize and operate the back office, which will then allow us to drive greater efficiency and effectiveness through the organization. It’s an exciting time.QOne long-term trend we’ve seen in the financial sector is the increasing commoditization of a lot of different loan and financial products, particularly in the consumer area and mortgage area. How do you look at commoditized financial products as part of your overall portfolio? Do you see that as something that’s a growth area for your organization, or is this something that you provide simply because you’re a full-service financial organization? A We’ve partnered with financial technology companies since 2012, largely around consumer lending but also in the small-business space. And we’ve had I think a good experience. The economic proposition has varied from relationship to relationship, but in every case we have learned something about what customers expect and prefer. We’ve been challenged around speed and agility.
We’re not at all willing to give up on those products that have been more commoditized. In fact, we’re trying to figure out how do we compete to get our part from our customers, whether it’s unsecured lending or credit cards or loans to small businesses. Increasingly those things, to your point, are easy to find in lots of different places and lots of different flavors. We still think that’s business that we can do, and ought to do, with our customers.
So we’re working to develop processes and platforms that allow us to be competitive. We have online application capabilities and e-signature capabilities so a customer can originate a transaction with us just as they can with any other financial technology company.
The key is how do we market that to our customers. How do we make sure they know it’s available and that we get our share of the market? We have a relationship with someone, particularly if we have a deposit account, they’ve already chosen to bank with us. As long as we have the functionality, we should also get the opportunity to make that loan. That’s an important part of what we’ve been investing in and working on.