More than 161 million people in the U.S. use digital banking, and will have a digital-only account by 2025. The ongoing COVID-19 pandemic has further emphasized the importance of no-touch and digital banking. We are also witnessing a sharp rise in the number of state-of-the-art ‘internet-only’ neo-banks and financial institutions across the globe, offering mobile-first banking and wealth management services to underserved market segments.
Banking was already focusing on digital experiences and the current environment has accelerated the pace of digital adoption from the customer’s point of view. According to the Digital Acceleration for Business Resilience report 2021, digital transformation is a board-level priority for 52% of BFSI respondents.
It is becoming increasingly apparent that the banking and financial services industry is at the cusp of transformational change, with end-customer experiences and engagements led by the marketing function at its center.
While several financial institutions have been enthusiastic about adopting next generation technologies to re-imagine the customer experience, many others have been slow to embrace the change. The reason is obvious: creating digital experiences is effort-intensive, expensive, and time-consuming. Successful digital programs require enterprise-wide commitment and cultural change.
However, technology and business decision makers must realize that the benefits of experience-led initiatives far outweigh the costs. A digital experience overhaul is not just important, but a strategic mandate for any organization that wants to meet the expectations of an increasingly tech-savvy member base and thrive in the current time and age. Curating rich, immersive digital experiences is central to promoting the financial well-being of members and consequentially boosting engagement and customer satisfaction. Moreover, by leveraging an omnichannel marketing drive powered by technology and algorithms, credit unions and financial institutions can deliver automated products and services based on their member’s financial situation and goals ensuring financial well-being.
Pentagon Federal Credit Union, popularly known as PenFed, is the second largest federal credit union in the U.S., with assets of $27 billion under management and 2.2 million members. The organization has been embracing the challenges as it looked towards leveraging technology to drive exceptional member experiences while empowering members to achieve their financial well-being. These roadblocks included disparate data sources, absence of closed-loop marketing, lack of a unified view of communication with members, and limited cross-functional collaboration.
To resolve these challenges, PenFed partnered with HCL to launch a multi-faceted program that leveraged the Adobe suite of products, to drive a paradigm shift in marketing strategy — from product focused to member-focused.
Speaking about the engagement, James Schenck, Chief Executive Officer, PenFed said:
“Due to the large-scale marketing transformation and digitization working in tandem with our member-first philosophy, in 2020 PenFed welcomed 389,000 new members, increased loan originations by 67% and net income by 40% over 2019 amidst the challenges of the pandemic. We achieved all this while simultaneously driving financial well-being of our members through personalized and contextual communications.”
PenFed members have an 80:15:5 usage of different channels: 80% are digital, 15% are through the contact center and 5% are through the financial centers.
To deliver a seamless, digital-first experience to their members while driving key business outcomes, such as organizational efficiency, service levels, and bottom line, PenFed leveraged three transformational levers to transform its marketing and customer-touchpoint approach:
Ensuring consistent, user-centric experiences across the branch, ATM, mobile banking, and internet banking is at the heart of ensuring financial wellness of credit union members. The omnichannel approach to banking seeks to merge these channels effectively to offer convenience, speed, and cost-effectiveness. Integrating physical and digital experiences to offer the right product and services at the right time can boost retention, allowing the credit union to know their members better over time and recommend the best products to help those members achieve their financial goals.
From searching for products to opening a new account, seeking 24/7 support, and checking balances, members need to be empowered to perform transactions at the touch of a button from the comfort of their homes.
Our philosophy on digital experiences is clear: build a functional, elegant, and simple member experience.
Creating such experiences requires credit unions to assimilate member information from disparate legacy data sources, enabling a frictionless digital customer journey, superior personalization, and right content. A single source of truth also empowers employees to better serve members by gaining in-depth visibility into members’ profiles — including preferences and purchase history — and tailoring offerings to anticipate and meet their immediate or future financial requirements.
At PenFed, omni-channel interactions with members and multi-channel support were prioritized while reimagining the member journey. By leveraging Adobe Experience Cloud and intelligent technologies, the credit union delivered customer-centric service bots and connected experiences across related ecosystems, delivering superior customer value and ensuring that their members could feel a constant connection to the organization, regardless of the channel used. With state-of-the-art and intuitive digital touchpoints, it comes as no surprise that PenFed members rely on digital and mobile platforms for 85% of their interactions with the credit union.
Personalized products and services
In an era of data explosion, there is a large volume of member data that credit unions can utilize to achieve critical business objectives. Using rich data around product usage, member demographics, and transaction history, credit unions can gain actionable insights into member preferences to tailor products and services.
By learning more about the members’ preferred channel and the product they are interested in, credit unions can push out targeted messaging to proactively meet member requirements leading to a high degree of satisfaction and better financial planning. Such insights can also help with product development and establish a sustainable competitive edge. The previously discussed omnichannel approach to banking further supports personalization as more channels mean more data available for analysis and understanding member preferences.
PenFed was able to achieve this level of personalization and more, by analyzing interactions with members across all communication touchpoints (advertising, billboards, direct mail, digital, and sponsorships), and leveraging the Integrated Customer Profile from Adobe Experience Cloud and Adobe Marketing Cloud. They honed their content management landscape to educate their members about new offerings through blogs, stories, and testimonials published on their website and social media channels. By combining the power of data, content and context, the credit union was able to run highly effective drip and lifecycle management campaigns, resulting in a substantial increase in the number of leads, prospects, and click-through rate.
Interactive remote customer service
With rapid proliferation and advancement of new-age technologies such as artificial intelligence, machine learning, and natural language processing, it has become possible to enable contextual conversations between man and machine. Credit unions can roll out chatbots to deliver round-the-clock, real-time customer support to their members and provide hyper-contextualized financial advice. AI-powered chatbots understand the member’s query or complaint and search a database of past conversations to find a resolution that was helpful in a similar situation.
This is especially important because most member queries can be resolved via self-service features or templated responses, freeing up human agents to attend to complex queries and complaints. Moreover, a study found that 72% of customers try self-service options before connecting with customer support. That further emphasizes the need for investing in automated customer support solutions that empower customers to conveniently resolve their day to day issues. Such tools can also help customer service agents provide support more efficiently and quickly, reducing the mean time to resolve and delighting members.
100% of service desk issues at PenFed were managed over the phone in 2019. However, the credit union is now positioned to generate 80% of transactions through the web and mobile applications, 15% on phone calls, and the remaining 5% in branches. This was a result of bolstering self-service capabilities with a focus on reporting and advanced analytics, ultimately paving the way for data-driven marketing and decision making.
Speaking about the engagement, Anand Birje, Sr. Corporate Vice President and Global Head, Digital Business, HCL Technologies, said:
“Our teams at HCL worked closely with the PenFed stakeholders to help the credit union leap into a world of hyper-personalization and hyper-automation by leveraging data and technology. The partnership enabled digital change in a cost-effective manner. The success of the engagement is evident in PenFed’s resilience and continued growth despite the challenges of a business landscape impacted by COVID-19.”
The way forward
By working with a competent technology and platform partner in HCL, PenFed was able to ensure that its strategic marketing goals were achieved while also driving financial well-being for members through contextual, personalized, omnichannel communications.
For financial institutions to empower their enterprise marketing teams and transform member experience, it is important to identify, personalize, prioritize, and execute digital initiatives with highest enterprise impact and business value. A sustained focus on customer journeys and the introduction of technology-led interventions to drive personalized, automated marketing, and a close alignment between digital strategy and business model, change management strategy along with decisive and visionary leadership, were some of the major contributing factors behind the success of PenFed’s marketing automation and digital experience transformation initiative.