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Michel Meinolf

Michael Meinolf: How banking innovation impacts regional banks and talent retention

Change is hard.

But that’s what makes it worthwhile. Our Kin + Carta Luminaries series highlights the people driving change in financial services. The lessons they’ve learned while implementing those changes are invaluable for anyone who’s trying to make an impact in a large enterprise or improve customer experience in a profound way.

Our fourth installment of the series is with Michael Meinolf, Chief Information Officer at Associated Bank, who dives into how he thinks banking innovation will change both the physical and the digital — from bank branches to open banking.

I love hearing executives in the C-Suite understand the power of culture and empowerment. Michael acknowledged the reality that Associated Bank employees may not be there forever, but they can be motivated to stay. And even if they move on to a new job opportunity, it can serve as just as much of a compliment.

JARED JOHNSON: As a regional bank, how do you see your strategy differing and what do you think the future of regional banks looks like from a customer experience perspective?

MICHAEL MEINOLF: With regional banks, you’re going to see more aggressive partnerships with financial technology firms that are on the cutting edge of customer experience. When I look at the overall technology spend of the top five or ten banks in the US, from a regional [bank] perspective it's an order of magnitude less. How do we as a regional [bank] compete with these large banks that quite frankly have invested not only in technology, but also in customer experience, and are winning the deposit war?

I believe 50 percent of all deposit accounts held in the United States are held by the top five largest banks in the country. As a regional bank, it's imperative for us to differentiate in ways that we can be successful, and that is obviously through customized customer experience, but on the technology front, there's no way we can do it alone.

We are going to have to find innovative partners and quite frankly, take some chances with those partners to develop unique and innovative experiences through the lens of our particular customer base and footprint. In order to compete with those large institutions, we have to acknowledge that the innovation may not be generated within the walls of our institution, but outside of it. Where the thought leadership is going is identifying those key partners and establishing those relationships to deliver value to our customer base.


JJ: How do you make the case for investing in customer experience and how do you quantify that ROI?

MM: One metric to use when it comes to ROI is customer retention. I think the days of both customers and employees being — and I’m going to use this term loosely — loyal are over.

It's about what's going to be the best experience, so I think it's clear that demonstrating innovative spirit within this organization is critically important for retention of both customer and colleague.

Technology is a critical component of any industry. There's no question that customers are taking a more discerning eye when it comes to the level of investment. I'm not only going to trust my money with banking, but I [want to trust] I’m putting my money in a place where I feel like there's innovation happening and that I'm going to have access to the best tools and experience available to me as a customer.

That ROI will certainly show itself in overall retentions — same with employees. The days are over where I'm going to spend 30 years with the same organization, especially on the technology side. Again, it's not just about this particular job — it's about my next job, and we just have to embrace that. The goal for me is to make the work interesting enough so that our people get hired by Apple, Facebook, PayPal, or Amazon — that would be a tremendous compliment because it would mean that the work we’re doing is innovative. And I'll define innovation as innovation within what we can control, not necessarily changing the banking industry, but maybe changing what our customer experience is. That would be a huge accomplishment to say that I've got people leaving who have honed their skills in our institution and were able to get hired by the big five technology companies in this country.

JJ: Do you see branches going by the wayside or are they going to evolve and serve different purposes and how does your branch strategy impact your overall strategy?

MM: I definitely don't think branches are going to go away, but they will certainly evolve. A surprising number of people continue to visit branches, but the reason why they’re visiting has changed. The days where the branch becomes your transaction hub are over. Customers would prefer to transact in a self service type of way as long as that experience provides a seamless, easy, frictionless exposure to transacting.

However, branches will still have a significant role in the financial relationship established with the customer. That doesn’t mean that technology can’t augment that — like with video chats as part of the experience — but there is still a sizeable population that prefer face-to-face conversation when it comes to discussing financial health and planning.


JJ: Are there specific opportunity areas that you see where digital is going to play the biggest role for Associated Bank?

MM: For us, we’ve already seen it. We see a tremendous adoption in terms of what I call traditional. When I say traditional, [I’m referring to] 10 years ago, prior to the proliferation of smartphones, traditional branch interaction transactions — so depositing a check, withdrawing money, those kinds of things. All that today can either be done via your phone, via image capture, or at an ATM where deposits and image capture can happen right at the ATM. I still think from a digital perspective, where we have some room to grow is further deepening and shifting those transactions away from the branch [and] moving them to a mobile experience. There's an opportunity for us to connect in a omni channel way. For example, scheduling an appointment with somebody specifically at a branch to have a particular discussion should be something that's facilitated digitally either via mobile experience or online experience, and then completed at the actual branch location.

[As far as] wealth management and those kind of things, I still see there's room for improvement on the digital side in terms of the tooling, insights, and financial IQ empowerment applications in the digital space and providing those to our customer base. So again, they feel like they’re in control and have a complete and deep understanding of their financial health personally. But as additional investments are explored or there’s a divergence of financial investments, it’s at those points where we’re going to see customers become interested in getting that personal touch in a branch or a similar type of environment.


JJ: There's a lot of talk about financial services companies developing open eco-systems using APIs. Do you see a lot of movement here?

MM: A lot of this movement, at least recently, has been catalyzed by PSD2 [Payment Services Directive Version 2], in Europe. From a banking perspective in the international community, we're going to see a lot of movement in terms of APIs and open banking.

From my regional bank perspective, I don't see us directly playing in that open API space. Our technology vendor partners are key to what we do from a technology delivery perspective, and they absolutely understand the need for openness within their ecosystems. As banks our size look to integrate across multiple platforms, it's imperative we have access to those [existing] APIs to stitch together a customer experience unique to our particular footprint. I don’t see us opening up our internals to other financial firms, but we have to understand what we want our customer experience to look like in aggregate, so that is going to mean us having [some] open APIs to certain elements of our environment to partners that are unique to us as stitch together our [customer] experience. For us it's going to be localized — built for purpose API integration [as opposed to fully open API ecosystems that an international financial services company might build due to PSD2].

JJ: What would you say demands most of your attention?

MM: [I’m] singularly focused on customer experience and what we call our colleague or employee experience. From a customer experience perspective, it's imperative that all of our products and services that we offer deliver superior customer experience, but truly understanding what that means and being fully committed to it is a different story.

For example, in my opinion, Silicon Valley owns customer experience. Startups have certainly focused their priorities on customer experience and worry about the after effects later. I always look at Uber. Uber didn’t pause, wait, and think about all the potential lawsuits it might receive from taxi companies and municipalities. They just went ahead and did it, and made sure they were focusing on the customer experience. They figured they would understand the friction and pain points of our current operating environment later and work through those issues, and that’s been a successful formula for them. We have to think the same way — we have to be innovative.

I think the other thing that's certainly top of mind for me is the digital environment that our employees and our customers experience in their day to day lives has become much more frictionless than it ever has been. Netflix certainly gives you suggestions on what movies that you may like and it does a pretty good job of that. Instagram gives instant gratification for interacting with your friends immediately. It's seamless and easy, [just like] the shopping experience on Amazon.

Our employees expect the same type of operating environment they have at home in the workplace. Today, everything's easy at home, and then they come into the workplace, and it's like they've gone back in time 20 years. The technology isn't the same — it's maybe not the same version, it’s slower. We make it hard for them to actually do their jobs well because they have to deal with layers of security and those kind of things. That is a balance of safety and soundness, and having this frictionless environment. We'll never be able to get to a truly frictionless base here, but my focus is to reduce the amount of friction that’s currently in place.

Our employees expect the same type of operating environment they have at home in the workplace. Upgrading systems to latest versions is easy. I think having hardware and form factors for our employees that are built for purpose, for what they do, and for optimized job experience is critically important. That to me is a challenge we have. We have to get faster from a technology perspective. When I look at the technology sector as a whole, it's like negative unemployment, especially in this geography, and there's certainly way more jobs than there are qualified people to fill them.

What's going to differentiate Associated Bank amongst all the other companies that offer technology roles within their organizations? And to me, part of that is certainly the work environment experience and the actual work. Is the work interesting? Do people feel like they're making a difference? When they come to work, do they feel that they're empowered to do what they need to do, or do they feel like they encounter a lot of institutional and technology friction that makes it difficult for them to deliver on what they're hired to do? That’s a very real factor for people because the marketplace is so wide open. Let’s be honest, it’s not just about the role that they have here — it’s about their next role and whether that role is within the bank or if it’s outside of it. [It’s about] having that kind of appeal so that people feel like they’re growing as an employee and growing a skill set.

Follow Michael Meinolf on LinkedIn.

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