Desire for Data-Driven Personalization Unites Demographic Segments

Jim Marous (00:12):

Hello, and welcome to Banking Transformed, the top podcast in retail banking. I'm your host, Jim Marous, owner and CEO of the Digital Banking Report and co-publisher of The Financial Brand.

Jim Marous (00:21):

Today, in the Banking Transform Podcast, we're joined by Jaime Dominguez, Principal Product Manager at Q2, who will discuss their groundbreaking report on cross-generational banking preferences.

Jim Marous (00:33):

This study conducted in partnership with Harris Research, offers critical insights into how financial institutions can deliver personalized experiences across different age categories. We discuss the surprising similarities in banking preferences across generations, the high level of trust that banking industry has, and the strong desire for personalized experiences.

Jim Marous (00:57):

We also delve into the role of AI for fraud detection, the importance of data-driven personalization, and Gen Z's unique banking behaviors. The findings challenge some common assumptions about generational differences in banking, while highlighting the important opportunities that financial institutions have today.

Jim Marous (01:18):

The power of personalized engagement is a differentiator across all demographic segments according to a new report from Q2 in partnership with Harris Research. The question is, how can financial institutions of all sizes take advantage of what consumers want in an increasingly competitive marketplace?

Jim Marous (01:37):

So, Jaime, can you share a little bit about Q2, your personal journey, as well as your initial thoughts on the new research that was just released.

Jaime Dominguez (01:48):

Yeah, for sure, Jim. Well, first off, thank you for having me here. I really appreciate it. It's great working with you always. For those of you who are not familiar with Q2, we are focused on digital banking.

Jaime Dominguez (02:00)

And one of the things that we really wanted to do was to get a good perspective of what consumers were thinking out there in relation to the financial services industry. You just created an awesome report that kind of looked at the perspective of the financial industry and what were some of the key trends that were coming from that.

Jaime Dominguez (02:21):

And so, we thought, what if we paired it up with, "Are financial institutions, really thinking in the same way that consumers are thinking?" So, this report we just came out which we partnered with the Harris Poll, was really to do that.

Jaime Dominguez (02:34):

Was to really give us a good perspective of what are consumers thinking about, and how do they pair up with the way that financial institutions are thinking, and we’ll talk a little bit more about some of the findings.

Jaime Dominguez (02:45):

But one of the things that I found super interesting in this whole report that really sticks out a lot is that when you're speaking to the financial industry, a lot of the folks always say, "Hey, you're always talking about Gen Zs and you're talking about millennials, but what about our existing clients? We got to talk about them as well."

Jaime Dominguez (03:03):

And so, one of the things that this report really, really highlighted is the fact that everybody – not just Gen Zs, but every generation is looking for personalized experiences. Actually, 74% of the respondents basically said they want more personal experiences. That's across all generations.

Jim Marous (03:26):

That was interesting to me as well, Jaime. It was interesting because as you said, you would think that there'd be differences among the generations, but I think in a way, COVID and the drive towards digital banking because of necessity, because the personalized, the face-to-face wasn't as available, really drove everybody closer together.

Jim Marous (03:47):

And we've discussed on different platforms in the past the fact that consumers now get this level of experiences, personalized engagement. Everything from their GPS system on their car, to the way they engage in the grocery store, to the way they engage in restaurants, it really has happened across all industries, but it certainly showed itself in your report with regard to personalized banking, doesn't it?

Jaime Dominguez (04:14):

Absolutely. And the reality too is because of that, I think the older generations (my dad is a great example of that) were forced to have to do digital. And once they did it, they realized, "Wait a second, this is actually not too bad."

Jaime Dominguez (04:33):

Because today, he Zelle’s me money, or he'll say, "Hey, let me borrow 10 bucks and Zelle it to me." Like there's no more cash exchange, zero cash exchange. It's all happening digitally and he's very comfortable doing that. Which by the way, I come to find out when I lend him the 10, he's actually giving it to my son. So, then I'm going, "Wait a second, what's happening here?"

Jim Marous (04:57):

Well, it's interesting, Jaime, when we look at the research you did, there were a lot of surprises, but they weren't surprises when you thought about it. It's one of those things that the trust level, for instance, among banking consumers is very high.

Jim Marous (05:14):

But what's interesting though is that despite a high trust level by consumers, and oh, and by the way, also the desire for personalized experiences, only 22% of consumers felt that their financial institution regularly anticipated their needs.

Jim Marous (05:33):

How do banks bridge this gap? How do they get better at this? Because really, I don't think this is negotiable anymore. I think consumers expect that from all their organizations they work with, don't they?

Jaime Dominguez (05:44):

Yeah, they do. Absolutely. I'd say one of the first things is really the utilization of data. And I know we say that all the time. Everybody says, “You got to use data, you got to use data, everybody has data.” But here's the thing that we're finding is really important …

Jaime Dominguez (05:58):

Everybody has data, the key is how are you translating that data into meaningful things that you can use to then help to create that better experience. Data that you can use to help to ensure that you're providing your consumers with the best services and products. It's really taking that data and creating meaning out of it. And I think that’s where a lot of people sort of have a problem with.

Jaime Dominguez (06:25):

Like everyone has data, but they're not sure how to actually utilize that data in meaningful ways. And I think that's one of the things that we need to really think about and ensuring that we're using the right technologies to help do that.

Jim Marous (06:40):

It's interesting because I've known Q2 for quite some time, this is one of the things that you really help your clients with. At the end of the day, Q2 provides a number of composable solutions that institutions can use in conjunction with their core systems to be able to get better deployment of solutions in the marketplace.

Jim Marous (07:03):

Everything from better user experience on a mobile app, to better personalized engagement on their communication. And I think it's important now more than ever for financial institutions, even the smallest ones, to partner with organizations such as Q2 to be able to bridge this gap. Because it's extraordinarily hard to find all the answers yourself, to build these solutions from the ground up internally at a time when the marketplace is moving so quickly.

Jim Marous (07:36):

I think what's also interesting is your survey showed that not only do consumers want precise experiences, they want their financial institution to anticipate their needs, but they're also surprisingly comfortable with financial institutions using their data for personalized experiences.

Jim Marous (07:56):

I think your study showed that what, 66% of consumers wanted their institution to use their data for personalizations, correct?

Jaime Dominguez (08:06):

Yeah, that is absolutely correct. And what was interesting about that particular part of the survey, is it was across the board, so the average 66% across the board. Obviously, the Gen Zs were just a little bit higher at around 72% and millennials came in at around 68%. But the Gen Zs and the baby boomers were at about almost 59%. So, it wasn't that far. I mean, the gap was not that far away at all.

Jim Marous (08:38):

But still, it wasn't like … we sit down with financial institutions all the time, and a lot of them were worried about privacy and sharing personal data and all this. And yet, when I do a speech in front of 250/300 people in the audience, I ask, "How many of you have Amazon Prime?" And everybody raise their hand.

Jim Marous (08:58):

And I say, "Okay, so how many of you ever considered closing your Amazon Prime account?" And there'd be maybe a third, maybe a quarter of them raise their hand. I say, "How many actually did it?" Nobody raised their hand.

Jim Marous (09:09):

And I say, "Now, think about that. What is the reason why you have Amazon Prime?" You can't say it's because of same day delivery or next day delivery because, “Oh, everybody gets that.” It's not because you are using it for looking at sports shows or movies and reality is, that's not why you kept it.

Jim Marous (09:28):

You keep it because Amazon has built trust in using your insights to make your shopping experience better. So, I think at the end of the day, that whole level of personalization, that whole level of using data still gets down to trust, doesn't it?

Jaime Dominguez (09:44):

Yeah, absolutely. A hundred percent. And it's all around us. How easy technology has made things for all of us with the understanding of our data, it's really everywhere. I mean, another example besides Amazon Prime, let's just take it down to the simplest terms of using maps with this guy.

Jaime Dominguez (10:07):

My dad gets into the card now that he understands how some of this stuff works, and maps automatically every day says, "Hey, I know where you're going around this time usually, and it's going to take you today 10 minutes versus tomorrow a half an hour."

Jaime Dominguez (10:22):

It immediately notifies him of how long he's going to take to get to the place that he loves to go through every single morning, and he knows exactly how much time it's going to take, and it's just the ease of that concept is what we want with everything we do, and so, why not with banking.

Jim Marous (10:39):

We take it for granted too. To your same point, in my calendar, I said, “I'm going to be working out this morning.” As soon as I got in the car, it says, as you said, “Here's how long it's going to take you to get there.”

Jim Marous (10:54):

We take all this for granted, but people are starting to apply it across everything in their lives, and when financial institutions have so much information, I think consumers really want you to be along with them on their financial journey.

Jim Marous (11:08):

We've talked to your institution quite a bit about the onboarding process, which onboarding used to be referred to as everything from the account opening for the next 90 days. Well, the reality is, it's not onboarding anymore, it's being with the consumer across the entire journey, and to be able to anticipate their needs.

Jim Marous (11:26):

And as we've talked about offline at times, to build engagement. It's no longer about the experience because the experience is pretty doggone good on mobile apps or on websites. The reality, what we're trying to do is how can we get people to converse with us, to share information, to rely on us more regularly because if we don’t, we’re going to lose that customer.

Jim Marous (11:50):

Your research for instance, showed that 48% of consumers logged into their mobile app or their website daily. To me, that's relatively astounding. I have to admit that I probably get into mine every day for some reason or another, but I think every institution really is looking to even increase that.

Jim Marous (12:10):

How do you see mobile banking impacting engagement and the desire to have their financial journey get better in the future?

Jaime Dominguez (12:21):

That's a great question. You hit the nail on the head a few minutes ago when we were talking about the engagement. And one of the things that when you speak to really a majority of financial institutions, especially the community bank space, and you ask them all, "How are you differentiating?" The number one thing that they always talk about is the personalization of the relationship that they have, but that's from a face-to-face perspective.

Jaime Dominguez (12:49):

Now, one of the things that we're trying to do is to help financial institutions understand that, “Hey, if across generations, people are logging in to the digital channels over 20 times a month, that now becomes the location that you have to grow that relationship.” And the only way you're going to be able to do that is to engage with those customers or those members across the board, regardless of what channel they're interacting with you.

Jaime Dominguez (13:23):

Great examples of that are … and I've used this in the past where my kid opened an account and he literally had zero engagement from the financial institution, zero engagement. He opened the account and never heard from them. Whereas before, if we would've done that at the branch, they would have engaged with him because they're right there, they're talking to him.

Jaime Dominguez (13:44):

So, one of the things that financial institutions need to realize is we need to start leveraging digital to create better engagements. So, the experience is a component of that but we have to engage across every single step of our journey now, and digital channels is a key component of that. And the only way you’re going to be able to do that is through data.

Jaime Dominguez (14:08):

Now, when we talk about engagement, one of the things that we've also seen is a lot of the engagement that you're seeing from financial institutions has to do with what we're selling. It's all about, "Hey, here's a new credit card, or here is a new loan." And some of them do a better job than others, but it has to go beyond just marketing.

Jaime Dominguez (14:27):

We have to be able to start putting content in front of us that makes sense based on where we are at that moment in time. For example, when I log into my financial institution, I see exactly the same thing my son sees when he logs into the financial institution, but yet, we're in two completely different parts of our lives.

Jaime Dominguez (14:48):

So, the engagement has to really be one where my financial institution should know me and understand the type of content that I want to see versus my son. As we begin to do that, we begin to create a much tighter relationship, which is what everybody wants.

Jim Marous (15:08):

It's interesting because what you're saying there is, on my mobile app that I go to every day, I'm seeing the same front page, it's always the balances. When in reality is you have an opportunity to provide me an offer or a suggestion or maybe insight into the marketplace that you know I'm going to be interested in for whatever reason. And I think you brought up a very good point. It's got to also be different across different customers.

Jim Marous (15:33):

And you want to make it so that I want to go to the mobile banking site to see maybe there's a good offer for me, maybe it's not even within the financial interest, maybe it's a discount on Starbucks, or maybe it's something else that they know, "Oh, look, I'm making payments to Starbucks on a daily basis using my debit card. You know what, it would really resonate well if every once in a while, I throw a bone out there that works towards something outside the bank that looks like, you know what, you're just trying to make my day better."

Jim Marous (16:03):

You think about that, and we forget about those opportunities because again, I do research among my audience a lot of times, and one thing I ask is, "How many of you have closed a primary financial relationship in the last five years?" And virtually nobody raises their hand.

Jim Marous (16:19):

Now, mind you, it's a biased audience of usually a banker. So, they're not going to close their own relationship at their organization they work at. But then I ask, "How many of you have opened or a relationship outside your primary financial institution with a financial intermediary that's like a FinTech or something like that?" And virtually everybody raised their hands.

Jim Marous (16:38):

I said, “This is the problem you guys are facing, the regular consumers doing the same thing.” They're spreading out their relationship and unless you bring them back to your app, unless you give them a reason to engage with you, you may just have this much top of mind awareness.

Jim Marous (16:54):

We used to call it card on top of wallet: “I want my card on top of wallet.” The reality is I want it to be top of awareness. And your research showed that across every consumer group, consumers trust their primary financial institution. Do you think we leverage that trust enough? And if not, how should we leverage it better?

Jaime Dominguez (17:21):

Well, due to the survey, obviously it shows that financial institutions have an edge, and that is that the majority of the generations trust a financial institution. I think there was only one portion where it showed a little bit of a skew, but for the most part, we all trust it. We all believe in the financial institution.

Jaime Dominguez (17:43):

But what I don't think is we're kind of taking that trust to the next level, and that is truly start to get to know me. Like you did a great job on it, person to person, now let's do that same quality job when I'm digital because that is where I'm spending the majority of my time. So, the two components of trust, I feel come in two parts.

Jaime Dominguez (18:02):

Number one is, are you securing my data? Which the survey also show that, yep, for the most part, everybody feels that financial institutions do a great job with that. But that the second component of trust is, are you truly engaging with me and understanding me and providing me with the things that I really want?

Jaime Dominguez (18:25):

And so, one of the things that financial institutions need to start doing is ensuring that they're using data to really engage with you, which is something we've been talking about, and to really start providing you with the things that are meaningful to you based on where you are in your life.

Jaime Dominguez (18:40):

As we begin to do that, then the trust is going to increase because one of the things we are noticing today, and I think you've probably heard this before, is that consumers nowadays have about four or five different accounts across multiple financial institutions.

Jaime Dominguez (18:58):

Let me rephrase that. Not just multiple financial institutions but multiple institutions, some of which are financial services, some of which are FinTechs. So, the key here is what can I, as a financial institution do to create primacy?

Jaime Dominguez (19:13):

Yes, people trust me. But now, I got to take that trust and begin to deliver on a much tighter engagement and a much more personalized engagement with the account holders that I have. So, hopefully, that will then in turn, create a wider range of products and services that they have with me, versus having them spread out across multiple institutions.

Jim Marous (19:40):

So, given the trust, given how often consumers are going to their mobile platform or their website, given the fact that we're going there so frequently and all that, would it make sense or is this an idea that some institutions may be already doing.

Jim Marous (19:56):

That you have an interstitial, I think they're called, the thing that pops up at the beginning of the mobile banking interaction that may be asks the simple questions such as, "Are you looking to earn more money on your deposit account, or do you make regular payments and want to make these electronically automatically every month?"

Jim Marous (20:16):

Something that's very simple that guides the relationship and says, “If I can ask a very simple one question, almost every time you get some mobile banking app, I'm going to know so much about you that I can help keep you out of trouble and guide you towards your destination simpler.”

Jim Marous (20:35):

I mean, from your perspective, would this break down the relationship because you're making it a little bit more difficult to get into what you want to do? Or would this be an opportunity that consumers would probably welcome?

Jaime Dominguez (20:48):

It's a huge opportunity. I mean, you use YouTube – YouTube does it all the time. If you're on YouTube, they'll pop up every so often and ask you questions about what you like or what you don't like. So, I think consumers in general are okay with that.

Jaime Dominguez (21:05):

Again, it's something that you have to … like anything else, too much of one thing is not always a good thing. But if you balance it out, that is a great way of having a good understanding of what somebody is looking for. So, we kind of look at it from two perspectives.

Jaime Dominguez (21:19):

The first perspective is through the transactional information that you have, being able to take that and understand what's happening. But then the other component is marrying it up with asking questions about what it is they want to do.

Jaime Dominguez (21:33):

What it is that they're looking for, and also, you can also even take that a little bit step further and not just ask questions, but also provide guides about how to utilize the system, maybe we begin with that route.

Jaime Dominguez (21:48):

A great example of that, when I sent my son to open the account, nobody taught him how to use the app. He got a check because he ended up getting a job over the summer. It was one of his first real jobs over the summer, and he gets a check for whatever reason, because the direct deposit wasn't complete and he didn't understand that.

Jaime Dominguez (22:11):

And he's like, "Okay, how do I deposit this?" And there was nothing when he logged on to even begin the engagement of explaining how to use simple things like that.

Jim Marous (22:20):

He didn't know where to click it. It was funny.

Jaime Dominguez (22:22):

Yeah. He didn't understand where to — he didn't even know that he could do that. So, I had to become the financial institution employee and walk him through all of that. But that's a good starting point.

Jim Marous (22:33):

It's funny because I had the same situation. My son opened his account in a branch, but then after that, he never went into the branch again. He was getting a relationship at his university where they wanted to pay him.

Jim Marous (22:46):

They said, "What's your account number?" He goes, "Dad, where do I find my account number? I don't have any checks." And I said, "I don't know. You may have to go to the branch." I didn't realize that it's one of the places on the mobile app where they actually tell you what your account number is.

Jim Marous (22:59):

You go like, geez, I didn't do as well as you did being the employee of the bank, but the reality was they don't teach them that, and it's that level of engagement. And oh, by the way, maybe you ask them that question: have you learned how to make a mobile deposit, that type of thing.

Jim Marous (23:17):

But again, as you said, not too much of a good thing. But also, if you ask questions, the key is, especially in a mobile app, do something with the information you get. So, if somebody says, “Yes, I would like to know how to earn more,” maybe don't get them into a sales pitch right away, but maybe the next time they go to the mobile app, you offer them, "Oh, by the way, here you can earn this much on your deposits right now. Based on what you have, you could probably put this much away on a regular basis." We have all this information.

Jim Marous (23:48):

How do you acute to help your financial institutions help their consumers do banking better? I mean, how do you help them build this relationship, build this interaction, build this communication?

Jaime Dominguez (24:04):

So, we actually have multiple different capabilities within our solution. One of which begins with utilizing data across the transactions that we have, taking that data, and then being able to make sense of that data by creating attributes.

Jaime Dominguez (24:21):

Now, some of those attributes also come from questions that can be asked based on what we're just talking about: do you want a goal? What kind of goal would you like? What are you looking to do? So, we're able to take all that information and we're able to create through the utilization of AI, these attributes that financial institutions can use to create segments, and then they can take those, the segmented consumers and start using those segments to do a couple of things.

Jaime Dominguez (24:56):

Number one, is yep, marketing which is also, it's a key component, let's make sure that we're offering you a deposit account if it makes sense to do so, or a loan, if it makes sense to do so, based on the segment of the population that you fit in from the attributes that we know about you.

Jaime Dominguez (25:14):

The second component is we're able to take those segments and also tie them to content so that when you log in, you actually get the content that is the most meaningful to you based on the segment of where we have identified or where the financial institution has identified you belong to, and then what they want to do with that particular segment.

Jaime Dominguez (25:37):

So, those are just two ways of how we help financial institutions create better experiences. And of course, the underlying component of all of that is data, but we have various other tools that allow, for example, to create knowledge.

Jaime Dominguez (25:53):

When I log in, I can actually create guides that say, "Hey, let me show you how to do certain things, let me ask you questions." And we can take that data and then drop it into creating these attributes that then the financial institution can constantly keep utilizing to create segments, and through those segments, be able to start really offering not just the right product and service, but the best experience possible through the content that is being displayed when you're logging in.

Jim Marous (26:24):

It's interesting, you mentioned AI and I don't think there's a conversation I have anymore that doesn't take into account AI in some form. Your study revealed that 70% of consumers are okay with using AI for fraud detection. How do you see the role of AI possibly changing in banking beyond simply risk and fraud?

Jaime Dominguez (26:46):

I think there's going to be so many different ways that AI is going to ultimately assist, and you're starting to see some of that right now. For example, call centers, the utilization of AI that can begin to analyze information of different calls that have come in to help the back office of the financial institution answer questions in the right way.

Jaime Dominguez (27:11):

And or even the ability to truly, for the consumer to start asking questions, and then being a little bit smarter about how things are being answered. So, AI is definitely going to be a huge component of that.

Jaime Dominguez (27:25):

I think AI is also going to play a big part in creating better processes, which in turn, are going to make things better for the consumer, because in the end, if the financial institutions processes are more streamlined, then they can focus on what they do best, and that is creating those better customer experiences and engagements and relationships in the end.

Jim Marous (27:46):

So, really a combination of efficiency and effectiveness, then?

Jaime Dominguez (27:50):

Oh, absolutely. A combination of both is going to be key and it's not too far away. I mean, you're starting to see already the number of technology companies that are investing in AI, it's a matter of just time and I think that time is going to be pretty soon in terms of the utilization of that, and the different places that you can begin to use it as well.

[Music Playing]

Jim Marous (28:17):

In talking to many of the people from Q2 as well as talking to other organizations, I think everybody realizes we've got to continually educate ourselves on what is possible with AI and generative AI and things of this nature.

Jim Marous (28:32):

While we may not be ready to jump into the fire right now, we can't hesitate in learning more about what the capabilities are because that train's moving. It's just a matter of when we get on and when we're comfortable and when compliance and regulations and all play a role there.

Jim Marous (28:49):

But it's not something we can wait and say, "I'll wait until it's all said and done," because then it's too late. It's going to be hard to play catch up.

Jaime Dominguez (28:55):

Well, I mean, you can, but then like you said, it'll be probably too late if you do that. That train's way out and it's not coming back.

Jim Marous (29:05):

I think it's interesting, your report, the part that probably opened my eyes, and I'm not too sure if I was happy with it or not, was a section on Gen Z. It's very clear that Gen Z is a unique generation. They're in many cases starting their banking relationships, they have a unique blend of digital-first preferences while still wanting in-person interactions.

Jim Marous (29:33):

And it was interesting because as soon as your report was released, somebody called me and says, "Look at this section of the report (it's a person that's very familiar with your organization) why is this happening?"

Jim Marous (29:44):

And the part that they were asking about was the fact that so many of the Gen Zs, 65% I think, want to open an account in person compared to 58% I think of older generations. So, the combination of that in-person and digital, from your perspective, do you believe Gen Z truly wants that in-person, or do many financial institutions make it so hard on the opening of an account to do it digitally that they defer to in-person?

Jim Marous (30:17):

So, it's one of these things, what comes first, the cart or the horse but I get concerned on, is this really the direction they want to go or is it the direction we kind of force them to go?

Jaime Dominguez (30:27):

That's a great question. I was wondering when you were going to bring that up because I know that's like-

Jim Marous (30:32):

Because you know we talked about it many times.

Jaime Dominguez (30:38):

When I saw that part of the report, obviously, I was first a little shocked, but then I kind of thought about it and I started really thinking through the whole process. And again, I'm going to use my son as an example just because it's brand new to me in terms of everything we went through.

Jaime Dominguez (30:54):

Opening the account through a financial institution is not an easy thing for a lot of us, okay. Number one, we're still using terminologies that people have no understanding of, especially the Gen Zs – I'm going to say not people but definitely the younger generation.

Jaime Dominguez (31:12):

For example, "Do you want to open a checking account?" "Well, what's a checking account? I don't understand what that means." "Do you want a check in? Do you want a savings? Do you want checks with that? Do you want a debit card?" "Well, I don't know what you're talking about."

Jaime Dominguez (31:24):

And so, what I think is happening and I actually had met with a financial institution really a couple of years back, and they were at a college station, and they actually had created a whole bunch of digital capabilities for these guys to go in and open accounts.

Jaime Dominguez (31:43):

Because their thought process was, "Hey, I'll have an iPad, they can just go and open the account because they're digital natives and they're not going to want to talk to us.” Well, what they realized is that all the terminologies that they were using were things that were just not comprehensible by the younger generation. Nobody really taught them that, and so therefore, they need help which is part of the reason they needed to talk to somebody.

Jaime Dominguez (32:06):

The other thing that I found interesting was with that particular financial institution is that over 90% of the folks that were opening the account took their parents because they didn't understand it. And I know this is a long answer-

Jim Marous (32:23):

Or because a parent says, "You know what, come with me. I'll take you to my institution, we open an account with," but I mean, it's a blend.

Jim Marous (32:29):

You're right. As you said, it's unknown territory and we have these children or kids, whatever you want to call them, open the accounts probably earlier than we ever did as children, so it's one of those things also that there's, as you said, so much is foreign.

Jaime Dominguez (32:46):

So, that was a long-winded answer to, I just think we make it difficult. And why I say that too is because my son at the same time opened another account with a FinTech company (I'm not going to mention their names) and they don't have a branch, and yet he opened it within two seconds. And he knew what he was doing with them but yet didn't really understand what he was doing with the financial institution.

Jim Marous (33:10):

As you were saying your answer, it was interesting because I'm thinking for that very first account, I'm thinking about myself as well, I don't know what I don't know. So, it's one of these things that, "Yeah, I could open a check account, but did I really open it with all the things I should have? Geez, I have to open a check account, but I should have direct deposit. Is that process difficult or easy? Maybe I need to have somebody I can help with.”

Jim Marous (33:39):

Secondly, beyond that, “Do I have to open up something completely separate for mobile deposit capture? Is there something different there? Well, but I don't know that at the time – or should I be opening up a savings account at the same time or a credit card at the same time? How do I get a debit card?”

Jim Marous (33:58):

All these questions and maybe it's all easy if you go digitally and you try it, but because of those questions, it's almost like buying a car. Geez, there's a lot of questions about buying a car even though everybody knows what a car is.

Jim Marous (34:13):

Do you want this amount of power? Do you want this amount of power? Do you want this size? You want that size? Oh, have you thought about trunk size? All these things we don't think about.

Jim Marous (34:22):

So, maybe it is that Gen Z because it's their very first engagement, they don't know what they don't know. So, that in-person engagement, and maybe it becomes video, we don't know exactly how that seeing the person here that can help me through the process, maybe just as well but we haven't quite figured it out.

Jim Marous (34:43):

And I'd say on top of that because you know how I'm going to be on this one – I still think we make it too doggone difficult. We can't do it in three minutes but your son found an engagement that did. And it's interesting because my son, I'll never forget, the first credit card he ever opened, and he's at a baseball game with me (I've told this story at least a couple times) beginning of the seventh-inning.

Jim Marous (35:03):

I remember it vividly; I can tell you where we sat, the whole nine yards. He goes, "Dad, I've been told by some friends that I should open this one kind of credit card, that it's a really good program for college students and that it's pretty easy to open." I said, "Okay, try."

Jim Marous (35:19):

So, he gets on his mobile app in the seventh inning, about one or two batters, and he goes, "They want to know my monthly income or they want to know my annual income, what should I tell them? They ask either for monthly or annual."

Jim Marous (35:33):

I said, "Tell them what you're making now monthly, and they're going to multiply it by 12, even though you're not making that 12 months a year, it gives you a better chance of having it opened." He goes, "Okay." So, he did that.

Jim Marous (35:44):

Before the inning was over with, he goes, "Look, I got my credit card." I said, "What do you mean you got your credit card? They didn't ask enough information," I didn't think. And he got it for $5,000 line. I'm going, "Well, doggone, I didn't have that when I left college."

Jim Marous (36:01):

But it was interesting because he did the whole thing digitally, in a very easy way. It was very easy to open. He had heard it from friends in much the same way that Gen Zs also, when they opened their checking account, first checking out, they first ask their parents, just for referral, in almost every case. And so, that's how it happens.

Jim Marous (36:18):

It's interesting because we also are looking at Gen Z and Gen X and the younger generations as, they're just starting off in banking, should we really be spending that much time with them? Because the fact is, they don't have that much money.

Jim Marous (36:33):

But your research found that … the report mentioned that $72 trillion in assets will be passed down to younger generations in the next 20 years. In my case, I hope it's longer than 20 years as opposed to seven years from now that will be passed on from me.

Jim Marous (36:52):

But the reality is, how does a financial institution position themselves with a young customer member to be able to be first in line as that wealth transfer happens?

Jaime Dominguez (37:06):

Well, a couple of things. I mean, the first one boils down to making things as frictionless as possible. I'm going to say easy, but easy is one of those terms that is kind of relative, so I'm going to use the word “frictionless.” Make everything as frictionless as possible because you want them to be able to do business with you.

Jaime Dominguez (37:27):

Number two is understand that generation. Like one of the other things that a lot of financial institutions I don't think realize, is that Gen Zs and millennials as well have been not just large generations but the most entrepreneurial.

Jaime Dominguez (37:44):

So, you're starting to see Gen Zs who are opening their own businesses during college, you're starting to see more and more of that. So, a second component of that is to be able to offer them the capabilities that they need to run their businesses.

Jaime Dominguez (38:02):

Whether it's a sole proprietor to begin with, and then who knows where it's going to go from there. So, making sure that they have … offer them the things that they need to be able to run what they need to run based on where they are at that moment in time.

Jaime Dominguez (38:16):

So, small business, that's another key component I feel that is important one for financial institutions to sort of think through, especially when it comes to the Gen Zs.

Jaime Dominguez (38:26):

And then the third component is really what we've been talking about, and that is use data. Use data but use it in a way that makes it easy for the financial institution to make sense of that data so that they can create a much more personalized experience and engage with them where it matters to them the most.

Jaime Dominguez (38:52):

So, a good example of that is when we talk about onboarding. When I mentioned my son opened the account and nobody talked to him, well, why not incorporate things. One of the things we incorporated as part of our Q2 Engage solution suite, which is for consumer, is something called Getting-Started. Where the moment that they open the account, the Getting-Started component pops up and it lists all the different things that they need to do to create a tighter engagement.

Jaime Dominguez (39:20):

Whether that's, let's say, “Hey, I want my documentation to be online or have you thought about starting a goal?" Whatever those components are that are critical to start off that engagement, it's front and center for them because we want to make sure that you start engaging them day one, otherwise, you're going to lose them.

Jim Marous (39:47):

There's so much from this report from the standpoint of getting to know what's going on in the marketplace. As you said, getting to know the segments, I think it's important not to apply our old feelings about what these segments represented as we look forward.

Jim Marous (40:03):

I think we have a lot of misunderstanding around how these segments have changed, especially the younger segments, but also the older segments as so much has happened since COVID.

Jim Marous (40:13):

As you look ahead, what do you see as the biggest opportunity for financial institutions in delivering the kind of experiences consumers want across generations? And maybe if you have to break it down, but what do you see as the biggest opportunity that right now is significantly undertapped?

Jaime Dominguez (40:33):

Ooh, that's a great question. And I'm going to sound like a broken record here, but the biggest opportunity, it really boils down to using data the right way, we're just not doing it. We've got it — and I don't mean we, as Q2, but financial institutions in general, have the data, but they're not utilizing it in the ways that they need to be able to create better experiences. And I think that, to me, is one of the biggest opportunities that we have is-

Jim Marous (41:03):

Boy, that is so key. And I'm going to do a plug for Q2 here. I think with any partner you have, any collaboration you have — people ask me, "Who's doing this right?" It's interesting that I find the organizations that are doing the best with personalization, with data utilization, with looking forward to what AI can be, it's the smallest and the biggest institutions.

Jim Marous (41:30):

And I think the biggest institutions, because money talks; the smallest institution, I think because leadership is allowing many organizations to do things they had never done before, they're open to change.

Jim Marous (41:41):

They're willing to say, "You know what, I'm going to revamp the way we are delivering banking to our consumers, credit unions, whatever it may be, and we're going to embrace this and do it." I think the biggest change that I've seen in the last four or five years has been partners collaborating with each other.

Jim Marous (42:00):

We used to be pretty much prisoners of our own core systems and the reality is, so many organizations now not only are providing solutions, but building partnerships with other organizations like Q2 does.

Jim Marous (42:14):

You have so many outside partners that you leverage to be able to open those doors for your clients to use them in a seamless way with the Q2 system. So, any organization of any size can, in a very economical way, compared to what was done in the past, build solutions that have been tested.

Jim Marous (42:35):

The reality is if I'm going to work with Q2 on something, I'm not going to be going for something that I'm going to be the first out of the block. You're going to have 15, 20, 30, 50 organizations that have already done it and you're going to say, "You want lowest hanging fruit, here's what's worked. Why do I need to battle things that other people have already battled and figured out the solution?"

Jim Marous (42:56):

And I think the acute should be whoever you partner with, it's important to leverage those partnerships, trust your partner, and then build greater trust with your consumers by providing solutions that are out there in the marketplace that have already been vetted that you may not have done on your own.

Jim Marous (43:14):

Jaime, I can't thank you enough for being on the show. It has been a long time since we've discussed things in public. We've discussed things privately in public situations more than a few times, and we always have an interesting conversation. But how do people get ahold of the report we’re speaking of?

Jaime Dominguez (43:31):

So, the report is going to be posted, I know, by you as well. So, Jim, thank you very much. They can also find it on our website. There's going to be a link to the report on the website as well. And then, we're also actually putting it out on social media, so if you're following us, you're going to actually be able to see the report as well.

Jaime Dominguez (43:53):

But one of the main parts, especially those who are listening to this podcast, will be through you. So, Jim, thank you and appreciate the fact that you're actually going to be linking to the report as well, which will be sort of like the primary-

[Music Playing]

Jim Marous (44:05):

And even though it's a few months away, we'll do a shameless plug for the fact that we are again going to partner on the 2025 retail banking trends and predictions for next year.

Jim Marous (44:18):

And we're already seeing some massive movement in the marketplace, a lot of it caused by the economic crisis, but also caused by the fact that people are getting more and more comfortable with digital and organizations and people across generations, across the asset sizes are doing things differently to deliver better experience and better engagement.

Jim Marous (44:37):

So, Jaime, again, thank you to you and your team at Q2 for helping us with this report, but also for partnership and continually educating the marketplace as to what’s possible.

Jaime Dominguez (44:49):

Thank you, Jim. I really appreciate it. Always a pleasure having a convo with you. So, thank you for having me.

Jim Marous (44:57):

Thanks for listening to Banking Transformed, the winner of three international awards for podcast excellence. If you enjoy what we're doing, please be sure to give Banking Transformed a positive review. Finally, be sure to catch my recent articles on The Financial Brand and check out the amazing research we're doing for the Digital Banking Report.

Jim Marous (45:14):

This has been a production of Evergreen Podcasts. A special thank you to our senior producer, Leah Haslage; audio engineer, Chris Fafalios, and video producer, Will Pritts. I'm your host Jim Marous.

Jim Marous (45:24):

Until next time, remember, at a time when there's so much noise in the marketplace, there's a greater need than ever for personalized engagement.