Digital Transformation Lessons From a $200B Bank

Jim Marous (00:00):

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

Jim Marous (00:23):

While every finance institution talks about digital transformation, the process is never easy. Melding modern solutions with legacy processes requires focus, commitment, and the supportive people from across an organization.

Jim Marous (00:38):

Research by the Digital Banking Report finds that digital transformation is the most difficult at financial institutions with assets between 50 billion and 500 billion. This is often due to legacy leadership that fights off changes that are more difficult than anticipated, and don't put down the money needed to make the investment where it needs to be made.

Jim Marous (01:02):

We have Melissa Stevens, EVP, and Chief Marketing Officer at Fifth Third Bank on the Banking Transformed Podcast. Melissa shares the digital transformation journey at Fifth Third, and the lessons she's learned along the way.

Jim Marous (01:14):

Headquartered in Cincinnati, Ohio, Fifth Third Bank is one of the largest financial institutions in the Midwest. With assets of over 200 billion and more than 200,000 employees, it is steeped in tradition with a focus on being future-ready.

Jim Marous (01:29):

So, Melissa, you have an extensive career in banking, having spent a large amount of your time at Citibank before joining Fifth Third, close to seven years ago. Two questions: first, what drew you to Fifth Third? And secondly, how did your time at Citi help you in the adjustment to Fifth Third?

Melissa Stevens (01:48):

Yeah, thanks Jim, and thanks for having me today. What drew me to Fifth Third are a couple of things. First, a really dear friend and colleague of mine that I was working with had gotten to a point in her career where she said sometimes you got to go where the grass is fed differently, just to see how you can explore and how you can experiment.

Melissa Stevens (02:05):

And it was time for me to do that. Citi was wonderful to me. I had a fantastic many different careers there, but it's time to try something else. And honestly, if you would've told me in January of 2016 that by that summer, I'd be living in what I formally considered a flyover state, I wouldn't have believed you. But the reality is Fifth Third was on the up and up, had really structured themselves in an impressive way, and I came and I stayed for the same three reasons.

Melissa Stevens (02:34):

One, it is truly a relationship-based bank in terms of how we treat our employees, how we treat our clients, and how we interact in the communities. But with everything that happened after the financial crisis, we'd lost our way a little bit in how to do it. And I felt like I could be a positive advocate and a change agent for that.

Melissa Stevens (02:51):

The second thing is, we had a CEO at the time, and now a new CEO who had a technology background. He actually isn't a banker. Having been in banking my whole career, most people have done the commercial banking track, they've been the CFO of the company, they become the CEO. He was at GE, then at Emerson, and entered Fifth Third as an actual CIO.

Melissa Stevens (03:15):

And to come as a CIO, then move into operating P&Ls, and then move into CEO, was impressive to me. It told me that we had a company that was dedicated to transformation and technology and just overall development, but not in love with tech for tech's sake. And so, that was the second reason.

Melissa Stevens (03:32):

And the third was frankly, being part of a company that cares so much about its community and about the economy around it, it was a chance to be part of someplace where you are expected to volunteer in your community, you are expected to be an advocate.

Melissa Stevens (03:44):

It's not that I didn't have that before, it's that I worked at such a large company, you didn't see the impact on individual hearts the way that you could at Fifth Third. And those three reasons are why I came. And seven years later, if I make it to May, that's why I stay.

Jim Marous (03:58):

You know, that's amazing. As I mentioned before the podcast, I have a bit of a history with Fifth Third Bank having worked with them through a previous employer. And it's interesting because Fifth Third was, as Cincinnati is, a very conservative — was a very conservative organization that didn't take a whole lot of chances. They were known for their continuous return for shareholders.

Jim Marous (04:21):

And very much like many of the financial institutions in Ohio that remain surprisingly independent. When you look at the large financial institutions and you look at KeyBank, I'm going to say National City Bank, PNC because I have legacy there. You look at Huntington, you look at yourselves, and it's very interesting how each of them have taken different paths towards innovation, digital transformation, and just embolden themselves upon where they can grow going forward.

Jim Marous (04:55):

When you join Fifth Third, you were in charge of digital and innovation. You would then assume the role of Head of Marketing as well. Over the past seven years, what did you see as the biggest challenge and what have you done to address those challenges?

Melissa Stevens (05:13):

Yeah, there are certainly, I like to say, opportunities everywhere in our company and in our industry. Frankly, the first challenge I experienced, which is a little bit the size of the bank, the little bit the humbleness of the culture of Cincinnati and of the Midwest region, there was a lack of belief that we could.

Melissa Stevens (05:35):

And I don't mean by the company at large, we were aligned at the executive levels and at the board level, but individuals actually believing that we could do it. We could change, we could move in a different direction. And so, as I got started on building our strategy for digital transformation, people kept saying, "Well, tech prioritization will be difficult, or you won't have enough money."

Melissa Stevens (05:55):

And I said, those have never been a challenge for me in my entire career. I had a lot of support at Citi, we did a lot of fantastic things. The problem is usually not those, it's actually people's hearts and their heads and convincing them that they can be part of that change.

Melissa Stevens (06:11):

And so, as silly as it might sound, it was the people part, and it's always the people part. It's first having the belief, then having the skills. And we've done a lot of upskilling, some reskilling, and we frankly brought a lot of new people in. So, we trained some up, we moved some over and we brought people from the outside because we needed a culture and a set of skills that could actually break us through.

Melissa Stevens (06:33):

So, that's been the biggest challenge along the way. The money figures its way out. The technology platforms and the prioritization, they come along if you have the right strategy and the right initiatives underneath it. But you've got to have the people part of the solution versus part of the problem.

Jim Marous (06:50):

You know, that's interesting because you referenced it earlier that your last two CEOs have both been tech people. That's a bold move, but it's required in order for what I'm going to call a mid-size, a large mid-size financial institution to move forward.

Jim Marous (07:05):

Those that aren't successful are usually steeped with legacy leadership that continues to do things the way they've done them in the past, by the way, very successfully and profitably. But the challenge is change sucks and nobody likes to change.

Jim Marous (07:23):

And unless you have leadership that really allows employees and customers to take the changes that are necessary, you're going to fail.

Jim Marous (07:35):

Just from listening to the way you speak, obviously you are given the runway to do things that are not necessarily legacy-based and to try new things. So, Fifth Third is referenced a transformation strategy that's going to enhance digital engagement and service capabilities. What are your top priorities today?

Melissa Stevens (07:59):

Yeah, so I'd say if I go very high level for the bank and then I'll break it into digital, we're really focused on three huge things. One is being a connected company: connected with our customers, with our employees, and with our communities.

Melissa Stevens (08:14):

Two, we're focused a ton on innovation. And there are two big pieces of this, and this is massively where the digital transformation comes in. One is how do you lean out your processes? How do you really create value and make sure that we're doing the best we can for clients every single day?

Melissa Stevens (08:31):

And two is how do you essentially, turn over the core. And you can't let that distract you. A lot of people think, "Well, I got to hollow at the core or modernize the core before I can actually do the digital transformation." You can do both. So, in driving innovation, we're working on the processes. We're working on the tech from a core standpoint, but we're also working on creating differentiated and innovative products, and that's where digital has been huge for us.

Melissa Stevens (08:56):

And so, the third we've been doing is driving organic growth, and we're a bit unique in our ability to drive organic growth compared to our peers at this point, which we're very proud of and we're continuing to invest in.

Melissa Stevens (09:08):

Then when I looked at digital and say, "Well, what are the priorities?" Well, we've spent the last six years of my tenure driving an overall transformation strategy that really was about a centralized digital team, yes. And getting the solutions that our clients need from the channel standpoint, the app that you have on your phone, the portal that you use if you're a business client.

Melissa Stevens (09:28):

But secondly, we actually really advanced on partnering with FinTechs. And that was important to us both in terms of investing from a private equity standpoint, but also in terms of commercializing solutions. We don't believe that we need to build them ourselves. We can partner with others and actually scale it in a way that's better for clients.

Melissa Stevens (09:48):

And the third is, we have bought some FinTechs and been very, very successful with it. Our first was a really, really small app called Doba, which was an automated savings app for consumers. Next was Provide, which is a medical practice, healthcare finance — you're looking to buy a dentist office, but you need help in the financing, you need help in getting that going, and that's been incredibly successful for us.

Melissa Stevens (10:11):

And just this past year we closed on Dividend Financial, which started out as a residential solar financing company, and is expanding across various renewables. And so, for us, it was the three parts. It's not one thing. And within each of those, it's been about what are the priorities to do, but it's a mix and match, not a one single thing.

Jim Marous (10:33):

So, when you're talking about partnerships, be it acquiring or partnering with FinTechs, or even partnering or collaborating with third-party providers that can solve certain solutions, how do you select the partners for these endeavors?

Melissa Stevens (10:48):

Yeah, it's a great question. We have a couple of ways that we do it, and it's a little bit dependent on the size. So, number one, when you're talking about a very specific solution, let's take something like mobile check deposit. We're looking for the providers that are the best in breed at it, that are doing the best out there.

Melissa Stevens (11:05):

And frankly, that probably everybody is using every major bank is using, but how can we then make the experience differentiated, make the experience better, and keep optimizing? When it comes to FinTechs, we've always got our eye on two things.

Melissa Stevens (11:19):

One, are they solving a real problem and is it a problem that we believe we need to solve for clients? And two, how's the leadership looking there? Like are the right people leading it in the direction that that the company needs it to go? That we need it to go, that the solution has to go?

Melissa Stevens (11:35):

And sometimes, that means we invest in a FinTech, and sometimes that means we start doing business with them directly and provide the solution to our clients. And other times, it's meant purchasing them to really fill out our portfolio.

Melissa Stevens (11:47):

But if I look at the last five years, we essentially have built FinTechs and we have bought them, and we have partnered with them, and we've got great solutions as a result. And that mix, if you will, is working really well for us.

Jim Marous (12:01):

So, you've talked about top of glass improvements. A lot of this really hinges on being able to work on the behind-the-scenes or behind the glass items, the processes. And we have a hard time as an industry getting out of our own way in embracing new ways of doing things. How do you do that at Fifth Third?

Melissa Stevens (12:23):

Yeah. Well, let me say this: we have a lot of opportunities still, and we're excited to keep working on it. But I have actually done a lot of using outside of our industry examples to essentially, point out how ridiculous it is that we are as behind as we are.

Melissa Stevens (12:40):

And having spent almost two decades in New York and early in my career, two tours in the mortgage business, my language sometimes gets a little more colorful than my region might enjoy.

Melissa Stevens (12:52):

But I say things like, hey, if I can know with a Domino's Pizza order the status at every single step of the way of, is it in the oven? Is it in the box? It is in the car with the driver, and can I have my smart app actually flash lights on and off so that you know to stop at my house on that dark street? Why can't I know the status of my loan application every step of the way? Why are so many human beings involved?

Melissa Stevens (13:16):

If Amazon can wait for me to unlock my front door, put it inside, take a picture, and load it into the app immediately, why can't we tell people the same thing about their status? And so, I pull examples from food, from retail, like anybody would do. Because that outside-in example, says, this is the art of the possible. And not only that — that's what we're being compared to.

Melissa Stevens (13:39):

If you're the CFO of a mid-sized company that banks with us, you're comparing us to your individual consumer experience, to that trip you took to Disney with your family, to the amazing return experience you had with Zappos, or to the unbelievable dinner you had at the fancy restaurant you went to.

Melissa Stevens (13:56):

And so, that's a lot is first, the mindset, and shifting the mindset. The second thing is a lot of client involvement. So, we have brought, and I have brought a method of how do you know what the client wants? How do you know what they need? Surveys are not enough.

Melissa Stevens (14:12):

We have to step back and look at what's the job to be done, what's the problem to be solved? If I take consumers, the first thing we did with the mobile app that we just launched in November was step back, work on the core technology, but also say, what does somebody really come to a mobile app to do for a bank?

Melissa Stevens (14:28):

Well, it's their everyday banking. It's the basics. I need a place to get paid and get my paycheck to come to me. Whether my paycheck is from a company or it's my social security check from the government, or it's an alimony check for the relationship that I've been in, I got to get paid.

Melissa Stevens (14:44):

Then I got to pay other people. I might have to pay my water bill, I might have to Zelle money to you, but I've got to get money out of my account. And then hopefully, I've got some savings going on. And certainly, and once in a while, I need to finance a large purchase: the new TV, the summer vacation.

Melissa Stevens (15:00):

And so, we really start in our approach with what is the job that the client is trying to get done. And we've done the same thing with our treasury management solutions. And that allows us to really break it down to the fundamentals and not get too in love too fast with the cool user interface — that'll come later. First, what's the core?

Melissa Stevens (15:19):

And when you asked the question, Jim, about process, well, that leads you right to process. Because when you step back and say, "I opened a business and I need to open a new account so I can actually do payments" and it takes you 20, 30, 40 days to open that deposit account, that's a problem for the business.

Melissa Stevens (15:36):

We got to lean out that process. It takes us three days, five days now — that is acceptable. There's back and forth on some electronic signatures and some funds, that works for us. So, to me, it always starts with the customer or the client, and what's the problem to be solved.

Melissa Stevens (15:49):

The other approach is, I literally often will say to my team, "Great job on whatever we did. This is called a blank piece of paper. If it were your money and your family eats this weekend, or they don't eat this weekend, how are we spending the money? And what is the real way to do this?"

Melissa Stevens (16:06):

Because in banking for so long, we've said "It's a regulatory thing. Oh, there's so much compliance." Or we've said, "Hey, I'm going to make it 50% faster than it was before." Well, I don't know, 50% faster might still be terrible.

Melissa Stevens (16:19):

So, you got to start with, if I were a new company and it was my family's money, what is the way I would actually solve this problem? That flipping the script for us has been a big part of how we've done the differentiation and the digital transformation.

Jim Marous (16:33):

It's interesting, PPP loans has certainly given us a good excuse for looking back and going, "Guys, we got something on a Thursday and came out on Monday with a brand-new product that the government created for us. Don't tell me we can't do it."

Jim Marous (16:46):

And it's interesting because I do the same thing. I look at Apple card and say, "Guys, it is four clicks on my mobile phone to get an Apple card. It is fewer touch with my fingers than it was for the 16-digit number of putting in my new credit card number."

Jim Marous (17:07):

That's what we're living to. And a major component of digital transformation is people which is increasing the area of differentiation in the marketplace, but it's also a stumbling block because every move we make towards digital, sometimes in the minds of employees, threatens their existing position. How do you hire, train and empower current employees to really work towards digital transformation at Fifth Third?

Melissa Stevens (17:40):

Yeah, so a couple of things. One, I talk personally and advocate that the human connection is actually the hero of the relationship. So, everything we're trying to do is to enable a better human connection with our clients. That doesn't mean that we're always going to see each other in person or talk on the phone, or I'm going to personally process everything for you if you're the customer.

Melissa Stevens (18:07):

But it does mean that what we're trying to do is augment the greatness of our people so that they can actually spend time on the higher value thing. So, that's the message that we're out and about with. The second thing is we ask people what would help them, and I've actually spent a fair amount of our team's bandwidth on improving digital interfaces and processes for employees, not just for the end customer.

Melissa Stevens (18:30):

Because if I can't do something simply and easily, how am I going to tell other people that my company's good at it? So, that's been the second thing is, hey, give me an example of something that isn't working well for you and how you do your job every day, and then we'll digitize that.

Melissa Stevens (18:47):

We'll fix that. We'll help with the process. We'll build you a much prettier screen to look at than the one that you've been looking at that's easier to your point on four clicks, four taps. So, that's the second one is letting employees participate in solving even their own problems.

Melissa Stevens (18:57):

And then the third thing is, and even our CEO does this — we make sure to talk to our employees all the time about, this isn't about displacing, it's about actually giving you the skills, as you said at the opening — fitting ourselves for the future. How do we make ourselves as individuals future-compatible, and how do we make sure the company's going to succeed in the future?

Melissa Stevens (19:17):

So, it's a lot. I hate to like sound basic, but it's culture. It's communication, it's culture, it's reassurance. The other thing is, we've done a couple times, and we've got to do more at this, but we've done kind of like a product hackathon type thing where any employee can come with an idea and they can present it, we can talk about it.

Melissa Stevens (19:36):

We're going to get better about that from an innovation standpoint, but letting people feel part of it versus I'm doing something to you has really been key for Fifth Third.

Jim Marous (19:46):

So, it's interesting, when your role is both in charge of digital transformation — and if I'm not mistaken, you're also in charge of marketing, correct?

Melissa Stevens (19:55):

Uh-huh (affirmative).

Jim Marous (19:58):

Usually, I see that at smaller institutions where the person who's in marketing is also in charge of digital transformation, but you're no small organization. How do you handle both? But more importantly, how do you see marketing and being the head digital person at a large financial institution working together?

Melissa Stevens (20:16):

Yeah, that was a question a lot of the marketers asked when we all came together, and I said, "Well ..."

Jim Marous (20:22):

Why are you here?

Melissa Stevens (20:22):

Yeah. So, I gave a little bit of the marketing things I did when I was at Citi, but I also said, here's the thing, if you start with the customer first, if you start with how are people receiving things, if you start with what does marketing look like now versus it looked like 10, 20 years ago, it's all about data, personalization, different ways of models, using machine learning — that at its core is tech and digital.

Melissa Stevens (20:49):

And so, talking with folks about how do we bring these capabilities together so we can all do better has been a big piece of it. The other thing is my ultimate goal is that Fifth Third thrives in the digital world. Not survives like a lot of companies and banks do, but actually is thriving, is leading, is differentiating. And we need marketing to be a huge part of that.

Melissa Stevens (21:11):

So, ultimately, I'm of the mindset that if every person in the company had some type of digital experience or expertise, then we've actually gotten to the place I'm trying to get us. I'm not looking to own a transformation strategy or a channel or things of that nature — I'm looking for it to be embedded in the way we do business.

Melissa Stevens (21:30):

Because for everyone who says, "Oh, we're digital-first, we took a digital-first approach," if you sit with a traditional product leader and they don't first talk about how to do this (like you said, the Apple card way), then we actually are not digital first. So, that's actually where our digital transformation is going. The marketing needs a ton of it too.

Melissa Stevens (21:50):

We do amazing things, but we also know we need to reinvent ourselves because what worked with customers or prospects five years ago isn't going to work 2, 3, 4 years from now. You can name any of the things you've talked about on here, including I think the most recent one on ChatGPT, and where AI is going.

Melissa Stevens (22:08):

The world's changing, and we can either choose to go with it and ahead of it or choose to be behind it, and I prefer to be in the front of it.

Jim Marous (22:16):

So, it almost gets to the foundation again with my question here, but just like every other financial institution, Fifth Third is sometimes playing catch-up between what employees and customer expectations are around digital transformation. How do you keep the focus on internal and external experiences at a time when many financial institutions use technology mainly to cut costs?

Melissa Stevens (22:43):

Yeah. It's I'd say we do our best to talk often and cascade messages about where our focus is. So, we know in certain cases (and we're open about this with our employee base) that some solutions going to be put in place and those jobs are going to be displaced.

Melissa Stevens (23:04):

But we are clear that we all have a job to optimize our spend. We all need to improve the efficiency ratio. And that's where it comes to the processes. Whether we put a bot in to handle something that was human manual before, or whether we just get rid of the process, that is going to create efficiency for the company. And that doesn't mean you're personally displaced, it might mean you don't do that type of job anymore.

Melissa Stevens (23:31):

And so, even when I set out in the digital transformation, I mean, we set out, we set up, as you'd imagine, many, many different teams across initiatives like digital mortgage, originations, and improving our account opening experience, and making it five clicks for an existing customer and less than three minutes for a prospect customer that's starting with us.

Melissa Stevens (23:51):

And we set out for the mobile app to actually redo the core and make sure it was cloud first, et cetera. But when we did it, I didn't say, "Now, let's go hire 200 people and keep them forever doing this." What I said is, let's set up specific missions, let's set up specific teams, and let's presume that they can complete their mission anywhere from a year to two and a half years. And along the way, let's talk about should they keep doing that or should they pivot to something else.

Melissa Stevens (24:22):

So, that's how we try to talk to all employees about it. If you're working in the call center, yes, we're trying to do more things digitally. We want messaging to be the way to go. We want you to do messaging digitally, but we also want the bot to take care of it for us.

Melissa Stevens (24:34):

That doesn't mean you won't have a job. It means you might not do that job anymore. And we also share openly that at any time, we're evaluating, some areas might not need the same resources they needed before.

Melissa Stevens (24:47):

So, for us, transparency and leaning into it versus shying away from it — if I go back like 10, 15 years ago, it's the same thing we all did in retail banking where you had branch employees paranoid that if there was a digital channel, you might displace them. It's taking the lessons from when we all went through that and applying it now to everything that we're doing.

Jim Marous (25:07):

So, let's take a short break here and recognize the sponsors of this podcast.

[Music Playing]

Jim Marous (25:10):

Welcome back. I'm joined today by Melissa Stevens, EVP, and Chief Marketing Officer at Fifth Third Bank. Melissa and I have been discussing the digital transformation journey at Fifth Third, and how mid-sized financial institutions can become future-ready at a time of economic uncertainty.

Jim Marous (25:29):

So, Melissa, how important is this for this for financial institutions to share data insights across the organization to drive better experiences and better employee experiences? How do you democratize the data across your organization to make it so that you can actually implement ideas with insights?

Melissa Stevens (25:52):

Yeah, listen, it's challenging. I mean, in almost any financial services firm, your data has been in many different places for a really long time. So, first, starting with how are we going to bring the right information together in the right way for the right people is a big piece of it.

Melissa Stevens (26:08):

But as we have it and as we're able to do it (and I'll tease out an example), we're helping people see the value of applying it. Our CEO likes to say we want people to make evidence-based decisions. But you've got to democratize the data to your point, or people don't know that.

Melissa Stevens (26:24):

So, the great news is, I have a lot of examples of succeeding with that at Citi in my prior life, and examples where we didn't get it right. And so, we're able to say — and I just had this example happen a couple weeks ago with a client where someone said, "I put a mobile check deposit in, pretty significant amount of money because it was a 529 plan (and they were getting it paid out so they could pay the college tuition). And it looked like it went through and then I got an email that it got rejected. What happened?"

Melissa Stevens (26:51):

And the digital folks would've in an old world said, "I don't know, it looks like everything was fine for me." And others would've said, "I don't know what could've happened. Or maybe it's the vendor or the partner, whatever."

Melissa Stevens (27:01):

But now, because we've actually put logging and monitoring across that experience together, in a matter of an hour, someone was able to say, "Oh, I see what happened. Because of the type of check it was, it looked okay, it kicked into a manual review queue, it went to this place in operations, and here's what's happened."

Melissa Stevens (27:18):

And then everyone's able to sit down and say, "Ah, that didn't go the way it should have. What could have been better? What can we change? And how many other clients were affected in the same way? And what's the quick fix and what's the longer-term fix?"

Melissa Stevens (27:32):

No one individually was doing something wrong there, but without looking at it end-to-end, we were making what we thought was a great experience in one channel, a not great experience in the end. That is just one example. Then if you look at how people are using things, I think in the old days, people say, "Well, is anybody complaining about it? Otherwise, it's okay." Or "Do we know if people are really using it?"

Melissa Stevens (27:55):

Getting to the point where we actually have data and information that we can share and say, "We have this many leads, we have this many people that are converting, we have this many people using these services," and letting then, to your point, customers use that data where it makes sense. And I'll tell you frankly, we've done more of that on the treasury management side than ... we've done it on the consumer side.

Melissa Stevens (28:15):

We've done a lot of it in the treasury management side, we had some great solutions out there that help people with their accounts payable, accounts receivable, and really empower the client to actually do it with machine learning algorithms behind it. Because why?

Melissa Stevens (28:29):

If I'm a business owner, I can't be waiting around to figure out why Jim paid me or didn't pay me. And in traditional sense, you would've said, "Well, Jim is 10 days late, so I should call him." But in reality, we can give them software solutions that say, "You know what, it's Leah, who's only two days late who has never been late and it's a higher value payment. Go to Leah and get her to pay you first. Don't worry about Jim. It'll come around. It always does."

Melissa Stevens (28:55):

That type of data and information to empower them to use their employees’ time in better ways is really what we're going for. So, that's a couple examples of how we do it and how we use it.

Melissa Stevens (29:07):

Now, I don't want to claim we've got it solved. We've got a long way to go, but we've identified the highest priority areas for employee information to do their jobs and for client and client information, and we're just churning through it.

Jim Marous (29:20):

Well, it is interesting, digital transformation is not a project. it keeps on moving ahead of us and another thing that's not a project, is innovation.

Jim Marous (29:30):

We talked about it a little bit earlier, but we talk about the importance of speed and scale of innovation, and we come from an industry that always did innovation on an annualized basis based on the strategic plan. That's no longer acceptable. In fact, it's a recipe for failure.

Jim Marous (29:46):

How does Fifth Third increase the speed of innovation and making incremental improvements across the board?

Melissa Stevens (29:54):

It's what you just said about not a project. And I will say to you, when I came here almost seven years ago, one of the first questions that people that showed up to talk to me asked me is what projects I was working on.

Melissa Stevens (30:06):

And in probably two east coast of an answer, I said, "I'm not working on any projects and if I am, we should be really worried because I don't think that we needed to hire me or relocate a family of five from Manhattan to Cincinnati to work on a project or a couple of projects. I'm here to drive a change in how we work. I'm here to move us from project to product."

Melissa Stevens (30:27):

And that is actually how we do it, is we've spent the last several years. And again, we're not done. We've spent the last several years from a technology, from a product for clients, and from the way that we work internally, moving ourselves to more of a product way of working.

Melissa Stevens (30:42):

Why? Because that's an ongoing entity, that's a lifecycle. And yeah, at the end of the day, certain products will serve their due and you'll want to sunset them. But we didn't have that mentality. We were first launching something and then I like to say, we were launching and leaving, and I wanted to launch and love.

Melissa Stevens (30:59):

And one of our executives is known to say, back then, "I feel like we might find that on my epithet, Melissa, because you keep saying I launch and leave." And I said, "Well, it's your choice how that ends."

Melissa Stevens (31:12):

So, we've really tried to move ourselves into launch and love. It's an ongoing entity, it needs care and feeding, and you always need to be — and frankly, we've taken a page from startups and FinTechs to teach people how to constantly be focused on that.

Melissa Stevens (31:25):

So, I'm not going to claim that we're always great at it. I will tell you the largest product that we offer in consumer banking for mass market is Momentum. And the product is as good, if not better than the FinTechs, but backed by a real bank, and it's got thousands of employees standing behind it to service you or talk to you when you need them.

Melissa Stevens (31:42):

The thing about that is, we had the idea for a really long time and we did not get off the dime quickly enough, but once we finally got ourselves focused and committed and got it out the door, we have brought out new features and functions or pieces of the product, literally at anywhere between 45 days to 90 days, and big, huge improvements along the way. That's an example for us of how we want our employees working all the time.

Jim Marous (32:06):

Well, and again, just like PPP, once you do something like that, it gives you the power to say, "Hey, we did it here, why can't we do it here? I'm no longer going to accept the fact that it's going to take us about seven to eight months, I need it in four weeks."

Jim Marous (32:23):

Or different than that: "We're not accepting that excuse anymore ..." compliance, technology, whatever it may be. You almost can check up mark them because you know what's going to come up and you sometimes even know who's going to say it in a room.

Jim Marous (32:38):

You also realize that many financial institutions do — they're letting compliance be the last person to touch something is not a great way to get things done. It's better to include them on the front end, and get all those things handled up front and make them part of the solution as opposed to just the ...

Jim Marous (32:55):

I look back in my days when it was legal, not compliance, and legal nowadays says, "Hey, I'm going to show you what the risk is, you determine what you want to do." They don't make the decision for you, which is really what you need to do.

Jim Marous (33:07):

So, we're going to talk about AI a little bit. A lot of investments being made in AI, but a lot of it in the past has been made in the fraud and risk areas. What areas of Fifth Third are going to benefit most from investments in AI and yeah, we have to keep this current — where do you see ChatGPT playing a role?

Melissa Stevens (33:28):

So, I think there's still plenty to do. First of all, AI is as you know, a very broad category and it can come in many areas. I think like there's plenty, plenty, plenty to do in know your customer, fraud, risk management, fraud prevention. And frankly, it's because folks that do bad things are spending a ton of money getting better and better at it. And so, we need to keep applying as much as we can to stay equal or hopefully, someday, ahead of it.

Melissa Stevens (33:56):

So, we got a ton more at our bank and all banks that we could do there. I also think there's a lot more to do on the automation and using of intelligent automation, whether it's specifically a machine learning algorithm or a different component of artificial intelligence to actually just make things flow more easily.

Melissa Stevens (34:14):

Earlier I said, "Why can't I know where my loan is the way that Domino's Pizza tells me where my pizza is?" The reality is those are places we need to apply AI. And again, not because I don't want real human beings doing work. I want them doing higher value work. And so, I want to enable that by actually applying more models to there.

Melissa Stevens (34:31):

I also think there's a ton (and I'll hit ChatGPT) on the way that we talk to and service customers. I mean, as the person who runs marketing, I just think it's rich for better personalization. It has been for a long time, and we've all tried a bunch of things, and now, we're moving into a cookie list world where I can't just drop a cookie on your browser and know a few things about you and target you better. I need to really get more sophisticated about that.

Melissa Stevens (34:57):

I need to be able to put hundreds if not thousands, of if then statements in there — if Jim clicks here, if Jim does that, if Jim purchases this thing. It's really complicated, and I think it's ripe for AI. I think of it as a marketer as an opportunity, but it's also an opportunity for the way that we service people.

Melissa Stevens (35:16):

On the ChatGPT front, as with many things that come out nowadays, I think it's just taking off. We've been looking at that and not doing anything. Production-wise, there's a lot to figure out. But making sure that we've got people that are using it and kicking the tires with it since it launched on November 30th.

Melissa Stevens (35:34):

And certainly, I mean, I was on this morning actually with one of my colleagues looking at a couple things and showcasing, and it's like we have so many people trying to use it like you might not be able to use it right now. So, there's a lot to figure out from scalability. It's got to catch up in the amount of years of data.

Melissa Stevens (35:49):

With the number of years of information that's in there right now, the last couple years still have to be brought to speed. I actually think ChatGPT is going to change the way that many companies work and where industries work, and other things like it will do that too.

Melissa Stevens (36:05):

But we've got to be careful. The conversation I've started is what are the ethics that we're talking about here? What are the codes that we're putting around that? What is the processes? How do you even check if somebody's doing their job themselves or using ChatGPT.

Melissa Stevens (36:21):

I had this conversation with my high schooler recently: "Are kids in your school using this? Is it writing their papers? Are they using it as a prompt or are they actually trying to turn in things from ChatGPT?" So, I'm a huge advocate and I think it's going to be a gamechanger.

Melissa Stevens (36:33):

I think we have to figure out how to capitalize on what it brings, capitalize on how we can scale it, but also, make sure that we are again, using that as an augment to humans so that we still bring that human touch and that check, and that way of working to life.

Jim Marous (36:49):

It's interesting, looking at ChatGPT, I think it's going to raise the tide because if you've played with it at all, you realize it's only as smart as the question that's asked. So, in other words, if you don't know how to structure a question to get a good intelligent, deep answer, that really brings value to the equation, you're just going to get an answer like you would've on Google. And sorry to Google, but right now, Google.

Jim Marous (37:13):

The reality is in the questions that are asked, if you can ask it in new ways, if you can test it in new ways, you're going to get much better answers. And the people that are naysayers, I say, “Have you done anything besides ask that one question you're trying to catch it with, because you're not going to get the right answer.”

Jim Marous (37:31):

But as you said, if you understand what biases could be brought in there, how do I avoid that in the way I ask it questions can be very powerful. And you mentioned about your high schooler — I smile because I sit here and go, "Geez, wasn't that what we said about calculators during tests?"

Jim Marous (37:48):

I mean, I'm sorry, but I took tests where you could not bring a calculator into the test. In fact, the only thing you could bring in was a slide rule, which to this day, I don't know how to use. So, a lot of it was finger-based and handwriting. But the reality is, it's how we use it, and do we need to spend all this time on the writing of thoughts as opposed to knowing what those thoughts are?

Jim Marous (38:13):

I'd rather have my son, if he was still in school, know what he was talking about as opposed to spending all the time trying to write it correctly. We can get in that argument forever around cursive versus script and all that. And I'm not even sure if those are the same thing, but you know what I'm saying there.

Jim Marous (38:32):

So, Melissa, I don't want to end this podcast without asking a basic question, but very interesting question. I looked at your LinkedIn profile, you've had a lot of different roles at two financial institutions. You've continued to grow your expansiveness of what you're doing and not necessary in a linear way.

Jim Marous (38:54):

You've gone into areas you weren't familiar with, you've gotten out of some areas. You're also a woman. It's very clear. Banking is not typically, and still to this day, a woman's world. It is still a man's world. What suggestions would you give to others so that they also can be listed on American Bankers, most powerful women in banking?

Melissa Stevens (39:18):

Thanks. I mean, I'd say a couple of things. And one of these is stereotypically not something women are great at. I am a huge fan of asking for help. And it took me a while early in my career to do that. But when you ask others for help, whether it's in your personal life, your professional life, it actually makes you stronger.

Melissa Stevens (39:38):

People want to help each other, we're naturally there. Just like you said earlier, we all hate change, it's an animal instinct. We also all as humans, like want to somehow be part of somebody else's success. And so, one I'd say, is ask for help when you need it.

Melissa Stevens (39:51):

And I had a woman talk to me recently who said, "I don't know how to do this," but actually said, "I'm nervous to tell you that because I don't want you to think I'm not good at my job or I'm not capable." But that's a powerful conversation to say there's a difference between asking for help and being incompetent. So, get your head around that.

Melissa Stevens (40:09):

The second thing is support system, support system, support system. I've got a great support system in my life, again, professionally and personally that I lean on. And that's really, really important for us.

Melissa Stevens (40:24):

As I started to have kids when my third kid was born, was when I started traveling globally the most. And if we didn't have a great support system between my awesome partner of 25 years and my husband, an amazing childcare giver for our children in a way that we all work together as equals, that wasn't going to work for me.

Melissa Stevens (40:44):

But I also, number three, I'm big into focus. I don't actually believe in like work-life balance as a thing, I believe in integration. And so I'm into, like when I'm with you right now, I mean, if somebody like had a catastrophic situation, I'm sure someone would let me know. But I'm with you now.

Melissa Stevens (41:02):

Similarly, when I'm reading a book with my fifth grader last night, I'm a hundred percent into that story and no one's going to bother that from a work standpoint because that's where I need to be. So, that's for me, a little bit of a "how do you do it?" You find a way to make it "all work" by actually never being so in one and so in the other, or trying to spread yourself too thin.

Melissa Stevens (41:26):

And then, in a workplace standpoint, I've had tons of awesome sponsors, male and female. Actually, my first real mentors and sponsors were men who advocated for me. It was one of my first bosses when I was in corporate compensation, a long way from where I am now who actually gave me the lecture about sitting at the table.

Melissa Stevens (41:46):

And he really explained to me how important it was for me to sit where I needed to be and to tell people the things that I knew, and to be an advocate for the things that I was intelligent about, smart about, talented about. And so, I do think it's about like listening to your sponsors and having mentors.

Melissa Stevens (42:03):

And then the last thing, and this has been important to me more and more as I've gotten more senior, is you got to watch out for others. I give this talk and I know there are other women that give it too. People spend a lot of time being upset about the "old boys club."

Melissa Stevens (42:16):

I always talk about the new girls club. I actually think there's a ton that's probably bad in the old boys club, there's a ton that's good. I have watched men work for each other, advocate for each other. One's the boss of one at one company, three years later, the other one's working for the one that he was working ... they just trade around. And women weren't always good at that.

Melissa Stevens (42:37):

Now, I get why. We were fighting to get to the top and if you were only one, you had to turn around and step on others because only one could fit. We're better than that and we can be better than that. So, we have to look back and pull people with us, and we have to demand that there is an open door for everybody to find their way into.

Melissa Stevens (42:54):

So, I find myself at this stage in my career, having a lot of those conversations, having people understand how they can be part of the solution. I talk a lot about unconscious bias, and I don't fear sharing with somebody, "Hey, this is how I experienced what just happened. How do we both make each other better so that other women, other people of diversity ..."

Melissa Stevens (43:15):

And frankly for me, it's often less male female. It's more, I'm very different. I say things differently, I talk differently, I walk differently, I decorate my office very differently than a typical corporate person. And so, that sometimes comes with, "Oh, you're just all pizzazz. You don't have any content. I don't think it matters if I'm male or female. It's just being dismissed in that way.

Melissa Stevens (43:35):

So, those are some of the things that I do and that I think about, but it's mostly, be a hundred percent dedicated to what you're doing when you're doing it so that you can then be a hundred percent dedicated to the next thing.

Jim Marous (43:47):

Finally, what are you proudest of over the last seven years at Fifth Third from a corporate standpoint?

Melissa Stevens (43:53):

I would say I am proudest that the people that joined my group in the journey that we are on, and the people that came from inside, outside, et cetera, almost every single one of them, whether they're here at Fifth Third or they've gone somewhere in our ecosystem, is doing bigger, better, bolder things and better off in their lives in general. Not just professionally, just overall from the things that we've done together.

Melissa Stevens (44:18):

And for me, it's only about enabling other people's lives. That's all that I care about, it's my entire purpose. And that is what I'm most proud of.

Melissa Stevens (44:26):

The things that we've launched, yes, super awesome. But to me, it always comes down to how am I helping someone find their superpower and helping them activate it so that they can actually shine in the places that matter most to them. So, that's really my pride moment.

[Music Playing]

Jim Marous (44:41):

Well, I can already tell you that you'll be a guest again in the future. You're an amazing guest with a great grasp of what's going on in the banking world. You admit to not having all the answers, but continuously have the inquisitiveness to know that and to keep on asking the questions. Thank you so much for being on the podcast today.

Melissa Stevens (45:02):

Thanks for having me.

Jim Marous (45:04):

Thanks for listening to Banking Transformed, the winner of three international awards for podcast excellence. If you enjoyed today’s show, please give our show a five-star rating on your favorite podcast platform. Also, be sure to catch the articles I’ve written for Financial Brand, and check out our research for the Digital Banking Report.

Jim Marous (45:23):

This has been a production of Evergreen Podcasts. A special thank to our senior producer, Leah Haslage; audio engineer, Sean Rule-Hoffman, and video producer, Will Pritts. I’m your host, Jim Marous.

Jim Marous (45:35):

Until next time, remember, to get digital transformation right, requires leadership that is committed to change, and willing to engage both customers and employees.

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