Driving Digital Sales in Financial Services

Jim Marous:
Hello and welcome to Banking Transformed. I'm your host, Jim Marous, owner and CEO of The Digital Banking Report and co-publisher of The Financial Brand. The way people in businesses shop for and buy financial services has been altered dramatically since the pandemic. No longer needing to go to a physical location, consumers can do the research, purchasing, and ongoing engagement on their phone. But just because banks and credit use have enabled consumer to open and use account digitally doesn't mean they will. Growth is not a given, and satisfaction is far from guaranteed.

Jim Marous:
We are very fortunate to have James Robert Lay, CEO The Digital Growth Institute, and author of the book Banking On Digital Growth, on the show. He discusses digital sales models and how organizations can multiply results by following a well-defined formula. Welcome to Banking Transformed. Before we start, I want to give you a backgrounder. For any of the very few people who may not know my guest today, James Robert Lay, he's an author, speaker, advisor, and teacher in digital marketing for financial services firms. As the founder and CEO of The Digital Growth Institute, he has helped more than 500 organizations with their digital marketing and sales strategies. He is a sought after expert and is a contributor and friend of The Financial Brand. Welcome to the show, James Robert. How are you today?

James Robert Lay:
I'm doing fantastic Jim, thank you so much for having me on.

Jim Marous:
It's great to have you on. While we converse often on digital channels, it's certainly been a while since we've had a real conversation one-to-one, and even longer since we've seen each other. So what have you been up to since we did our own personal and professional pivots as a result of COVID?

James Robert Lay:
Two big things really, it's been one year since we launched the book, Banking On Digital Growth, which has been a fantastic experience. It has been probably one of the best things that I've ever done in my entire life.

Jim Marous:
Wow.

James Robert Lay:
And I don't say that lightly because the timing, it was the timing of getting this book out into the market to transfer everything that I've learned over almost 20 years of working and advising financial brands. It's in the hands of thousands now around the world and it just turned one. And then right on the heels of that, we are coming up on the 100th episode of The Banking On Digital Growth podcast, which has been just another gift. And I'll never forget, I mean, I think you were guest number one going all the way back now, right at a year. So what a year this has been to, I think really just grow in ways that probably none of us had ever imagined before.

Jim Marous:
It's interesting, you mentioned the one year anniversary of your book and the fact that you have a podcast. We've certainly traveled similar paths over the years. We both been involved with financial services extensively, both focusing on the sales process, and more recently as you mentioned, we have both embraced the power of the podcast to get our messages out to the industry we love. Over your 19 years, focusing on the sales process in financial services, what has changed the most and what's still the same?

James Robert Lay:
When we look at marketing, we look at sales, I think the biggest thing that has changed the most has been the way that people shop, the way that people buy financial products. Historically we can say there were two major points on that buying journey. There was some type of an awareness broadcast marketing, TV, print radio, for example, driving people into an in-person branch experience to make a purchase. And then they'd leave with the checking account, the mortgage, and life went on. But now that simplified buying journey of awareness and purchase has become massively more complicated, particularly for a financial marketing team and a sales team even, that what we see as a gap and really an area of opportunity isn't just awareness and purchase, but it's what we would call the consideration stage of the buying journey, where there's a lot of complexity built in, not just for financial brands, but also for consumers as well.

Jim Marous:
It's interesting, you mentioned the fact that almost overnight financial institutions had to really completely change the way they did sales, the way they did engagement. It was either disrupt your previous business model or stop growing. How are financial institutions overall do you believe done with this embracing of change?

James Robert Lay:
It's one of those forcing functions. I think we've probably seen the greatest amount of progress in the shortest amount of time. And for those that have been comfortable feeling uncomfortable, they have been the ones that have reaped the fruits of their labor. And so no longer is doubling in digital just an option, it has really become a table stakes game, both on the marketing and the sales side of things. And so I'm very hopeful for what I have seen over the last year post pandemic, and now coming out on the other side.

Jim Marous:
It's interesting because we talk about this pre and post pandemic thing, and the process was already starting. I mean, we can't sell the financial institutes in short, they were already moving to digital, but it wasn't the fastest pace and the definition of digital really wasn't in place. I mean, we talked about digital, we got to enabled people to open accounts via the phone or on an online platform. But what we did find in, and you referenced it a little bit, is what overnight we found that financial institutions had to do a resetting of the stakes. Because number one, while they may have ranked themselves, and in our research, we found that they ranked themselves pretty well on data and analytics, and innovation and digital transformation before the pandemic, not high but okay. They actually rated themselves lower once the pandemic took place.

Jim Marous:
I think, as you mentioned, it's organizations kind of found out, "Oh geez, I guess I wasn't where I thought I was." And on top of that, the consumer expectations changed so quickly that it was hard to keep up. So when you're working with financial institutions, and you're doing it a whole lot more than I am on a one-to-one basis, what is the biggest challenge that you've seen for financial firms that are looking for growth?

James Robert Lay:
COVID was like a trip to the doctor. We go to the doctor and we think that we're healthy. Life is good. But what COVID showed us was the real reality underneath the skin and that what we perceived to be health was actually an opportunity for what we would call health optimization, or in this particular case digital optimization. And when it comes to really the big opportunity it's examining why are we doing what we're doing as a financial brand in the first place? Are we focused on the commoditized transaction of dollars and cents, or can we dive in tap into really a deeper opportunity to put the transformation of people, their lives, over the commoditized transaction of dollars and cents?

James Robert Lay:
And through that really rethinking of purpose, help people get beyond the financial stress that COVID has exponentially multiplied, putting tolls on really their physical health, their physical wellbeing, their mental and emotional wellbeing, and even relational wellbeing, to get people beyond that towards a bigger, better brighter future. And we're seeing that we're hearing conversations around, not just looking at the mission and vision of the financial brands that have been so heavily commoditized, but really looking at the third path, the third way forward, the purpose of the financial brand, which is an opportunity to emotionally connect with people in the marketplace to bring humanity back into money.

Jim Marous:
So it's interesting you should mention that, because one of the major transformations that we saw as a result of a pandemic in our research was an increased need to prioritize branding, which has really had fallen, I wouldn't say off the charts, but did not become as big of a deal as it used to be. It was considered [inaudible 00:08:43], it was considered soft, and it wasn't driving the numbers. But we saw that organizations amped up the prioritization branding, but also what they actually represented, as you said. And when you look at that, how does branding empathy sustainability play into the new sales model, and more importantly, tactically, how do you do that?

James Robert Lay:
Well, let's look at that. Let's break this down into what we teach. It's called the pyramid of human relationships. And in every single relationship there is a foundation, there's a foundational level. And we'll call that foundational level of the relationship, it's respect, help me when I have a need as a consumer, not when you financial brand have a need. And that's how marketing has been so often for so long. Marketing, we need loans, so we're going to run a loan campaign. But people shop and buy when they have a need, not when a financial brand has a need. At the pinnacle of the pyramid of human relationships, it's love. And in this particular case, we're going to just look at love as commitment. And digitally that commitment is made when I click on the apply button or the open the account button, and I start that application process.

James Robert Lay:
But something has to bridge the gap between respect and love, and that is trust. And trust is built on two things, what you say and what you do. And that is where we can look at branding as just one aspect and element of that conversation, the feelings and the emotions, but it goes deeper than that because when we think about trust in this digital world, trust is what we trade on. Trust is currency to a degree, and it takes weeks, months, sometimes even years for a financial brand to place enough deposits into a consumer's trust fund that sits between their ears, and as many deposits are being made, there'll be a point to where we can make that next step, that next commitment in the relationship to apply to open the account. But let's not kid ourselves and let's be very careful. We saw this with Robin Hood. It can take minutes, a bad experience if you will, to deplete that trust fund altogether.

Jim Marous:
So you're really saying, we can't fake it anymore. People are making these decisions either to buy or to abandon in nanoseconds. And what Ron Shevlin has seen, what I've seen, what you've seen, is you sometimes don't even know that the customer's left. We have a situation now where I can keep my relationship with bank A and build a digital relationship to supplement or replace my original relationship without closing my account. So from an attrition basis, it may all feel right, but really what's happening is the relationship is breaking down behind the scenes. And so what you're saying then is when you started your career 19 years ago, and I started mine double that, the reality was we always look for what products are hot at different times.

Jim Marous:
Equity credit was hot in the spring. Auto loans, hot in the fall. Because of some things that happened in the banking world in the 70s and 80s, we had a special deposit account with tax benefits. Every October we knew we had a lot of maturities come due. In fact, it's still the case in financial institutions that the largest number of maturities come due in October. And so you'd hit the mass. And if a person owned a home, you hit him for an equity credit line. If a person had a car, you hit him for a car loan. If a person had a deposit account at all, you asked him for a renewal without really any data backing it up. So how do organizations now move away from what I would easily call a push sales model to one that is really completely based on identifying needs and providing proactive recommendations? What do you suggest organizations do?

James Robert Lay:
So there's a couple of tactical things that we can do here. Number one, let's put people at the center of all of our thinking and all of our doing. We have to make that commitment for this type of strategy to actually become number one, a reality, and then number two, becomes sustainable. Otherwise, it's so easy to fall back on to what we know, to get trapped into what I call the cave of complacency. And so when we put people at the center of all of our thinking, all of our doing, it starts with defining who those people are to begin with in the first place? Focusing down on maybe some niche market segments, because that is a natural step to stop being all things to all people.

James Robert Lay:
And so persona development can come into play here. And yes, we can look at big data, but I think the opportunity is to also look at thick data, getting more into the hearts and minds of people asking them questions. And the acronym for that is to go all in, ask, listen, learn, and then launch these initiatives because it's so easy to just launch without even having any context. So the question that I have for the dear listener, when was the last time that you just got out and you talk to people as a marketer, you talked to the frontline, you ask questions, what's keeping people up at night? What are those common patterns? What are the pains, the questions that they have?

James Robert Lay:
And then on the flip side, what are the hopes and the dreams that they're looking to achieve? And then when answering those questions that can help to drive the next step in the pattern of this, which is content production, and then content promotion framed around the personas' questions, concerns, hopes, and dreams, and guiding people through a buying journey of awareness consideration purchase. But it doesn't just end there. We also have to consider the adoption piece of that journey because now we can retain those accounts, because like you said, and as Ron has noted, we might be losing relationships behind the scenes, just as fast as we're acquiring them on the front end.

James Robert Lay:
But there's another area of opportunity here when I look at this, once we go through the adoption stage, it's the advocacy stage, asking people to leave a rating, to leave a review, and ultimately refer their friends digitally, which then repeats this entire buying journey together, and actually could probably shorten that curve because people trust people. Jim, I trust you. If you told me, go stay at this hotel, go eat at this restaurant, I wouldn't question it. I would just go based upon your recommendation because I already know you, I already like you, I already trust you. And the same is true when we think about these relationships, people need to know a financial brand before they like them, like them before they can trust them, trust them before they love them, love them before they tell the world how great this financial brand is to their friends, to their family.

James Robert Lay:
And to me, it's a great untapped opportunity. We're seeing this happen in the digital retail space. We're seeing this happen in the FinTech space more specifically, and FinTech is really tapping into the digital referral market as an exponential multiplying growth factor.

Jim Marous:
So it's interesting, you talk about organizations have to put the customer first and saying, or rather, doing rather than saying. The problem is, in all of our research for the last 10 years, improve the customer experience has always been number one, always been number one. On the other hand, when you look at the decisions that financial institutions make, I mean, you've been in the banking world long enough to know, when ATMs were introduced, the reason the financial institutions said they wanted to have ATMs was to make it more convenient to get money. But inside the business case was based on get people out of the branch. Online banking, same thing.

Jim Marous:
We want to make it better for you to do your transactions. We want you to be able to do transactions anywhere. And the reality is we gave them what the teller was seeing on their screen on an online device, and then we moved it to the mobile device. And it really wasn't about customer experience. And even today, when we're talking about digital banking transformation, if you get underneath the initial layer of what they'd like to hear them say, we find that organizations continually are looking for cost savings and efficiency, which isn't always aligned with better customer experience, which isn't always aligned with being empathetic, with building trust.

Jim Marous:
One of the key areas of emphasis for financial institutions have been focus on data analytics and personalization, as it can support digital sales. During COVID consumers got used to Netflix style proactive recommendations, the Amazon type of cross-selling, PayPal forms of embedded banking. How do we take the data that we can have access to and the focus on the consumer and make it so that sales can drive growth with a consumer wanting to buy as opposed to someone being forced to buy?

James Robert Lay:
Let's look at this. The history here, service for example, service has always kind of been a part of the conversation around experience, but what is an experience? An experience, the way that we define it is well-defined systems and processes that have been number one, defined, number two, applied, the secret here is the third step to optimize these experiences over a period of time resulting in a positive or a negative emotion. And so for me to rise above the service aspect, and really service and financial services has been a very reactive state. So we need to flip the script to take a proactive stance in a person's life. Like you said, the Netflix recommendation style approach. We probably have a better understanding and a better idea of a person's financial lives, their behaviors, their habits, more so than they do through the data that we collect around, for example, transactions.

James Robert Lay:
So that's where the next level up into this comes, what I'm calling the coaching guidance advisory piece of financial services, whether that be delivered through automation, through AI, or probably more so in a combination of automation and AI with the human touch, the human element, so the digital experience combined with the human experience to make those proactive recommendations. Very similar to healthcare, getting people in on a quarterly, or at least at a minimum, an annual checkup of where their financial condition is. For example, I'm excited about like what some of the work that Amex is doing on this subject, in conjunction with the financial health network. Because this coming back full circle now, this is how you really put the transformation of people over just the transaction of dollars and cents.

James Robert Lay:
It's making those proactive recommendations based upon how they're spending, and then also helping them, I think this is key, helping them get really clear, an account holder, for example, of what they want their future to look like. Because now we're getting into some really deep level of human behavior stuff here. 98% of people have probably never set goals, yet alone go back and revisit these goals on an annual basis. That's why new year's resolutions fall flat by January 30th, because number one, either the goal was never set, or number two, there's not been the accountability piece, the coaching piece of this. And that's where the financial brand can play that role of that coach that guide that advisor, that counselor, to hold account holders accountable to achieve the goals that they're looking to set out to achieve in that period of time, and then supporting that with data.

Jim Marous:
So it really gets to being a trust, a transfer, and a value transfer. You think about Amazon, I've talked about this often, that we pay $120 a year for the right to shop on a digital platform. That's insane. But I think it's because we trust Amazon to use our data to make our experiences better. So at the end of the day, we would need the consumer to trust us as a financial institution, to use their data in a way that's going to be beneficial to us, as opposed to just beneficial to them. You talked about the medical community, I'm looking forward to, in fact, I've already in my mind said I'm going to be buying a new apple watch in September, because it's supposed to be able to give you some blood information that isn't there now. And I'm a pre-diabetic, so knowing on an ongoing basis, what I'm doing right and wrong instantly without having to prick my finger, anything else, which I'm no longer doing.

Jim Marous:
But the bottom line is to have that proactive solution requires trust because I don't want to let go of that information just for the sake of giving you something that you don't use. And a lot of the reason also is what is the solution you'll give me in response. So when you're looking at the new digital sales model, part of this also has to do with the products the financial institutions have to sell and the way that that engagement takes place. So you can give a financial intuition, I would imagine the best possible sales model, but if it takes 15 to 20 minutes to open an account on a phone, it's not going to work. What do you give financial institutions that you work with, what do you tell them they need to do more than just digital selling and digital marketing, what do you tell them they have to do from the product line and the way people engage?

James Robert Lay:
That's where it's interesting. You talk about Amazon, we pay a membership fee. I'm looking at this as an opportunity, this idea of financial coaching to support the products, particularly that on the commoditized, let's just say checking account. And not even to use the word checking account anymore because who writes checks, but the spending account that if you can package up maybe different levels of advisory coaching accountability, you can charge some type of non-interest income. So now we're talking about new revenue models, the membership economy is a new area of subject that I think financial services could really tap into. The Financial Gym, for example, out of New York is already doing this as a membership like model.

James Robert Lay:
But the other thing too, because you talked about this idea of product, product positioning, I'm seeing particularly FinTech doing more advisory even pre-sell, pre-conversion, so quizzes, for example. So we're collecting data before someone converts and then be able to provide proactive recommendations. Ignite Sales is a platform that is doing that now for financial brands that's taking in the inputs of someone and then regurgitating product recommendations based upon. So now it's becoming very bespoke white glove, just like we'd sit down and have a conversation in the branch. And Jim, I had asked you some questions about your life and your goals. Now that's being done digitally and interactively.

James Robert Lay:
And there've been other financial brands that have actually put together what are called quick savings quizzes to where they ask these very simple questions, yes, nos, do you have a mortgage? Yes, no. If it's a yes, how many? One or two. And then based upon the data that they've been able to collect internally, they're able to say mortgages, auto, personal loans, CDs, based upon all of this data, we estimate that we could probably help you stop losing and start saving X number of dollars by developing your relationship with us over there. And it's that vernacular, help stop losing and start saving, it's very important because people are more likely to make a change in their behavior to avoid a loss than they are to even achieve a gain.

Jim Marous:
As the medical committee, I mean, I do something out of fear as opposed to some benefit. You react that way, it's human behavior.

James Robert Lay:
Exactly. So the other thing too, that I'm seeing on this, because you mentioned the... It can't take 15 minutes to open the account anymore. We are very close to wrapping up a digital secret shopping study for a financial brand that we've been advising now for probably four or five years. And it's the idea of the digital secret shopping study. And I wrote about this in Banking On Digital Growth. We've spent so much time over the years, secret shopping our physical branch experiences. But around 92% of financial brands have never secret shopped their digital experience. And you can do that quantitatively with heat maps and qualitatively by just doing observational research.

James Robert Lay:
And this particular institution, we were benchmarking them against another local institution and they're pretty comparative. But then the wild card we brought Chime into the mix. And Chime by far has, I want to say 80% had a... Actually Chime had a 100% open conversion rate where these institutions were only seeing about a 50 to 60% conversion rate. And then we did a 30 day follow-up study on this and the memory recall, 30 days post-conversion out of these three different digital experiences, which one do you remember? 100% remember Chime. And because Chime was sending 10 to 12, 15 emails in the first 30 days, and the followup question to that was, did that feel intrusive? Did that feel bothersome? Did it annoy you? About 80, 85% said absolutely not.

Jim Marous:
Right, right.

James Robert Lay:
It was very helpful.

Jim Marous:
And but the way, if you don't do that at the onboarding process and all of a sudden you turn on 12 to 15 a year from then, it's not going to be accepted nearly as much. New customers want to be talked to. They want to be asked questions. That's crazy. Great insight.

James Robert Lay:
Very much so.

Jim Marous:
Let's take a short break here and recognize the sponsors of this podcast. Since we focus on how banking and finance are transforming, I like to talk to you about three letters, F-I-S. From local shops to global banks, FIS is evolving commerce and helping businesses and banks transform in the digital world. FIS moves $8.1 trillion annually, serves over 90% of the world's largest private equity firms, 60% of the world's largest merchants, and 90% of the world's most innovative bank and credit unions. They have the unmatched expertise needed to advance your business.

Jim Marous:
So if you're looking to transform, then look no further than FIS Modern Banking Platform, cloud enabled, containerized, open and secure, it's built from the ground up to meet the unique challenges and opportunities of the digital age. The advantages are many and the value is real. Lower your costs, reduce IT burden, manage regulatory concerns, and launch new products easily, all with one flexible digital core banking platform. With FIS Modern Banking Platform, your bank can boost innovation and agility, participate in a flourishing modern ecosystem that is open real-time and cloud native, and offer engaging customer experiences. The time is now and the solution is here, FIS Modern Banking Platform. So joint 80% of the world's most innovative banks by going to fisglobal.com/modern banking. FIS, advancing the way the world pays banks and invests.

Jim Marous:
Is your organization trying to embrace digital banking transformation in 2021? Are you trying to elevate the customer experience, figure out what technology you want to implement to improve the customer journey, look at data analytics to really better understand and personalize the customer experience, and you try to make it so that more of your employees can buy into and be part of your digital banking transformation? If this sounds like you, I ask you to reimagine banking with our newest podcast sponsor, Microsoft. They give you the opportunity to unlock new opportunities at speed throughout innovative business models, deliver differentiated customer experiences across channels, products, and services, and redefine new ways of banking.

Jim Marous:
Microsoft in this partner ecosystem helped bank to achieve differentiation through sustainable growth, streamlining core systems, reducing cost and risk, and delighting customers and employees. If you're in the midst of a journey, trying to figure out what to do next, maybe try and find out what other organizations do to lift up their experience level. I really encourage you to look at Microsoft. For more information, visit microsoft.com/financialservices.

Jim Marous:
Welcome back. I'm joined today by James Robert Lay, the CEO of The Digital Growth Institute and author of the book Banking On Digital Growth. We've been discussing the future of digital selling and the potential for growth in financial services. So let me take a really quick pivot here from where we are talking and get deep into something. What is the role of the branch in the new digital sales model?

James Robert Lay:
This is always kind of the hot button topic. So you've got the two extreme versions here. You've got the Bret Kings of the world, back in, was it 2011, Branch today gone tomorrow. For me, I'm not going to be as bold or bullish to say that the branch is going to be completely dead, but I'm looking at this as more from a transformational experience. We do not need three to 5,000, 10,000, 20,000 foot branches anymore.

Jim Marous:
Right.

James Robert Lay:
I really see that maybe, a micro footprint, 500 square foot, I'm going to come back to healthcare on this, right? Because if you think about healthcare with COVID, pre COVID digital telemedicine was available, but not as widely as adopted as it is now, where, when we think about financial services, digital was starting to pick up. We saw some adoption, but now it's exploded, but like healthcare. So if healthcare can get by with these smaller satellite offices to whenever you really need to come and sit down and see a physician and talk with them, consult with them, they can run tests and diagnostic, I believe the same would be true in this digital space that we're in now to where we can do a video conference, a video meeting with an account holder.

James Robert Lay:
I know that there's a De Novo Bank here in Houston that is starting up digitally only. And their hypothesis is why would someone want to come into the branch, because they're targeting the small business market, why would they want to leave their small business come in to when we can actually go and just meet with them digitally speaking, everyone wins with that. So to me, it's going to be on an as needed basis, not transactional, more consultative, if an only if someone wants to come down and sit face-to-face, but even then, like we're doing right now, we're face-to-face in a digital world.

Jim Marous:
Well, and that's interesting. We just had an interview earlier this week with [inaudible 00:33:08] Caldwell from City Bank, and they have enabled every one of their branch people to have Zoom type calls, to open accounts and do everything else. And I said, man, this just hit me between the eyes. I'm going like, this is interesting because if you have a digital engagement, you talked about the attrition rate or the abandonment rate of a new account opening process, I might be able to settle for a 10 to 15 minute new account opening process if I'm doing it digitally with a person in front of me, they won't let me go. It may not be the best process, but the reality is the conversation can go, I can understand the person, and it won't be uncomfortable.

Jim Marous:
I don't want to set 15, 20, half an hour, an hour away in my day simply to sit down at a desk in a branch. And some people will, but I think you're right, things are changing. We have to get the finances institutions out of the thought that that's what people prefer as opposed to that's a backup plan for those that actually needed them. So you've conducted dozens upon dozens of workshops, clinics, book club meetings, and the like for bankers and credit union executives, what's the most difficult concept from your book that you discussed that people have trouble embracing?

James Robert Lay:
It's probably the most important one, which is what I call the banker strategy circle. And banker is an acronym. Build an audience, attract leads with personalized offers, nurture those leads with automation and content, expand relationships by delighting accounts, and then the R, is to repeat this process to gain ratings, reviews and referrals. And I say that's the most difficult one for people to wrap their heads around because you're talking about five stages of operations that can then be multiplied by their different product lines. And so they think, "Oh my gosh, that is a lot of work." And I'm like, "Yes, it is a lot of work. But why don't we just simplify this a little bit?" Because the only way to escape complexity in what I call the circle of chaos is through a journey of simplicity.

James Robert Lay:
And let's focus on the few things that are going to create the greatest value going forward. Where's the low hanging fruit today when it comes to digital marketing and digital sales? And I still say, it's the abandoned application, right? Because we're seeing so much attrition, not even attrition, but abandonment and we have worked with financial brands who have deployed what we call digital and abandoned application systems and methodologies that are collecting another 15, 20, 30% of those that abandoned are actually coming back through, that's where digital video comes into play. And you're broaching the subject here from your previous comment. I say digital sales will require digital video, and that's going to require new training, new upskilling, because it's very different to have a conversation through video than it is face-to-face.

James Robert Lay:
And there's a CEO over at the West Texas A&M, this article just came out. They filmed over 3000, 3000 welcome videos for incoming freshmen to welcome them to West Texas A&M University. And they're 15 to 30 seconds personalized. So you've got the personalization now, you've got the human aspect of the human touch of onboarding, what a great opportunity for a financial brand to do the same as part of their onboarding experience, coming back to the banker strategy circle, expand relationships by delighting account? So my thesis of this, when you think about those five different areas of operation, you cannot do them all at one time. Pick the few that are going to create the greatest value, which is pretty much working from the bottom of the funnel to the top. Otherwise, if you're working at the top of the funnel down, you're adding more complexity and you're losing opportunity instead of capturing it.

Jim Marous:
So it's interesting because everything you said, and we're already seeing this in the product side, the new definition of convenience, which used to be locational in geographic, is really speed, simplicity, and the interactivity, isn't it?

James Robert Lay:
Yes.

Jim Marous:
I mean, it really is one of these things that you can't ignore that, but either from a product standpoint, speed and simplicity and empathy, but even from a sales perspective, that the process itself, if you're going to hold my hand on my digital journey, I need speed, I need some publicity, and I need it to be intuitive, which gets us back to data analytics and AI and engagement. And when we talk these things, they are bigger than a breadbox as is digital sales. When we look at the necessity, this is not even an option anymore, to at least use data and analytics to drive everything we're doing, including the decision making we're having, can small financial institutions keep up?

James Robert Lay:
That's a great question. Can small financial brands keep up with the massive transformation and change happening in the marketplace, being driven by consumers, by being driven by technology, being driven by the competition, being driven by COVID? The answer would be a definitive no, if they try to do it themselves. They're going to have to look beyond the competition of financial services, and more specifically FinTech to look at collaborative opportunities with FinTech, and dare I even say, collaborative opportunities with other financial brands, particularly community financial brands. Because when you can pull your resources together, you can now make one plus one equals three, or one plus one equals 10.

James Robert Lay:
So to me, for smaller financial brands to succeed in all of this data analytics, AI, automation, and to the point of automation, I always like to bring in Issy Sharp from Four Seasons because what a great fantastic brand experience with the Four Seasons. And I've had the opportunity to stay at Four Seasons around the world. And it's always the same, but Issy Sharp, one of the things he always said was, "We need to automate the predictable so that we can humanize the exceptional, or we need to systemize the predictable so that we can humanize the exceptional." So collaboration is going to be key collaboration in this post COVID digital world is far greater than competition.

Jim Marous:
That's interesting because I say somewhat the same thing, not just with FinTechs, but with solution providers.

James Robert Lay:
Yes.

Jim Marous:
Your back office systems that are run by multitude of companies, but probably four or five different companies out there, everyone will say they have the different tools, but the bottom line is sometimes you have to break away from the big and find those that can solve the problem you have.

James Robert Lay:
That's agreed.

Jim Marous:
There are organizations out there that can help you with your digital account opening process to get rid of all the crap that you're asking for, that you don't need, and can get you down that path faster and easier. And what I usually say is it's like the GPS solutions where they can help you avoid the detours that are going to cause a problem. They can help you get there faster and easier than ever before. Oh, and by the way, they've seen all the things that you think as a financial institution makes you different. Oh, our guard, our debt is garbage, or this is this, or this or this. Bottom line is solution providers today have seen it all. Robert, James Robert, you've seen it all.

Jim Marous:
The reality is pick partners that can get you there quicker because speed is your friend, and oh, by the way, it's going to cost you something, but it will save you much more than it costs you in this solution and the timing of that solution. Because I go back to the dates of the beginning of mobile banking, and so many institutions were going, "We keep on going between this solution, and this solution." Same thing happens with CRM systems. We look at this and this, and they keep on joking, they want better that we make to simply go to the other one. We find out in retrospect, it would've been better to make the decision wrong early and adjust, than not to have made the decision at all. Now that's nowhere near the kind of scenes you've given me all day today.

Jim Marous:
But the reality is speed is your friend. And the lack of speed can destroy you because you get back into your old habits again, which is difficult. So, James Robert, from where you are in the industry today, you talk in your book about solutions that can bring 10 to 20 times the amount of growth. Now, some institutions it'll take that, some institutions won't. When you look at the next three to five years, what do you think the industry will be, where will it be and what will define the winners and the also-rans?

James Robert Lay:
We're going to see a lot more consolidation over the next three to five years. And it's like anything, change is hard. Change is painful. Change is scary. And for those that come out on the other side of this, I think we're going to see some key characteristics. And this is actually framing up some thinking for my next book, Banking On Change. Key patterns, number one, clarity. Getting really clear as to why we're doing what we're doing as a financial brand, and maybe even redefining that, redefining who we're doing that for. And then once we're really clear into that, then getting really clear into what the opportunities are to execute against that, to really achieve this idea of digital growth of digital transformation. And you've got to wonder why do 60 to 85% of all quote unquote digital transformation projects fail?

James Robert Lay:
And you've seen that through multiple research McKinsey, BCG doesn't really matter who it is because they're all seeing the same thing. And I have to say, it's not the technology. You can have the best CRM in the world, but it comes down to the people who are having to implement that technology on a day in and day out basis and modify and transform those behaviors. So now we're talking talent with that. So number one, clarity, number two, the courage to commit. It's the courage to commit and stay committed, to not fall back on what we once knew that felt comfortable, that felt safe, that felt secure when things get tough.

James Robert Lay:
And then that brings us to the third part, exponentially increasing competence every step of the way by measuring not perfection because this... The risk aversion of this industry is great and it should be because we're dealing with people's money. But it's almost like that risk aversion is an achilles heel in this digital world as a double sword. Our greatest strength could also become our greatest weakness as well. And so when we look about at measuring progress, we look at measuring progress, not by what we have to do, because it can feel overwhelming and impossible. We have to measure by where we've come from and doing that every 90 days, not every year, even, not every three to five years, but shortening the strategic perspective is a way that can help build that level of confidence and then repeat that process all over again.

Jim Marous:
And share the results. I mean, because the key is, if you keep on visiting an internal report and don't share with every single employee, because you can't any longer define the front office and back office, we talked about this with data and analytics.

James Robert Lay:
Correct.

Jim Marous:
You've got to show the insight to everybody and give them the tools to succeed. What that also does is as you know, and what you work with, is it lets employees know that they're not going to be expendable. Because the reality is they all are needed in the digital world, as long as they embrace what needs to be done to move to digital. I don't mind my branch having five people that are idle, if they're on the phone all day working with onboarding processes on a one-to-one human basis. It does create a problem if I have those people seated at a branch, waiting for the next customer to come in, which they're not going to do or filling up an empty in the ATM. The reality is the world has changed-

James Robert Lay:
Reskill.

Jim Marous:
-but give them the tools to do so. It gives them the confidence that they're not being outplaced.

James Robert Lay:
Give them the tools, but give them the training as well to support the tools. Because, I say that all transformation begins with two things. Number one, telling the truth to yourself and to your team about where you've been, where you're at, and where you could go next on this journey of growth. And then number two, getting the training and the education that provides, we're coming back to the word clarity, of the next best steps forward.

Jim Marous:
Great to have you on the show today, James Robert Lay. How do people reach you? Because I'll tell you there's probably not a financial institution I know or understand that doesn't need what you provide. And you do it with enthusiasm and passion that is hard to find on our industry and one that I really respect. So how do people reach out to you?

James Robert Lay:
Thank you very much, Jim. And thanks for having me. Best way to reach out and say hello, LinkedIn, James Robert Lay, Google Meet, James Robert lay, or just get the book on Amazon, Banking On Digital Growth. There is a podcast by the same name.

Jim Marous:
Great having you on the show. I appreciate it, James Robert.

James Robert Lay:
Thank you, Jim.

Jim Marous:
You know what a great conversation with James Robert Lay. He's a good friend, he has an amazing message. He has something, it's very tangible and very usable by every financial institution. There's no financial institutions that have optimized their sales process, certainly not in the digital world. And if you're a credit union, you're a bank, and you're small, you're medium, you're large, his message transcends all of that and really makes it important for you to listen to. And I'm going to have him on again soon because we discussed his service and what he can help organizations with.

Jim Marous:
Thanks for listening to Banking Transformed, just awarded of the Communication Award of Excellence for an outstanding brand series by the Academy of Interactive and Visual Arts. If you enjoyed today's interview, be sure to follow the show on your favorite podcast app. And we would love review of our show. Also, be sure to catch my recent articles on The Financial Brand, and check out all the new research we've done on the Digital Banking Report. This has been a production of Evergreen Podcast. A special thanks to our producer, Leah Longbrake, audio engineer, Sean Rule-Hoffman, and video producer Will Pritts. I'm your host, Jim Marous. Until next time make every day a learning experience.