Optimizing Consumer Journeys with Data, Technology and AI

Jim Marous (00:00):

Hello and welcome to Banking Transformed, the top podcast in retail banking. I'm your host, Jim Marous, owner and CEO of the Digital Banking Report and co-publisher of The Financial Brand. In today's digital world, consumer expectations for personalized, seamless experiences are higher than ever. For banks, optimizing engagement to drive loyalty and satisfaction presents both challenges and opportunities.

Jim Marous (00:36):

To explore how banks can leverage data, analytics, and technology to better understand and serve customers, we're joined by Devesh Khare, CPO at MeridianLink. We discussed how banks must reinvent customer engagement in the digital age.

Jim Marous (00:51):

By leveraging data, analytics, and technology, financial institutions will be better equipped to understand consumers and deliver better, personalized experiences at speed and scale. By avoiding pitfalls like data silos, and by taking a customer-centric approach, banks can drive loyalty amid rising consumer expectations.

Jim Marous (01:14):

Though challenges remain, the opportunities for banks are tremendous, if they connect with consumers in relevant, meaningful and easy ways.

Jim Marous (01:27):

So, Devesh, before we dig into the challenge and opportunities in banking, when we leverage data, technology and AI, can you share a little bit about your background and a bit about MeridianLink?

Devesh Khare (01:42):

Absolutely. And first of all, I would say thank you for having me on the podcast. I'm an avid listener, and I love hearing the topics you go through and they're near and dear to my heart. So, thank you for having me on here.

Devesh Khare (01:52):

Just about myself, I've been lifelong technology for my career. I'm an engineer by degree, been in product management for many, many years. I won't say the number of years, but many, many years across mobile commerce, health technology, payments, fintech.

Devesh Khare (02:08):

And really the mindset I bring is around innovation. And what I call innovation is really how do you change someone's day-to-day experiences, really is what it comes down to. Innovation isn't a cool feature, isn't a cool new product. It's how do you actually make impact in someone's day-to-day life? And that's really how I measure innovation.

Devesh Khare (02:26):

You're looking at that in terms of the MeridianLink perspective to introduce the company for those who aren't aware, we're a SaaS cloud-based platform. Ultimately, what we deliver, the way I like to say it, is connected solutions that span the key points along a consumer's financial journey, that lifelong journey, what are those key points?

Devesh Khare (02:47):

And we have technical solutions that solve and create digital experiences, bridging data across account opening around consumer, mortgage loan originations, analytics and collections. And you think about that in terms of your journey, how you can bring that data together and really provide that bridged experience, again, through that entire life of a consumer with a financial institution.

Jim Marous (03:15):

It's interesting, I mentioned in our pre-call that I've worked with MeridianLink in the past and done events with you and wrote white papers around your solution. But that was back in the day when you're really, really tightly focused around lending products and lending engagements.

Jim Marous (03:32):

You've actually expanded beyond that using your technology and your understanding of the marketplace to go beyond just loans. Correct?

Devesh Khare (03:42):

Absolutely correct. I mean, I always start with, who's the end customer? For financial institution, for a bank or credit unions, it's the consumer, that's us. Jim, you and I, are the consumers and our expectations have changed. And so, there's a need for change within all these organizations.

Devesh Khare (03:57):

And we've heard a lot around digital transformation and that's true. But also if you look at macroeconomic environments, there's more pressures on these financial institutions. And so for us, we looked at our solutions as we start off, like you said in that lending space. Really just thinking about how do we capture demand for a financial institution.

Devesh Khare (04:15):

Someone wants a loan, they apply for it. We help make that a real simple experience. But now the experience has to go broader. It's not just about just that initial origination. It's around how do we create, again, those connected experience for the consumer through the course of their life.

Devesh Khare (04:31):

Because ultimately, now when you look at consumers, they want a relationship with that financial institution, but they're willing to shop around. And so, again, how do we help those institutions create those experiences using data that they have and create that loyalty? And so, it's again, beyond just lending, it goes into sort of every day of their financial lives.

Jim Marous (04:51):

One thing that's happened since 2020 and even before, is the change in banking is going so quick. And there's so many things going on, and we talk about digital transformation as if it's a thing or something that there's an end point, there really isn't.

Jim Marous (05:05):

But you're in front of financial institutions a lot in your organization. What are some of the key themes that you're seeing in your discussions with organizations like banks and credit unions?

Devesh Khare (05:20):

And so, no surprise digital experience is front and center. Again, it's what do we do? Everything is moving so fast. But I joke that the challenges that financial institutions face is no different than almost any industry that went through that digital transformation. Just, they all have their own cycles.

Devesh Khare (05:36):

And the first thing I've seen in all the experiences that I've had in different industries, it always starts with changing the mindset around outside in thinking versus inside out. And so, what I mean by that is, a lot of times when I go visit a bank or credit union, they'll talk about how they grew historically, what their focus areas are, but they tend to not speak at it from their customer side.

Devesh Khare (05:58):

And so, the ones that I see that are innovating faster, that are really making change and impact in the industry is that they are actually first starting with what is that desired customer? Who am I targeting and what kind of experience do I want to give them? And when they start with that, they look inwards, it really drives a lot of change.

Devesh Khare (06:16):

And so, for me, I think that's the biggest challenge that I've seen. And just as an example, let's take our day-to-day lives. Something like Uber, you press a button, car shows up, 5, 10 minutes later, you jump in the car and you go off to where you need to go to. It's not a pure digital experience, the initial experience is digital on the phone, but it translates into a human interaction experience, then translates into how you run your day-to-day life. Same thing happen in financial services.

Devesh Khare (06:47):

I meet with a lot of financial institutions that are worried about if I go digital, I lose that relationship. Not true. It's not true. It's just another touch point that their consumers demand. So, think about how do you design those experiences, and I've used the word before, connected experiences through that everyday day-to-day life. So, you can provide that better experience in terms of when a consumer needs it, how they need it, and then how do you bridge that into the digital, into the human interaction?

Jim Marous (07:14):

It's interesting you bring up Uber, because Uber has changed so much, and some of it is subtle until you look at it. And what I mean by that is, it used to be, as you mentioned, you push a button, you say where you want to go, you find a car that's close, that is in the grade that you wanted. They start off initially with just, we're going to show up with a car. And now you can have different kinds of cars.

Jim Marous (07:35):

You can get shared experiences, you can get a van, you can get a big car, you can get a small car. Sometimes you ask for a small car, you get a big car anyway because they're closer. But what's interesting is what goes on once you get in the car, and you mentioned it first, you have that human experience. They greet you by name, partially for security, but also for the engagement.

Jim Marous (07:55):

But beyond that, as you're looking at your app, your app is telling you based on where you're going, things such as what restaurants are nearby, based on what your eating habits have been with OpenTable, because they have a partnership with them. They also say, "Oh, by the way, if you're going to be staying at this hotel and you're going to be staying in, here's some things you may want to call for takeout and we'll deliver it."

Jim Marous (08:18):

Then they'll also, if you go further down, they'll tell you about experiences based on things you've done in the past, based on where you've gone, where you've driven. And it's really interesting because as you look at this, what they're really looking at is saying, "How can we go from a transaction to an engagement and include in a good experience?"

Jim Marous (08:41):

So, what have you seen within the financial services industry as organizations try to find better ways to engage and to build more loyalty by, let's call it making banking easier. What are you seeing right now challenging the financial institutions in that realm?

Devesh Khare (09:03):

You actually said it, you led the witness here, Jim, but what you said was really around the changing of mindset from transactional, two experiences. And so, I joke with the team internally here. I bought a TV earlier this year. And the first thing I did is I went to Best Buy and looked at all the TVs on the wall.

Devesh Khare (09:22):

You see all those TVs across the wall trying to figure out, "Hey, what do I want? What size do I want? What features do I want?" And I narrowed it down to one or two, do you know what I did next, Jim, I want on my phone on Amazon, I looked at that TV and I bought it from Amazon.

Jim Marous (09:37):

Oh my God.

Devesh Khare (09:37):

But I first went into the store to take a look at it, but then I went on Amazon because I got a better price. They do the white glove delivery into my house, and I get it the very next day, hassle free. But to me, it was a combination of easy transaction, but I got the better experience on the backend for what I was looking for.

Devesh Khare (09:54):

And so, if you think about, again, if we do that outside in thinking, you think about those consumers who, your financial institution wants to be one of their lifelong customers is has that institution really defined what is my differentiated value proposition? What am I trying to be for my customer, and why should they bank with me forever?

Devesh Khare (10:17):

And I think that's the key thing that I'm seeing is that change in mindset in terms of how do I create that personal relationship, personal connection with every customer so that they want to be a lifelong.

Jim Marous (10:31):

It's interesting because I could take the exact same transaction you were talking about and turn it around for a different consumer. For instance, somebody who shops on Amazon for the kind of TV they want, but they can't pay for it right now. So, they go into a retailer and use a buy now pay later solution at the retailer as opposed to buying it from Amazon. Plus they may want to buy the installation agreement that comes with it.

Jim Marous (10:58):

So, it depends on the consumer, but both of them are buying the same product, but they're getting an experience or engagement that's customized to them. You're more of a do it myself type person. But there's another person that says, "You know what, I don't want hassle it, I want somebody to come in, put it in so that's somebody else's responsibility if something goes wrong."

Jim Marous (11:21):

And in a financial institution, it used to be just about the product, but now you can get product anywhere and you can change your financial relationship by expanding beyond your traditional financial institution. How do you work with financial institutions to make it so they don't have the silent attrition that we're seeing more and more of? How do you work with financial institution to give them solutions that make those customers or members want to stay with that financial institution?

Devesh Khare (11:56):

So, first I think it's important for those that don't know what the silent attrition is, to at least just talk about that. because I think it's important for them to understand what that really means. Jim and I were talking about this earlier, but historically, all of us have our primary checking account that we used to pay all our bills where we get our direct deposits and all of that.

Devesh Khare (12:12):

And you basically would buy new products off of that hung up that chicken account, you get a personal loan, get a car loan, you do all of that, but you banked with a financial institution because they knew you, they knew who you were and you trusted them.

Devesh Khare (12:27):

And so, but we're seeing now is consumers being bombarded with offers everywhere. I mean, I can't count how many pieces of direct mail I get, email I get, texts I get now, ads I see on Instagram around offers. And it becomes overwhelming, but they're attractive.

Devesh Khare (12:45):

And so, I'm sure everyone listening here is probably opened up another account somewhere along the way. Maybe a Venmo, maybe a Chime, maybe something else, just to give it a try, because hey, that offer looked attractive. And the challenge is, as you see those open up more and more, what you start seeing is the concentration of financial relationships starts to dilute with a given organization.

Devesh Khare (13:08):

And that's really what silent attrition really goes to, is it's about losing that effectiveness of what traditionally finance institution provided to a consumer and a consumer now actually becoming more kind of spread out in terms of their overall relationship.

Devesh Khare (13:23):

And so, for me, that's the biggest challenge that institutions have, is that you start competing for transactions. It's a race to the bottom. You're going to be just competing on price, and you lose any of that concept of value proposition.

Devesh Khare (13:35):

If I step back and think about me personally, and my start in the financial world as a consumer, it started with a relationship. I remember at 16, my parents took me to their bank, their relationship manager, I remember opening an account with that person.

Devesh Khare (13:51):

A year later, my parents said, "Hey, you need credit, you need to put a credit card and paid off every month, but you need to open one up to start building credit history." So, they took me to the same relationship manager, the same bank, same branch. They knew who I already was, and said, "Sure, we'll give you a credit card," and my parents co-signed it. When I had to get my first card, guess where I went? Same relationship manager. They knew who I was and they provided me with that personal service.

Devesh Khare (14:14):

And so, as I look at financial institutions and think about what needs to really be done, it's about how do you build that understanding, that relationship, but it's crossing the digital and the human realm. But if you really take a step back and look at traditional financial institutions, they manage those relationships and they use data.

Devesh Khare (14:32):

The data was actually the interaction we had day-to-day. They knew how many accounts I had. They would encourage me to open up new accounts if I had a need. But now, instead of it going from the direction of the finance insitution, to me, it's about me knowing where can I go to, what offers exist today? And is this really what I want with my current finance institution or not?

Devesh Khare (14:53):

And so, again, if that financial institution's value proposition isn't strong, I'll shop around just like I shopped around my television.

Jim Marous (15:00):

So, with that in mind, when we first started relationship, let's say it's on the deposit or the lending side, one of the things MeridianLink does is make that process easier. It's interesting, I talk about this often, that we do research for the Digital Banking Report, and we find that about 85, 86% of finance institutions say they have a digital new account or digital loan opening experience.

Jim Marous (15:24):

Then we asked the secondary question, which is, how long does it take for deposit services, a checking account? It takes between 14 and 18 minutes on average. For a loan, it takes anywhere from 18 minutes to over an hour, and in some cases for more complex loans over a day.

Jim Marous (15:45):

How does MeridianLink simplify that process to make it so that organizations make banking easier and more seamless, so they don't stop the process they've started?

Devesh Khare (16:00):

And we get that question a lot from our customers. Because again, if you think about the traditional way someone would open up a new account, apply for a loan, is that probably walk into a branch, and they would say, I have this need, or they even start applying online, but then they need to go into the branch to complete the application, there's hurdles and steps.

Devesh Khare (16:18):

And so, a lot of it starts with, again, a financial institution looking at how they want to design that end-to-end experience. And like you said, that's where Meridian comes in. We've got the solutions that allow a very seamless digital application to be completed.

Devesh Khare (16:32):

You can think of things like pre-fill. We already have information on these consumers, consumers can provide leading information that we can take to go extract known information about them to help fill in the application, so you save work to fill in the same information over and over again.

Devesh Khare (16:48):

From there, we automatically pull credit within our systems. We have the backend workflow that'll pull in all the necessary information. So, we can package up a new account, package up a new loan, we can do the decisioning in an automated fashion with the idea that if you look at that end-to-end flow from digital application to booking that loan, booking that new account to the core, and then funding it, reducing that to just a matter of mere minutes, is really the ultimate goal.

Devesh Khare (17:17):

And how we measure success on our side is, we call it speed. But speed is not just about automation. It's about providing that digital experience that consumers expect and demand today. You're from digital application to funding as fast as possible.

Devesh Khare (17:32):

And the goal really is to reduce and remove human intervention when it's not needed. If it's not needed, why introduce a hurdle. Because if we know consumers, if you say, Jim, applied for a loan, let's say a new credit card, actually make it real simple and they said, "We'll get back to you tomorrow."

Devesh Khare (17:47):

The very next thing you're probably going to do is go apply somewhere else and go look for someone that's going to say, "Hey, who's going to prove me right? You're not going to sit there and wait for a day." So, again, it's a change in that mindset.

Jim Marous (17:58):

It's interesting because it's not about the future of rates, it's about the future of speed and simplicity. I look at my relationship with my business bank and I realized to get a loan from them because they don't really understand me. And I get all my receipts by PayPal and I pay out all my collaborators by PayPal. The reality is PayPal knows who I am.

Jim Marous (18:20):

They give me on an ongoing basis a pre-approved bridge loan if I want it. But it would take me days to get it with my financial institution. Guess what, I'm not going to check price in those situations. Because if I don't need long-term lending, I'm not really competing on price, I'm competing on how easy is it to engage.

Jim Marous (18:37):

So, you're sitting down with financial institutions, this brings back memories talking with your firm in the past and you sit down with a financial institution, you know what you can do.

Jim Marous (18:49):

But invariably, bankers tend to get in their own way. They go, I want to buy exactly what you sold me with a couple differences. I may ask for a wet signature. I may ask for ID, that's different. I may ask for the customer to actually come into the branch to close loan, whatever it may be. What do you find to be the biggest challenge for financial institutions to actually buy what you're selling?

Devesh Khare (19:20):

So, I love that question because it comes up a lot, obviously. And so, first and foremost, I think you said it well, is they get in their own way. We used to do it this way, why do we need to change, is that common question. We have our standard policies, we have to live with these policies. And I always say why.

Devesh Khare (19:37):

If the consumers have changed means business and how you operate needs to change. It means your policies and procedures will need to change. It's all an evolution, that's what innovation really means. And so, for us it's really first starting with working with a financial institution, really define what is their objective and outcome they're trying to achieve. Ultimately, they're talking to us because they want to change. They have a desire. But now they're stuck with how do I make change.

Devesh Khare (20:06):

So, it always starts with, I have a desire to make a change. And so, if we get to that point and we go, "Okay, well what change are you trying to make and why?" And help frame that conversations around the outcomes that they're trying to drive.

Devesh Khare (20:18):

And then ultimately where we come in, because we deal with thousands of financial institutions that we can see some of those best practices, we know what works. Looking at some of our other customers, looking at case studies, looking at the data that we sit on, and we can do comparisons in terms of based off a financial institution, here's what peers of your size, peers in your geographic region, peers of your product offerings do, and how well they perform.

Devesh Khare (20:42):

And in doing so, we can get that conversation changed around, "Okay, well we can't do this. So, okay, now how do we do this?" And then we even have a team of consultants that'll work with a finance institution to help them understand how to craft some of those procedures and policies that best's leverage our products to drive the outcome that they ultimately defined on their own.

Jim Marous (21:01):

Boy, that last comment is so key. I was with an organization yesterday and I said, one challenge I see is a lot of organizations have what I would consider to be exceptional solutions. The problem is we sell that to the client, a bank or a credit union, or a fintech company, and we let them run for it.

Jim Marous (21:22):

So, we don't help them actually implement it or even help them market it to their customers or members in a way that builds business, that builds a revenue stream around what we've given them.

Jim Marous (21:34):

And the fact that you have consultants that come and actually help them with that, because we have so many experiences, this is where we talk about composable solutions in the business, is find those companies that can not only help bring you the solution, but can help answer those questions internally, when somebody in the organization says, "No, I want to do it this way," and we find a partner that will help us build that argument, says, "We actually have a way that's less risky than what your traditional way was," seem easier.

Jim Marous (22:05):

And you'll generate so much more business. And with as many relationships you have, you can show them what the results will be. The difference will be from an ROI perspective. I remember back, a few years ago when we were simply just getting used to what technology, data, AI could do together to really build these seamless experiences.

Jim Marous (22:30):

So, when you look at an overall customer journey today, what does that look like from the beginning through the process of engagement, when you're partnering with your best customer, the customer's doing it in your mind, the best way, what does an ideal customer journey look like today?

Devesh Khare (22:51):

And so, really there isn't one recipe for every customer, because again, there's different needs that every customer has, but again, it always starts with defining what is that outcome they want? What are they really trying to achieve?

Devesh Khare (23:02):

We've worked with customers, some examples where they were really trying to remove the friction in terms of that concept of touchless lending, more automation, better customer experience, but they're really trying to do it. And they were able to narrow it down in terms of one of the big friction points was automated decisioning.

Devesh Khare (23:20):

They had manual reviews that had to occur. And so, they first had to change their policy, then also go look at how can they adjust and add more granularity in terms of overall decisioning criteria to better service a broader base of the population because again, two consumers don't look the same.

Devesh Khare (23:39):

So, it means you need to leverage more data, provide more decisioning granularity to then evaluate every consumer as they come through. But ultimately they realized if I could drive more of that automated decisioning, I could give a better experience.

Devesh Khare (23:51):

And so, as a result, this customer was able to increase their automated decision by over 25% and they're already doing really well. And they were actually able to increase it even 25% above and beyond where they were to drive just a better experience for that customer. And then they coupled that with the ability to cross sell at the same time that they originated those new loans. And so, deepen that financial relationship at the point of a transaction.

Devesh Khare (24:18):

So, it wasn't just about, "Let me get through this transaction." It was actually, let me get through this transaction as easy as possible for the consumer, make them happy. And then also present them with relevant personalized offers that could help them in their day-to-day lives at the same time of that transaction. Which then again, helped increase that financial relationship with that consumer they'd given time.

Devesh Khare (24:37):

So, that's just one example of a journey. It's again, staying with that outcome, they knew that the way they can accomplish that concept of touchless lending was to focus on their key area around automated decisioning. So, that's one example of an engagement.

Devesh Khare (24:49):

A brand new engagement, again, starts with just going and defining, okay, well what are some of your metrics today? Do we know what those metrics are? And let's compare them against the best practices that we know and that we see in the industry. Let's see how far you are. Let's first understand that and let's lay out the situation in terms of where we are.

Devesh Khare (25:09):

And then we ask is, "Have you thought about who you're targeting? Who is your consumer that you're going after? Where do you want to grow?" And then it transitions into, "Okay, well what is that value proposition you want to create in the market? Can you define that?"

Devesh Khare (25:22):

Once we know that, then it talks about, positioning, which products do we start with? How do we configure those products for you to meet those objectives, meet those goals, and then start tracking that progress? Because we know that innovation and change doesn't start with just one big change. It starts with a bunch of incremental changes that you keep tuning over time.

Devesh Khare (25:40):

And that's why if you really look at that MeridianLink platform that we talked about, it's really about having all those different products that connect together. So, again, bring customers on that lifelong journey.

Jim Marous (25:50):

So, you're actually saying that if a financial institution doesn't want to go all in, do a complete core transformation, you can sell composable solutions to specific targets for specific products, for specific parts of the journey if they can't commit to everything right now. Correct?

Devesh Khare (26:11):

That is correct. And that's important, because ultimately we obviously, selfishly we want them to buy everything from us. We really believe that our connected solutions will make a difference in terms of helping them delivering their outcomes, but they need to start somewhere.

Jim Marous (26:23):

And the reality is, especially in today's economy, most organizations don't have the budget to do it all right away. And in many cases, you're better off from a speed and scale perspective to say, "How can I dip my toe in the water, make this happen today, or in the next two months, and then move on to the next thing," prioritization goes into play here too.

Jim Marous (26:46):

So, when you are working with financial institutions, what is the biggest roadblock they have to doing what you believe is right? So, what gets in the way of progress to the degree that the consumer's really demanding it?

Devesh Khare (27:04):

I think you said it earlier. It's kind of getting out of their own way. It's taking a fresh perspective and knowing that they need to change, that we collectively need to change for that better outcome. So, really just goes back down to how do we rethink operational structure? How do we rethink the division of labor resources that we have? And how do we best utilize them to ultimately meet that customer expectation, consumer demand, that's the first thing.

Devesh Khare (27:31):

The second thing that we hear a lot is that going digital, they feel like they're going to lose the connection with their customer. And so, a lot of it's educating them on how that's actually not true. If you leverage the data properly, you can actually have better insights and better knowledge of that customer. So, you can actually provide that better experience for them when you talk to them, when you deal with them online, when you're messaging to them.

Devesh Khare (27:53):

So, it's actually changing the mindset of digital doesn't reduce the sense of personalization and knowledge. It actually helps increase it as long as you think about the investments you're making and how you harness that data and create that connection in different channels.

Jim Marous (28:10):

I can't emphasize it enough that one of the things that you probably take for granted, but you rely on every day is the fact you have such a broad array of financial institutions that are your customers and have been customers for a long time. That data that's collected, that insight that's collected can help every future organization do it better.

Jim Marous (28:30):

I was at an organization about three months ago, and they said, it's interesting because if any new solution about 80% of what we do is really the same at every organization, it's at 20%, that's a differentiator. But the reality is don't waste time on the 80% going through the things that everybody's already learned already. Don't remake the wheel that we already know what's best, but work on that 20% that really makes it independently good for your organization.

Jim Marous (29:03):

So, when you look at traditional finance institutions, they're all threatened and challenged by fintechs and tech companies overall in the marketplace. What advantage does a traditional financial institution have over fintechs today, given all the new digital solutions?

Devesh Khare (29:25):

And as funny as it sounds, it's actually that human connection that they sit on. So, if you look at any fintech, any other kind of service that you've used, if you had any issue before, you try to get a human to explain to you what's going on, good luck.

Devesh Khare (29:41):

It's usually I have a bunch of online help, they may have a chat bot that they use, and none of those things are bad. But ultimately, if you get to a really tough problem, I want to talk to someone, just someone to explain to me what's going on, how can they help me, and how can they give me a solution that meets my needs? It's almost impossible.

Devesh Khare (30:00):

But if you look at what financial institutions have done well historically, look at credit unions, look at community banks, is they have that personal connection to their customer or their member. And ultimately what it means is they know what they need and they help tailor solutions around them.

Devesh Khare (30:17):

That's a strength that doesn't need to go away. It's actually harnessing digital and creating the multichannel engagement strategy helps create and expand that personal connection. But the default is, if that customer, member needs help, they can go to the branch, they can call somebody and then get that help. And that is a unique differentiator that fintechs can't do.

Devesh Khare (30:41):

If you look at how they're funded, their profit sheets don't allow for those humans to provide that level of service. And I think that that's where you look at these banks, you look at these credit unions, they can sit on those assets and they truly are assets to create that human connection. And again, focus on how do I help each consumer along their own personal lifelong journey.

Jim Marous (31:05):

And it's so key that it's humanizing the digital experience as opposed to digitizing the human experience. Because you can't digitize an old process and make it better, but you can certainly add humans into a digital process. It's the augmentation of the digital process that traditional financial institutions can do. But it means bringing all the channels together.

Jim Marous (31:29):

It means bringing all the data together so that everybody, the democratization of insight, so all employees know where a customer is in their journey. And attentionally, we've talked to Citibank in the past and they had a time ago, were not really pleased with their new account opening experience.

Jim Marous (31:45):

And one of the ways they helped solve for that in the name of building a better solution was as soon as a person disengaged from the digital process, somebody reached out to that consumer immediately, because the first two things they reached, they collected was the email address and the phone number. They reached out to them immediately and said, "We see you've broken off of the engagement process from our digital platform. We understand that, a lot of people do. Let's help you go through it."

Jim Marous (32:13):

Well, if that's done, the consumer's going to stay on the line forever with that person because it's a human. But it makes it so that you can take something that may be somewhat broken and make it better through humans, which is not possible at many of the fintech organizations, most of the digital organizations. And it's a balancing act.

Jim Marous (32:32):

And it's also, we've talked about this with data and analytics. It's also trying to get an understanding of how does the consumer like to interact, what is the preferred channel under different circumstances? There's one thing to open an account, it's another one to do transactions, it's another one to get sold or get referred to other products.

Jim Marous (32:51):

And it's another one to keep me, and the best organizations out there, not just financial institutions, but all organizations find a way to capture data that says, we understand the way the consumer wants to engage. So, when you're looking at this and you're looking at the data and the analytics involved, how does MeridianLink help leverage the data and insights that's available to build even better solutions and better engagements going forward?

Devesh Khare (33:22):

And first I just want to address the concept of this personalization. A lot of banks I talk to are worried like, "Our consumers are afraid of this personalization, I have all this data, I'm tracking them, is that encroaching on an area that makes my customers uncomfortable?" And the answer is no.

Devesh Khare (33:40):

I mean, there's plenty of surveys out there, one that I saw recently had over 50%. You have consumers actually want their financial institutions to know more about their transactional history and look at it, analyze it, and then present opportunities that say, "Help me, make it better or give me something that's different for me."

Devesh Khare (33:59):

And as you go lower in terms of that demographics towards the millennials, gen Zs, that starts to get closer to like two thirds, they want their finance institution to know about them. They want them to track their usage and provide recommendations.

Jim Marous (34:13):

As long as they get something that can reach return.

Devesh Khare (34:15):

Exactly. And so, that's where MeridiaLink comes in, is we obviously sit on data, we understand the transactional information, we also pull the credit. And so, we have the credit data that we can look at, understand how exposed a consumer is, or how much opportunities are for this consumer.

Devesh Khare (34:31):

And so, for us, we take all that data and then we kind of wrap it into a set of insights that we can provide to a finance institution, both for their operations, but also in terms of their customers and members, and go, "Did you know that this customer has already pre-qualified for these products based off their history, based off their credit profile?"

Devesh Khare (34:49):

There's a general sense of need within their portfolio for this. Those are relevant, those are timely. And they don't last forever, they do expire. But what we do is we kind of create this concept of these customer opportunities that we can surface to a finance institution and really make it easy for them to expand that financial relationship by just monitoring what's going on and then boiling up insights that they can use for both their operational side and their customer side.

Jim Marous (35:18):

It's interesting because it's not like it used to be where if you cross sold something, you take out another set of forms and have to fill in from beginning to end again. The reality is you've made it so that on that instant, and again, credit bureau is such a valuable asset because you can find out if they've test droven a car lately, you can find out if they bought a house lately. You can find out if they've added somebody to the account lately.

Jim Marous (35:43):

You can find all these things out in the credit bureau to allow you, as you said, to very quickly, instantly at the same point of purchase, open another account without any friction.

Jim Marous (35:55):

It's like Apple, when you get an Apple card, the credit card, it's only four steps on your phone, which is insane by itself, but it's all prefilled with information they already know about you and they say, "Is this right?" And for me, it was right.

Jim Marous (36:08):

And then they say, "Okay, can you validate your last four digits of your Social Security number? Can you validate your annual income?" Well, this is simply buying time, but it's also cross validation for know your customer. And then the next step is read these rules and regs, and you got the credit.

Jim Marous (36:25):

Well, now with their savings account, they immediately can get you into the savings account with just pushing a button. Do you want to build a savings account? They don't make you go through the process. And this is one of the things that your company has done very well is saying, "We don't want to lose all this momentum we have going," somebody's put some effort into opening an account. How can we make it so this account, this relationship is broader and how can you do it? And it's key in any channel.

Jim Marous (36:52):

In other words, I can do, if it's all digital, I can do if it's a mix between digital and human, I can do if it's all human, and this is the way financial institutions have to look because the consumer expects it, but each consumer experience is different. Everybody judges their finance institution by different parameters.

Jim Marous (37:11):

I judge it by my Netflix account, my Amazon account and my PayPal account where I go, "These companies know me. They know everything about me, and they won't make a mistake by what they want to engage me with."

Jim Marous (37:26):

So, when you're looking at these engagements overall, and when you look at the whole data issue, how do you balance privacy with personalization? I think you almost touched upon it where that balance comes because of the value transfer you give them. If you give them something valuable, they're more flexible on what they share with you. Correct?

Devesh Khare (37:49):

Yeah, absolutely. And for me, and I think about this from my own personal life, not even from a MeridianLink lens of privacy versus personalization. I think it comes down to, "Is it helping me or not? Are you just trying to sell me product because you want that transactional relationship or are you really trying to build a long-term relationship with me?"

Devesh Khare (38:07):

And so, for me, the latter is personalization. It's really about really getting to know me, my needs, and helping me better my life versus just selling me the next thing that you can find and can see. And so, to me, that's that fine line.

Devesh Khare (38:22):

Now obviously, how you manifest that in technology permissions and all that, there's a long tail to conversation there. But ultimately the lens that I always use is really about what is the intent with this data? What is the intent with what you're trying to do as an organization? And ultimately for personalization, it's about helping me achieve my goals as a consumer versus just selling me a transaction.

Jim Marous (38:48):

So, our last couple questions, one of them is, you overlap to a certain degree what most firms core platform provider provides. They provide application process, they provide data, they provide opening, they can transfer into the overall core platform.

Jim Marous (39:08):

So, what you're actually in many times going against is organizations saying, "Yeah, I already get this from my core provider, I'd have to spend more with you." How do you fight that argument? How do you show the value improvement on what you can provide versus what they probably have today?

Devesh Khare (39:30):

It always starts with the data. It always starts with, let's show you kind of how, your peer-to-peer, customers that are using MeridianLink versus ones that aren't how they're performing. It's ultimately, looking at that, and we've done some studies based off segments where we've seen customers that are using MeridianLink outperform their peers by over 20%. In terms of like-

Jim Marous (39:53):

And that's money.

Devesh Khare (39:54):

AUM growth. And that's money but it also means longer term relationships, that doesn't just come from net new customers. It means from existing customers buying more with you, doing more with you over time, that's how you grow. It's a concept of bringing things in and keeping them, not just losing them into that silent attrition we talked about earlier.

Devesh Khare (40:12):

So, first and foremost, it starts with that, is the results that can be provided. But the other thing too, is if you look at a lot of financial institutions, they struggle with, how do I create this sense of a connected journey? How do I create the right member experience?

Devesh Khare (40:25):

I mean, as I talk to institutions, the thing I learned is a lot of them are starting to use the word journey. It's more and more prevalent, over the last three and a half years I've been with MeridianLink. But yet when I ask them, how do you measure the strength of your relationship with a customer, I don't always get a good answer, it really, really varies.

Devesh Khare (40:45):

And so, to me, we're still at the beginning phases of understanding how do we measure strength of relationship and think about that lifelong journey. But if you take a step back, the only way to do this, to have these connected solutions that meet the needs of the consumer as they go through that journey. And unfortunately, when you buy, point solutions that aren't connected, it's hard to create a lifelong journey.

Devesh Khare (41:07):

And so, that's really kind of the conversations we have with our customers is really one, start with performance, but then two, they talk about the rest of how need to build these connected journeys to meet the needs of your consumers long-term.

Jim Marous (41:20):

That's a great point. I think we continue to measure things in the way we've always measured things. We talked about before we got online today, the fact that the measurement of attrition can no longer be, how many accounts did I lose against how many total accounts do I have? Because that does not measure those that have diversified the relationship without using you.

Jim Marous (41:43):

In addition, you mentioned that you have to measure what is possible compared to what is today. And that's a hard thing to measure. You also have to measure what's broken. In other words, how long does it take a consumer to do X process and how does that compare to the norm?

Jim Marous (42:01):

And again, you have so much data with your clients, you can say, "Our norm with organizations that really do what we're asking them to do is this, our norm with organizations that don't do it all is this and your norm is this." And to measure things in a new way that are much more customer focused.

Jim Marous (42:19):

I'm not a big fan of NPS scores, that's not surprising that I say that because I say it often. And it's because it's one thing to measure how much people who already are with you love you, because if they didn't love you, they wouldn't be with you, versus how do you measure funds flow every month.

Jim Marous (42:40):

How much money is flowing out of your organization to other financial institutions that you haven't captured and made it yours. So, what advice would you give financial institutions looking to optimize engagement and loyalty?

Devesh Khare (42:57):

So, for me, it always starts with focus. Who is your target customer? Who are you trying to service? Not all finance institutions are going to have the same target, be it demographic, be it geographical, be it product mix, whatever it is. It starts by defining who do you want to be. It's not just about transactions, it's about creating that differentiated value proposition.

Devesh Khare (43:18):

So, I always ... as I meet with finance institutions and I've spoken at different conferences, I always say, first take a hard look at who do you want to target and why? It always starts with understanding that target. I mean, in my technical product world, that's always what you do, is you start with the end customer and target. What are you trying to solve for and who?

Devesh Khare (43:36):

Then it starts to go, okay, now for that consumer, that target you're going after, what is the ideal journey? What do they expect? Go talk to them, understand their needs. Start from the outside and then look inwards.

Devesh Khare (43:51):

And then it starts looking, now how do you change your organization's thinking, processes, policies to now meet those needs? But without defining the target, without defining what their needs are, you can't move forward.

Jim Marous (44:09):

That's a great point. We take it for granted, but unless you decide what you're trying to solve for, and as you mentioned, unless you've defined your why and your who, it's not quite time to determine what your what is because it's like going to a GPS and going, "Ah, I want to go north," as opposed to giving it a specific location, you may get there.

Jim Marous (44:33):

But if I say I want to go north in Ohio and if I'm in Columbus, Ohio, I can end up in Toledo, I can end up in Cleveland. Those are vastly different places that are almost the same distance apart as Columbus is to the two cities. So, you end up being no closer to where your destination was, but you defined it without complete clarity.

Jim Marous (44:53):

And I think many organizations will set their why or their desire on a real high plane, and I'm going to keep on referencing it because it happens way too often, and then they won't let go of the past. And I think one of the things we forget is we have to bring on board every one of our employees to talk about the fact, how they're part of the digital future as opposed to being threatened by it.

Jim Marous (45:21):

We got ChatGPT, we could've gotten into that today. And we have all these different things that threaten us and our futures in our minds. If our organization works to inform us on how we're still going to be important, then the credit adjudicator, the person that works in the back-office collections, whatever it may be, will not feel threatened if we include them.

Jim Marous (45:43):

If we don't, then you're going to have a whole lot of people voting thumbs down on any new process because what they see is you're trying to replace me.

Jim Marous (45:55):

Devesh, I really appreciate your time today. It's good to catch up and to find out how MeridianLink has really transformed into an organization that can certainly help financial institutions move into the future and be future ready.

Jim Marous (46:08):

We're not there yet in any stretch of the imagination, and probably as soon as we turn off the cameras today, we'll find there's something that's happened in the marketplace that's going to make us pivot a little bit more. But it's being on top of the game and for financial institutions to realize that, find the professionals that can get you to where you want to go in each little product area, each little customer segment, and work with them.

[Music Playing]

Jim Marous (46:33):

Because if they're running on your behalf, you have the ability to look at other priorities that need to be focused on, that you may be best at. But don't be afraid to partner with those that can get you to the finish line faster, easier, and at speed and scale. Thank you, Devesh, I really appreciate your time.

Devesh Khare (46:52):

Thank you, Jim. It's a fantastic conversation. I really enjoyed it and I love this topic.

Jim Marous (46:56):

Thanks for listening to Banking Transformed, the winner of three international awards for podcast excellence. We appreciate the support we've received to make this endeavor a success. If you enjoy what we're doing, please take some time to show some love in the form of a review.

Jim Marous (47:11):

Finally, be sure to catch my recent articles on The Financial Brand and check out the research we're doing for the Digital Banking Report. This has been a production of Evergreen Podcasts. A special thank you to our senior producer, Leah Haslage, audio engineer, Chris Fafalios, and video producer Will Pritts.

Jim Marous (47:28):

If you've not already done so, remember to subscribe, hit Banking Transformed on both your favorite podcast app and on YouTube for more thought-provoking discussions on the intersection of finance, technology, and leadership.

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