Interview with Hope Mitchem, Senior Vice President, Union Bank

Union Bank, N.A., is among the 25 largest banks in the United States, based on assets. The bank has 335 branch offices in California, Washington, and Oregon; two international offices; and facilities in six other states.

Hope Mitchem, Senior Vice President, at Union Bank spoke to Sumit Virmani, Head Product Marketing, Infosys Technologies Limited about the role interactive online tools play in empowering customers to make informed decisions and how online channels can be positively leveraged to redefine customer experience.

Q.	CRM has been an overused term in the banking industry specially in the past decade. Despite widespread options, customers’ trust in their banks continues to dwindle. What do you think banks need to do differently?
A.	Although Union Bank is well known for its customer service and customer relationship management we feel as if we need to work on continuing to talk to our customers in terms that they understand. We want to engage our customers by recognizing who they are, when they do business with us, what channels they come through and perhaps give them a view to the status of their requests, whatever they are. The idea is to deliver service that is both precise and friendly, and to offer something beyond problem solving in terms of solutions, perhaps creating a solution out of a problem.
Q.	Given the challenges of growing customer engagement, or the lack of it how in your opinion can the online channels be positively leveraged to redefine customer experience?
A.	Our point of view is that we want to create our channels so that customers have a similar experience whether they are on the online experience, if they are in the branch, or in a direct banking centre. So the online experience can be leveraged through the use of tools so that customers can get the sort of advice they might be getting in a conversation with a relationship manager. We also think it is important that our online reach extends into the other channels as well, so that if someone starts to do business with us online and then for some reason wants to switch to another channel, then they can easily do that and our employees can pick up where the online channel left off.
Q.	We are also increasingly seeing a new category of customers emerge who strongly believe in self service. What role do you see for interactive online tools in empowering such customers to make informed decisions?
A.	Well, I think there is tremendous opportunity and our vision has to do with offering our customers a dashboard, if you will. One , that not only gives them the 360 degree view into what they are doing with the bank, but other tools to help them make decisions. We see a world where potentially we could have online communities, so that professionals such as doctors or lawyers could have a section of their screen devoted to their needs, whereas if we were serving an affluent segment they could have tools that would help them project what their interest income might be and make comparisons between different product choices or different risk profiles in terms of the type of products that they might choose. We also think that customers seeking self service are really a good fit for Union Bank because what we intend to do is offer as much straight through processing as possible for those who elect to self serve, so that folks engaged in Internet banking get a truly immediate response to whatever their needs might be.
Q.	All these new initiatives that you talked about… how soon are your customers going to see them actually happen in the market place?
A.	Well, depending on what we are talking about, somewhere in the next 24 months or so. These initiatives are currently on our roadmap. We currently enable a lot of customer self service on the web and we have a certain amount of straight through processing of requests. Our Internet road map includes things like click to chat, smart FAQs, intuitive tools, identification of the next most likely product for our customers, so these are things that we have been planning to do, and we are hoping to begin using some of the technology and capabilities out of our IBP project to make them happen more quickly and perhaps more efficiently.
Q.	Despite such huge investments in online channels over the last couple of years, branch continues to be a preferred channel for a majority of customers. What impact in your opinion can innovations like direct banking have in transforming the off branch experience?
A.	The direct banking channel can be utilized successfully when you make it an experience that’s similar to what might happen at the branch and you have it staffed with employees with the knowledge base that enable them to be truly helpful to the customer. Again, changing the direct banking centre from a place where they simply answer a question or solve a problem into a center with solution providers is key. For instance, we currently have a small group that does outbound calling to our small business customers and they also receive in-coming calls. A prospective customer can begin an account opening process, they can answer any questions that someone might have about a loan and if the customer elects to move into the branch channel from starting in the direct banking channel they are perfectly able to do that, but if they want to stay in the direct banking channel all the way through they can. They don’t have to be sent to the branch, if they are the type that prefer not to go there.
Q.	Do you primarily see direct banking playing a complimentary role to the branch or do you ever see it becoming a standalone effective channel?
A.	I think it is already a standalone effective channel for certain market segments that prefer to do business that way and certainly, as the footprint of our bank expands into larger geographies, we will be more dependent on things like the Internet channel and the direct banking centric channels, while getting less reliant on what we call bricks and mortar, which are the branch buildings and sales centers, so that these sales centers can be replicated virtually in these other channels.
Q.	We are not going to see branches disappearing anytime soon?
A.	I don’t think so.
Q.	Talking about customer experience again, it is as much about the customer as it is about the relationship manager. What role do you see online tools playing in empowering the relationship manager to impact and serve their customers better?
A.	Well, there are a couple of ways. Of course, with the information that the relationship manager has about what his customer is doing on the web and the kind of business that they are transacting, they can be more helpful to the customer, but when I think about the sales process and how these tools might ultimately impact us I have a vision that might include the customer doing some research about a potential investment or a potential deposit account or a loan and then asking a question about it. Then the aspect of the relationship manager, being able to understand what those questions are. Of course, you have to be careful. You don’t want your customers to feel like you are looking over their shoulder. You could also take the online experience a step further perhaps. As a relationship manager, on a sales call and meeting with a valuable customer, if the Internet had additional tools that one could use, perhaps one could turn his screen to the customer and show them the modeling or the pros and cons or the cost benefit analysis of what it is that is being proposed. The next step to that, I believe, could be simply initiating the sale at that point rather than then saying to the customer “Let’s see if we can take this back to the office and get it set up for you.” It would be great to see the customer enroll right there and have the product available for them later that day or the next morning. So, I think Internet tools that the customer uses cannot only help them make decisions but can help the relationship manager be more useful to them.
Q.	Let’s talk about cost optimization. It is today critical for the industry, and banks are looking up to technology to drive those operational efficiencies. What are the thrust areas for Union Bank especially with respect to online investments in this space?
A.	We have conducted our own research and we are clear that the Internet is a key resource in driving operational efficiency. It is an integral part of our channel strategy. Online sales and service through smart FAQs, the click to chat or click to call, that a lot of other industries have used successfully, is what we plan to invest in. We want expanded online applications for things such as account opening and mortgage loans that will capitalize on the tools that we have in our roadmap and we are going to spend some time simplifying our navigation to make it easier for our customers to find their way around. Ultimately we also want to drive more traffic to our website so that we are not solely dependent on other marketing channels to bring them to us. We want to look at how our bank appears in a list of choices that our customers get when they use a search engine and our overall goal is to provide such a superior online experience that our prospects will convert into customers. We think that we can lower the costs of acquisition of customers and at the same time, if we build the appropriate straight through processing that’s tied to these activities, we can create true efficiencies in our operations and really manage our cost in terms of both acquiring, on-boarding and managing those customers going forward.

Hope Mitchem,
Senior Vice President,
Union Bank.

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