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Banks’ digital transformation goes beyond their IT stack

“If you’re not changing more on the inside than the outside world is, then you’re falling behind.”

Aug 18, 2023 / Digital Banking

Financial institutions are modernizing operations across all functions to be more competitive—not only via technology, but also by adjusting the way employees work. 

Such is the case at the $899 million-asset Jonestown Bank & Trust in Jonestown, Pennsylvania, says Troy A. Peters, president and CEO. “Our bank has been around for 150 years, but we’re still building it every single day,” Peters says. “If you’re not changing more on the inside than the outside world is, then you’re falling behind.” 

The bank has stepped up its digital offerings not only for retail customers but also business customers via enhanced cash management tools and payment capabilities, says COO Edward Martel. The digital team increased from 1.5 to four full-time positions, now staffed with more knowledgeable employees who are able to provide internal and external customer support for the new services. “And they are not just reactive—they are also helping to build and maintain products, and in some cases they’re actually working directly with clients to support their needs,” he says, adding that the call center is also staffed with employees trained to provide tech support for such things as online banking, digital wallets, debit cards or making Zelle payments. 

Outside of technology, the bank enhanced its annual event to celebrate exceptional bankers by including an “efficiencies together” session, where everyone shared ways to more effectively accomplish tasks and suggestions on how the bank could make their jobs better. 

Branch makeup has also evolved: no more employing universal bankers to handle both transactions and “relationship building” via opening accounts or resolving issues, says Carrie Ehrgood, branch administration officer. “We’re now looking for more specialized bankers to staff the branches—people who can troubleshoot digital banking or can open and maintain a complex business account,” Ehrgood says. “This allows those higher-level bankers to become experts in their roles and heightens the client experience.” 

The $153 billion-asset Regions Bank in Birmingham, Alabama continues to evolve its treasury management offerings to help meet the needs of its clients “today and into the future,” says Bryan Ford, head of treasury management. 

“There are now different solutions available for the sending of funds and payments and the receipt of funds and the collection of payments, and we continue to invest in solutions that enable our clients to be competitive in their business,” Ford says. 

The bank took its primary solution, iTreasury, from on-premises to one that is hosted by a third-party vendor that allows Regions to make continuous upgrades with new features and functionalities, he says. For example, while clients for years have had the ability to receive real-time payments, recent enhancements now allow clients to also send them.  

Clients can enable alerts within iTreasury, such as when users have been added to the platform, when transactions have been initiated that require secondary approval, or when incoming transactions have been posted to the account, says Greg Miles, head of treasury management product and development team. 

Separately, Regions has transformed its lockbox solution by leveraging AI to provide research, archive and transaction perfection capabilities to create efficiencies for clients to speed up their cash flow recognition, Ford says. This also improves the bank’s employee experience by not having to do as much manual processing as they did previously. 

Regions also has a growing set of clients who want to interact with their enterprise resource planning (ERP) platform for accounts payable, accounts receivable and treasury management, as they do for other operations like HR and managing inventory, Miles says. These clients would rather access their banking information within the content of their ERP, and they can now do that via open banking APIs that connect Regions’ platform to another third-party vendor that provides connectivity to various ERP platforms. 

“We also have to consider the security, stability and reliability of the connections at all points in the process—the connection between Regions and another third-party vendor providing ERP translation capabilities, the connection with that vendor and the ERP platforms,” he says. “The effect of this is Regions is present as an option within the context of the ERP platforms alongside other banking institutions. That is the ‘open banking’ aspect of APIs that provide connectivity to the ERP platforms.” 

Many financial institutions overcome the limitations of their existing infrastructure and operational processes by partnering with fintechs to provide capabilities around advice, accelerated product development and automation for credit decisioning. 

Such partnerships have been enabled by the “plug and play” nature of APIs and the evolution of the banks’ infrastructure, which in many cases is moving towards a technology stack that can more readily engage with APIs, says Richard Rosenthal, a principal at Deloitte & Touche LLP, based in New York City. 

“This is occurring in the backdrop of increasing regulatory focus on bank/fintech partnerships—with recently finalized third-party risk management regulation,” Rosenthal says. 

Much discussion is also centering around modernizing the banker desktop, extending from a focus on digital customer experiences to a range of specialized capabilities that a financial institution can leverage when creating their banking products. The $1.8 billion-asset IncredibleBank in Wausau, Wisconsin has this approach to modernizing internal operations, says Kathy Strasser, COO and CIO: “We will do tasks within our operations areas manually until it becomes too painful or we need to put additional resources behind it. By doing this, it allows us to really understand the experience for our employees, and most importantly for our customers.” 

Sometimes that means totally overhauling functions, like implementing digital checking account opening and onboarding chat tools, or automating the back-office operations for acquiring, underwriting and closing business loans, Strasser says. But it also means regularly finding ways to remove at least some manual steps by leveraging workflow tools already in place. 

IncredibleBank is also now partnering with third parties that will access its payment rails or banking 

technology to offer additional services. “We call this integrated banking, which some may call banking-as-a-service,” she says. “We are excited about the potential opportunities and are taking the necessary steps to think through all of the details and requirements to bring this to fruition.” 

We offer actionable insights on other digital evolution topics that can benefit banking institutions in the BAI Executive Report, “Keeping up with banking’s digital evolution.” 

Katie Kuehner-Hebert is a BAI contributing writer.