In this interview, Matt Lehman discusses the role of digital channels in supporting KeyBank’s relationship banking strategy. Lehman has been with KeyBank since 2012 and involved in online financial services for the past 14 years of his career. Cleveland-based KeyBank is a regional bank with assets of approximately $91 billion and 1,044 full-service branches in 12 states.
KeyBank is positioning itself in the marketplace as a relationship bank. What goals has Key outlined in its positioning, and how is Key addressing those goals?
Lehman: We view relationship banking as “responsible banking” – understanding our clients’ financial goals and developing solutions to help them meet those goals. It’s also about giving our clients the opportunity to choose channels and interactions that best suit their needs at any point in time. We strive to deliver consistently high-quality and operationally sound service across all channels and to minimize channel conflict.
We use the term “focused forward” to describe our broader corporate strategy. In the past few years, the corporation focused on rationalizing our cost structure and improving efficiency. But now we’ve shifted to being laser focused on those areas where we can drive revenue. While we can still gain further efficiencies, our growth will come through focused initiatives, including building relationships through the digital channel.
How does relationship banking manifest itself within the Key community bank group, and how do Key’s digital banking initiatives support that?
Lehman: Historically, our personal bankers sat down with clients and held a relationship review with them at the beginning of each year to understand their goals and discuss how their various financial relationships – not just their relationship with Key – can help them meet their goals. We are beginning to bring that same kind of experience into the digital age. We’re looking at how we can we use the data we have about clients to provide them with more tailored plans and solutions. How can we use digital communications to make interactions more seamless and convenient for clients? Are there opportunities to show clients how to use digital channels during the relationship review?
Our recently launched account origination application represents another example of how we’re enabling clients to open an account easily in whatever channel works best for them regardless of how we’re organized. The application is responsively designed to work seamlessly from tablet to handheld to desktop device. A future step will be to put those seamless experiences in the hands of personal bankers and call center associates.
We aim to leverage our technology investment across channels. A key criterion of assessing any technology investment is whether the solution is designed for multi-channel application.
What are the primary business goals of Key’s digital banking initiatives, and how do you track them?
Lehman: Broadly, we look at three pillars – digital acquisition, client engagement and operational excellence. The recent rebuild of the account origination product area is a big step toward driving more growth through digital channels.
We measure client engagement in multiple ways to determine how active our clients are with us digitally – how many are using our core services and how often, for example. Then we examine how digital engagement relates to outcomes such as retention and products per household.
In measuring operational excellence, we determine if we are building and maintaining the digital platforms that at least meet, and exceed, clients’ expectations. In addition to internal measures, we also use objective third-party resources to determine how well we are performing.
Key has formed an Analytics Center of Excellence. How is the digital group using analytics in its initiatives?
Lehman: What’s great about digital is there is so much data derived – every click, every page view, every outcome. While we continue to build a repository around digital activity, the challenge is not in collecting an adequate volume of data – it’s piecing the information together analytically in a thoughtful and purposeful way.
It’s not just about features and functionality. It’s marrying feature and functionality with client data to deliver a truly differentiated experience.
As an example, we collect a huge amount of data around alerts, but we need to ensure that clients are receiving their alerts in the way that’s optimal for them and they can easily update their preferences. Making alerts accessible to clients in the way they want to receive them reinforces our position of responsible banking.
Key, like a number of banks, is looking at branch consolidation where it makes sense. How can banks leverage their digital banking services to turn branch consolidation into a positive experience for affected clients?
Lehman: Bankers should gain a thorough understanding of clients’ digital usage well before the consolidation takes place. We look at not only how many people are logged in and the digital products they use but also the devices they are using to give us a good technographic view of clients using the branch. Leading up to the consolidation and even afterward, we try to move those clients up the digital engagement ladder and measure progress each step of the way.
Technology is quickly changing the way clients interact with bankers. Especially with the advent of tablets, the notion that an older demographic isn’t digitally inclined is going out the window. We strive to tell a cohesive story in our communications and ensure our branch associates are comfortable about articulating the benefits of the digital channel.
In 2012, Key became a self-issuer of credit cards. Is this important within the context of mobile commerce?
Lehman: We think there is a huge opportunity in this space to offer clients different ways to pay for goods and services beyond the traditional credit card. The ability to issue cards and having strong network partners are table stakes to get in the game, but ultimately, winning will depend upon delivering value to clients in order to drive alternative payment methods. We are thinking about how to integrate the mobile payment into other components of the Key experience such as our Relationship Rewards program, which is one of the best in the industry.
We feel that Key specifically and banks in general are in a great place to participate in mobile payments as the capability of accepting them at the point of sale becomes widespread. We have a very strong position of trust with our clients. Protecting that trust is first and foremost, but we can leverage that position to lead the way in mobile wallet and mobile payments. Not only are many of our retail clients currently using mobile apps, but we also have a tremendous number of small business and retail business relationships. Our strong merchant services offering provides us with a venue to help our business clients understand the benefits of accepting mobile payments. The beauty of our model is that we can influence both sides of the equation – consumers and businesses – and deliver great value to both.
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