Banking on Digital Growth
Banking on Digital Growth

Episode · 1 year ago

56) #ExponentialInsights: How Payments UX Can Catch Up to Digital Transformation w/ Michael Bank & Seth Fenster

ABOUT THIS EPISODE

When’s the last time you went into a bank to pay bills? 

Even if that’s your preferred method of payment, the pandemic has probably brought it to a screeching halt. 

In this Exponential Insights episode of Banking On Digital Growth, James Robert Lay chats with Blip co-founders, Michael Bank and Seth Fenster, about improving payments UX. They also discuss…  

  • How accelerated digital transformation has affected financial institutions
  • Ways banks can appeal to the digitally native consumer
  • How Blip helps financial institutions improve customer experiences 

You can find this interview, and many more, by subscribing to Banking on Digital Growth on Apple Podcasts, on Spotify, or here.

...if I'm budgeting off of what I've already done, it's just not as helpful to me, you know, on a go forward basis. And so when we're taking a forward look at users upcoming bills, that's really where we're able to provide, You know, more proactive financial advice around making positive changes. Mhm. Mhm. You're listening to Banking on Digital Growth with James Robert Lay, a podcast that empowers financial brand marketing, sales and leadership teams to maximize their digital growth potential by generating 10 times more loans and deposits. Today's episode is part of the exponential insight Siri's, where James Robert interviews the industry's top marketing sales, and Fintech leaders sharing practical wisdom toe exponentially elevate you and your team. Let's get into the show. Greetings in Hello, I am James Robert Ley and welcome to the 56 episodes of the Banking on Digital Growth podcast. Today's episode is part of the exponential insight, Siri's and I'm Excited to welcome Michael Bank and Seth Fenster to the show Mike on Seth or co founders of Blip, and they're doing great work to empower positive financial health for people. Welcome to the show, gentlemen. You know this is gonna be fun. This is This is this is the first time that I've had two people on this show at once. And so I know you guys gonna add a lot to the conversation now that we're 55 episodes in. And when we look back and we reflect on this great century, that will call 2020. And we were looking ahead now to 2021. I just want to start the dialogue and the discussion around. What are you most energized about?...

Whether that be personally or professionally? Sure. Yeah, certainly start off on that question. And so no way, really, you know, from our perspective with our company blip way really believe that consumers can't effectively save, spend or invest without first taking care of their bills, and so that that's kind of those a lot towards the larger purpose, you know, on what we're focusing on. And so the mission around blip is really to empower positive financial health, as you alluded to in your introduction there. And so we really are doing what we dio because we want Thio to really address the lack of help and the lack of education around financial management that has has really affected us. And so that's what we're excited about the future and so literally helps look at finances and more of, ah, forward or or an upcoming way rather than looking at historical trends. And so that's really you know, where we think there's gonna be additional value. Thio help people with their financial, health and financial wellness. I really like that perspective. Blip is future focus versus being routed. When we traditionally think about financial services, it's historically focus or reviewing past transactions. And that's very hard because it's it's a lot of like when I think About and coach financial brand leaders. You know, it's so easy to get stuck in the present moment making decisions that were informed by the past where if we look in this post covert world, particularly from financial services, how quickly things are changing and evolving, we look like even from a consumer standpoint, financial stress. Those levels air out the roof right now, so I like getting ahead of the problem before the problem even exist. Is that a fair summary of the perspective of Blip? Yeah, absolutely. No, no. I was just gonna say for sure and I think...

...again like what excites me, and this has been a tough year for everyone. I think it goes without saying. But at the same time, we've seen so many changes happening so much quicker than we anticipated like that. The timelines of digital adoption really obviously in financial services, but just across the board, in every industry, or just accelerated by even decades. And so I'm personally really invigorated about that because we're kind of emerging at this time where it's really everyone is just like, How do we make this work now? Digitally, It's just like a completely different world right now. And so again, like Mike was saying, it's really about bringing that digital point of view to the forward looking aspects of financial management. And and James you alerted to it before everything has really been about historical spending and prompting your user with the notification that they spent, you know, x amount of dollars on God knows what in the in the last month or the last year, and that could be really helpful. But it really just seems more like budgeting and just time and time again, people have shown they don't really care about budgeting, but they do care about the bills they have do the next month and the ones after that. And so that's really where we're focusing. I love that perspective, Seth. You know, let's talk about that. But why is budgeting painful? Why is budgeting hard? I mean, you know, it's one of those things. I think back and and to your point that the changes that we've seen in digital I've been in the space almost 20 years now. And I've never seen this type of acceleration, and it is, it's It's very exciting, but it can also be very scary for those as well who have made her career. But I want to talk specifically about budgeting and the challenges of budgeting for people. Why is it painful? I just think people don't Maybe for one I think, is that maybe as a culture and the society, we tend to be very spending consumption based market in the U. S. And e think, if you really look at maybe what you should be spending versus what you should be spending it on. Maybe I would say it's probably that people don't want to know that they're doing something that maybe isn't in their best interests and that they kind of...

...don't they don't really care about what they spent on. They just kind of care about where they're going and they don't wanna go through the whole process of saying I have this much coming in and I could spend it on this this and that And I think the other layer is like It's not It's not really easy to do that. And so maybe it's maybe a non ideal situation. Ah, budget is great, but I think by calling it a budget, you think about sitting down and like in the old, older way of balancing a checkbook and running through your all your statements. And no one wants to do that. And I think if you kind of said to them, You know, this is automated system that really budgets for you because, in essence, your budget is your bills. They would say, This is great, like you just kind of can't call it budgeting. You have to kind of call it managing your finances. But it's it's kind of one of the same. Yeah, I would agree with that point just to echo it. I think that this is again what James Robert was bringing up previously, but ah, lot of it around the historical trends. You know, if if I'm budgeting off of what I've already done, it's just not as helpful to me, you know, on a go forward basis. And so when we're taking a forward look at users upcoming bills, that's really where we're able to provide, You know, more proactive financial advice around making positive changes rather than retroactively saying, Oh, I messed that up or I should have done this instead of that. It's kind of catching it proactively and being able to help people make smarter decisions before that actually made those decisions. You know, the way that I hear you guys distilling this, I think a lot about health care and this, like the trip to the doctor. No one wants to go to the doctor because it's painful and, you know it takes time. Even even there was a report by Viacom that specific and talking about financial services. This was a couple of years ago that said people would rather go to the dentist than to go visit their financial...

...institution and that's that's a pretty painful statement right there. But I think to healthcare is starting to transform the way that their position themselves, because they're talking about preventative medicine, getting ahead of the problems before the problems even exists. And so when we look at this from the lens of financial services, that's why I appreciate the work that you're doing and, you know, budgets. They're hard, they're scary. They're painful. Let's talk about transforming that perspective through the work that you're doing at Blip. Yeah, I mean way. Think a lot about this topic because we're really a digital organization from the ground up. But we're working a lot with companies that do digital, and I think that that's an important you know. We think that's important distinction. And so it's really about leading the organization to the problem. And I think that the healthcare analogy is a good analogy and, you know, way have seen a lot of changes around digital, especially in the banking space, like you said in a post covert world. But it's really taken a catalyst, like like a co vid for for a lot of these institutions, Thio to take more of like an introspective look at their technology. But I think that they really are actively thinking about ways toe improve their experiences for customers just in the same way that, like you said in the health care side, they're you know, they're actively trying to do that as well. Well, let's talk about that. Experiences. Experiences are particularly when we look at digital experiences. Digital experiences are nothing more than well defined systems and processes that have been defined, applied and optimized over a period of time, resulting in one of two things. A positive emotion or a negative emotion. And when we look at the systems and processes traditionally...

...of bill pay that incumbent financial brand bank credit near might bring to market, what are some of the challenges that those traditional systems might present either internally for the financial brand but also externally for the end user or the consumer? Yeah, I would say first and foremost, I mean, these legacy bill pay systems were really expensive, and they primarily run on a CH transfers and writing checks on the customer's behalf, and so that's an expensive way to pay a bill for the actual financial brand itself. But it's also doesn't it doesn't really gel with the more digitally native consumer who's expecting, you know, like instant notification that their payment was made or that they want a flexible option to use a card. You know, cards, debit and credit are very popular. And so right now that whole system of how you really go on pay a bill, even in this situation where you can kind of see it digitally, you still have to go and manually submit the payment either through your bank's bill pay, which we know isn't really getting a ton of use. Or, you know, just managing that. I think it's on average of seven bills a month per per person. So you gotta, you know, go to seven different websites and seven different times during your busy life and each month and make those payments like it's a lot of things fall through the cracks, which, by the way, those websites are not always mobile. Optimized that I'm calling out my city municipality with their water bill. So now that's definitely that's definitely true. But if you think about it like Seth just mentioned, you know, the average number of bills is seven per month. And what's interesting is that about 75% of those bills are actually paid on on biller websites. And, like you just said, most of these builder websites are really not optimized to be user friendly. It takes me like, 10 minutes just to pay my utility bill. And this is, you know, in its current form, what people are...

...considering the better approach than using the traditional bank will pay model. So that's where you know, you know, of the 15 billion bills that are being made, you know, annually that this is the best approach people are taking, and it's still subpar at best. And so that's where again, if we can figure out a way, which is what we're trying to accomplish, obviously with Flip to really improve that experience from the ground up, it's really gonna gonna take everything to the next level, and it's really going toe. Enable the financial institutions toe bring customers back to the organization because they're predominantly not paying bills through the banks and credit unions currently, And if we get people to come back and to pay through the bank to pay through their credit union that reinforces once again that positive relationship because you're simplifying the complexities of my life. You're helping me to stop losing this valuable time and to have this annoying frustration because as a consumer, my expectation is being set and really met by gaffe a Google Amazon, Facebook, apple and even on the payments front. You know, I think about Zell has done, like, you know, or even Venmo. It's that simplicity of being able t to move money from a to B peer to peer person to person, even for me with with With four kids. You know, it's a requirement that my baby sitters have either a Zell or Venmo account so that I don't have to come home at midnight and have to stop by some shady A T M and pull out some cash. I'd rather just pay them on the way home and life is good and we go on. So no, I really get where you're coming from. Yeah, E O. And the really the It's All About Opportunity and Mike Mike mentioned. There's 15.4 billion bills paid every year, and that's about 488 a second and that each one of those is a unique opportunity for a financial brand to make an impact with their customer. Because we talk a lot internally about ah, world where you...

...know, your bank says to you like we see that you have this credit card bill and it happens to be at a different financial institution. And you know, your interest rates really high on that and you've been carrying a balance. And why don't you think about doing a balance transfer and bringing that into our you know, our institution and it'll save you over time and just showing, you know, in a simple mobile act like how much in the dollar amount of savings would be and just that is so powerful and like that's a scenario where one the customer is benefiting from saving money for sure. But it's also a touch point with the institution who they have some relationship with, but not the main one at this time. And that institution is demonstrating to that customer that they have their back, even though they're not currently their customer for this product. But they're still looking out for them, And so, yeah, it's maybe a little bit of a cross sale, but it's really more of a like I'm advocating for you and that's missing. Yes, and I would actually push back on the idea that that's across cell. That's actually a methodology that I teach called helping First. It's been even methodologies demontre help First cell Second because what you're doing is you're identifying where people are losing money and people are more likely to take action to avoid a loss and change their behavior to modify their behavior. Then they are to achieve again. So if you can, I position that say, Hey, we've identified how you can stop losing you know, $1000 in this high interest credit card. You know, click here. And so it really is that that mantra of help. First cell second being applied through the context of digital. And I would assume that this would work as well not only just for credit card but any other opportunities. Whether that be auto Morgan, whatever those those kind of reoccurring payments are. Is that Is that correct? Yes, that's it. I mean, it could it could even it could even be expanded beyond just the hanging products as well. You know, if if you're fed up with your cable provider as an example, there is no reason again because of the data we...

...have on Billy information that again we couldn't help customers, you know, proactively Look at what? What other offers air available to them to be able to get to your point, Save that money. If, if I could see, I could see just the amazing amount of opportunity to provide that financial education, let's say, even if it comes back to the whole purpose of what you guys were talking, it's empowerment because I'm empowering you to make even better decisions, decisions that you might not even know are available or you might not even be aware. So you're providing clarity into the unknown opportunities for the consumer I want. I wanna see dig into another common pain point, cause I'm just getting excited, as you know, speaking from my lens of of being a consumer, let's talk about those annoying re occurring transactions, you know, maybe 10, 12 bucks a month. We live in a subscription economy, you know, I've got my YouTube subscription, my Spotify subscription, my Netflix subscription, which by the way we canceled that a couple of months ago because we were I was, like, just done. We're done with Netflix. And it was for me personally. It was a fact of way too much content, way too many options, way too much choice to where I found that if we sat down to watch something, it was the paradox of choice applied. I really My wife and I were like, What are we gonna watch? I don't know. What do you wanna watch? And it was like, this whole. I was like, You know what? We're not getting any figure out what to watch. Terrible mention. They've suddenly continue toe up that subscription for you. Yeah, I'm really glad you brought up because another amazingly exciting opportunity with all of this is that when Netflix decides to raise the rates when your cable company raises your rates, you're out of luck. There's nothing. There's nothing you could do. You could go cancel, but it means nothing to them. But if everyone is able to collectively say we don't want this and we're not just gonna complain on Twitter, we're all going to cancel at once. 100,000 cancelations coming from one platform. It's...

...aggregating these bills might get a discount collectively. And so there's some layers of not just financial advice, but also mawr empowerment beyond just the advice of individual but kind of toe act as a collective. And I think that's extremely exciting. Yeah, and and so you're providing that once again that knowledge, that clarity, that awareness and they are the annoying pain points that we might not. It might be more painful. Just stop that behavior to like, you know, And I could think of some subscriptions that I've had over the years where it's like, Oh, here's that bill again. It Z only like 12 bucks a month. I'm just gonna let it ride and I'll come back next month. There it is again, and because it's more work for me to go out and cancel that subscription, then a t least in my mind thio more work to where If you're bringing that awareness to the fold, it's Wow, This is really it's really transformative because that 12 bucks, I mean, that's 100 and $44 of the course of year, you know, that's and then they add up. They start to multiply, and you probably don't notice you have that subscription until they've charged your card for that month and good luck trying to get them to give you that money back. Sure, you can cancel for the next month, but they're not gonna know before the charge went through. They're not going to give it back exactly. So we've already identified two major opportunities from the consumer standpoint, an opportunity from the financial brand toe. Just keep people coming back. And then, and and really, a second opportunity as well, is to get that that help for cell secret providing. Hey, here's a recommendation that could help you stop losing money. Just something to think about something. Consider what other opportunities are available for either the financial brands or the consumer for financial brands to bring to consumers. With this, it really comes down to kind of is all really related to the to the two major ones because those are really the overarching themes of like, how do we kind of inject proactive elements into your financial life? I would say it Z really just more broadly like what?...

What can we do when you're not really sure how to do it yourself, and how do we facilitate You're doing it so that doesn't really feel like you're doing anything to make your life better. It's like, How do we let you manage your finances in a way that's like a controlled autopilot? Oh, I think I think all of the best products platforms APS that we use feel like second nature. They don't feel like any more work. I love the analogy of just autopilot, you know, because it does make life more simple. It does make life feel even better. So let's say Let's play Let's role play with for a second. I'm a financial brand leader. I'm a CEO. I'm a CEO. I'm a chief digital officer. What are some of the roadblocks that you might be bumping up against right now? And how are you helping to educate and empower those leaders to overcome some what I would just call limiting beliefs? Or there's they're stuck either in the circle of chaos that I write about in my book or what I'm really starting to. And this is for my next book, banking on change but stuck in what I call the Cave of complacency. What are ways that you can educate and empower financial brand leaders that, hey, there's an even better way to empower and educate your account holders by just this Looking at this one simple behavior modification with Bill pay. Yeah, it's a great question, and it really comes down to educating these financial brand leaders on how they can go and do this. And when you start talking to them about the use cases and the potential of the getting access to this type of data and these customer experiences like they love it like there's no reason not to love it. But it's a challenge, because by design, a lot of these institutions are slow moving, and a lot of them are dealing with technology vendors that, you know they don't have a lot of leverage over. And so what we've really...

...done internally is try and build a system that, like an infrastructure layer but also in a kind of like out of the box customer experience ready software that they can use to really make. It is easy as possible to offer this either, you know, if they want to spin up a kind of like a bill pay AP separately from their core, you know, digital banking stack or if they wanted more deeply integrated. So it's really our job is toe, not just tell them, but show them that they actually can do it. And I think it kind of goes back to our point about where the digital adoption is accelerated. Thes air conversations that would probably have gone a lot differently even a year ago. And so it's really kind of Maura about, like, How do we take this and get it toe work now and and how fast and what's involved in doing it. And so really, it comes down to not just educating them on the opportunity, but really demonstrating how easy it can be toe to make it work and make it happen. That's a great point. So let's talk about value creation. You know, you've you've been in the market. You've got some validation. What has been some of the feedback or the value that you've created for the end user for the consumer? Yeah, it's a it's a good question. So we're currently the process of doing a beta rollout, and so we've been able to collect a lot of valuable feedback from the users that are actually testing out product and a lot of the feedback that we're getting, you know, things that we obviously thought that we would get. But obviously, then we're getting valuable feedback that was thought about in ways to use the product will consume the product that not necessarily even the way that we initially intended it. And so a lot of the positive feedback we're getting is around the aggregated nature of the product being able to pull all your billers in tow. One convenient location has been really important toe to our end users because, like we were talking about before, they're typically going out to each of the biller websites individually. So that's been really, really invaluable feedback to...

...us on then. Another component of the feedback that we have been receiving from from the beta test beyond just the user experience of aggregation, is largely around the on boarding flow because that's really important as well. Typically the banks and credit unions. If they're using ah bill pay provider, the user needs thio, add their card number, their pay address information and and even finding like what is my account number like is even a difficult task. And so you just give up on it. And so were quickly and easily able to get people set up with all the billers were able. Thio, look at your transaction history to recommend billers that should be added. And so again, it's kind of this proactive nature that people are really, you know, really enjoying and getting us great feedback about from what we have so far. Having done at this point well over 1000 different digital secret shopping studies for financial brands, I gotta tell you that pain point of on boarding of having to go and find those particularly like if if if you have a new account holder and I'm talking like on boarding to to a financial brand. So a bank or credit acquires a new deposit account holder and they're wanting to, you know, help bring all of the accounts over to new F I. Well, there's a lot of friction tied to that experience even now, because I have to go and find all of those statements. And so one of the things recommendations that I made over the years for for those in our program is like, Let's just put together some type of a concierge service to where I show up and I dump you know, my 10 12 different statements that I get and then you can put all that do all that work for me because it's it's work. And I love how you're addressing that team once again removes the friction to the very common pain points in people's lives. What we also one of the other...

...really more powerful thing aspects of the feedback we've gotten was around the idea that some some of the beta testers weren't entirely sure why they were seeing a bunch of different balances for their, like their credit card bill, that they lengthen the app and and one in particular reached out toe May. And you know, they asked why, why am I like? I think this might be wrong doesn't line up with what I'm seeing in like the bank's app, and we explain like we're actually showing you the current balance, the minimum balance and statement balance. And that was something that this particular Beta tester hadn't really encountered before and said even texted me. It was like I just I just didn't realize that it worked like that. And so they were just paying their like, their current balance every month, which was, you know, not bad behavior with a credit card. But, you know, that's extra that they could have, you know, saved it for something else for the same month. And so it was like that that educational aspect of kind of seeing the bills like this is actually really helpful and really powerful. And so that's been a really promising feedback as well. Yeah, but one thing I would just add on to that point again around providing data and kind of just a clean and simple consumable format that gives people the information that they really need is we've seen a lot of people will just go into, you know, not to name any specific bank, but they'll go into a bank, app or website and look at what their current checking account balances and think that that's kind of like they're safe to spend them out. This is the money that I've got in my account. So I'm good to go and, you know, just as like an example, if somebody has $400 in the checking account. When they go out and buy a TV for for $300 they think, Great. I've got $100 left over where they're not actually thinking about again. That proactive, upcoming nature of bills they have throughout the rest of the month and very quickly. Then by the end of the month they're actually in the red. And so we, you know, visually show what your current balances but then show what those upcoming bills are dio and then we'll basically minus those two numbers to give you almost a leftover safe to...

...spend amount. And so we've got a lot of good feedback on people actually looking at that number, as opposed to the current balance number, in gaining a better understanding of their finances. So you know the way that you're describing that I almost see Blip is being the financial crystal ball to foresee the future once again. Now we've come full circle with this conversation. What a great one. It has been Thio help! People are to help prevent people from getting into trouble before that trouble presents itself. As as we look ahead, Thio Ah, whole new year full of opportunity in 2021. What is one piece of advice, or what does one recommendation that you might have for financial brand leaders in the banking space or in the credit in space, does that feel free? Obviously, jump in here. But you know, I would say, really embrace the change. And I think that again covert is obviously pandemic and has been the terrible for many people. But I think that it is has again, like we talked about the very beginning of this conversation kind of opened the eyes of people and institutions to say, Well, if people are gonna be coming into our branch like, what are we actually do? And so it's kind of taking that introspective look, which I think you know. So it's the second half, or even even the first half of 2020 people have started doing but roll with the punches of changes that are coming. And don't be afraid Thio to make these changes because consumers are experiencing a lot of change with other aspects of their lives. Being ableto quickly by something on the Internet and it arrived several hours later is kind of the experience that people have come to expect from other aspects of their lives or even talking about like the Netflix is where the content is just right there. And so people have come to expect the same from the banking experience, and it's just not really there yet. So I would say Don't be afraid to make these changes. They might seem kind of scary, but it's...

...something that is moving the ball forward from from the digital perspective and something that people really want and need. Yeah, take. You must be greater than high I Q. Like a person's adaptability quotient must be greater than a person's intelligence in this world. Because to that point, what you guys are providing an individual human being would never be able to do to crunch all of this data and then to provide recommendations. But you're empowering the financial brand to further empower people. Final thoughts from you, Seth. Yeah, I would just add I echo everything like said, but I would just add that it would be very helpful, Thio not stop thinking that you can't do something just because historically it was challenging or difficult, and that might be you know, it's it's hard to to do financial services digitally, and maybe there are some aspects that that's true. But for the most part we can make it happen. And we'll work with any financial brand that you know wants to do this. And you know, every every institution is unique. Every situation is unique, but we're working on a platform, really that could be used by by any institution, any financial brand, because we know the power of what this unlocks and ultimately at the end of the day, like it's about making it happen and actually executing it so that all of those bills are actually turned into the opportunities that we know they are. And it really just kind of starts with the mind set of like we could do this at our institution, can change it should change, and we're going to make it happen. And as long as you have that mindset, companies like Blip, we're gonna work with you and we're gonna make it happen. Yes, when you put the transformation of people of account holders over the commoditized transaction of dollars and cents, that's when real transformation happens and and what better time than now to really make that commitment because money is stressful. That stress is taking a toll on people's health, their relationships, their overall sense of well being. And the opportunity that I see in this post covered world is for financial brands to commit to guide people beyond that financial stress towards a bigger, better and brighter...

...future. And I appreciate the the important and meaningful work that you guys that you to Michael and Seth are doing at Blip. It's been such a great conversation. If anyone's listening and they have follow up questions, they want to connect, they want to continue the conversation with you. What's the best way for them to reach out and say hello? Twitter is great. Either add Blip labs on Twitter or set T J f for May weaken. Set up an email from there any you know, phone call. Anything, always happy to chat were across all the social platforms and our our website. Try blip dot com is welcome. You could drop a note in there. We'll find you Excellent, Michael said. Thanks for joining me on another episode of banking on digital growth, as always, in until next time be well, do good and wash your hands. Thank you for listening to another episode of banking on Digital Growth with James Robert Ley. Like what you hear. Tell a friend about the podcast and leave us a review on Apple podcasts, Google Podcast or Spotify and subscribe while you're there to get even. Mawr Practical and proven Insights, visit www dot digital growth dot com to grab a preview of James Roberts bestselling book Banking on Digital Growth or order a copy right now for you and your team from Amazon. Inside, you'll find a strategic marketing and sales blueprint framed around 12 key areas of focus that empower you to confidently generate 10 times more loans and deposits until next time, be well and do good.

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