Tom Shen boasts a long and fabled career in financial technology spanning some 40 years. Some of the companies he’s been associated with, like Software Dynamics and S1, are long forgotten. Others like Digital Insight and Maluzai Software are still fresh in our memories. Today Shen is on the board of two financial technology rising stars: Sensibill and Zsuite Technologies. In short, he can back up his opinions with plenty of experience.
In this episode of The Digital Banking Podcast, Shen discussed his personal and professional journey, as well as his perceptions of the market and digital banking with host Josh DeTar. The two also addressed the importance of humanizing the banking experience and hyper-personalization in FIs. They also tackled digital platforms’ shiny objects and the importance of understanding customers’ needs.
⚡ The three buckets of digital banking. Financial institutions face many challenges due to constant change and innovation in the digital world. According to Shen, there are three categories that FIs want their products to fall into: strategic differentiators, the good enough, and the cheap and cheerful. “We understand that in any competitive landscape there are companies that — if your financial institution wants to focus on being different or being better, you need to acquire the product set that allows your brand to shine,” said Shen, [that’s the strategic differentiators]. “The good-enough simply does everything you need to do — it has got all the table stakes — and other digital providers have that. And then, the last category is the cheap and cheerful, where you’re really buying on price.”
⚡ You must understand your customer. The success of any platform depends on the end users. If you offer the user exactly what they want, they’ll be satisfied and you’ll be successful. According to Tom, the ability to humanize and hyper-personalize the digital banking experience is very important. “When you think about understanding your customers, what are some of the key tenets? What do we focus on? Number one is to anticipate customers’ needs,” noted Shen. “The second is behavior – understanding their behavior, preferred platform, and preferred way of communicating. And then to understand the context – the life stage, upcoming events, and preferences. Based on these types of basic understandings, we can extract certain information.”
⚡ Relevancy is the shiny object of a customer data platform. Talking about the companies he invests in and the boards he sits on, Shen pointed out that most of them try to help consumers by offering applications that make their lives easier. “One innovative credit union uses this feature so that when someone has location turned on using Larky within their app, when they drive up to a credit union’s physical location, they actually know you’re at one of their branches,” claimed Shen. “And if they had an offer, they would make that offer while you’re inside the branch. That’s an interesting intersection between physical and digital, or some people would call it ‘phygital,’ so it’s an interesting intersection to make it more relevant.”