It’s not easy being big. Or being big and regulated.
Among other things, it makes running a footrace with FinTech startups — tough. Big and regulated banks — especially these days — are not set up to sprint. Decades of legacy infrastructure and a web of regulations make it tough to adopt a “move fast and break things” mantra — even if the regulators would allow it.
So, established banks have to think differently about what it takes to enter the race and win it. That race is all about acquiring and engaging a digitally savvy customer who wants a different experience from their bank.
“That change presents us with a tremendous opportunity to adapt to a digital customer’s needs by leveraging the customer-centric philosophy that’s been the hallmark of our financial institution for the last 200 years,” Carey Kolaja told Karen Webster in an interview prior to the launch of Citi FinTech’s new mobile banking hub for Citigold customers.
The new Citigold Experience for the Citi Mobile App (for the iPhone) is getting its public coming out party today (Dec. 6). The app as designed will allow customers to combine their banking, wealth management and money movement capabilities all in a one-shot digital location. The new app also features expanded authentication options for users, including biometric login via fingerprint, voice or facial recognition, as well as PIN.
Kolaja is global chief product officer for Citi FinTech, a new unit of Citigroup primarily focused on reimagining mobile banking experiences. She said the new unit launched a year ago with a simple directive: Rethink the firm’s position to find a way to create innovative experiences for digital banking customers — and then get them to market fast.
Easier said than done, you say. Isn’t this the same Citibank that has tens of thousands of employees, millions of customers and scores of services all spread out all over the world, is a 200-year-old institution that has legacy built on top of legacy systems and technology and, as a global financial institution, is regulated on a scale and scope that most people would find dizzying?
Yes, that Citibank. And thus, the challenge of becoming more agile, while adhering to the high-quality standards that are the cornerstone of the bank, and of staying “very, very focused” on putting a product in the market that checks those boxes while moving at FinTech speed.
“That’s really where we started,” Kolaja said.
A statement that kicked off the candid conversation between Kolaja and Webster as they chatted about the launch of Citi FinTech’s new mobile product. A statement that triggered a logical follow-up question: In the face of global regulations and massive compliance complexities, can big banks really move fast?
Dealing With ‘Compliance Debt’
Kolaja admitted that compliance challenges are — and will be — a massive and constant factor to be dealt with.
“It’s not easy dealing with 200 years of legacy, technology and compliance debt,” she noted.
But not impossible, once the right principles are put in place.
Starting with recognizing that driving change was something that Citi FinTech could not — nor wanted to — do “ourselves.”
“I think there are a lot of places with a very exclusive ‘build it here’ culture, and to make the product work, we really had to invert that way of thinking,” Kolaja said.
That has meant, for one thing, working actively to partner with FinTech startups, either directly or through white-labeling their services. Making those partnerships really work means getting them involved right up front and keeping them engaged so that all of the parts of the design process are progressing in tandem instead of in silos bound to disrupt each other’s progress.
And having a clear focus and path to success. Kolaja noted that the launch of Citi FinTech wasn’t designed to go globally throughout all of Citibank. Instead, it is only in the U.S. and focused on a single segment of its massive global customer base.
The Importance Of Listening
Kolaja emphasized that customers drove the development of the mobile app.
“We are very proud of the fact, within 12 days of our launch in November of last year, we were talking to customers,” she said.
Kolaja said that Citi FinTech understanding how its customers think about their money and their relationship to it was critical. She said that they talked to over 2,500 customers and showed those customers who opted in to being part of the feedback loop updates every two weeks. From there, they were able to refine the app to reflect what was important and what might have been nice to add.
That resulted in giving the customer a totally new experience from Citi from the moment they log into the app. Gold customers will be able to open new brokerage accounts from their phone going forward and trade directly in the app. The app will also make it possible for customers to find and access their financial advisor in a matter of minutes and decide what level of direct services they need, including how they wish to authenticate themselves across the platform.
Also on the roadmap is the ability for customers to instantly send money domestically and internationally, where consumers can specify exactly how actively, or passively, they want their security authorizations to go through.
The view is strategic, said Kolaja. Citi FinTech is designed to be the nimble, creative end of the bank — one that can design and perfect the kinds of features that can be integrated back across the massive Citi platform worldwide.
Because, at the end of the day, banks do have something that no one else does.
Consumers Really, Really Trust Banks
Negative headlines and some ill feelings about the Great Recession and the mortgage lending crisis aside, Kolaja noted that what tends to get left out of most discussions of the stodgy, old banks waiting to be disrupted is the simple reality that customers actually like their bank.
And they more than like them — they really trust them. One of the benefits of banks being subject to all of those complex compliance rules is they tend to give customers some level of comfort that their money is actually being correctly controlled and managed. Consumers have remained largely loyal to banks, and that gives the institutions a massive amount of scale to leverage.
But to do that, banks have to start really getting back to offering consumers what they want and need and in a way that is comparable to the more agile and responsive players, Kolaja said.
Citi FinTech thinks it can square the circle between speed and size and find new ways to innovate, while still providing the highly stable services that consumers have come to expect.
And win the race, with many of its FinTech partners running right alongside it.