Digits and Dollars

Technology and digitization driving banks to adjust the way they serve customers

If you have noticed your financial institution altering the way it handles transactions and other activities with more emphasis on technology and digitalization, it's only just the beginning. Bank on it.

To stave off competition from surging financial technology (fintech) startups—think online personal lenders, mortgage apps or cryptocurrency exchanges—as well as in response to some unflattering customer satisfaction measures, traditional banks have been adjusting how they do business and serve customers by pushing more digital offerings.

“To stay relevant, traditional banks will now need to find ways to offer more seamless, fully integrated services that can help them to keep up with changing customer expectations,” said Mike Smith, CEO at Business Expert, a U.K. invoice finance platform. "At the moment they have a long way to go, but those that are willing to change and can effectively connect information, people and processes will be able to succeed in the long run.”1

One recent survey found that 60% of millennials think that big banks aren’t designed to service their generation, and 33% of millennials believe they won’t ever need a banking institution. In that same survey, 53% of the 10,000 respondents said they see no difference between the institution they use and other banks. Of generation Y respondents, 73% said they would be more excited about a new offering in financial services from Google, Amazon, Apple, PayPal or Square than from their own nationwide bank.2

In other words, there are segments of customers—including some hyper-digitalized millennials—untied to traditional banking and more open to alternative money institutions.

More customers, too, seem to ache for financial advice or guidance from their banks. Earlier this year, a J.D. Power survey found that 78% of retail bank customers want that financial advice—millennial customers being among the most receptive. But banks seem to be struggling to deliver on that advice digitally.3

Big banks have realized they cannot continue offering banking services in the same way and without technology. It’s become a question of what needs to change, not whether change is needed.

What are the fintech businesses doing to draw some customers away from traditional banks? Many are taking advantage of digital channels to open up markets that have traditionally been difficult to access. Others simply are giving customers what they want, such as:

  • Fast response to inquiries or complaints.
  • Simple purchasing process.
  • Ability to track orders in real time.
  • Clarity and simplicity of product information across channels.
  • Ability to interact with the company over multiple channels.4

“Bank customers, both businesses and private customers, now expect greater flexibility, price, transparency, access and convenience than ever before,” Smith said.5

Don’t forget speed. New online lenders, for example, have made the loan application process much more customer-friendly. Instead of walking into a branch on Main Street, for instance, and spending hours filling out paperwork, borrowers can complete online applications with lenders—such as Lending Club and Kabbage—in minutes and from laptops or phones at any hour of the day. Approval times are cut to days or, in some cases, a few minutes, fueled by data-driven algorithms that quickly prequalify borrowers based on a handful of data points.6

How are big banks reacting? Some strategies they’re deploying include:

  • Creating better banking apps. Online lenders have built slick apps that allow their customers to do the basics. Big banks have caught on to this and have improved their own mobile banking apps. As a result, some now hold their own against the most innovative of upstarts.
  • Investing in and acquiring fintech startups. Big banks have shown a willingness to acquire promising fintech players.
  • Partnering with fintechs. Investing in partner agreements allows some of the new technologies to be integrated into the traditional bank’s loan application and decision-making apparatus, for instance.7
  • Downsizing their brick-and-mortar footprints. Some big banks are closing branches and investing the money they save in building better technology and shoring up other customer service channels.8

“Changing customer behavior is another significant factor. Customers spend the majority of their time on digital—social, messaging—platforms,” said Ian Pollari, global fintech co-leader and head of banking at KPMG Australia. “Hence, financial institutions must position themselves where their customers are and create a corresponding digital platform strategy relevant for their market position, customer service proposition and strategic objectives.”9

Some warn there can be a risk in becoming too digital—that is, phasing out a branch-based service model to one that is more focused on strictly digital channels. There will always be some need for human, face-to-face contact between service providers and customers. Historically, banks have considered “interaction” to be an on-site meeting between client and financial advisor during daytime working hours.

But how does that model fit today’s customers, who want 24/7 digital access? Retaining customers seems to be related to agility but also to the bank’s ability to interact with customers across different channels.10

“Customers who become digital-only are becoming less satisfied than those who have the right blend,” said Bob Neuhaus, senior director at J.D. Power.11

Perhaps the traditional brick-and-mortar branch is ready for a facelift. Bob Meara of Celent, a research and consulting firm focused on financial services technology, said the new bank branch could be the traditional bank’s newest digital channel.

“As video service becomes more mature—that is, video advisory through tablets—user experiences across devices will begin to blur, and the branch of the future will look even more like a digital experience. In the new environment, the branch becomes another presentation layer,” Meara said.12

—compiled by Mark Edmund, associate editor


  1. MinuteHack Staff, “How Fintech Is Disrupting Traditional Banking Models,” Sept. 28, 2017, https://tinyurl.com/minutehack-fintech.
  2. Jean-Pascal Nepper, “How Banks Are Tearing Down and Rebuilding Customer Experience,” KPMG Industry Insights, Sept. 20, 2018, https://tinyurl.com/mondaq-banking-custex.
  3. J.D. Power, “Retail Banks Play Valuable Role as First Line of Financial Advice for Customers,” Feb. 26, 2018, https://tinyurl.com/jdpower-bank-customers.
  4. Nepper, “How Banks Are Tearing Down and Rebuilding Customer Experience,” see reference 2.
  5. MinuteHack Staff, “How Fintech Is Disrupting Traditional Banking Models,” see reference 1.
  6. Karen Mills and Brayden McCarthy, “How Banks Can Compete Against an Army of Fintech Startups,” Harvard Business Review, April 26, 2017.
  7. Ibid.
  8. Al Roberts, “How Are Traditional Banks Competing for Customers in a Digitally Disrupted Industry?” ClickZ, Oct. 16, 2017, https://tinyurl.com/clickz-digital-disruption.
  9. Nepper, “How Banks Are Tearing Down and Rebuilding Customer Experience,” see reference 2.
  10. Ibid.
  11. Kevin Wack, “JPMorgan Chase Ranks No. 1 in Customer Satisfaction: J.D. Power,” American Banker, Sept. 27, 2018, https://tinyurl.com/jdpow-banking-scores.
  12. John Ginovsky, “Digital Drivers for Banks,” Banking Exchange, Sept. 1, 2015, https://tinyurl.com/banking-exchange-drivers.


Sreedhar, Santhy, “Key Strategies for Effective Digitalization in Banks,” Finextra, Oct. 8, 2018, https://tinyurl.com/finex-key-strategies.


Judges to Reconvene, Make Recommendations

The Baldrige Award judges panel will huddle this month to discuss its site visits to 12 organizations vying for this year’s award.

Judges visited three organizations in the healthcare category, four in education, three nonprofits and two small businesses. The site visit evaluation teams—composed of Baldrige examiners—included experts in each sector. The teams spent several days at their assigned organizations’ sites, interviewing employees at all levels of the workforce to clarify and verify information submitted in the award applications.

This month, the panel will review its findings and determine which organizations to recommend to the secretary of commerce for the award. The award recipients will be honored at a ceremony during the 31st annual Quest for Excellence Conference, April 7–10, 2019, near Washington, D.C.

New @ ASQ

Quality Management Journal (QMJ) is seeking applicants for its book review editor. The editor is responsible for managing the review process, which includes assigning books to other reviewers and editing the book reviews. For more information, contact QMJ’s editor, Tom Foster, at tom_foster@byu.edu.

ANAB has accredited its first certification body for gluten-free management systems (GFMS). Perry Johnson Registrars, based in Troy, MI, is now able to certify organizations for GFMS conforming with the requirements of the Allergen Control Group Gluten-Free Certification Program (GFCP). For more on ANAB requirements for accreditation to certify organizations conforming to the GFCP, visit www.anab.org/management-systems-accreditation/gluten-free.

James M. Lucas, a statistical and quality management consultant, is the recipient of ASQ’s Statistics Division’s 2017 William G. Hunter Award. Lucas is associate editor of the Journal of Quality Technology, and a past associate editor of Chemometrics and Intelligent Laboratory Systems and Technometrics. He is an ASQ fellow and an American Statistical Association fellow, and the past recipient of the Shewhart Medal, the Brumbaugh Award, the H.O. Hartley Award, the Ellis R. Ott Foundation Award, the Don Owen Award, the Shewell Award and the Youden Prize. His current research focuses on practical solutions to real-world problems, emphasizing the underlying science for the problem.

This month, ASQ’s Inspection Division celebrates its 50th anniversary. The division has more than 2,400 members and sponsors the quality inspector and quality technician certifications. For more on division activities, visit asq.org/conferences/inspection-division.

Getting to Know…

Joanne Wendelberger

Current position: Scientist in the statistical sciences group at Los Alamos National Laboratory in Los Alamos, NM.

Education: Doctorate in statistics from the University of Wisconsin-Madison (UW).

What was your introduction to quality? I worked a summer job doing inventory for Harley Davidson, where a team of temporary workers was brought in to count or estimate the number of available parts for every type of part used in a motorcycle plant.

Do you have a mentor who makes a difference in your career? During my time as an R&D manager for the Statistical Sciences Group at Los Alamos National Laboratory, Stephen Lee, a computer, computational and statistical sciences division leader, was invaluable as a mentor. He greatly influenced my career by providing advice, encouragement and challenges that helped me grow as a manager and a researcher.

Is there a teacher that influenced you more than others? My Ph.D. advisor, George E.P. Box, impressed upon me the importance of the interaction between the theory and practice of statistics.

What’s the best career advice you’ve ever received? Know what your priorities are, and actively manage the amount of time and energy you spend on different activities.

Previous note­worthy jobs? I served as the group leader of the Los Alamos National Laboratory Statistical Sciences Group. Early in my career, I was a statistical consultant to the General Motors Research Laboratories.

Are you active in ASQ? I serve on the management committee for Technometrics, a joint publication of ASQ and the American Statistical Association (ASA). I also have served as an associate editor for Technometrics. I recently joined the William G. Hunter Award Committee and have previously served on the Wilcoxon and Youden Award Committees. I frequently attend the Fall Technical Conference, and have served as a session organizer and moderator.

Have you had anything published? I have published research articles in statistics, quality and computer science venues.

What note­worthy activities or achievements outside of ASQ do you participate in? I am a fellow of the ASA, served as elected chair, program chair and council of sections representative for the ASA section on physical and engineering sciences, have served as president of the ASA Albuquerque chapter, and have been involved in conference organization, awards committees and publication reviews.

Any recent honors or awards? I was selected by ASQ as the Youden Award Speaker for the 2016 Fall Technical Conference and as the William G. Hunter Award recipient in 2017. That was special to me because Hunter was one of my professors at UW.

Personal: Husband, Jim Wendelberger, and three daughters: Barbara, Laura and Beth.

Quality quote: Variances are variable, beware!

Call for Candidates

The Baldrige Performance Excellence Program is seeking candidates for the 2019 Baldrige Executive Fellows Program. The one-year leadership development program, designed for C-suite-level executives or leaders who report to senior leadership, works to facilitate dialogue among participants on all aspects of leadership and how it relates to a visionary focus, strategy, operational excellence, customer and employee engagement, and an organization’s long-term success. For more on the program, visit www.nist.gov/baldrige/products-services/baldrige-executive-fellows-program.


AME Recognizes 4 Manufacturers

Four organizations have been recognized by the Association for Manufacturing Excellence (AME) for continuous improvement, best practices, creativity and innovation.

The recipients of the 2018 AME Excellence Awards are:

  • FPT Powertrain Technologies, Bourbon-Lancy, France (a CNH Industrial Co.). The AME assessment team praised FPT’s strong leadership culture and its pursuit of advanced technology, including Industry 4.0.
  • Goodyear Innovation Center Manufacturing (ICM), Akron, OH. Assessors noted ICM’s safety reporting system, a closed-loop system and a Goodyear best practice that focuses on identifying near misses and analyzing events.
  • Iveco, Valladolid, Spain (a CNH Industrial Co.). The assessment team lauded Iveco’s robust improvement suggestion system for its facilitywide participation and its work instruction tools, which include visual aids and real-time assembly instructions at the point of use.
  • Littelfuse, Lipa City, Philippines. The AME assessment team highlighted Littelfuse’s strong culture of respect for the individual and its creative, immediate and accountable execution of Littelfuse’s define, measure, analyze, improve and control daily continuous improvement cycle.

To learn more about the award and this year’s recipients, visit www.ame.org/excellence-awards.


Quality-Related News From Around the World

—powered by Lexis Nexis

More Than 70 Million Vehicles on The Road With Open Recalls

A significant number of owners are “turning-in” used cars with an open recall, or those vehicles are being recalled by the manufacturer while waiting to be resold. The automobile recall program is one of the government’s most important auto safety functions, but to be truly effective, recall completion rates must be dramatically increased. Visit https://tinyurl.com/y9ozvk5w for more information.

Amazon’s Future May Soon Be Tied to Brick and Mortar

The first two decades of Amazon’s explosive growth and disruptive power have been all out about online shopping. As they get further into their third decade, a deeper brick-and-mortar presence will be key to unlocking market share in certain large categories. Read more here: https://tinyurl.com/yd7e4wgl.

Most Drivers Overestimate Car Safety Systems

Most drivers don’t understand the limitations of advanced safety technology installed on new vehicles, according to a new study by AAA Foundation for Traffic Safety. The study indicates that drivers overestimate the capabilities of features such as blind-spot monitoring systems, automatic emergency braking and adaptive cruise control. Read the full story here: https://tinyurl.com/y8cm648f.

New Lean & Six Sigma Review Magazine Debuts

ASQ is unveiling a reimagined, redesigned publication this month: Lean & Six Sigma Review.

Formerly known as Six Sigma Forum Magazine, the refreshed magazine features in-depth case studies, as well as new departments and columns such as:

  • Quick Wins—A collection of news and notes on relevant lean, Six Sigma and quality-related topics.
  • Ask a Belt—Reader questions about lean and Six Sigma addressed by top experts.
  • Nuts and Bolts—A primer about a Six Sigma or lean tool, concept or method.
  • 5 Whys—A profile of someone making a difference.

Lean & Six Sigma Review also carries over several columns from the previous magazine: Lean Thinking, Human Side of Six Sigma and Random Thoughts.

Lean & Six Sigma Review is published quarterly: February, May, August and November. To allow anyone to read, the inaugural issue is open access. Visit asq.org/pub/sixsigma to view and download the full issue. Call 800-248-1946 to subscribe or modify your member benefits.


Customers Still Pleased With PCs

Customer satisfaction with personal computers—including desktops, laptops and tablets—remains unchanged at 77 (on a 0 to 100 scale), according to the American Customer Satisfaction Index’s (ACSI) Household Appliances and Electronics Report 2018.

This new stability is helped in no small part by the high customer satisfaction with desktop PCs.

Although just 17% of respondents recently purchased a desktop computer, customer satisfaction with them jumped 4% year over year to an ACSI score of 83. Tablets also climbed 4% to 80, overtaking laptops, which rank as the only segment to deteriorate, down 3% to 75.

“Phones continue to supplant computers for web browsing, shopping, banking and entertainment, but desktop computers are workhorses for gamers and business users,” said David VanAmburg, a director at the ACSI.

“These users make up a small but passionate corner of the PC market, choosing desktops for the power and functionality that phones, tablets, and even laptops still can’t match, according to our satisfaction data,” he said.

For more on the customer satisfaction report, visit https://tinyurl.com/customer-sat-PCs.

Reading the article on the Baldridge Award:"Judges to reconvene, make recommendations" it struck me that of the 12 site visits planned only 2 (about 17%) will be in businesses, more specifically in the small business category. To me this indicates that the impact of and interest in the Malcolm Baldridge Award and the associated model has come down drastically. The organization should try to find out why and what can be done about it. To the best of my knowledge none of the high profile companies fueling the digital transformation of today like Facebook, Apple, Amazon, Uber, Tesla, booking.com, etc have ever applied for the award (I stand corrected if this is not true). Again, this should be a reason for concern about the relevance and importance of excellence models in today's successful businesses. It would interest me to know what the answer of NIST is to my comments.
--Willy W VANDENBRANDE, 12-13-2018

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