With its own digital labs and an accelerator programme for financial technology start-ups, Wells Fargo is one bank that can boast it is keeping pace with technology trendsetters such as Google and Apple. Jane Cooper looks at how the bank is integrating new technologies to provide a seamless customer service experience.

Wells Fargo’s aim is to eliminate 'pain points' from the customer experience and produce 'delighters', a pursuit that has become increasingly sophisticated with technological change.

Consumers are often exposed to experiences that are painless and, at times, delightful: the simplicity of a Google search, the brevity of Twitter, or the look and feel of Apple products. Many banks aspire to such experiences, but Wells Fargo has the advantage of being on the doorstep of some of the world’s most innovative companies.

As a San Francisco-based bank, the nerve centres of the likes of Google, Apple and Facebook are only a short drive away. Danny Peltz, Wells Fargo's executive vice-president and head of treasury management, points to the advantages of being close to Silicon Valley in terms of the technology that is emerging from the region and the talent that the higher education institutions attract. While the themes of social and mobile may be big in Silicon Valley, for Wells Fargo the overarching themes are global, mobile, and the transition from paper to electronic, explains Mr Peltz.

Next big thing

When asked what the next theme in financial technology is, Mr Peltz says: "The next big thing is already here. Customers expect a similar experience whether they use a smartphone, tablet or PC." He adds that the online and offline worlds have been converging for a while and that the focus for the bank is how to make it fit together.

This is one of the tasks for A Charles Thomas, Wells Fargo's chief data officer. Customers are increasingly hopping across channels. "Historically," says Mr Thomas, "we would have viewed each of those interactions individually – now we need to string them together. Customers do not shift channels – they add channels. If those things are not linked together – to paint a vivid picture of the customer – opportunities can be missed."

This shift has opened up opportunities to gather more data from customers, but how do the customers feel about the bank using their data in this way?

"Customers do not mind you having the data, as long as you are not obtrusive, you are not giving it away and you use it in a relevant and timely way," says Mr Thomas. The aim, he says, is to use the data in a purposeful way, rather than irritating customers with multiple offers; the goal is to 'delight'. "More data means fewer offers, and not sending them more stuff. The more you know, the more selective you can be," says Mr Thomas.

Total immersion

Mr Thomas does not just rely on quantitative data to find out what customers actually want. "Technology is wonderful, but there is no substitute for the human analyst," he says.

Pointing to the value of having hypotheses validated by ethnographic research, Mr Thomas explains that transaction data will show what customers are doing in the Wells Fargo branches, for example, but it will never explain why they do the things they do. A customer's behaviour could be influenced by the store's location, the signage or the person who greeted them. It is qualitative analysis – not big data – that will answer the question of 'why?'. 

Ethnography – where a researcher is immersed in an environment and carries out in-depth observation – is a method that Wells Fargo makes full use of in its quest for a better customer experience.

Secil Watson, head of wholesale internet solutions at Wells Fargo, explains how ethnographers will watch the users of the bank's solutions to understand the context in which they are used. The ethnographic research involves going to the clients' offices and observing them for one to three days. "We shadow them and we look at the things they are not telling us – much of this may be through non-verbal cues," she says.

These clues could be a person clasping their head in despair over a cumbersome log-in process or the look of surprise when things go well. These 'pain points' and 'delighters' all inform the bank's picture of what its customers' needs actually are.

Another world

One of the biggest changes that both banks and their customers are having to adapt to is the evolution from paper to electronic, though cash and cheques are still a feature of corporate life. Ms Watson gives an example of a company using a desktop cheque scanner, which may scan 1000 cheques at a time. Instead of cheques being posted to the company and batched up to be processed a few days later, an agent on the ground – repairing an air conditioner, for example – can now scan the cheque with his or her mobile device for immediate processing.

"We need to work with our clients to change their business model. That is how mobile is going to change things – our customers' customers will be using it more," says Ms Watson.

Elsewhere in the bank, in its 'digital labs', people have their eye on more futuristic technologies and are anticipating how they could apply to financial services.

The Oculus Rift virtual reality headset – developed by Oculus VR, a California-based company that was acquired by Facebook in March 2014 – is one such example. Wearing the headset is akin to experiencing a computer game in three dimensions. In the Wells Fargo demonstration, I walk through a virtual branch, meet a virtual ‘greeter’ and a virtual ATM. It is hard not to reach out to touch the ATM, but when I take the headset off, the ATM is (obviously) not there. So, where do I withdraw my cash? And what use is a virtual ATM in the physical world?

These are questions that are mulled over but, for now, Wells Fargo is experimenting with virtual reality to understand how the technology works and what its potential uses are. Product manager Margaret Honeycutt explains that, in the short term, one use for the technology could be to allow new students to open an account with the bank during their orientation periods at university.

Looking through new eyes

One long-term potential use of Oculus Rift is as a communications device, enabling three-dimensional video conferencing that could be so realistic people may no longer feel it necessary to fly across the world for business meetings.

Such technology could also cause the visualisation of data to change dramatically. "Data is no longer two-dimensional," says Brett Pitts, executive vice-president of product management for Wells Fargo's digital channels group. He adds that it also raises new possibilities of how the bank can interact with its customers. "Team members are the most effective at establishing relationships with the customers. This technology does not disintermediate, it actually has the potential to do the opposite," says Mr Pitts.

Another technology emerging from California is Google Glass, a type of wearable technology that features an optical display in the corner of a pair of spectacles. Instead of viewing information on a smartphone, it is possible for it to be displayed in the right-hand corner of a pair of specially designed glasses. It is also possible to speak commands to the device or scroll through options by stroking the arm of the frames.

In Wells Fargo's digital labs, Ms Honeycutt demonstrates how the bank is experimenting with Google Glass. To deposit a cheque, for example, the user holds the cheque in front of the glasses and commands it to take a photo, thus converting it into a digital cheque that can be automatically deposited. 

Moving in the right direction

The bank is also experimenting with the 'connected car' concept, as a number of car manufacturers are developing Wi-Fi-enabled vehicles. Applications of such technology include using voice biometrics to log in to a 'car wallet', which enables the user to pay for bridge tolls, parking or petrol.

Mr Pitts explains that it is important to develop new solutions that are appropriate, and says that the bank will not run with ideas that the customers may find off-putting. For example, in the retail industry the customer may be offered discounts on their smartphone as they walk into the store, but this may not necessarily work for financial services. "We have to have a dialogue with our customers to find out how they feel about that different type of experience from their bank," says Mr Pitts.

If feedback from the customers is not positive, the bank will drop the idea. Such cases are not described as failures but are instead treated as a learning experience. In the case of Settle Up, a peer-to-peer payment settlement solution that did not make it down the production path, the findings from that experiment fed into the development of the bank's SurePay money transfer solution, which did make it in to the market.

Thinking ahead

Wells Fargo is also looking outside of its own four walls for future ideas. In August 2014, the bank launched an accelerator programme for financial technology start-ups. After an application process, the successful start-ups will receive an equity investment of between $50,000 and $500,000 and entry into a six-month programme of workshops and coaching that will expose the start-ups to the inside of the bank, which could end up being a client of the technology vendor.

The companies taking part in the accelerator programme may be involved in customer experience, payments or usability technologies, for example. Mr Peltz explains that the accelerator is more future-oriented and will help Wells Fargo shape future customer experience. The purpose of the accelerator, Mr Peltz explains, is "to inform our thinking and where we want to go in the future".

On the question of whether there is pressure for the investments to succeed, Mr Peltz quotes Bob Dylan's song lyric "there's no success like failure" and adds: "The only way to learn is by trying new things. If you do not fail, you will never succeed." 

This is not to say that the bank will invest money indiscriminately. "We're not going to be investing in things willy-nilly – the enterprise has to be profitable. We have to try many different things. As a general rule, we are pretty good a betting on new technology in terms of the themes that are important. We grasped early on how important the internet was going to be in 1995, then corporates in 2000, and with mobile in 2006 we bet on that early," says Mr Peltz. 

The bank's focus on the customer means that it does not always pursue new ideas, even if it makes sense from a financial point of view. On the data side, Mr Thomas explains there have been instances where Wells Fargo "could have made money, but the bank has decided not to do it. It has to be the right time, the right offer and not be obtrusive."

He adds that the “secret sauce” is getting a view of the customer across all the channels and that "timing is really everything”. And, if this is done well, the bank could deliver a painless and delightful customer experience to rival that of its neighbours in the San Francisco Bay area.


All fields are mandatory

The Banker is a service from the Financial Times. The Financial Times Ltd takes your privacy seriously.

Choose how you want us to contact you.

Invites and Offers from The Banker

Receive exclusive personalised event invitations, carefully curated offers and promotions from The Banker

For more information about how we use your data, please refer to our privacy and cookie policies.

Terms and conditions

Top 1000 2023

Request a demonstration to The Banker Database

Join our community

The Banker on Twitter