InformationWeek 500: Wells Fargo Pushes For Customer-Facing Innovation

ATM features such as envelope-free banking are typical of how it strives for a better user experience.
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In addition to expanding the envelope-free ATM effort, Wells Fargo also used data mining to personalize teller machines. It added features such as automatically showing customers their most frequent transactions, knowing they're very likely to want to do one of those transactions again. Sounds appealing, but IT had to figure out how to deliver constantly updated data. That involved a fairly simple database search, Wang says, but it takes a lot of computing power to mine all customer transactions for the past 180 days every day. So Wells Fargo runs that overnight, using otherwise idle computing capacity, and mines only the changes from the prior day.

The bank's customers aren't necessarily early adopters of technology, Modjtabai says, so Wells Fargo tends to make changes in "small steps." When it showed customers the first iterations of envelope-free ATMs, many were hesitant to use the service, Wang says. The machines are technically impressive--able to handle up to 50 bills in different denominations, facing up or down, and a stack of 30 checks at a time--and eliminate paper. But teaching customers that envelope-free deposits give faster access to funds helped increase use.

There was still a big reason many people didn't make ATM deposits: Fear. "If you have a $10,000 deposit, you often want a stamp on it to say, yes, they took it," Wang says. So the bigger breakthrough came when Wells Fargo offered the option of printing an image of the check as a receipt. "That changed a lot of behavior," Wang says, "including some people on our own staff who admitted they had never deposited a check in an ATM."

Modjtabai says Wells Fargo doesn't budget specific funds or have staff dedicated to innovation, so there isn't pressure to cut an innovation budget line during a down economy like this. Much of its innovation is focused on customer-facing projects, and those tend to continue to get funding in a downturn.

IT infrastructure is another area where Wells Fargo is innovating. Here Modjtabai's team is on a major push to cut costs and improve effectiveness through increased automation, virtualization, and consolidation, and offering more tiered IT services. Storage is a good example of tiered services, Modjtabai says: "We used to offer only tier 1 storage of all of our applications, whether or not they were tier 1, 2, or 3 applications." Now, for data that doesn't require as fast access, Wells Fargo is buying lower cost storage, which it's also finding easier to manage.

With the Wachovia acquisition, there's pressure to make operational improvements like these even faster, since IT teams already are working on nearly every system as they consolidate the two banks' systems. "In times of big changes and mergers, it gives us an opportunity to accelerate some of those initiatives," says Modjtabai.

The Opportunity Ahead

Wells Fargo's CIO On:
Emerging tech
"We know it may take a couple years until all the kinks and bugs are identified." Customers value availability and security first.

On adding features
"Customers are used to a certain look and feel, so we try to make incremental changes ... in an easy-to-digest way."

On her prior role leading HR
"Wherever you are, you have to run it like a business. We're not a support function."
Mobile banking, like envelope-free ATMs, also didn't take off on its initial debut. The bank made a concerted push around mobile banking six or seven years ago but found the technology wasn't mature enough to deliver a great experience.

Banks need to "put what customers need in their path," says Modjtabai. Six years ago, people used cell phones to make calls, but today, they're using them to manage their lives. Wells Fargo offers mobile browser versions of its online banking, as well as text message banking. Modjtabai anticipates "huge growth" on this platform.

That leads to one of the bank's biggest challenges: delivering a consistent experience across platforms. Modjtabai leads, in addition to IT and operations, a team that's part of the company's "One Wells Fargo" initiative, whose job is to look across the company for places it's not delivering a unified customer experience.

One systems integration victory on this front is that when customers open accounts in branches, they can select certain preferences for other channels, like what the default withdrawal amounts are on their ATM screens. But there's always more work to be done. Even as Wang describes that success, he notes they never develop in a silo. "We haven't done it yet, but we're thinking, 'Why not let you select your ATM preferences from the Internet channel?'" he says.

As Wang himself might say, never "good enough."

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