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Navigating digital transformation as a bank with remote teams

Raise your hand if you’re working remotely, and you like it.

If your experience of the last few months is anything like mine, you’ll agree that the changes we’ve all had to make have brought some surprise learnings that will impact the way your business operates for years to come. Something I know is that evolution powered by need can push you out of our comfort zone and into a place where decisions are made quickly, impact is felt immediately, and you realize that “the luxury of time” is one you can do without—and maybe even be better off without it.

Such was the case with the transformation from a community bank to digital bank at Quontic.

When I bought the bank in 2009, I believed that the internet was going to render bank branches obsolete in the near-term. Bank branch expansion is expensive, time-consuming, and in my mind wouldn’t have been optimal as a medium to long term sustainable strategy for consumer banking. I personally never went into a bank branch, my peers didn’t—it seemed to me like opening bank branches was a strategy of yesteryear. So, this one-branch community bank I’d purchased, that relied on walk-ins to generate deposits, was already struggling. We were relying on wholesale deposits, and when regulators at the OCC criticized us for doing too much of that, we were forced to quickly evolve our strategy. Since option A—opening more branches—wasn’t really an option in my mind, we had to find a new way to compete.

Our early strategy shifted to offering high-interest rates online. If you’re going to pay up for the deposits, it becomes very apparent that you don’t really need the branch, especially since it was also becoming apparent that even brick-and-mortar branches were having to pay up to compete with the larger banks anyway. You may as well pay up on the internet. In order to become a digital bank, we had a lot of lessons to learn. Implementing an online account opening process doesn’t magically make you a digital bank overnight. Nor does simply paying up for money market accounts and time deposits. Customers are going to have questions and issues, and we needed a customer service division to handle digital customers across the country. We also needed to evolve our offering to attract low cost sticky deposits.

So, not only did we need technology, we needed a customer service team versed in online chat and handling everything digitally. We needed to build a call center pretty quickly to accommodate the volume of calls, chats, and emails. And our team was trained well and started to convert online leads. Over time, however, the technology we were using proved to be inadequate too. We realized that if we wanted to be an online bank in earnest, we needed to look at our technology.

At that point in 2018, we were missing command of our data. The first thing we did to bridge that gap was building QuonticWorks, a cloud-based database that extracts data from all of our core processing technology platforms into a usable, reportable format that gives us access to real-time data and gives us everything we need to measure, report on and manage the business.

We went department by department, spoke with each stakeholder, and determined the metrics they needed to measure their staff’s performance on a minimum, primary, and visionary scale. We had never really done that in a data-driven fashion; it was much more subjective before. But now with all this data, we’re more efficient, we have the means to measure individual employees’ performance, and all employees know exactly what standard they’re being held to. We cut costs, created efficiency, and used data to do all that.

So, and please don’t hate me for this—when coronavirus hit, the transition to remote work was seamless for us. Where many businesses—banks in particular—struggled with managing people remotely, Quontic employees are more productive than ever. On projects where people were missing deadlines, they’re hitting them now. With virtual meetings, everybody is on time. And at the end of the day, the data speaks for itself precisely because we built QuonticWorks, our reporting capabilities, and the KPIs by which we measure the staff. We’re doing so well that we’re even contemplating a permanently mostly remote workforce.

What we’re learning by navigating a digital transformation as a bank with remote teams, is that data is king.

Likewise, reporting on the data to provide timely feedback to the staff, management and the board is critical to this stage in our evolution.

This data and technology now have allows us to hire senior-level people who aren’t in New York, like our Chief People Officer, who lives in Indianapolis, and a digital banking product executive who lives in San Diego. We’re also hiring processors and underwriters from all over the country. As we’re doing this, the labor pool opens up very wide because we’re not limited only to people that live in New York. We’re setting the mode by which we’ll operate. Down the road, as we start to eliminate brick and mortar costs, profitability goes up.

An unprecedented asset to working remotely is seeing our teams communicate more frequently and with more regularity than we ever have before. For example, every other morning, we spend ten minutes with our Innovation Execution Team, or IET, on Zoom. Each member of the team reviews their priorities for the week and communicates any need for coordination between departments. Then, each department also has a daily ten-minute touch base with their staff. Lastly, once a week, we have all 150 employees tune in on Zoom, and we share company updates, initiatives, and key employee highlights. Employees even nominate each other weekly for emulating our Core Values. I know my staff better than I have before, and the staff knows each other across departments better than they ever have before.

On top of it all, people are happy working remotely. One game-changer for some of our remote employees, was cutting their commute times. That’s two hours of their lives saved every day (in New York, at least)! With this, we’re finding that our employees’ working time has become more flexible.

So, if you’re working from home and putting in an 8 to 10 hour day, for many positions we don’t necessarily care when you do it. If you want to trade weekends for weekdays, many of our employees can do that (as long as they make sure they’re not eliminating their free, personal time). We’re successful at measuring your productivity using the KPIs that we’re able to extract from with QuonticWorks. The quality of life for our employees is going up. And that’s the very best part.

Now, as we consider the future, we’re looking at a workforce that is 95% remote. We’re even contemplating a mostly permanently remote workforce. It’s an interesting component of the digital bank story; we don’t need branches for customers, and we don’t really need brick and mortar locations for employees. We can operate this entire bank virtually.

We’ve never done anything like this. Now, we’re not behaving like a community bank—we’re behaving like a fintech bank that wants to evolve. And coming at the end of 18 months of blood, sweat, and tears going into that evolution, I can’t imagine anything more exciting.

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