Since its launch in 2009, US digital-only Ally Bank has attracted over one million customers. The bank follows a strategy of offering digital services that closely align with its product set; Robin Arnfield takes a closer look at the bank’s service portfolio and how it has greatly aided the firm’s growth
Ally is the direct banking subsidiary of Detroit-based automotive financing provider Ally Financial. In the year to 30 September 2015, Ally Bank saw year-on-year retail deposit growth of 15% – $6.8bn to $53.5bn, while brokered deposits rose slightly to $10.2bn. Ally saw 16% year-on-year growth in the number of deposit customers to reach 1.03 million.
During the third quarter of 2015, Ally added 36,000 net new customers.
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“We have a growing customer base of millennials, who like the products, convenience and service we offer,” Carrie Sumlin, Ally’s Digital Deposit executive tells RBI. “We also have a lot of older clients interacting with us digitally.”
Forrester Research ranked Ally best-in-class in its 2015 US CX (Customer Experience) Index, while Money Magazine declared it the best online bank five years running, from 2011 to 2015. In January 2016, GOBankingRates’ Best Banks series named Ally the best online bank of 2016’ out of a total of 30 US online-only banks.
New products
Plans are underway to leverage Ally Bank’s brand and customer base to launch a range of new products, Ally Financial CEO Jeffrey Brown told a Goldman Sachs conference in December 2015. Products under development in 2016 include credit cards and mortgages, he said.
Rather than use its balance sheet or operations, Ally works with an affinity relationship partner for credit cards, Brown says. It also uses a third-party service provider for mortgages.
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By GlobalData“We’re excited about the future opportunities, where the company can grow by offering more products, services, and technologies, all in the spirit of better serving our customers,” he adds.
Innovations
Making a virtue of being digital-only, Ally offers innovative self-service facilities including Ally Assist, its talking digital assistant; an online CD management tool; and an ATM and POS cashback locator app.
Ally’s recent digital innovations follow a complete redesign of its online platform in 2015, using HTML 5, the fifth revision of the HTML standard since the inception of the World Wide Web. HTML 5 was published by the World Wide Web Consortium in October 2014.
As well as giving a more mobile look to Ally’s online banking service, the new platform enables Ally to make changes and improvements in a low-cost manner.
“The criterion for offering digital services is that they align closely with Ally’s product set,” says Sumlin, who led the redesign of Ally Online Banking.
“We won’t do a lot of first-to-market on newer technologies, or do things that are cool for the sake of being cool.
“We wait until there’s an advantage to our customers or a demand from them for these new technologies.
“A lot of our changes have been service-based changes,” Sumlin continues. “We want to let customers interact with us in digital channels if they want to, and not force them to use faxes, document scanners or phone calls if they don’t want to.”
Among the enhancements introduced in 2015 was the facility to submit wire transfer requests online, whereas previously customers had to fax wire transfer requests. Another was to provide customers with access to seven years of statements and tax receipts online, compared to the usual 18 months provided by most banks.
“As a digital bank, we thought it important that customers shouldn’t need to call us to get their information,” Sumlin says.
“We want people to retrieve their statements electronically rather than have to request paper versions.”
Ally also made it easier for clients to submit documents, so that, during the online application process, customers needing to verify their ID can upload additional documentation.
Enhancements to Ally’s Bill Pay service included same-day online bill payments to 600 payees, and overnight cheque payments for almost all paper payees.
The cut-off time for submitting requests was extended from 7:30pm to 11pm Eastern Time to accommodate customers managing their accounts in the evening and especially those not on Eastern Time.
Interest rates
Interest-bearing checking accounts and competitive lending and saving rates are mainstays of Ally’s marketing, reflected in products such as Certificates of Deposit (CDs) and Individual Retirement Accounts (IRAs).
“Ally doesn’t have a costly infrastructure, so it has a strong marketing message that it offers great rates,” says David Albertazzi, a senior analyst at Aite Group.
Ally ‘is a one-stop bank that helps you avoid most (although not all) fees while maximising interest across multiple accounts’, said Money magazine when it named Ally Best Online Bank.
Ally offers CDs with terms from three months to five years. Customers can raise their CD interest rate once for two-year-term CDs and twice for four-year-term CDs.
They can withdraw all their money any time after the first six days following the date the account was funded and keep the interest earned with no penalty.
In 2015, Ally introduced an online CD management tool with interest disbursement options for non-IRA CDs.
“A lot of our clients prefer to do their business digitally, and now we’ve moved the management of that core function for a large portion of our CD portfolio to the digital channel,” Sumlin says.
The management tool allows clients to specify renewal instructions for their CDs up to a year in advance without needing to speak to a call centre agent. For example, they can roll the CD into a different type of CD or add money either from an Ally or non-Ally account. Clients can also set CD interest disbursement options online.
Customers who prefer to talk to an agent on the phone may continue to do so. Ally offers 24-hour access to its call centre, 365 days a year.
“You can call at any time day or night and get the same service you would get during the day for your accounts,” Sumlin says. “That resonates with people as they can’t go to a branch called Ally Bank, but they can call us any time.”
Mobile
Over the past few years, Ally has seen a big trend for customers to supplement their online banking with mobile interactions. “40% of all digital channel log-ins and transactions now take place through mobile devices, either through our app or our mobile website,” Sumlin says.
As well as iPhone and Android smartphone apps, Ally offers tablet-optimised apps and a mobile-optimised website.
Customer preference for mobile transactions is apparent in remote deposit capture (RDC), where 90% of deposits now take place via the mobile channel.
“Mobile RDC is hugely convenient for consumers and works so well on mobile,” Sumlin says. “Many people don’t have PC scanners, and, even if they do, it’s much easier to use a smartphone than a scanner to deposit cheques.”
The success of mobile banking prompted Ally to redesign its online platform using practices created for the mobile channel, such as easy navigation and presentation of information on a smaller screen. Besides simplifying online banking, the redesign created a uniform experience across different channels.
“Whether our customers are using a tablet while watching TV in the evening, doing online banking from a desktop PC at work, or using a smartphone while collecting the children from school, they have a similar-looking experience,” Sumlin says.
In order to use the mobile app, customers have to register first on the online banking site and set up their ID and password. They can access this site either on a PC or via the mobile web on a mobile device.
They also need to set up a delivery mechanism for receiving one-time passcodes, which are used when they log in from a device not recognised by Ally.
Customers aren’t required to carry out a separate mobile enrolment, and, once their credentials are established, they can use their phone to log in.
Ally Assist
Introduced in 2015, Ally Assist is an Apple Siri-style mobile virtual assistant that responds to queries and commands submitted via speech or text. It can transfer funds, pay bills or make deposits. It also provides detailed information on transactions, interest earned and saving or spending patterns.
Typing or speaking ‘how much did I spend in May?’ or ‘how much did I deposit?’ will produce a calculated answer and then a list of specific transactions. Customers can also ask how much they have spent at a particular merchant.
The digital assistant generates reminders, warns about potential problems, and gives financial recommendations. A prediction page provides a real-time view of customer accounts and contains information such as a reminder that it’s time to pay a bill, a notice that a recent purchase has posted to an account, or that an account balance is low.
Ally Assist is accessed via the iPhone banking app and isn’t available yet for Android devices. Sensitive information is delivered via text only.
“Our digital strategy is in line with customer experience – it’s rooted in making things easier for customers to open new accounts with us or service their existing accounts,” Sumlin says.
“We want to make financial services seamless and easy for clients, not a burden – by achieving a really good smooth online experience, we benefit as a digital bank, not just our customers.”
ATM locator
To further differentiate itself from rivals, Ally has enhanced its ATM locator app to provide the location of POS terminals offering cashback. In 2015, an Apple Watch version of the app was added.
Ally customers have unlimited access to 40,000 US ATMs in the Allpoint surcharge-free network. Additionally, Ally reimburses customers for up to $10 worth of fees per month incurred when using surcharging ATMs.
Benchmarking
Ally’s research group keeps a keen eye on news and external industry research. “If we’re not in line with our rivals, we look at whether we want to be different from them or if we should try to get in line,” Sumlin says.
But even stronger than external research is the use of what Sumlin calls the voice of the customer. To hear this voice, the bank’s research group carries out regular phone surveys of its mobile app and online banking site users.
Additionally, every Ally web page has a ‘give feedback’ link, where clients can leave messages, usually about digital services and call centre experiences. The comments posted on the website are read on an hourly basis, Sumlin says.
“Many of our executives and product mangers get direct product notifications every time these messages are posted to our website so we can understand what we need to improve or what is going well,” she says. “This informs our roadmap directly.”
Ally monitors social media to find out what its customers are concerned about, Sumlin says. It also uses social media to educate customers about general banking issues, provide financial information that may be useful, and publicise service developments.
“If a person tweets about an issue they are having, we will respond to their question and try to help them,” Sumlin says.
