Creative Science

Science Project—PeoplesBank established its Consumer Innovation Lab two years ago to maintain the best, most current products and services within its competitive marketplace in Holyoke, Mass. From left are the lab’s key team members Mike Raposo, project manager; Greg O’Donnell, data scientist; and Karen Buell, vice president–Customer Innovation Lab.

Science Project—PeoplesBank established its Consumer Innovation Lab two years ago to maintain the best, most current products and services within its competitive marketplace in Holyoke, Mass. From left are the lab’s key team members Mike Raposo, project manager; Greg O’Donnell, data scientist; and Karen Buell, vice president–Customer Innovation Lab.

Spotting early tech winners with
an innovation lab

By Ed Avis

Banking technology changes constantly, and it can be challenging for a community bank to determine which opportunities are worth pursuing and how to best implement them. PeoplesBank, a $2 billion-asset mutual savings bank headquartered in Holyoke, Mass., tackles that challenge head-on with its Customer Innovation Lab, a special department tasked with evaluating and implementing new customer-facing technology and improving existing technology.

“With the speed that technology is moving, it’s our responsibility to make sure the bank stays competitive and meets, or hopefully exceeds, our customers’ expectations,” says Karen Buell, PeoplesBank vice president, who is in charge of the lab. “We keep a close eye on what is trending.”

The bank has been evaluating and implementing digital banking solutions since 2008, and that practice eventually evolved into the innovation lab, which officially opened in 2014. The goal: to keep the bank abreast of upcoming technology to lead competitors in providing the latest, most useful products and services.

The three employees of the innovation lab—Buell; Greg O’Donnell, data scientist; and Mike Raposo, project manager—consider technology developments in a space within the bank’s headquarters building that is designed for collaborative effort.

“It’s a very fun space,” Buell says. “If you think of the environment in a high-tech startup, it’s probably a similar environment. Bright colors, modern furniture, an idea wall you can write on, and a nontraditional feel to it. That’s important to get the creative juices flowing.”

What it studies

The technologies the lab considers are typically the same as those being implemented by bigger banks. For example, Buell and her team spent about four months evaluating online and mobile banking systems before switching from their previous provider to their current one in May 2015. They went through a formal request for proposal process, then considered each system for integration capabilities, aesthetic appeal, security, functionality and many other characteristics.

The number of registered users has jumped 45 percent since the implementation. Theoretically, any bank could engage in that kind of tech-evaluation process, but a dedicated technology innovation department should speed implementation and increase the likelihood of success for new technology and product and service projects, Buell says.

“In community banking, people wear many hats—and I still do—but the lab allows us to focus on customer-facing technology, improve on what we have and look at what we still need to add,” she says. “We have more time and energy to focus specifically on technology.”

Discovering wants

Tapping customer data to determine what needs to be improved or added is part of the lab’s work. For example, the team at PeoplesBank’s innovation lab examined data about how customers were using their mobile banking system. It found a group of them who regularly used the mobile deposit function for smaller checks but had to visit an ATM or branch to deposit larger checks, since the mobile system has a relatively low deposit limit.

“That was not a good experience for them because they obviously wanted to use their mobile for those deposits,” Buell says.
Based on their behavior, those customers were determined to be at low risk of fraud, so the bank increased their mobile deposit limit.

Overall, Buell’s main advice on technology innovation for other community banks is: Simply try new things, be nimble and be responsive. Community banks should not allow their small scale to keep them from innovation, she says.

“You have to be willing to try new things,” she says. “Just a small group of people committed to focusing on advancing technology [can help]. You don’t have to work at Google to feel that you are innovative. “It’s really about putting forth the effort, collaborating, and reaching out to our team and the other lines of business within the bank for other ideas and other perspectives.


Ed Avis is a writer in Illinois.

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