Community Banking Improves Digital Customer Experience at Webster Bank

Webster Financial CEO James C. Smith is confident that Community Banking is the key to an elevated digital customer experience for his customers. Webster Bank has 177 branches and 316 ATMs located in Connecticut, Massachusetts, Rhode Island, and Westchester County, N.Y.

In the company’s annual report, Smith and Webster Financial President John R. Ciulla wrote a letter to shareholders that included its focus on community banking, mobile banking, and the digital customer experience.

“No segment of the banking business has faced a more daunting path to economic profit than retail banking, due to rapidly changing consumer behavior and accompanying high expectations and to a more demanding regulatory environment,” the letter says. “To meet these challenges, we laid out several years ago a transformational strategic roadmap that would hasten the day when Community Banking would earn its cost of capital. Directionally, this roadmap focused on enhancing our digital presence, especially mobile banking, to match customers’ shifting preferences and optimizing our network of banking centers to reach the appropriate presence in the best locations.”

In January, Webster Financial announced plans to consolidate eight banking centers during the second quarter of this year.

“We are also adapting our product set to appeal to high-value customers and ensuring that our bankers have the skills to be financial advisors and problem solvers for our customers,” the letter says. “The change in customer preferences is proceeding at a brisk pace. Webster’s banking center teller transactions have declined almost 40 percent over the past five years. In addition, nearly half of our checking account households have embraced mobile banking, and self-service deposits now represent 40 percent of all deposits.”

Community Banking continues to improve the digital experience, the letter notes, as reflected in a 16 percent year-over-year increase in active mobile banking users and a 6 percent increase in active online subscribers.

“Community Banking’s progress has been gratifying and, in the process, we’ve maintained our best-in-class net promoter score,” the letter says. “Further validation of the ongoing high level of service our bankers deliver came last fall when Money magazine named Webster the ‘Best Bank in New England’ based on factors ranging from product features and mobile banking experience to customer satisfaction scores and ATM network. Business Banking continues as an important funding source for the bank, as deposits significantly exceed funded loans in the segment.”

Webster’s Our Fast Track Business Loan initiative has cut origination time by 75 percent for loans under $100,000, boosting pull-through rates and origination volume, and overall loan growth exceeded 10 percent.

“We continue to build momentum in the strategically compelling Boston market as activity grows across all of our business lines,” the letter adds. “While deposit and loan balance growth has been slower than originally anticipated, the number of new accounts opened has met expectations. We crossed the $200 million mark in banking center deposit balances and our loan pipelines are expanding. We fully expect to exceed our estimates of $1 billion in new deposits and $500 million in new loans over five years.”

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