Gareth Gaston came to U.S. Bancorp from the hotel industry two years ago. Now he’s executive vice president of omnichannel, which means he’s in charge of making the bank’s nonbranch retail customer experience work, and work together across the internet, mobile, call centers and physical branches. He spends a lot of time thinking about the future of banking. Based in San Francisco and overseeing 2,000 employees, he sat for an interview at the Star Tribune last week.
Q: What’s the future of the bank branch?
A: Listen, we think the bank branch is still important, and what we see today in our numbers is that customers continue to use the bank branch. Other industries have had their debates about whether or not the physical location matters, and I think everyone now recognizes that physical branches, or stores, or whatever, are still a very important part of customers’ lives.
Our philosophy on life is we want to be where the customer wants us to be. Branches are still a very important element of the overall channel mix. Of course we’re always thinking, “Are the branches in the right place? Are they in the right format?”
Q: It surprises me that customers still want to go to a branch.
A: It depends on what your needs are. For day-to-day banking transactions, then yes, most of those will be mobile or on the web or a call or an ATM.
But there’s a benefit in being able to go in and sit down and talk to somebody about your mortgage or your investments or, especially, your small business. I would say walk over to the IDS Center and you’ll be pleasantly surprised at how busy the branch is.
Q: You’re based in San Francisco. Why?
A: The thought was that one foot in San Francisco, which is of course in the digital world where everything begins and a lot of the fintech’s there, and a lot of the talent’s there.
My team’s all over the country, and we have a lot of people here in the Twin Cities as well. We have a lot of our digital talent here. But really it’s access to the fintech community.
Q: You served in the Scottish infantry. What’d you learn from that?
A: It forces planning ahead to look at all the things that could go wrong.
Q: What do you see as the key challenges for U.S. Bank and traditional banks over the next five or 10 years?
A: The first thing is the ability to make smart investment choices. There are so many things you could invest in. We live in exponential times, where there are so many more things possible in technology and everything gets adopted quicker than the last thing. Super easy to get distracted. How we handle that is we read customer feedback every day, every month, and we take our guide from what our customers tell us they want from us.
The second thing is getting the pace of change right. Our customers don’t give us a pass because we’re a bank. Every day they’re buying things on Amazon or interacting on Facebook and all these different companies.
But what is the appropriate pace of change for us? You also don’t want to go too fast, because then you risk overinvesting or you risk doing something wrong. It’s important that you find the right cadence.
The third thing is a unified customer experience. It’s very easy to be swayed by just digital. When I was in the travel space, for years people talked about the digital traveler. But there’s no such thing as a digital traveler, in the same way there’s no such thing as a digital banking customer. They’re customers. What customers tell us is they want all the channels to work together, rather than it be jarring.
Q: You mentioned you came from the travel business. How did that happen, and what are the overlaps?
A: We strongly believe at U.S. Bank that we’re in the relationship business, and relationships are ultimately about hospitality, so I see a lot of overlaps. The type of reception and experience you get when you walk into a hotel is the same type of reception and experience you should get when you walk into a branch. A lot more similarities than differences.
The reason U.S. Bank looked outside to find me is that industries like travel and retail have trodden this digital change and omnichannel wave just a little bit earlier. The digital disruption happened in travel 20 years ago.
Q: Do you think U.S. Bank is adapting quickly enough?
A: Yes, I do. I think we’ve got the right mechanisms in place. We’re large enough to be able to do all these things, but we’re also small enough to continue to collaborate. We have the right forums that have sponsorship right from the top. That is thankfully not something I’m burdened with by myself.
Q: Does the massive profitability of U.S. Bank — $5.9 billion in 2015 — hurt the sense of urgency?
A: Do you mean are we complacent? No, I don’t think we are. Right from the top, there’s a huge sense of urgency. It’s not about chasing shiny objects, it’s really about what do our customers want, and how can we meet that? And customers are very demanding, and we listen to that.
Q: Just last week, U.S. Bank announced a shift on real-time person-to-person payments, offering them for free. Why the shift?
A: More and more banks are using clearXchange. We want to make sure that our customers see that this is the right facility for them. For us, it’s about making sure our customers take advantage of this.