Chase Hires Amazon Customer-Service Exec as Digital's Rise Reshapes Branches
JPMorgan Chase & Co. (JPM) - Get Report has hired an executive from Amazon.com Inc. (AMZN) - Get Report to oversee customer initiatives in its consumer business, where the rise of mobile banking is rapidly reshaping the role of brick-and-mortar branches.
Marbue Brown will report directly to Thasunda Duckett, the head of the New York-based firm's consumer unit. An expert in analytics and customer measurement, he has two master's degrees from The Ohio State University and his career includes stints at Microsoft Corp. (MSFT) - Get Report and Cisco Systems Inc. (CSCO) - Get Report .
At online-retailer Amazon, Brown led the "Andon Cord" initiative, based on a Toyota Motor Corp. innovation that let assembly-line workers halt production when they spotted quality issues. Amazon adapted the program to identify merchandise that caused bad customer experiences, then pull the items until the issues could be resolved.
It's experience that should serve Brown well in banking, where customers are shifting from making deposits and withdrawals at teller windows to mobile apps that can give balance updates and process checks. The consumer unit is a lucrative business for Chase, too, part of the Community Banking division that accounted for more than 40% of $52 billion in revenue in the first half of this year.
Brown will "help us define the vision for a world-class customer experience," Thasunda Duckett, the head of consumer banking, said in an employee memo obtained by TheStreet and confirmed by the bank. "He'll help guide our Chase customer journey with a focus on deepening relationships."
Industry-wide, the number of branches in the U.S. has declined as millions of customers migrate to smartphone apps that are more convenient for them and less costly for banks. Indeed, a 2016 study from consulting firm Bain & Co. estimated that each teller transaction costs $2 to $3, compared with a dime for the same service at an ATM and just a few cents via a mobile device.
In response, Chase executives have modified branches to focus on services such as wealth management and mortgages for which customers typically prefer in-person conversations. The largest U.S. lender ended 2016 with 5,258 branches, a drop of about 2.8% from the year before.
At the same time, the number of JPMorgan's digital customers rose 20% over the two years through 2016, and its mobile customers increased at nearly twice that pace to 26.5 million.
While conventional wisdom suggests millennials, the 92 million people born from 1980 to 2000, shun branches for digital banking, that's not necessarily true in all cases, JPMorgan found.
"About 75% of our deposit growth comes from customers who use our branches," Duckett told investors in a February presentation. "Maintaining our leading physical presence is critical to our success."
Digital services are equally important, though. Customers deposited nearly 75 million checks via smartphones in 2016 and transferred almost $28 billion via QuickPay, the bank's person-to-person payment system.
"Our digital capabilities are the invisible ties that bind," Duckett said. "By having a prominent place on our customers' mobile phones and making their everyday lives a little easier, we're more connected to them in a deep and personal way."
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