How BMO Is Pioneering Digital-First Banking While Maintaining Customer Connections
Digital transformation in banking isn't just about implementing new technologies – it's about reimagining how financial institutions serve their customers in an increasingly online world.
Chicago-based BMO Bank, the U.S. subsidiary of Bank of Montreal, has emerged as a leader in this space through its comprehensive approach to modern lending.
Confronting Digital Challenges Head-On
Before embarking on its transformation journey, BMO faced several challenges in its lending operations. The mortgage and personal lending processes had become increasingly cumbersome as customer expectations continued to evolve. Modern consumers demand websites that are intuitive, responsive, and personalized – expectations that traditional banking processes struggled to meet.
The personal loan application process was particularly problematic. As Mark Shulman, Head of Consumer Lending at BMO, described it: "Very manual, very time-consuming, a negative customer experience. It was not a product that we actively marketed."
These inefficiencies weren't just operational issues – they directly impacted customer satisfaction. For home equity lending, the in-person closing process constrained by branch hours created frequent customer frustration. Meanwhile, bankers spent valuable time coordinating and attending closings instead of focusing on strategic initiatives.
Wade Bundy, Senior Business Transformation Manager at BMO, highlighted this limitation: "We didn't give customers the choice in their closing options or time. Every home equity transaction was forced to be closed in a branch, which bound customers to branch hours and banker availability."
The bank needed a more flexible, customer-centric approach, and building solutions in-house proved prohibitively expensive. As Shulman noted, "When we looked at the cost of the build in-house, including the cost of the maintenance and upgrades, it just didn't make sense to us."
Embracing Digital Solutions Across Product Lines
To address these challenges, BMO turned to Blend’s suite of digital solutions, including its Personal Loan solution, which drastically improved the efficiency of consumer loan applications.
"The technology is very intuitive. It's made so it's simple for a customer to use, and for a branch to use. Taking a five-minute app versus a 30-minute app feels very different," explained Shulman.
The bank then turned its attention to home equity closings, introducing Remote Online Notarization (RON) capabilities that revolutionized the process. These digital closings eliminated the need for in-person visits, allowing customers to finalize transactions entirely online.
Bundy emphasized how this shift empowered customers: "The biggest impact was giving customers the choice in their closing options,” he notes. Today, more than half (65%) of all activity occurs outside standard branch hours.
Measuring Transformation Success
The results of BMO's digital initiatives have been impressive across all key metrics. The bank experienced a 53% year-over-year increase in digital home equity applications. Additionally, mortgage and home equity application cycles were shortened by five days – a significant competitive advantage in today's market.
The streamlined personal loan application process also led to a significant boost in customer satisfaction. As Shulman observed, "We're happy to now more aggressively market the product to the customers rather than the branch having to take 30-45 minutes to take a loan application. It's a five-minute process. It's so much friendlier to the branch staff, much friendlier to the client, and a good customer experience."
Beyond application efficiency, the shift to digital processes eliminated post-closing errors that had previously affected 15% of transactions. The adoption of hybrid and RON closing solutions saved BMO bankers an estimated 10,000 hours annually, allowing them to redirect their focus toward customer engagement and pipeline development.
Bundy emphasized these operational improvements: "Deploying a strategy that took the closing activity away from bankers allowed us to eliminate errors, create a better customer experience, and give customers the ability to close electronically or via mobile notary."
Establishing New Standards Through Collaboration and Innovation
BMO’s collaboration with Blend transcends a typical vendor relationship; it’s a dynamic alliance that propels continuous innovation and establishes new standards in the financial services industry.
However, the bank isn't merely focused on keeping pace with industry change – it's determined to lead innovation. This forward-thinking approach ensures BMO remains at the forefront of delivering exceptional digital experiences to its customers.
Bundy summarized this philosophy: "We are able to abide by our digital-first strategy. Everything that we do is about having a digital process that's frictionless and easier for the customer, for our sales teams, and for our operations groups alike."
The Path Forward for Banking
BMO's journey illustrates how traditional financial institutions can successfully embrace digital transformation while maintaining focus on customer relationships. By strategically implementing technology that addresses specific pain points in the lending process, the bank has created measurable improvements in both operational efficiency and the customer experience.
The lessons from BMO's transformation are applicable across the financial services industry. Financial institutions that adopt similar approaches – focusing on customer choice, operational efficiency, and seamless experiences – stand to gain significant competitive advantages in an increasingly digital marketplace.
As the banking industry continues to evolve, the institutions that will thrive are those that, like BMO, view technology not as an end in itself but as a means to better serve customers in the ways they prefer. This customer-first digital transformation represents the future of banking – one where technology enhances rather than replaces the human connection that remains at the heart of financial relationships.
About Author:
Gaurav Nagla, Product Leader at Blend