Heritage Bank NA is an employee-owned bank that operates nationally, with six physical locations across Iowa, Minnesota, and South Dakota. The company provides mortgage lending, commercial banking, and agricultural banking in addition to personal banking and a full suite of deposit products across three different brands: Heritage Bank, Physician Bank, and Acres Bank.
Problem: Heritage’s existing KYC solution lacked the flexibility and robustness it needed for a national expansion.
Heritage Bank has been expanding beyond its origins as a community bank by attracting more customers and deposits nationwide. But to better compete with large national banks, Heritage knew it would need to accelerate its digital, mobile-first transformation.
A key part of this transformation? Empowering customers to open an account online and onboard remotely without needing to visit a local branch — while still complying with the AML and KYC requirements required by law.
“Our core banking software has a digital account opening solution, which we used for about three years,” says Doug Verduzco, Digital Transformation Officer at Heritage Bank. “But it really couldn’t meet our needs for a number of reasons.”
The first reason the solution wasn’t adequate, according to Doug, was that it couldn’t be customized. While the solution was convenient — it was, after all, embedded within the bank’s core banking software — Heritage couldn’t customize it to better meet its business objectives or customer needs. It was stuck with the fields, verification flow, and branding that came with the solution out of the box.
The second reason is that the existing solution didn’t have an effective way to capture customer IDs or documents that Heritage needed to collect for verification. Once customers submitted their application, they would receive a request by email to submit their documents. It wasn’t a seamless process, leading to confusion and drop-offs.
“Even successful account opens were taking 30-35 minutes to complete,” says Doug.
Finally, the solution wasn’t able to handle fraud attempts at scale, forcing Heritage to implement manual fraud reviews as part of onboarding to ensure fraudsters weren’t getting through.
“It lacked a number of automated checks that could have stopped fraudsters from getting through in the first place,” says Cheryl Moe, Deposit Operations Manager at Heritage. “We were spending hours each week cleaning up.”
With these complexities multiplied across more than nine product lines and three brands, Heritage knew it needed to start looking for a more robust option.
“At the end of the day, the solution was really built for small community banks,” says Doug. “But we’re trying to market our products nationally, at a much larger scale, to people who are never going to come into a branch. We were trying to make it work, but it just wasn’t designed for that.”
Solution: Heritage partners with Persona for automated KYC verifications across brands and product lines.
After considering its options — including potentially building its own solution from scratch — Heritage ultimately decided to partner with Persona. A few of the reasons it went with Persona include:
Automated verification
One of the key capabilities Heritage Bank was looking for in a solution was the ability to automate identity verification for digital account openings — a need that Persona’s suite of identity tools was specifically designed to meet.
“The automated verification piece was really something that the deposit operations team was looking for,” says Cheryl. “So much of what we used to have to do manually, we can now do automatically with Persona.”
Today, when an individual wants to open an account digitally, they are prompted upfront to capture and upload a photo of their government ID and a selfie. The information on their government ID (e.g. address, date of birth) is automatically extracted via OCR technology and compared against information from a government database. In cases where the address in the ID and database are inconsistent, the user may be prompted to upload a document for proof of address. At the same time, the selfie is algorithmically analyzed and compared against the portrait in the ID, looking for discrepancies that may point to spoofing.
For individuals that pass this initial round of verification, the workflow automatically runs reports to see if they are on a government watchlist and/or politically exposed persons (PEP) database, which would prompt more stringent verification.
“It saves us a lot of time and is a much more seamless process for users compared to the old system,” says Doug.
Flexibility
Another key consideration for Heritage was flexibility. Frustrated with the constraints and inflexibility of its existing solution, Heritage knew that whatever solution it chose, it needed to be customizable.
“In our old system, we were severely limited in what we could change and adjust,” says Doug. “We couldn’t add fields, text, or branding to the screens or adjust the onboarding flow to meet our needs.”
With Persona, Heritage was able to take full control over the content of its onboarding flow: adding and removing fields as necessary, deciding which verification methods would be deployed when, inserting educational messaging throughout the flow to ease customer confusion, and more. Likewise, it was able to tailor the logo, color palette, and other branding details to each of its brands for consistent messaging.
Integrations and low-code environment
Finally, Heritage was looking for a low-code environment that would be relatively easy to set up, maintain, and integrate with its existing ecosystem of other tools.
According to Doug, “it’s relatively easy to make adjustments using Persona’s template editor, and there’s a real bang for your buck in terms of how much effort goes into making a change and how much value you get out of it.”
Doug also notes that Persona did a lot of technical heavy lifting during implementation, helping Heritage design templates, deploy workflows, and tweak the product based on what the company was trying to do.
“We were a little worried that support would drop off after implementation,” says Doug. “But we’re glad to say that Persona has continued being spectacular whenever we have a question or are running into an issue trying to get something done. It’s been incredibly helpful.”
Results: Persona streamlines IDV and fraud detection, leading to faster account opens and less fraud — and empowering Heritage to pursue its digital transformation
It’s only been six months since Heritage deployed Persona for IDV, and it’s already seeing benefits from the switch.
Before Persona, it took customers an average of 12 minutes to get through the initial application to open a new account, and then back-end processing could take an additional week. Today, customers finish their applications in an average of five minutes — less than half the time.
“With some additional tweaks to the onboarding flow, we’re hoping to eventually get initial applications down to two minutes,” says Doug.
When fraud does occur, the automated nature of Persona’s fraud scanning tools means that Heritage has a much easier time handling it and cleaning things up.
“In the past, we’ve seen large-scale fraud attempts. Sometimes it might result in having to shut down new online applications for at least a week while we deal with the fraudulent applicants,” says Cheryl. “But the most recent time it happened, we weren’t even affected by it because Persona did such a great job of weeding out the bad actors automatically. That means less research on our part and the ability to keep applications open.”
Looking ahead, Heritage is excited to make additional improvements to its onboarding flows by integrating additional data sources like customer surveys, net promoter scores, and even voice options. And while the bank currently isn’t using Persona to conduct KYB on business banking accounts just yet, it has a goal of getting there.
“When the time comes, if we can complete KYB and facilitate business banking account opening through Persona, that would be another big win for us,” says Doug.
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