Building Change Customers Will Notice
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The document discusses building change that customers will notice in the banking industry. It notes that while some phrases don't change, their meanings have evolved over time. Customer preferences for channels have also shifted, with in-person interactions still preferred for opening accounts but online and mobile growing significantly. Younger customers and wealthier segments prefer more digital options. The document advocates understanding customer data and channel preferences to provide a consistent experience across applications and locations. Building agility requires organizing channels together, taking action on insights continuously, and reviewing processes for extension to other channels.
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Building Change Customers Will Notice
- 1. October 12, 2011 Can You See Me Now? Building Change That Customers Will Notice Nicole Sturgill Research Director Retail Banking & Cards © 2010 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved.
- 2. Agenda Welcome and introductions Building change that customers will notice What has changed? Data, data, data on consumer preferences The need for agility and how to build it Break for lunch Panel discussion Building agility Q&A © 2010 The Tower Group, Inc. 1
- 3. What has changed? © 2010 The Tower Group, Inc. 2
- 4. Some phrases don’t change, but they take on a different meaning 1991 2015 1. Maintaining Profitability 1. Service Quality 2. Credit Portfolio Management 2. Maintaining Profitability 3. Service Quality 3. Market / Customer Focus 4. Regional Economy 4. Operations / Systems / Technology 5. Cost Management 5. Credit Portfolio Management . . . ? . 38. Electronic Banking 38. Expanded Securities / Insurance 39. Expanded Securities / Insurance 39. Industry Overcapacity 40. Inflation 40. Off-balance Sheet Regulation 41. New Sources of Capital 41. Geographic Expansion 42. Antitrust Backlash to Consolidation 42. Industry Consolidation 43. Economic Globalization 43. Nationwide Interstate Branching 44. International Banking 44. Antitrust Backlash to Consolidation Source: Bank Marketing, 1991 © 2010 The Tower Group, Inc. 3
- 5. Everything is Additive 1951 1981 © 2010 The Tower Group, Inc. 4
- 6. To Today, When Channel Proliferation is Dizzying © 2010 The Tower Group, Inc. 5
- 7. Tea Leaves: How do we know what to build next? © 2010 The Tower Group, Inc. 6
- 8. The Branch Is Still Preferred, At Least for Opening Accounts Preference to learn about financial products and services Australia 35 44 2 5 4 10 Canada 42 40 1 5 6 6 Mexico 44 44 2 5 2 3 UK 26 55 22 7 8 USA 40 35 2 5 10 8 Malaysia 27 49 5 5 4 9 Singapore 35 40 5 3 8 9 0% 20% 40% 60% 80% 100% Preference to purchase financial products and services Australia 55 24 2 5 1 13 Canada 61 22 1 5 1 10 Mexico 62 24 3 5 1 6 UK 41 39 2 5 3 10 USA 61 19 2 4 3 11 Malaysia 47 27 7 6 3 10 Singapore 51 26 6 2 5 9 0% 20% 40% 60% 80% 100% In person, face-to-face Online (Web site) Mobile app Phone Mail Unsure Source: CEB Financial Services Customer Experience Survey, 2010 © 2010 The Tower Group, Inc. 7
- 9. The Role That Age Plays Preference to learn about financial products and services in the United States 18-34 30 45 4 6 6 8 35-54 42 37 1 4 8 8 55+ 47 24 1 4 15 9 0% 20% 40% 60% 80% 100% Preference to purchase financial products and services in the United States 18-34 48 30 3 6 5 9 35-54 63 18 2 4 1 11 55+ 73 10 3 3 12 0% 20% 40% 60% 80% 100% In person, face-to-face Online (Web site) Mobile app Phone Mail Unsure Source: CEB Financial Services Customer Experience Survey, 2010 © 2010 The Tower Group, Inc. 8
- 10. Channel Preference by Wealth Segment Learn about financial products and services Mass Market¹ Mass Affluent¹ 4% 13% 10% 3% 6% 1% In person 37% 43% Online Mobile Phone Mail 38% 45% Note: Mass Market = less than $100,000 in investable assets; Mass Affluent = $100,000 + in investable assets Source: CEB/TowerGroup Customer Experience Survey, 2010 © 2010 The Tower Group, Inc. 9
- 11. Channel Preference by Wealth Segment Make purchases of new financial products and services Mass Market¹ Mass Affluent¹ 1% 3% 2% 2% 4% 5% In person 21% Online 26% Mobile Phone Mail 70% 66% Note: Mass Market = less than $100,000 in investable assets; Mass Affluent = $100,000 + in investable assets Source: CEB/TowerGroup Customer Experience Survey, 2010 © 2010 The Tower Group, Inc. 10
- 12. Contact Preferences for Addressing Issues (2010) Phone In-person: Staff 7% 4% In-person: Manager 2% 4% 31% E-mail 8% Website 21% Write a letter 22% Satisfaction survey None of the above Unsure Source: CEB Financial Services Customer Experience Survey, 2010 © 2010 The Tower Group, Inc. 11
- 13. Reasons for Attrition at US Financial Institutions Moved to new location Delivery issues Poor customer service Limited access 5% 17% 24% Excessive or hidden fees 6% Another FI's offer more 12% attractive 13% Inferior offerings 5% 16% Wanted FI with better reputation None of the above Prefer not to say Source: CEB Financial Services Customer Experience Survey, 2010 © 2010 The Tower Group, Inc. 12
- 14. Building Agility © 2010 The Tower Group, Inc. 13
- 15. US Banking Delivery Transactions by Type (2008–13P) Transactions (in Billions) 100 14.0 Mobile 9.4 (CAGR = 116%) 80 3.0 5.6 1.2 Online 33.3 35.0 (CAGR = 8.5%) 60 26.8 30.0 23.3 Call Center 40 (CAGR = 3.1%) 17.0 17.8 18.5 19.3 19.8 Branch 20 14.7 14.7 14.1 13.7 13.3 (CAGR = .07%) 14.6 14.7 14.8 15.0 15.1 ATM 0 (CAGR = .61%) 2009 2010P 2011P 2012P 2013P Source: TowerGroup © 2010 The Tower Group, Inc. 14
- 16. Linking Financial Products to Customer Utility Account Opening Complex Services Check Cashing Financial Advice Balance Inquiries Transaction Services Payments Withdrawals Transaction (Cash) Services Deposits CONSUMERS Account Inquiries Complex/Transaction Bill Payment Account Opening Account Inquiries Complex/Transaction Problem Resolution Account Opening Source: TowerGroup © 2010 The Tower Group, Inc. 15
- 17. Example: The Bank Product Sales Cycle Consumer request Teller/agent recommendation Identify Prospects Complete forms Teller referral Enter application Platform data discussion Provide Open account Make contact Online outreach compliance documentation Discuss concerns Ask Answer Provide electronic Qualify lead questions/online questions help tools means of communication Establish creditworthiness Present offer Determine account type Source: TowerGroup Explain benefits © 2010 The Tower Group, Inc. 16
- 18. Delivery Challenges Branch rationalization - Keep or remove? - Redesign or stick with tradition? Shifting demographics Resource availability and prioritization Competing priorities: - Lower cost of self-service vs. cross-sales and loyalty generated by face-to-face interactions Rationalization of internal cost and revenue structures Siloed channel management © 2010 The Tower Group, Inc. 17
- 19. Connecting Channels and Products to Provide a Consistent Experience Channel Applications Getting There From Here Deposit products •Customer Insights Branch •Preferred channels •Existing products Mortgage loan •Demographics •Credit Quality Credit cards ATM Mobile •Enabling any channel, anytime, any place access •Business Process Management Consumer loans •Account origination, problem resolution, customer requests Wealth Online Contact Center management Source: TowerGroup © 2010 The Tower Group, Inc. 18
- 20. Solutions and Next Steps Understand the customer Data is useless if you don’t know what to do with it Play to the customer – Know the preferred channel(s) Know what the customer expects from you; compare existing demographics vs. desired demographics Organize Plan for agility — determine the vision and lay out how to get there Rationalize competing goals: utilization and financial Bring channel management under one roof Take action Make customer insights an everyday process, not a point in time analysis Review existing channel-specific processes to see what can be extended to other channels Don’t forget the back office © 2010 The Tower Group, Inc. 19
- 21. Smarter Banking for your business What is Customer Care & Insight? Influence and Drive Insights Predict & Act Sense & Respond Interactions Face-to-Face, Direct Voice, Self Service Analyze & Derive Information Pervasive & Quick Access to Trusted Data Capture & Notice Any entry point, continuous cycle, continuous discovery and refinement 20 IBM Confidential © 2011 IBM Corporation
- 22. Smarter Banking for your business Influence and Drive Example: Example: Customer Analytics Insights Multi-channel Transformation Predict & Act Sense & Respond Interactions Face-to-Face, Direct Voice, Self Service Analyze & Derive Information Pervasive & Quick Access to Trusted Data Capture Example: & Notice Single View of Person Any entry point, continuous cycle, continuous discovery and refinement 21 IBM Confidential © 2011 IBM Corporation
- 23. Backed by Cisco’s Integrated Architecture for Retail Banking © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 22
- 24. Questions nsturgill@towergroup.com © 2010 The Tower Group, Inc. 23
Notas do Editor
- The idea of these next 3 slides is to show that customers have changed but banks haven’t.
- This section will focus on what we know right now – consumer data from our study plus channel volume forecasts.
- For today’s discussion, I’d like to focus on the US statistics. Branch sales are certainly not going away. 61% of US consumers preferred to open their accounts in the branch. However, we can ignore that 19% of consumers don’t just consider opening accounts online but actually prefer to do so. An even greater number prefer to research products online before going in to the branch. The question I would ask is “How many branches are familiar with the information being delivered online? How many are ready for a more informed consumer?”
- Focus on the US – at the aggregate level, only 19% prefer to open accounts online. But there are definite demographic differences with 30% in the 18-34 range preferring to open accounts online and only 10% in the 55+ category preferring to open accounts online. Numbers are higher across the board for researching. This preference for online will continue to grow as the 18-34 segment is backfilled with new, younger consumers.What this means is that the bank has to be prepared to meet customer needs in all of the channels. What’s important is knowing which customer prefers which channel. It doesn’t mean that you need to offer every function in every channel but that you adjust your strategy to match customer tasks to the preferred channels. We’ll talk more about this in a few minutes.
- This section will focus on what we need to do to adjust to the new consumer and build agility so that banks can be more adaptable in the future.
- Goal of slide – show need for agility. Be available where customer prefers to perform tasks.
- Identify prospects – Branch: customer request or teller conversation. Online: Need automated data to provide a targeted offer.Make contact – Branch: In person. Online: Based on point of contact i.e. online ad will vary from ATM screen message or mobile text offer.Qualify lead – Branch: Ask personal questions, conversational. Hopefully a prescreened offer to give the customer. Present offer – Branch: Determine the right account and explain why it is the best option. Online: Customer researches accounts or uses an online wizard.Answer questions – Branch: In person. Online: Customer should be able to call contact center, send an e-mail, or start a chat conversation.Open account – Branch: Typically paper forms that are then keyed in by branch personnel. Online: Customer does the keying.Interestingly, the processes that we’re currently putting in place to improve sales through the self-service channel can help us improve the process in the branch, as well. Let’s look at how we interact with customers in 4 different branch models.
- Plan for agility – Do you plan for the next project or do you plan for the future (i.e. any future project)?