Insight on financial sector trends & innovation within digital services. Given Mobey Fo

1. INSIGHT
NEXT LEVEL IN ONLINE BANKING:
USERS TO THE CORE OF THINKING
From products & transaction-focus towards
end-user-need –orientation
Mobey Forum Quarterly Meeting
Amsterdam
Tommi Pelkonen
Strategist
December 1, 2011
© Frantic 2011

2. Frantic = Digital Creations
35 people, Helsinki-based, 15 years of experience in digital solutions
WHAT DO WE WANT TO DO?
To make services that:
Strategy 1) Generate business opportunities
and additional revenues for our
Research & analytics
customers
2) Make services that people enjoy
to use and benefit of
Design
Technology
© Frantic 2011

3. TOMMI IN BRIEF
2010->: Strategist at Frantic
2008-2010: Business Consultant at Finpro Budapest in
ICT/software business
2005-2008: Strategist at Satama Amsterdam
1999-2005: Business Consultant at Satama Helsinki
1996-1999: Research at the HSE Electronic Commerce
Institute, focus: digital media service companies
Born 1971, married, daughter
M.Sc. (Econ.): 1999, Helsinki School of Economics,
HSE, International Business, Finance & Accounting,
Information Technology
Lecturer and author of several publications & articles in
the fields digital media, internationalisation of SMEs and
service business
Motto:
Industrial focus: Media, Telecoms, Financial sector, “The most robust
B2B Commerce, Industrial manafacturing knowledge is created in
Consulting focus: Strategy, Procesess & Innovation, interactions, via
Digital opportunities, Business modelling
positive conflicts”
© Frantic 2011 3

4. BACKGROUND:
THE DIGITAL REVOLUTION HAS REALISED,
BUT IT STILL CONTINUES
PERMANENT • The Internet has changed consumer and industrial buyer behavior
CHANGE permanently.
• All business operations are influenced by the online channels and e-
TOTAL IMPACT business.
EMPOWERED • Customers and consumers have more power than ever in economic
CUSTOMERS history
• Digital channel functions as transformation agent within
CHANGE DRIVER organisations. Competences to run digital channel-drive business
increase gradually.
STILL HUGE • Change process takes time – many business processes are not yet
digitised nor utilise the online channel to the its potential. Solid
POTENTIAL success metrics are emerging.
FRAGMENTATION • Innovation and society fragmentation continues – globally.
© Frantic 2011
eBusiness = Business!

5. INSIGHT
The next wave in digital services
for banking industry customers
• BACKGROUND: From modem noises towards real time,
pan-European & always-on digital banking for all
• SOME TRENDS: Innovation happening in and outside the
traditional banking/financial sector
• CHALLENGE: How to keep the trust and compete in the
turbulent times?
• SO WHAT: Why should you care?
© Frantic 2011

6. EVOLUTION STEPS IN BRIEF LEARN TO LISTEN &
BE PERSONAL
OFFER
THEMES EVERYTHING Need-based
Customer empowerment
Microbanking
Product offering explosion
BREAK TO THE Financial “supermarkets”
MASS MARKETS
Mobile banking era
1999->
New
Internet banking era
1995->
innovation
TEST & TRY and service
Internet- models for
EARLY DAYS boosted banking
1980-early 1990s efficiency and
self-service JOY OF USE
explosion (still GUIDANCE
Early trials going on)
with pioneers LOYALTY
and leading New sources of
companies EASE OF USE
banking
EFFICIENCY innovations are
emerging from
© Frantic 2011 TEST OPPORTUNITY DRIVERS user-orientation

7. KEY MOTIVES FOR BANKING AUTOMATION
• Cost savings, cost savings, cost savings…
• Freedom of time, place & location
• Ease of use
• Plethora of new & innovative financial products,
also for consumers
• Explosive growth of the financial instruments and electronic
commerce in professional, but also in private sectors
• Increased global hyper-competition and massive
investments into self-service platforms
• Reduction of churn = loyalty programs
BUT NOW:
Joy of use? Relevance?
Guidance of the consumers to better benefits?
© Frantic 2011 7

8. INSIGHT
The next wave in digital services
for banking industry customers
• BACKGROUND: From modem noises towards real time,
pan-European & always-on digital banking for all
• SOME TRENDS: Innovation happening in and outside the
traditional banking/financial sector
• CHALLENGE: How to keep the trust and compete in the
turbulent times?
• SO WHAT: Why should you care?
© Frantic 2011

9. BANKING IS A KEY APPLICATION AREA
FOR ONLINE USERS
476 M Internet users in Europe (2011), 58% of the European population
WE LOVE OUR SELF-
SERVICE BANKS – OR
DO WE?
http://www.internetworldstats.com/stats4.htm
© Frantic 2011
http://www.iabeurope.eu/media/43499/mcdc%20european%20overview.pdf

10. CONSUMERS IN VARYING STAGES OF
BEHAVIOUR
• Forrester Research asked in 2009-2010 about
consumers preference to seek & research / buy online
financial products
• ITA: 11% - 4 %
• FRA: ~20 % researched / 3 % bought
• SPA: 20 % - 5 %
• GER: 26% - 11 %
• NL: 49 % - 21 %
• UK: 43 % - 28% !
CONSTANT GROWTH IN
ONLINE USAGE FOR
FINANCIAL SERVICES
© Frantic 2011 Source: Forrester Research, 2009-2010

11. THE COMPARISON & BIDDING POWER IS
REACHING EVER SMALLER SEGMENTS
Comparison engines in pure
Letsbuyit.com – style of
eCommerce style – transparency
consumer insurance brokering
for standard products
with usage of aggregated power
of a B2B financial institution
© Frantic 2011 11

12. PERSONAL FINANCE MANAGEMENT TOOLS ARE
EMERGING INSIDE & OUTSIDE THE BANKS
POTENTIAL: Aggregate to an outside /
other bank’s online service to get richer,
clearer and more relevant information…
© Frantic 2011 12

13. SIMPLICITY IN BANKING & BUDGET BANKING
Simple, easy to use, no-thrill, bare bones banking.
© Frantic 2011
Is the the dawn EasyJet era of banking?

14. GREAT NEW INNOVATIONS DOING
GLOBAL GOOD
Online & mobility-empowered banking, microfinancing and risk sharing
© Frantic 2011 14

15. ALSO NOT-THAT-POSITIVE INNOVATIONS
EMERGE (FOR THE CONSUMERS !)
Case: Very short-term loans in Finland
Aggressive marketing +
User interface & process
innovations!
Leading to consumer interest
rates up 1300 % p.a.!
© Frantic 2011 15

16. INSIGHT
The next wave in digital services
for banking industry customers
• BACKGROUND: From modem noises towards real time,
pan-European & always-on digital banking for all
• SOME TRENDS: Innovation happening in and outside the
traditional banking/financial sector
• CHALLENGE: How to keep the trust and compete in the
turbulent times?
• SO WHAT: Why should you care?
© Frantic 2011

17. WE NEED TO RECOVER AND FIND MEANS
TO RE-ESTABLISH THE CREBILITY
How about learning from the best practices of other
© Frantic 2011 sectors to improve the situation, at least a bit?

18. THREE DIMENSION FOR FINANCIAL
SECTOR CONSUMER INNOVATION
FUNCTIONALITY TRUST
Security Credibility
Speed Expertise
Access Systems & Organisations
technology & processes Benefits
Usability Efficiency
Joy of use FINANCIAL SECTOR Transparency
INNOVATION
Social systems and A never-ending wheel
networks
of opportunities and/
or challenges in these
turbulent times…
Reputation Participation
Listening FAME Attitudes & behaviour
© Frantic 2011

19. BACK TO TRUST: HOW ABOUT DESIGNING
SERVICES FROM A “USERS FIRST -ANGLE”?
Let’s start from this angle…
• Who are they?
• What do they want?
• What do we want them to do?
• How do they behave now and will behave soon
• What makes them succeed (with us or without?
• How can we help them in their needs?
• What do the really want – what makes them
happy?
© Frantic 2011

20. USER-ORIENTATION TO THE CORE OF
(DIGITAL) PLANNING & THINKING
1. RESEARCH THE ACTUAL NEEDS & BEHAVIOUR OF THE USERS
Surveys and especially with qualitative interviews
2. FIND AND DESIGN SERVICES TO MATCH THESE NEEDS
Try to find the need that your organisation can service and excel in
within the time, budget, technology and resourcing available
3. HAPPY CUSTOMERS + GOOD BUSINESS !
SIMPLE IDEA – BUT SO RARELY EXECUTED
© Frantic 2011

21. SOME METHODS FOR THE USER-ORIENTED
THINKING OF (DIGITAL) SERVICES
Data analysis
Affinity Contextual Design
Card sorting (e.g. web
diagramming inquiry critique
analytics)
Diary/Photo Heuristic
Focus groups Interviews Meetings
study evaluations
Paper Participatory Remote Usability
Task Analysis
prototyping design testing tests
Continuous
Agile A/B & MVT
trial-learn- …
development testing
develop loops
User-orientation calls for softer methods – do we have the belief
believe in them in our number/fact-oriented financial industry?
© Frantic 2011 21

22. QUICK HINT: HOW ABOUT FOCUSING INTO
LOGICAL TIMING WHEN PEOPLE BUY
FINANCIAL PRODUCTS?
Getting a
Retirement Marriage
new job
Getting
Layoff/
Moving divorced/
loosing a job
separated
Becoming
Getting ill …
pregnant
This is not a marketing trick – it should become an
© Frantic 2011 essential part of financial service sales!

23. HOW ABOUT TRYING TO ANSWER THESE
QUESTIONS IN THE ONLINE BANK?
ACTIONS: How
can I move STATUS: What do
forwards? I have?
Dear Bank,
• What to do now – how • Give a great overview to
to improve this? Let’s the situation Please offer me all of
do it… this is a manner and a
language that I can
understand.
I am not a financial
expert, thus please
listen to me and help me
PERFORMANCE: to become better and
ADVICE: What How am I doing? more empowered,
should I do now?
• If this is so, what are
• What is happening –
am I loosing / winning?
thank you!
my options? Am I reaching my
goals?
Online banking could be not only necessity – it
© Frantic 2011 could be pleasant, even a fun experience! 23

24. HOW TO EXTEND THIS TO CONTAIN ALSO
THE SOCIAL DIMENSION?
Possible solutions
• Testimonials & reviews
• Peer-to-peer support
• Live support (chat, video)
• Benchmark & comparison data & tools
• Closed social circle alerts, discussions,
sharing – “my advisors”
• Life events – use content & relevant
supporting tools to trigger attention &
usage
• Bank feed – what is happening to me &
around me
• Visual appeal & analyser tools
• Financial diary functions etc.
• …
Innovation is opened up with a new
angle to thinking…
© Frantic 2011 24

25. INSIGHT
The next wave in digital services
for banking industry customers
• BACKGROUND: From modem noises towards real time,
pan-European & always-on digital banking for all
• SOME TRENDS: Innovation happening in and outside the
traditional banking/financial sector
• CHALLENGE: How to keep the trust and compete in the
turbulent times?
• SO WHAT: Why should you care?
© Frantic 2011

26. GOOD SERVICE SELLS ITSELF;
BAD SERVICE SELLS ITSELF EVEN FASTER…
Fitting the user needs
(utility) "
Useful
! Bad experience
= I will tell it 20 of my
Good experience closest friends and
Tells really
= I will share it with good
Designed publish a bitter update
four people for people on FB for my 223
stories
“friends”…
Desirable Stimulates the Usable
senses
Pleasurable Easy to use
experience (usability)
(satisfaction &
feelings)
© Frantic 2011

27. BETTER SERVICE EXPERIENCE AIMS FOR A
POSITIVE BUSINESS CASE - TOO!
• To existing or new clients
MORE SALES • Via enhanced marketing and conversion improvements
• Via improved retention of clientele
= more ! • Via measured and monitored online operations
MORE LEADS • Information clarity and lead process development
• Campaigning and analytical development
= more !
COST SAVINGS • Decreases in customer service costs
• Decreases in sales costs
= less - !
BUSINESS CASE IS A KEY FACTOR FOR GREAT DIGITAL
© Frantic 2011 SERVICE PROGRAMS – AND SO OFTEN NEGLECTED!

28. OUR TARGET: BEST-IN-CLASS USER EXPERIENCE
WOW!
I find things where
I expect them to be
I like the brand and
its visual design I got exactly what I needed know
Fitting the user needs
(utility)
It is nice to do
things online
BEST I feel the site
USER understands me
I saved a lot of time EXPERIENCE
doing things online I am impressed
Pleasurable experience Easy to use by the service
(satisfaction) (usability)
I get things done more
efficiently than offline I want to recommend this to
my friends
The banking sector has already made many of these things
© Frantic 2011
right . Yet, there is plenty of room for improvment
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29. DREAM:
HOW DOES A
LEADING ONLINE
BANKING SERVICE
BEHAVE & FEEL IN 2014?
© Frantic 2011

30. IN 2014, THE LEADING ONLINE
BANKING SERVICE … IT’S
HERE!
… offers a well-packaged multi-
channel customer access to reach
one’s financial service provider via
the preferred method of contact…
© Frantic 2011

31. IN 2014, THE LEADING ONLINE
BANKING SERVICE … LET ME
CONFESS
… create a trusted environment into
which customers want to come and
share their views and plans of the
their financial situation and the
provider. They feel treated as
respected customers…
© Frantic 2011

32. IN 2014, THE LEADING ONLINE
BANKING SERVICE … NICE TO
BE BACK
…remembers and recognizes its
users and offers personally
customised advices and services and
is present then when needed…
© Frantic 2011

33. IN 2014, THE LEADING ONLINE
BANKING SERVICE … GOOD
NEWS OF
YOU
……aggregates the consumer
opinions & reviews to its offerings,
advices and content dynamically…
© Frantic 2011

34. IN 2014, THE LEADING ONLINE
BANKING SERVICE … I AM
HAPPY!
…increases dramatically the
customer satisfaction and boost
revenues with lower churn and
clever cross-selling.
Outcome: Marketing budgets
start shifting from acquisition
to retention and loyalty programs!
Quality service sells itself!
© Frantic 2011

35. SUMMARY
• There have great potential for innovation via a
new angle for online banking innovation
• There is more new ideas around than ever for banking
innovations (also outside financial industry – we need to
match these to our world
• We need to find new ways to service the more
demanding online-empowered and social-advice
& impact amplified consumers
• Mobile banking/payment is not only an access
technology or transaction issue – it is the always-
on bank with the best of ease of use – but only if done
properly
© Frantic 2011 IN BRIEF: LET’S REINVENT OUR ONLINE BANKING SERVICES!

36. LET’S GO AND CREATE
GREAT DIGITAL SERVICES!
Tommi Pelkonen
Tommi.pelkonen@frantic.com
+358-40-50 50 821
http://www.slideshare.net/TommiP
© Frantic 2011
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