Digital Banking

Digital Banking
DIGITAL BANKING Nikolay SPASOV TBI Bank Deputy Executive Director
WHAT IS DIGITAL BANKING? Internet Banking Mobile Banking Omni-channel Banking NEW UNDERSTANDING OF BANKING 2
NEW UNDERSTANDING OF BANKING INTERNET OF THINGS (IoT) DIGITAL BANKING 3
WHAT IS INTERNET OF THINGS (IoT)? Device with ON/OFF switch Mobile Phones Coffee Machine Fridge Washing Machine Heating Systems Lamps Headphones Wearable Devices SOURCE: Gartner 4
5 Alarm Coffee Machine Fridge Reminder Remind me to buy milk! 1 2 3 Remind me to buy milk!
6 Your Car Calendar 1 2 3 4 Message I am in a traffic! Will be late with 10 min. 5 New Bulgarian University Maps
7 AN E X P L O S I O N O F C O N N E C T E D D E V I C E S 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 50 30 40 20 0 10 Equal to Sofia City population in that time Increase of connected devices in 11 years CISCO estimates that IoT is born in 2008-2009 US National Intelligence Council recognizes IoT on their list with six most “disruptive“ with expected impact till 2025 Machine-to-machine will reach 18 billion by 2022 with consumer electronics & intelligent houses The number of connected devices to internet exceeds twice the population of the planet Emerging sensors – traffic light cameras, parking spot sensors, entertainment & smart utility meters are all communicating to other machines via broadband Taking population predictions into account, there will be about 6.6 devices per human on the planet DEVICES YEARS 1992 2003 2012 2009 2013 2014 2015 2016 2017 2018 2019 2020 SOURCE: US National Cable & Telecommunications Association Songdo, South Korea
INTERNET OF THINGS & DIGITAL BANKING 8 Users Data
9 INTERNET OF THINGS & DIGITAL BANKING Banks Data IoT Car Accident 1 Financial Data 2 3 4 Customer X Bank
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DIGITAL BANKING PILLARS Digital Banking Experience Content Data & Analytics Omni-channel 11
1313 TRADITIONALCYCLEONLINE awareness information advice becoming a customer servicing & transactions share BankLeaflets Bank Officer Bank Service & TRNX Worth-To- Mouth Presence Personali- zation Interactive Simplicity Convinience Feedback
You’ve got to start with the customer experience and work back toward the technology – not the other way around Steve Jobs 1955 - 2011 14 “ ”
CUSTOMER JOURNEY MAPPING (MORTGAGE LOAN) Young Couple THINKING & FEELING BANK TECHNOLOGY OPPORTUNITIES CONSIDER ACCESS OPTIONS DISCOVER DEFINE REQUIREMENTS SELECT CHOOSE WHAT TO BUY VERIFY ID & FINANCIAL CHECK PURCHASE SALE NEGOTIATED COMPLETE MOVE Decide to buy Learn about the mortgage Calculate the budget Property search Compare mortgages Apply for mortgage loan Assessment Sign contract & Deal Move 15 Renting means freedom w/o security Buying a property is more binding than marriage A real estate agency will save money Visiting bank for consultation - helpful Selecting real estate agency – comparing & selecting property Form filling is time consuming & the bank should know our details, already The bank needs hard copies Just something that will pass quickly The bank officer will handle everything Can’t this all be online? All parties communicate hard The bank officer kept us updated This took time! We need to clean  • Explains products • Prepares indicative offer • Advices to select real estate agency BANK CUSTOMER SERVICE OFFICER • Fills in application form & copies ID Cards • Provides list with required documents BANK CUSTOMER SERVICE OFFICER BANK CREDIT DEPARTMENT • Performs assessment of applicants • Evaluates property • Prepares approval • Periodically updates the customers over the status of their application BANK CUSTOMER SERVICE OFFICER Online one-stop- shop preposition Online advisory, including real estate offer & indicative budget Auto data gathering from state databases (NSSI; GRAO; BNB; etc.) + IoT + Social Assessment Software & Decision Engine Biometrical electronic signatures software Quick & easy Less time & efforts consuming
Customer experience is the cumulative impact of multiple touch points over time which result in a real relationship feeling (or lack of). Warren Buffett Customer experience helps you drive value, reduce cost and build competitive advantage 16 “ ”
CUSTOMER EXPERIENCE VS. BUSINESS VALUE How often are customer insights used to drive decision-making around the organization? Almost always 10,7% Occasionally 37,3% Frequently 30,7 Infrequently 16% Not at all 5,3% 17SOURCE: Customer Strategist, Volume 6 Top actions taken based on customer experience metrics 1. Improve customer-facing operations 2. Review results across the organization 3. Improve channel interactions 4. Report results to the entire organization 5. Improve non-customer-facing operations 6. Reward customer-facing employees based on results 7. Reward executives based on results
CUSTOMER EXPERIENCE VS. BUSINESS VALUE What experiences are most enhanced or modified based on customer experience measurement? 18SOURCE: Customer Strategist, Volume 6 How difficult is it to colerate changes in customer experience with changes in business performance (revenue, operating margins, customer lifetime value)? 1. Omni-channel experience 2. Mobile experience 3. In branch experience 4. Phone agent experience 5. Web experience Extremely difficult 32.4% Moderately difficult 28.2% Somewhat difficult 23.9% Not at all difficult 7.0% Haven’t tried 8.5%
CUSTOMER EXPERIENCE EQUATION The ability of an organization to increase its customer base The ability of an organization to keep and grow the customers it already has Acquisition Retention Efficiency The ability of an organization to do more with less GENERATE MORE OPPORTUNITIES INCREASE BRAND EQUITY INCREASE MARKET SHARE INCREASE SHARE OF WALLET DRIVE LOYALTY DRIVE ADVOCACY INCREASE ROI INCREASE PRODUCTIVITY 19 DECREASE OPS COST Customer Experience
CUSTOMER EXPERIENCE METRICS 20 Acquisition Marketing Campaign Effectiveness Up-Sell Cross-Sell Rate Average Revenue Per Customer Products & Services Per Interaction Retention Efficiency Average Resolution Time Uptime Channel Accessibility Channel Cost Acquisition Cost Retention per Customer - Cost First Contact Resolution Average Handle Time
22 CONTENT
“Content isn’t just a tactic, it’s a function of your entire marketing process. ” 23 Robert Rose
24 CONTENT ORGINATION CREDIT & DEBIT CARDS PRODUCTS MORTGAGE & HOUSING LOANS PRODUCTS CONSUMER & PERSONAL LOANS PRODUCTS SAVING PRODUCTS INVESTMENT PRODUCTS FINANCIAL SERVICES
25 HOW BANKS BECAME PUBLISHERS? 75%Local Banks 87%Affluent Customers RESEARCH Local Financial Media: 1/2 – connect with PRO’s 1/3 – PRO’s content 1/4 – create PRO content International Financial Media: Digital Marketing Team
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28 Without data you are just another person with opinion.“ ” William Edwards Deming 1900 - 1993
RECAP Customer Experience Banking ContentFinancial Data 29 IoT Data Data Management
30 DATA MANAGEMENT TOOLS & ANALYTICS 80%Local Banks place customer centricity as a top priority 1out of every 2 executives believe they do not have mature capabilities to support their customer strategies ?? CONSTRAINS TECHNOLOGY Real-time processing of data & analytics 59% SOURCE: SAP “Banks Betting Big on Big Data and Real-Time Customer Insight” Predictive analytics 59%59% Customer Relationship Management System 54%
PREDICTIVE ANALYTICS 31 PREDICTIVE ANALYTICS is the use of data, statistical algorithms and machine-learning techniques to identify the likelihood of future outcomes based on historical data. SOURCE: SAS “Predictive Analytics: What it is and why it matters” DRIVERS FOR PREDICTIVE ANALYTICS IN BANKING Customer Insight Customer Experience Management Channel Execution Business Strategy Risk Management Marketing ☛ Sentiment analysis ☛ Social media analysis ☛ Credit analysis ☛ Customer profitability ☛ Virtual agent ☛ Next best action ☛ Relationship pricing ☛ Next best offer ☛ Profitability ☛ Sales/channel performance ☛ Product channel strategy ☛ Risk & capital modeling ☛ Risk & capital management ☛ Risk adjusted pricing ☛ Portfolio risk management ☛ Fraud / AML ☛ Lead generation ☛ Customer segmentation ☛ Campaign management
TOP 5 PREDICTIVE ANALYTICS SOLUTIONS 32 Predictive Analytics SAP Predictive Analytics PREDICTIVE ANALYTICS SOURCE: Gartner Advanced Analytics Quadrant 2015: Gainers, Losers
WHAT IS CRM ? 33 system allowing businesses to manage business relationships and the data and information associated with them. Customer Relationship Management SOURCE: Salesforce Blog
WHAT CRM AFFECTS ? 34 SALES ☛ Product wise pipeline ☛ Customer on-boarding (lead capture) ☛ Real-time sales (online) MARKETING ☛ Campaign management ☛ Lead distribution to branches ☛ Campaign follow-up SERVICE & SUPPORT ☛ Listen, engage & respond ☛ Auto assignments to back office ☛ SLA’s and escalations PRODUCT & INNOVATION ☛ Product analytics ☛ New product market research ☛ Pilot product launch COMMUNITY ☛ Collaboration analytics ☛ Internal collaboration ☛ Unified employee desktop CUSTOMER EXPERIENCE ☛ 360 degree customer view ☛ Personalized offers ☛ Alerts ☛ Advisory
HOW CRM WORKS ? 35 Electricity Company Bank Customer X 80 BGN Electricity Bill Customer X
HOW CRM WORKS ? 36 Electricity Company Bank Customer X 80 BGN Electricity Bill Customer X Account Balance 0 BGN Customer X
HOW CRM WORKS ? 37 Electricity Company Bank Customer X 80 BGN Electricity Bill Customer X Account Balance 0 BGN Customer X
HOW CRM WORKS ? 38 Electricity Company Bank Customer X 80 BGN Electricity Bill Customer X Account Balance 0 BGN Your account balance is 0 BGN. Do you want 100 BGN overdraft for electricity payment? Y Customer X
HOW CRM WORKS ? 39 Customer X Electricity Company Bank Customer X 80 BGN Electricity Bill Customer X Account Balance 100 BGN
CRM & SOCIAL – EXAMPLE 40Facebook
CRM & SOCIAL – EXAMPLE 41 Boyko Borisov CRM System
CRM & SOCIAL – EXAMPLE 44 Boyko Borisov Boyko Borisov Male June 13, 1959 Bankya, Bulgaria Single female Friendship Networking G.E.R.B. Christian Bankya, Bulgaria CRM System
CRM & SOCIAL – EXAMPLE 45 Boyko Borisov CRM System
TOP CRM SOLUTIONS 46
OMNI – CHANNEL BANKING 48
49 OMNI – CHANNEL DEFINITION OMNI-CHANNEL BANKING is about ensuring customers have a consistent experience of the bank products and services irrespective of the channel they use, as well as ensuring channel integration and seamless customer transition between channels. SINGLE CHANNEL Customer Branch Customer and bank have a single touch point SOURCE: A Market Leader in Ovum's Decision Matrix – Digital Banking Trends in 2014 – Webinar Recap MULTI - CHANNEL Customer Branch Web Customer sees brand through multiple touch points with bank using siloed communications Customer WebBranch Call CROSS - CHANNEL Customer sees unified brand through many touch points. Bank has single customer view OMNI - CHANNEL Customer WebBranch Call Mob Customer has holistic brand experience. Bank leverages unified view of customer
50 OMNI-CHANNEL ENVIRONMENT Customer Online Banking Mobile Banking CRM Call Center ATM Corporate Website Branch Lending Platform Social
Online and physical branches are complementary, not rivals. They must unite together to increase turnover which is the key to a successful omni-channel strategy.. “ ”Marc Benioff 51
BRANCH IN OMNI – CHANNEL 52
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CONCLUSION 64 As customers become increasingly comfortable with technology, they are interacting with banks in multiple ways. They expect to be treated as individuals and according to their preferences. For banks, the time is now to take advantage of the wealth of customer information available. As the world becomes even more digital, capitalizing on technology will make the difference – digital banks are here.
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