Banking on Digital: Enabling a digital first mindset

Accenture Interactive – Point of View Series

Everywhere Banking

Everywhere BankingEverywhere Banking is one of seven enablers that can help financial services providers renew the customer experience in the digital era. Adopting a “Digital First” mindset—putting digital at the heart of the business—enables banks to redefine their relationship with their customers.

Find out more: www.accenture.com/bankingondigital

Banks typically operate according to traditional retail rules, waiting for customers to come to them. In an increasingly digital marketplace, today’s banks find themselves at a crossroads: Either they become a utility-like provider with little brand differentiation, or they establish digital ecosystems that embed their services into customers’ everyday lives.

Everywhere banking puts the bank wherever the customer is, with services extending beyond traditional financial products. In this approach, customers tap into a network of partners and consumer services based on their choice of device. As an essential part of this new ecosystem, the bank has the opportunity to become a “one-stop-shop.” It interacts with customers on a daily basis as they make purchases and financial decisions, serving as an advisor, benefit provider and access facilitator. With such dispersed and limitless services, banks can become indispensable to their customers, helping to boost profitability, customer satisfaction and brand differentiation.

Why Does Everywhere Banking Matter? By helping to resolve customers’ problems and playing a more central role in their lives, everywhere banking can:

Enhance the customer experience: Everywhere banking makes financial services ultra-convenient. Customers no longer need to worry about how they can access a desired service; the bank anticipates and offers what they need, when they need it, working with a network of partners.

Protect brand positioning and increase customer loyalty: Everywhere banking can help distinguish the brand with convenient services the customer cannot find elsewhere. Enabling customers to accomplish their goals swiftly and efficiently helps build trust and loyalty.

Improve profitability: With greater brand differentiation and one-stop customer access points, banks can avoid pricing pressures and apply premiums for value-added services. For instance, banks could connect small merchants with good value service providers in their area. Everywhere banking can also help banks improve operational efficiency by radically transforming front- and back-end processes.

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How can banks make themselves central to their customers’ lives? Through relevant networks and seamless execution. To make everywhere banking a reality, banks will need to create or be part of a broader ecosystem that uses digital and emerging technology to transform customer services and engagement.

Through the implementation of digital marketing capabilities, analytics and mobile payment services, the ecosystem will enable innovative, interactive and engaging communications, as well as real-time banking services. Together, ecosystem partners will be able to deliver the most relevant products to customers using their preferred distribution channels. Mobile payments and data capture will form the backbone of any future offering.

Practical Guide to Everywhere BankingIn this new, central role, banks are well-positioned to satisfy customers’ retail and finance needs. They can employ deep knowledge of customer wants, bolstered by market information, to offer appropriate purchasing choices. Furthermore, through an alliance of partners, banks can provide customers with significant benefits, such as discounts or reward schemes. As the main facilitator, the bank continues to glean customer data and insights to help the ecosystem of partners provide customers with the most relevant products and services into the future.

In establishing this new ecosystem, there are three options that banks can adopt, each with a myriad of channels and services (See Figure 1). Choosing the right model will depend on the bank’s strategic goals, the services it wishes to provide, the role it intends to play and, to some extent, the strategic opportunities that arise.

Payment-driven ecosystemMany financial services providers already have some degree of mobile payment capability. Most of the current capabilities, however, cover specific tasks solely executed in a banking context, such as transferring money from one account to another. But a payment-driven ecosystem expands payment opportunities into other realms, offering a variety of relevant services at scale and at the precise retail point of sale. Payment-driven ecosystems can be integrated with social media, in-store payments and peer-to-peer payments, where individuals transfer payments using digital wallets.

Ecosystem partners are able to share transaction data to formulate more relevant future offers. For instance, using a mobile phone for payments at a partner department store could trigger a money-off coupon for the customer’s next purchase.

In Australia, Commonwealth Bank created a highly successful app on iOS and Android that allows customers to make contactless payments and pay friends using mobile, e-mail or Facebook contacts. In just 18 months since the launch, around 800,000 people downloaded the app and those customers used it to transfer or pay A$6.7 billion.1

Commerce-driven ecosystemIn this ecosystem, banks connect merchants and suppliers to offer the customer both financial and non-financial services. A commerce-driven ecosystem uses mobile marketing, loyalty,

customer data, social media and analytics to enrich and tailor the customer experience and offers. Assuming a leading role as a trusted advisor, banks support customers with products and services at key financial or purchase decision points, such as buying a house or car, through partnerships with non-financial institutions.

For example, American Express teamed with Facebook to launch “Link, Like, Love,” which offers customers deals, access and experiences based on their likes, interests and social connections. It also delivers rewards points offers, entertainment access, exclusive content and special events based on the cardmember’s Facebook social graph.2

Fully integrated ecosystem

In a fully integrated ecosystem, banks also assume a custodial role, connecting partners from a variety of industries. However, the partners expand the scope of financial and non-financial products and services available across multiple retail categories and channels through joint ventures. The bank, telecommunications company and retailers aggregate their customer and transaction data to design a complete customer experience with personalized offers and integrated, convenient services at the point of sale.

In Belgium, BNP Paribas Fortis and Belgacom are creating a mobile wallet solution that helps drive in-app commerce sales for merchants. With the solution, customers can make payments, store tickets, redeem coupons and gain loyalty points in a secure environment, all within the retailer’s app.3

Foundational ElementsThe ecosystem a bank decides to adopt will depend on the geography, strategic interests, customer behavior, digital maturity and available pool of partners. There are, however, three important operational capabilities that banks need to establish as they map out their approach.

Digital Platform Banks and their partners will need to decide what digital wallet features and marketplace capabilities they require to configure a digital platform that supports their chosen ecosystem.

Customer Analytics All ecosystems require intelligent data to succeed. Customer insights drawn from transaction data and customer records, merchant intelligence and campaign management capabilities will help drive business decisions and deliver relevant and engaging services and products.

Digital and Mobility Services Ecosystem partners will need to determine the kinds of services they will offer and the best distribution methods, from targeted advertising, coupons/vouchers, loyalty and ticketing to business digitalization and social media.

Figure 1: Everywhere Banking—the new role for financial services providersIn this new ecosystem, there are three options that banks can adopt, each with a myriad of channels and services.

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ConclusionEverywhere banking helps package and scale tailored banking services at the point of need to improve competitive differentiation. It also heads off potential industry disruptors and stakes out a claim in the digital ecosystem. Such an approach positions banks as providers of choice across the spectrum of customer needs, not just in one market segment.

To learn more about building digital capabilities in banking, contact:

Joydeep Bhattacharya j.a.bhattacharya@accenture.com

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1 Benjamin Ensor's Blog, "Kaching Lowers The Barriers To Mobile Payment Adoption," April 23, 2013, http://blogs.forrester.com/benjamin_ensor/13-04-23-kaching_lowers_the_ barriers_to_mobile_payment_adoption accessed October 24, 2013.

2 American Express Press Release, “American Express Launches "Link, Like, Love" on Facebook—first-Ever Platform to Deliver Deals, Access and Experiences Based on Cardmember "Likes" and Interests," July 19, 2011, http://about.americanexpress.com/ news/pr/2011/link.aspx, accessed October 24, 2013.

3 Belgacom Group, "Belgacom and BNP Paribas Fortis Jointly Launch “in-app commerce” on Smartphones," March 18, 2013, http://www.belgacom.com/be-en/newsdetail/ ND_20130318_Mobile_wallet.page, accessed October 24, 2013.