digitally mutual - transform research into the online capability of uk building societies

Digitally Mutual 2014RESEARCH INTO THE ONLINE CAPABILITY OF UK BUILDING SOCIETIES

Why?WHY THE DIGITAL CAPABILITY OF BUILDING SOCIETIES MATTERS

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As citizens we need challengers to compete hard against high street banks

“Banks in the UK have failed in many respects. They have failed taxpayers who had to bail out a number of banks … with a cash outlay peaking at £133 billion, equivalent to more than £2,000 for every person in the UK. They have failed many retail customers, with widespread product mis-selling … They have failed in their basic function to finance economic growth, with businesses unable to obtain the loans that they need at an acceptable price.”

Report of the Parliamentary Commission on Banking Standards, 2013

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To compete with banks, building societies must master digital services

50%

Online is now the primary way that UK banking customers transact. Research suggests that three out of five online banking customers use online banking at least once a week. Customer loyalty may also correlate with online usage.5

online banking users4

30%

Building Societies will soon run out of non-internet using customer/members.

Only 13% of British adults (6.7 million people) has never used the Internet.35.7 million British adults use the Internet daily.

non Internet users22007 2013

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But most building society websites are not transactional, usable or innovative

15% 0%

47%

MOBILE FRIENDLY?

The majority of Building Societies do not sell any products online.

28%3 of all Internet traffic is mobile. But only 15% of building societies a mobile friendly website.

No UK Building Society has launched a digitally innovative product or service.

Only 20% of Building Society websites offer fully usable site search.

BUILDING SOCIETIES HAVE LOW LEVELS OF DIGITAL CAPABILITYLess than half of building societies provide a transactional website.

Only 20% provide site search that is usable and meaningful to help member/customers find what they need.

Only 15% provide a website that is usable on a mobile device.

No building society offers any truly innovative digital product or service.

ONLINE PURCHASING? USABLE SITE SEARCH?

20%

DIGITAL INNOVATION?

Findings 1THE DIGITAL EXECUTION GAP IN THE BUILDING SOCIETY SECTOR

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We tested how well building societies use digital to meet basic customer needs

DIGITAL MATURITY BENCHMARK

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Our Digital Maturity benchmark is a simple test of how an organisation uses digital to meet customer needs – for basic information, sales, service, etc.

A website is shaped by the culture of the organisation that made it. Efficient code can be written in a silo. But it’s harder to get marketing, product, legal, compliance and IT teams to work together for coherent customer outcomes.

Digital Maturity is a simple test of how an organisation has embraced digital to meet customer/member needs.

CUSTOMER-CENTRIC DIGITAL BENCHMARK

PRESENTING INFORMATION

ONLINE SALES

ONLINESERVICE

CHANNEL INTEGRATION

DIGITAL INNOVATION

1

2

3

4

5

8

Digital maturity tests 22 factors that drive customer experience


ONLINE SALES

ONLINESERVICE

CHANNELINTEGRATION

DIGITAL INNOVATION

1. Microformats for easier display on Google.

2. Information architecture that is logical and usable.

3. Responsive design for better mobile experience.

4. Compliance with EU Cookie Directive achieved through best practice mechanism.

5. Product pages are clear & actionable

6. Site search works.

7. Social media integrated on site.

8. Application forms that are downloadable.

9. OR application forms can be requested by clicking.

10.At least one product can be bought online.

11.Many/most products can be bought online.

12.Products can be bought online by new customers without first setting up an account.

13.Basic online account for balances, etc.

14.Online tools and calculators.

15.Online call back requests.

16.Community polls, forums or blogs.

17.Transactional mobile app.

18.Channel transitions from web to phone can be made without repeating information.

19.Livechat can be used for help and information.

20.Single Sign-On uses common identity credentials across channels.

21.Mobile app provides helpful (non-transactional) functionality.

22.Uses Digital capabilities to offer innovative product or service.

Building societies tested

52

Average age of building society

Total assets of all building societies tested

130

313

Number

Years old

£ Billion

s

9

Digital maturity ranking

Owned by Nationwide Building Society

Owned by Yorkshire Building Society

Observations• The top three are

Nationwide, Yorkshire and Saffron.

• Nationwide and Yorkshire control over 70% of sector assets. But Saffron controls just 3%.

• Nationwide and Yorkshire have so far had limited ‘digital parenting’ success with their acquisitions.

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Bigger isn’t always better

10 to 120 to 1130 to 2140 to 3150 to 41

1

Rank by Total Assets

Rank

by D

igit

al Maturity

23

45

67

89

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• Joint first place in Digital Maturity was held by Nationwide, Yorkshire and Saffron building societies.

• Nationwide and Yorkshire are the largest building societies. They jointly control 72% of the sector’s assets. Saffron controls just 3% of the sector’s assets.

• Skipton is the fourth biggest building society by total assets but came in only joint 10th place ranked by Digital Maturity.

THE SIZE OF A BUILDING SOCIETY DOESN’T DETERMINE THE QUALITY OF ITS WEBSITE.

Punching above their weight

Punching below their

weight

TOTAL ASSETS VS. DIGITAL FLUENCY™

BiggestSmallest

Worse

Best

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Making it difficult for users to get the information they need from Google

Micro formats make it easier for both humans and robots to find and use web information.


GOOD PRACTICE: use micro-formatted data so that Google presents useful information such as address of nearest branch, directions, local contact number, opening hours and a status (e.g. “closing soon”).

of building societies do not use good practice

BAD PRACTICE: Search engine results that are not helpful to members/customers. For example, few people need to know when a society was founded or the name of its CEO.

74%

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Usability on a mobile device is an issue. Mobile devices now drive 28% of traffic.

GOOD PRACTICE: Use responsive design so that the website adjusts to the screen it’s viewed on. Smaller screens require reduced content and simpler navigation.

BAD PRACTICE: Squeezing a desktop-sized website onto the small screen of a mobile phone. This is simply not usable.

Responsive design gracefully adjusts to fit desktop, tablet and smartphone browsers.


of building societies do not use good

practice

85%

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A third of building societies fail to present sensible structures to help members navigate their site

GOOD PRACTICE: A logical, mutually-exclusive-collectively-exhaustive way of categorising information on the site that is focused on the things that users are most likely to be trying to find. This information architecture should be universally available across the site.

BAD PRACTICE: Includes failing to break up menu into high level product areas and misleading categorisation. In the above example, a “jargon buster” is not a “product”, even though it’s listed in the “product menu”.

A logical and effective information architecture and menu structure that helps users navigate the site.



32%

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80% of building societies use site search tools that don’t provide fully usable results.

GOOD PRACTICE: The top result for a generic search term like “savings” should be a splash page or similar that summarises the society’s savings range at a glance and allows a user to click through to the relevant product.

BAD PRACTICE: For a generic search term like “savings” bad practice is to present either irrelevant results or results that are overly specific towards a particular product or transaction.

Site search is typically used by between 2% and 15% of users to find information on a website.



80%

Worst top search results:

For the search term ‘savings’:•‘airport parking’ (Hanley)•‘about us’ (Furness)

For the search term ‘cash ISA’•‘did you mean ‘cash is’?’ (National Counties)

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Over half of building societies don’t provide product landing pages to allow product comparison at a glance

GOOD PRACTICE: Product pages should give clear features, benefits and regulatory information with a prominent call to action. Splash pages should provide at-a-glance, scannable information about products in the range.

BAD PRACTICE: The example above is a product splash page that does not provide scannable information about products in the range.

Site search is typically used by between 2% and 15% of users to find information on a website.



53%

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53% of building society websites don’t allow members to purchase even one product online

GOOD PRACTICE: To enable member/customers to buy and manage many/most of the Building Society’s products online. New members/customers should not be required to set up an account before having completed a purchase.

BAD PRACTICE: In the example above, the Teachers Building Society requires customers to print and post an application form for its ‘online savings account’. Many societies do not provide any online purchase capability.

Online sales conversion is generally lower if customers are forced to open an account before purchasing.


53%

ONLINE SALES

Findings 2THE DIGITAL INNOVATION GAP IN THE BUILDING SOCIETY SECTOR

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Building societies are accomplished product innovators

Affinity Accounts

Clubs & Associations

Client Accounts

Council Accounts

Pension Fund

Accounts

Credit Union Accounts Individual

Accounts

BUILDING SOCIETY PRODUCT INNOVATION IS

STRONGLY COMMUNITY-DRIVEN

Empty Homes

Parental Assistance

Self-build

Refurbishment

Affordable & Help to buy

Local reduced rates

Affinity mortgages

Shared ownership / equity

• Building Society savings products help gather and retain assets in local communities.

• Building Society mortgage products often address real community issues such as housing supply, affordability and sustainability.

• Pricing is frequently better than banks.

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But in 1775, building societies were the original Kickstarter

The first known building society was founded in 1775 by Richard Ketley, in the Snow Hill area of Birmingham. Members paid a monthly subscription and lots were drawn to decide who got property first.

This radical financial innovation brought property into the reach of working people. But if Richard Ketley had had the Internet in 1775, he wouldn’t have invented a building society. He’d have invented Peer-to-Peer finance (P2P).

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Today building societies are missing the most significant mutual finance innovation of the last 50 years at least PEER-TO-PEER FINANCE IS

INHERENTLY MUTUAL

Peer-to-Peer Finance allows businesses and individuals to receive loans from a pool of online savers.

Peer-to-peer is inherently mutual.

The UK is a world leader in peer-to-peer. Despite this, no building society has yet announced plans to enter the market.

430% |

growth of peer-to-peer finance sector, UK 2011-2013 7

But Peer-to-Peer Finance requires digital capability to execute.

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In conclusion - time is running out for building societies to exploit digital

• As citizens we need powerful challengers to banks.

• Building societies are the natural challengers.

• As financial consumers we expect a digitally mature experience; 50% of us regularly use online banking and just 6.7 million of us are non-internet users.

• Building societies digital capabilities are, on average, of low quality; most worryingly less than half of building societies enable online product purchases.

• Building societies are also failing to use digital technologies to innovate. No building society currently participates in peer-to-peer finance, arguably the most significant mutual finance innovation of the last fifty years.

• Digital deficits are likely to be caused by cultural and skills issues rather than by resource gaps.

Transform

WHO WE ARE, OUR CAPABILITIES AND CONTACT INFORMATION

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About Transform

Digital & multi-channel consultancy, working with clients to deliver customer-centred change for commercial benefit

Bringing together experts with cross-sector expertise

Innovation, creativity and rigour, to define, design and deliver services relevant to a rapidly changing world

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Part of Engine: 11 best in class agencies under one roof with more than 700 professionals

Brand Consulting

Strategic & Digital

Consultancy

Advertising Full Service

Digital

Sponsorship Consulting & Activation

Direct Digital Marketing

Consumer PR

PR & Public Affairs

Social Media

Experiential

Data Strategies

Digital Design

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What we do

STRATEGYSTRATEGY DESIGNDESIGN DELIVERYDELIVERY

M&AM&A

Channel StrategyChannel Strategy

Proposition DevelopmentProposition Development

IT Strategy & Planning

IT Strategy & Planning

Implementation Planning

Implementation Planning

Programme DeliveryProgramme Delivery

DevelopmentDevelopmentCommercial

Strategy Commercial Strategy

CX StrategyCX Strategy

Change ManagementChange Management

Innovation ExecutionInnovation Execution

Digital CX Digital CX

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What makes us different

• Customer-centred – innovation and creativity, working with clients to deliver customer-centred change

• Expert led – breadth of experience, depth of knowledge, exploit best practice across sectors by focusing on customer not product

• Fishing rods not fish – bringing the expertise you need and sharing our knowledge

• With you not to you – working collaboratively, recognising where expertise is needed and how to get results

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Challenges we address

Customer insight – who are our

customers and what are their needs?

Customer insight – who are our

customers and what are their needs?

Multi-channel – how do we make

it feel integrated from front to back?

Multi-channel – how do we make

it feel integrated from front to back?

Customer engagement – how do we reach and connect with the right people through the right

mix of channels?

Customer engagement – how do we reach and connect with the right people through the right

mix of channels?

Innovation & prototyping

– how do we quickly prove our concepts?

Innovation & prototyping

– how do we quickly prove our concepts?

Emerging channels – how should we leverage web, social and

connected TV?

Emerging channels – how should we leverage web, social and

connected TV?

Capabilities – what do we need to support our

future business?

Capabilities – what do we need to support our

future business?

Strategic planning – how do we

respond to the challenge / opportunity?

Strategic planning – how do we

respond to the challenge / opportunity?

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Experience and expertise

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Experience and expertise

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Simon Kirby, Transform Associate

[email protected]

07973 395 329

Transform, 60 Great Portland Street, London, W1W 7RT

www.TransformUK.com

Connect with us: @TransformUK

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