IBM Commerce Redefining Customer Engagement to Create Rewarding Experiences Nicholas Goldsmith

Julian Thomas Toohey

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Personalized relevant experiences win customers

Consumers are becoming more demanding, and expect 24*7 financial

services anywhere anytime. Younger generation is going digital fast, uses a variety of channels and has low

brand loyalty.

China’s banking industry is undergoing major transformation

Digital banking will become commodity

Digital banking is going mainstream. Today, about 70

percent of Chinese consumers say they would open an account with

a pure digital bank.

70%

Customer loyalty is becoming a challenge

Chinese consumers are still among the least loyal in Asia. Less than half of Chinese consumers will remain loyal to their primary bank when

offered more attractive pricing terms from competitors, compared with

nearly 70 percent in emerging Asia.

70% 43%

Chinese consumers

Consumers in emerging Asia

Percentage of consumers who would remain loyal when offered more attractive pricing from competitors

Tendencies to shift undermines bank’s long-term businesses

Among the consumers in developed Asian markets, more than 80 percent said they were willing to shift some of their holdings to a bank that offers a

compelling digital proposition. In emerging Asia, more than 50 percent

of consumers indicated such willingness.

50% 80%

Consumers in developed Asia

Consumers in emerging Asia

Percentage of consumers who would shift some of their holdings to a bank offering a compeling digital proposition

Consumers in developed Asia have a clear view of what digital features they are seeking

Source: see details in speaker notes

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Intensifying competition in Banking

Simple3: Mobile-only bank with differentiated digital experience Fidor Bank4: “Bank with friends”: social business model Smarty Pig5: seek contributions through social networks

Lending Club6: Peer to peer lending platform Currency Cloud7: Payment engine platform

Disruptors enter core payments

Virtual platforms challenge traditional banking functions

Virtual banks compete with traditional banking

Paypal1: Pioneer in online money transfer services M-pesa2: mobile based money transfer service

Disruptive forces are dramatically impacting banking with non-traditional players entering the industry

Partnering

Agility Innovation Analytics Digitization

As a result, banks will need to develop key capabilities like partnering, agility, innovation, analytics and digitization to transform

We don’t expect to call your toll free help line and be placed on hold forever. We expect to get the attention of someone on Twitter or Facebook NOW. When we don’t, we get the attention of plenty of others about our problems.

Attention marketing is where there is hope. You can’t just be providing a wonderful product anymore. You have to use your platform as a business to make their lives more meaningful.

Our attention spans are shorter

We don’t see ourselves as passive “consumers”

Technology has changed customer expectations

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“The last best experience that anyone has anywhere…

…becomes the minimum experience they want

everywhere”

Trend 1. Expectations have risen – the digitally enfranchised customer / employee demands more, faster

Trend 2. Disruptors are fueling higher expectations and innovating with new business

models Trend 3. Big data and advanced analytics create the opportunity to learn more about customers and take tailored action

The new reality...

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The focus shifts to Human Experience

Designing Experiences Emerging Technologies Mobile as a Transformation Enabler Social

Designing Customer / Employee Engagement and Experiences

Extend physical experiences with digital 2

IBM Confidential

Distinctive and Creative Digital and Physical Convergence Smarter Bank Branches and Retail Stores

our design thinking experience

• “Good design is good business.” • – Thomas Watson, Jr.

Citi Mobile Lite: The First Banking App on the Apple Watch

anz group

• Problem • Providing a quality experience was

proving labor-intensive and costly. • Insight

• Field representatives and financial advisors were dependent on a very involved and time intensive process to best advise high net wealth investors.

• Idea • Invite Watson to close the deal.

• Impact • Watson now helps advisors deliver

advice with a consistent standard of quality while eliminating the weeks’ worth of work it used to require. The bank even plans to expand Watson’s responsibilities to other areas as well.

taps into a wealth of knowledge

Systems of Engagement

Systems of Record Systems of

Insight Drive every decision

Fuel every interaction Power every process

We are moving from a process-centric to an insight-centric world

Inside Solutioning

Predictive Analytics

Event Detection Real-Time Decisioning

Contact Optimization

Campaign Management

Marketing Operations

Email/Mobile Marketing

Digital Analytics & Experience

Management

Engagement Use Cases should focus on the desired business outcomes

Personalized Onboarding

“Hand Raiser” Triggers

Digital Channel Analytics & Personalization

Financial Wellness & Guidance

Next Best Question

Strengthen net-new and new-to-product customer relationships using models, batch-based rules and cross-channel delivery

Increase marketing, sales, and service opportunities through detecting events in batch, near-real-time and real-time

Augment user response and click rates by testing, refining and optimizing prospect/customer interaction

Enhance engagement and deepen relationships by using “information & analytics as a service” to guide the customer on the path toward financial wellness

Drive improved service and cross-sell by supplementing what we know about the customer with the next logical question

Strengthen net-new and new-to-product customer relationships using models, batch-based rules and cross-channel delivery

Increase marketing, sales, and service opportunities through detecting events in batch, near-real-time and real-time

Augment user response and click rates by testing, refining and optimizing prospect/customer interaction

Enhance engagement and deepen relationships by using “information & analytics as a service” to guide the customer on the path toward financial wellness

23 © 2015 IBM

Banorte Makes it personal across all channels to drive loyalty – with IBM Global Services and all powered by IBM Marketing and IBM Customer Analytics Solutions.

40% 20% Improvement in operating efficiencies

Return on equity 200M

USD expected bottom line benefit in the first 24 months

ING Bank

17 3x Week reduction in campaign cycle times

Increase in customer responses 35% Reduction in overall

marketing costs

24 © 2015 IBM

Transforms their marketing effectiveness through a focus on personalization -- all powered by IBM Marketing solutions.

Web & Mobile Channels Reduce People to Data

See Your Digital Channels Through the Eyes of

Your Customers

Organizations aren’t even aware of bad experiences

1 in 10 US adults contact the company directly after a “poor” or “very poor” experience using a website or mobile application.2

Without understanding your customers

conversion rates down? why customers struggle?

most profitable customers? more relevant offers? reaching intended audiences?

prevent customer churn?

Zions Bank Wanted to understand and improve their customers mobile banking experience as they transitioned from web browser to mobile channels – achieved by IBM Customer Analytics solutions.

72% Increase in completed applications on mobile devices 60%

Improvement in customer support response times

30 © 2015 IBM