Data-driven digital transformation is reinventing the retail bank experience

Smarter Banking: Win Customers by Being Wherever They Are

Table of Contents

Introduction

The Current Environment

Recommendations

Conclusion

Customer Experience Musts

Smart Banking: Win Customers by Being Wherever They Are | 3

Introduction

A customer of a retail bank receives a home improvement

loan offer via email.

While commuting home, he uses his smartphone to go online to read the offer and its fine print.

Smart Banking: Win Customers by Being Wherever They Are |

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A URL in the email takes him to a dedicated landing page with the offer details clearly spelled out.

He clicks the “Apply Now” button, which takes him to a form prefilled with his basic details (name, address, etc.).

He decides to add the required financial information when he gets home, so he

navigates away from the page to read the news.

Settled on the couch after dinner, the customer goes back online to complete the form, opts in to received text alerts on the loan status,

and closes his laptop with a smile.

During his commute the next morning, he receives a text with his loan approval and an email

with next steps.

He’s so impressed with the experience, he tells the friend he commutes with, who decides to see if he qualifies for

a similar loan with that bank.

5

If that series of seamlessly connected experiences sounds like your bank, excellent. If not, you’re at great risk for

losing customers to banks that deliver a true omnichannel customer experience throughout the customer lifecycle.

The banking journey has evolved into a dynamic path comprising of a proliferation of touchpoints and owned by customers who desire a better omnichannel experience—one that includes everything from a website and mobile app to email and ATMs to social

networks and emerging channels that interest them. This doesn’t just apply to basic deposits and transfers; retail bank customers want smooth and simple omnichannel experiences for products such as credit cards, loans, and mortgages.

Gone are the days of a linear banking experience where customers complete transactions in one channel.

Smart Banking: Win Customers by Being Wherever They Are |

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Retail banks, credit unions, and savings and loan providers are facing major challenges in meeting consumers’ omnichannel demands.

Although

61 % of banks believe that a customer-centric business model is important,

a mere 17% feel prepared for this shift, according to PwC1.

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Competing on the Basis of Customer Experience | 7

Financial institutions have an exorbitant amount of customer data available to them. Most consider it a boon. Research from The Financial Brand found that 84 percent of financial services executives say knowing each customer’s personal financial situation is “very or extremely important.” And 80 percent of those polled agree that providing real-time customized financial guidance is “very or extremely important.”

Both of those capabilities prove challenging for most banks. As with most organizations, customer data resides in numerous siloed systems and sources across different departments and channels. The customer experience that retail banks must deliver today requires bridging those silos to create a single point of control for non-sensitive data, decisions, and interactions.

Fortunately, there’s a way retail banks can compete on experience and stay relevant: leverage customer data as the foundation for their digital transformation.

Smart Banking: Win Customers by Being Wherever They Are |

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If retail banks expect to stay competitive in today’s fast-evolving financial services industry, they must harness the data they have available to deliver experiences that translate into both customer and business value. In doing so, they’ll be able to effectively

while improving the ROI on marketing spending

understand and interact with their customers based on everything from channel preference to financial goals, recognize individuals, create individualized journeys, and make insights accessible to the entire enterprise—with head-turning results.

According to McKinsey,

“DATA-ACTIVATED MARKETING BASED ON A PERSON’S REAL-TIME NEEDS, INTERESTS, AND BEHAVIORS”

can boost sales by 15 to 20 percent

ACROSS CHANNELSIII.

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budget constraints,

and compliance regulations.

a lack of marketing resources,

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Research from The Financial Brand foundIV.

Credit Unions

Lack of strategy

Employee engagement

Project management

Executive buy-in on marketing initiatives

Content creation

Banks

Compliance regulations

Customer engagement

Budget constraints

Lack of departmental resources

0 10 20 30

NUMBER OF INSTITUTIONS

Source: The Financial BrandV.

Retail banks must overcome numerous obstacles. Along with customer engagement challenges, the top obstacles are

Biggest marketing challenges facing institutions today

Smart Banking: Win Customers by Being Wherever They Are |

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Using data to support digital transformation can help retail banks manage these challenges to create more efficient operations, increase profits, and transform the retail banking customer experience.

A customer engagement platform is the keystone to support all of these efforts. It can help bridge data and organizational silos, reduce marketing costs, and support the personalized customer experiences retail banks need to deliver today, as well as future-proof the bank’s efforts to continue to deliver personalized experiences throughout the customer lifecycle.

Smart Banking: Win Customers by Being Wherever They Are |

Smart Banking: Win Customers by Being Wherever They Are |

There’s an uneven playing field in financial services. Most of the big banks can hyper-personalize customer communications across multiple channels to build engagement and loyalty and grow sales and wallet share. But most regional banks, credit unions, and savings and loans providers haven’t developed these capabilities to the same extent, which limit their opportunities to improve operating efficiency ratios.

The Current Environment

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How banking providers rate their ability to provide a personalized digital experience

Only 6 percent of banks considered themselves “advanced” in terms of their ability to provide a personalized digital experience, according to The Financial BrandVI. Most banks, 59 percent, consider themselves “emerging.” Less than 20 percent of retail banks say they’re able to provide personalized offers, and less than 10 percent are able to provide real-time spending analysis or advice based on a customer’s activityVII.

STATICLittle or no personalization but likely to consider adding them soon

34%

EMERGING Basic level of personalization, but plans to offer more

59%

6% ADVANCEDOur digital experience is very personalized

1% NO PLANS

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The majority of retail banks are masters of customer acquisition, often focusing on direct mail and the branch experience. While that’s vital to their success, it may not be enough to ensure growth and retention as big banks and fintech startups work feverishly to use data and technology to deliver effortless omnichannel customer experiences across product and services types (e.g. from basic account activity to loan applications) and through the customer lifecycle to promote retention and increase wallet share.

Smart Banking: Win Customers by Being Wherever They Are |

Executives from traditional financial services firms have taken notice:

94 percent of retail banks are “very” or “extremely” concerned about fintech startups—an increase from 50 percent in 2016, says The Financial BrandIX. Yet only 44 percent of executives from traditional financial service firms feel confident in their fintech strategyX.

Digital banks and fintechs are gaining ground.

About half of banking customers worldwide are using products or services from a fintech firm, according to CapgeminiVIII.

Smart Banking: Win Customers by Being Wherever They Are |

Competing on the Basis of Customer Experience |

The old-school approach of giving toasters for new accounts will no longer suffice in today’s environment. Retail banks need to surpass the personalization capabilities big banks and fintech companies possess by gaining a comprehensive single view of the customer. The value of this is clear to retail bank executives:

the business driver for embracing big data is to enhance customer engagement, retention, and loyaltyXI.

that to increase their revenue, they need to better understand customers and big data will help them do so

that having a real-time view of data provides a significant competitive advantage and believe that batch mode is ineffective

76% say

71% say

55% say

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But many feel stymied by their lack of timely access to holistic customer data. Research from Capgemini found that the two biggest obstacles to effective decision making are data related: having too many data silos, according to 57 percent of banks polled; and the time it takes to analyze large data sets, cited by 44 percentXII.

Another challenge is identifying customers across channels. Only 15 percent of marketers say they’re able to identify addressable customers “extremely well” across channels, research from Winterberry Group and DMAXIII. Yet this is an especially important area for traditional retail banks to conquer as they battle upstart fintech firms.

Source: eMarketerXIV .

How well do marketing professionals in North America rate their company’s ability to identify its addressable customers/audience across channels*? June 2018% of respondents

Smart Banking: Win Customers by Being Wherever They Are |

Identify extremely well

Identify fairly well

Identify somewhat well

15.3%

33.7%

35.1%

11.8% Not able to idenify very well

1.4% Not able to identify at all

2.8% Not sure

Note: numbers may not add up to 100% due to rounding; *media channels (including owned websites), devices and transactional touchpoints

Competing on the Basis of Customer Experience | 16

More and more companies across industries are turning to customer engagement platforms to keep pace with these type of market drivers and obstacles. When retail banks use a customer engagement platform as a hub of customer data, they can create an advantage over big banks and fintech firms by gaining that essential holistic view of the customer that allows for contextually relevant personalization across channels and over a customer’s lifecycle.

By acting as a single point of control for data, a customer engagement platform can help bridge silos. In doing so, it increases collaboration and optimizes processes, which reduce marketing costs. And, most importantly, it provides the real-time access to each customer’s “golden record” that enables the personalized experiences that customers expect from all their preferred brands, including retail banks.

Retail banks can also use a customer engagement platform

as a hub for the data that will feed such tactics as predictive analytics

and triggered- and intent-based marketing, which will allow the bank to deliver differentiated experiences

throughout a customer’s journey.

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Offering unique customer experiences is so important because it’s profitable. Fully engaged retail banking customers bring in 37 percent more annual revenue than disengaged customers, according to GallupXV. Research from Accenture found that predictive analytics can improve conversion rates 7X and grow top-line revenue tenfoldXVI. Plus, customer retention is 14 percent higher among companies that use analytics.

Customer Experience Musts

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Fully engaged retail banking customers bring in 37% more annual revenue

than disengaged customers.

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In banking, however, the number of retail banks applying data to the customer experience is small. For example, the Gallup study found that only 12 percent of banks use analytics to under-stand customer attrition.

That’s a problem for banks that don’t change — and an opportunity for those that do.

About 80 percent of consumers consider their banking relationships as transactional versus advice based, Accenture foundXVII. And 60 percent of consumers consider their bank as a necessary utility versus a trusted partner, according to The Financial BrandXVIII.

In other words, it’s just not personal.

Only 22 percent of global consumers say that the companies they do business with tailor experiences for them based on their needs, preferences, and interactions, according to AccentureXIX. That’s not just a missed oppor-tunity for growth, it’s also a recipe for attrition: 33 percent of consumers who switch providers do so because personalization is lackingXX.

Consumers expect financial institutions to communicate with them in the manner and time they prefer. They’re frustrated by messages that don’t acknowledge previous interactions. Annoy them enough and they’ll look elsewhere for their banking services. Get it right and they’ll reward you. Nearly two thirds of consumers are willing to share more data if it results in better communications.

Sharing Data for Use by My BankI am happy for you to use my data for improved services or products.

Only 22% of global consumers say that the companies they do business with tailor experiences for them based on their needs, preferences, and interactions

Basic information

Family/household

Transaction data

Contract data

Social

63% 19% 18%

39% 24% 37%

30% 25% 45%

36% 24% 40%

10% 13% 77%

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Retail banks need to use the reams of data they have to better understand customers — and to prove that they do so by delivering relevant communications in the channels customer’s find valuable. Doing so is essential for building trust, which is vital for encouraging customers to share more data. It’s either a virtuous cycle of value or a vicious cycle of churn.

Where retail banks and credit unions often falter is by hard selling the products or services that they want to sell, versus marketing the ones that customers would be most interested in buying.

It takes a deep understanding of individual customers to personalize the full customer journey and offer the right products and services at the right time for each customer — in the moment of a customer showing interest or intent, as well as at a key moment based on lifecycle triggers. Indeed, more than half of marketers (57 percent) say that what’s driving innovation is the need to provide contextually relevant experiences that customers value, according a study by CMO Council and RedPoint GlobalXXII.

The study also found that the lack of real-time access to holistic data is creating a gap between customer experience strategy and execution. Forty-two percent of respondents say they lack systems that leverage real-time data to provide contextually relevant experiences, and

37 percent say they lack the organization-wide single view of the customer that would ensure consistent engagement across channels.

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Bank’s current technology is getting in their way.

Retail banks can instead use a customer engagement platform to bring together non-sensitive customer data from all sources across an organization — batch and streaming, internal and external, structured and unstructured, transactional and demographic — to create the holistic view that enables a deep level of customer understanding, which drives truly personalized recommendations. A customer engagement platform simplifies the process of unifying data, creating microsegments, using approaches such as intent-based triggers, and creating differentiated customer experiences at scale.

“The ability to change communications on the fly for each individual is the new reality,” Capgemini says in a report on customer communications management.

“It’s no longer about what you have to say and what channel you want to use. Today banks need to adapt to whatever channel, message or frequency each individual wants.”

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The bank that uses deep insights to proactively engage customers with relevancy, taking personal needs and channel preferences into consideration, is the one that will gain a significant competitive advantage.Executives at many retail banks think they know their customers because they have demographic data and FICO scores. But today, that data isn’t enough to meet customers’ expectations for personalized experiences.

Recommendations

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Retail banks need to do more with all of the other non-sensitive customer data they have access to. They need to know all that it knowable about a customer; to harness every-thing from transactional and social data to marketing and service data to behavior and life-stage data to create a holistic view of each customer and understand context and intent. And they need to build a single source of customer truth that marketers and other customer-facing employees can access in real time, at a customer’s moment of engagement.

Smart Banking: Win Customers by Being Wherever They Are |

Although 27 percent of marketers say they doubt that building a single customer view is attainable, many believe it’s possible through collaboration. Sixty percent say building that single view “requires the organization to contribute to each customer record, according to the CMO Council and RedPoint Global.

Competing on the Basis of Customer Experience |

That means retails banks need to bridge silos, connecting non-sensitive customer infor-mation through technology such as a customer engagement platform. A customer engagement platform can provide access to data in real time — everything from anonymous-to-known, struc-tured and unstructured, batch and streaming, and first-, second-, and third-party data. This helps to clarify who customers are, eliminate irrelevant communications, and enable highly relevant, real-time interactions.

Further, by using predictive analytics and machine learning with the customer engagement platform, retail banks can dynam-ically match products and services with the right customers through the right channels based on their behaviors, intent, and stage of the customer lifecycle. This will allow them to look beyond the expected customer journey for unexpected opportunities — at scale — based on what the data reveals.

The ideal approach to all of this is to use the customer engagement platform as a single point of control that combines people, process, and technology to enable a real-time, holistic customer view and supports omnichannel marketing. The customer engagement platform

serves as a central hub from which marketers can make decisions and push them out to the appropriate channels, a single point of control for aggregating and understanding customer data, and a single point of control over customer interactions across every touchpoint.

Competing on the Basis of Customer Experience |

It’s time to stop thinking about a transaction-focused episodic campaign approach and instead establish a real-time dialogue with customers. Understand customers’ objectives and personalize their journey. Be there in the moment.

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Using non-sensitive customer data from across the organization will dramatically change the retail bank experience moving forward — enabling personalized, real-time engagement at the speed of the customer in their desired channels and touchpoints. Banks can build an omnichannel experience that incorporates their website, mobile apps, email, ATM’s, call center, social networks and any other emerging channel. More than half of marketers (51 percent) believe that doing so is possible with new tools and talent to support the transformation, according to research from CMO Council and RedPoint GlobalXXIV.

Conclusion

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And, 62% plan to use customer knowledge to reshape their communications and interactions.

Indeed, 55% of marketers polled for that study plan to improve their analytics capabilities to gain a more contextual understanding of their customers

and 45% plan to connect engagement systems across touchpoints — including outside of marketing.

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Marketers from retail banks can achieve those goals using a customer engagement hub. By optimizing customer engagement through the insights gained from a single view of the customer, retail banks can drive higher r evenue and customer lifetime value while lowering costs.

They can transform their bank’s customer experience to one that is more productive and less costly, by presenting the most relevant recommendations through customers’ preferred interaction points, creating new customer journeys and touchpoints, and building customer trust and increasing retention.

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Smart banking today isn’t about pushing products, it’s about customizing the experience and meeting customers where they are. In fact, a survey of retail banking industry insiders ranked top three trends for 2018 as removing friction from the customer journey (61 percent), improving the use of data and advanced analytics (57 percent), and refinements in multichannel delivery (42 percent) . A customer engagement hub is the link to the data that retail banks need to achieve these goals.

RedPoint technology has a

RedPoint technology has a proven ability to implement a customer engagement hub in as little as 12 weeks while surpassing ROI thresholds in the first year, realizing higher revenue productivity and improving the customer experience at the same time.

Top three trends of 2018

Removing friction from the customer journey

Improving the use of data and advanced analytics

Refinements in multichannel delivery

About RedPoint Global Inc.

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EB SBUS1118 01

I“Eyes Wide Shut: Global Insights and Actions for Banks in the Digital Age,” PwC, 2014

I I The Financial Brand, September 2018

I I I “The Heartbeat of Modern Marketing: Data Activation and Personalization,” McKinsey, March 2017

IV“Help Wanted: Trends Reshaping Financial Marketing Departments Today,” The Financial Brand, August 2018

V“Help Wanted: Trends Reshaping Financial Marketing Departments Today,” The Financial Brand, August 2018

VI“Financial Services Enter a New Era of Customer Engagement,” The Financial Brand, September 2018

VII“94 Percent of Brands Can’t Deliver on the ‘Personalization Promise,’” The Financial Brand, September 2018

VIII“World FinTech Report,” Capgemini, Efma, and LinkedIn, November 2016

IX“94 Percent of Brands Can’t Deliver on the ‘Personalization Promise,’” The Financial Brand, September 2018

X“World FinTech Report,” Capgemini, Efma, and LinkedIn, November 2016

XIGlobal Banking Industry Study, FinExtra Research

XII“Big Data in Banking,” Capgemini

XIII“Know Your Audience: The Evolution of Identity in a Consumer-Centric Market-place,” Winterberry Group and DMA via eMarketer, August 2018

XIV“Know Your Audience: The Evolution of Identity in a Consumer-Centric Market-place,” Winterberry Group and DMA via eMarketer, August 2018

XV“The State of the American Consumer,” Gallup

XVI“Next Generation Banking Model,” Accenture, 2016

XVII“Banking on Value,” Accenture Research, 2016

XVIII“Digital Banking Consumers Demand Hyper-Personal-ization,” The Financial Brand, December 2017

XIX“Put Your Trust in Hyper-Relevance,” Accenture

XX“Put Your Trust in Hyper-Rel-evance,” Accenture

XXI“Digital Banking Consumers Demand Hyper-Personal-ization,” The Financial Brand, December 2017

XXII“The State of Engagement,” CMO Council and RedPoint Global, 2018

XXIII“The State of Engagement,” CMO Council and RedPoint Global, 2018

XXIV“The State of Engagement,” CMO Council and RedPoint Global, 2018

XV“Top 10 Retail Banking Trends and Predictions for 2018,” The Financial Brand, December 2017

Connect with us

RedPoint Global’s software solutions empower brands to transform how customer experience is delivered. RedPoint Global’s solutions provide a single point of control to connect all customer data, determine next best actions in real time, and orchestrate interactions across all enterprise touchpoints. Leading companies of all sizes trust RedPoint Global to deliver highly personalized and contextually relevant experiences that optimize customer engagement.

The RedPoint Customer Engagement Hub™ helps marketers overcome silos of data, business rules, and processes and enables them to deliver seamless, hyper-personalized interactions at the speed of the customer by providing a single point of control over data and customer journeys. Marketers need a single point of control to orchestrate customer interactions across an entire lifecycle. The Customer Engagement Hub provide marketers with the insight they need to present a continuous, dynamic path to purchase that is personalized based on contex-tually relevant insight for each customer and can be delivered wherever they show up next.

For more information, visit www.redpointglobal.com or email contact.us@redpointglobal.com.