the future of customer engagement in banking · 2018-08-22 · the future of customer engagement in...

The Future of Customer Engagement in Banking

August 14, 2018

Presentation materials and video replay will be provided within one week.

Have questions? Use the chat panel – we’ll field them as we go and during the Q&A recap at the end of the call.

2

Stephen NikitasSr. Market StrategistHarland Clarke

Steve Nikitas joined Harland Clarke in October 2010 and has more than 30 years of experience in strategic planning, marketing, public relations and executive speechwriting. As senior strategist with Harland Clarke Marketing Services, Steve provides consultative services to banks and credit unions, helping them craft marketing and retail strategies and campaigns to take advantage of existing market and financial conditions and to grow targeted portfolios.

Today’s Presenter

It’s All About Data

Banking Model of the Future

Mobile Banking Challenge

Agenda

3

It’s All About Data

4

Trends In Retail Banking

5

4%

10%

10%

14%

15%

26%

27%

35%

42%

57%

61%

0% 10% 20% 30% 40% 50% 60% 70%

Investment in an innovation accelerator program

Testing and use of blockchain technology

Emergence of new challenger banks

Exploring advanced technologies

Responding to regulatory challenges

Expansion of digital payments

Building partnerships with fintechs

Open APIs

Improvements in integrated multichannel delivery

Use of data, AI and advanced analytics

Removing friction from customer experience

The Most Important Trends for Retail Banking In 2018

Source: DBR Research - Digital Banking Report – December 2017

The Marketing Analytics Roadmap

6

Marketing Database

Data Collection

Data Definition

Data Format and Storage

Data AnalysisOpportunity Assessment

Implementation

Results

Artificial Intelligence or Accelerated Intelligence (AI)

Simulates human thinking by constantly seeking patterns, learning from experience, and providing responses to situational awareness

• Machine learning is a set of algorithms that recognizes patterns from large datasets and then applies these findings to new data

Financial services is a leading and early adopter of AI

• According to IDC, AI will reach $19.1 billion in 2018, with the banking sector as the second biggest spender to retail

Source: Joyce, Lisa, “Reality Check: Can The Banking Industry Make AI Pay Off?,” The Financial Brand, May 15, 20187


Source: “Citi GPS: The Bank of the Future,” March 20, 20188

Automation Connectivity

Enhance Efficiencies

Simplify and automate engagement

Robo-Advisory is 80%+ more cost-effective than

traditional models

Reduce costs by automating manual tracking and reviews

Automation of standard legal processing can

reduce costs by 80%+

Automate and standardize process

flows

RPA reduces processing costs by 40-50%

Customer Engagement Risk and Compliance Operations




Improve Scale

Augment and enhance human effort in

interactions

Virtual agents can handle 1.5-2 million customer

queries daily

Track risks in real time while improving

effectiveness

AI use in cybersecuritycan improve detection

by 3x

Augment capacity to address variable demand

and complexity

Quicker ledger reconciliations can

reduce capacity needs





Accelerate and Enhance Decision Insight

Increase speed and quality of insight to

target and personalize

Increase targeting returns by 2x+

Reduce time to detection and

mitigation

DL techniques can reduce time to fraud detection by 30%+

Reduce time to predictions and

information retrieval

ML can improve treasury liquidity forecasting

effectiveness by 35%+



11


Source: Capgemini Financial Services Analysis, 201712

Broad Customer Base Extensive Network Regulatory Expertise Funding Capabilities

Financial Institutions





Innovative Products Agility Nimble Solutions Distinct Culture

FinTechs





Innovative Products Agility Nimble Solutions Distinct Culture

FinTechs

Effective Data Utilization Rise of New Business Models

Customer-centric Products and Services Enhanced Customer Trust

Together



$3,638 $3,942

$5,267

$7,359$8,113

$11,542

664 866 9521,292 1,488

2,018

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

2012 2013 2014 2015 2016 2017

Venture Capital Backed FinTech Funding(In Millions)

Funding Number of Deals

Banking Model of the Past

Source: Deloitte, 201716

Branch

Contact Center Online Mobile Mail


Source: Deloitte - 201717

Branch

Contact Center Online Mobile Mail

PAST

FUTURE

Mobile

Branch

Contact Center Online

Open APIs Mail


Source: Shevlin, Ron, “Reinventing Checking Accounts,” Cornerstone Advisors18

89%85%

77%

65%

53%

88% 86% 84%

75%

62%

93% 91% 90%

82%

67%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

18-24 25-34 35-44 45-54 55-75

U.S. Consumer Smartphone Ownership

2015 2016 2017


Source: “2017 Omni-Channel Shopper Survey: A Digital Inflection Point for Banking, Novantas19

20%18%

30%

16%

10%

4%

1%2%

26%

23%

18%

13%

9%

6%4%

1%

28%

25%

16%

11%9%

6%4%

0%0%

5%

10%

15%

20%

25%

30%

35%

Leading Online/Mobile No Foreign ATM Fees Branches Near Me Lots of ATMs/Branches ATMs Near Me Convenient BranchHours

Telephone Other

Drivers of Perceived Convenience

2014 2015 2016

Banking Model of the Future - the Economics

Source: “Branch Banks: Navigating A Sea Of Industry Change,” Jones Lang LaSalle IP, Inc., 2017 20

Cost to Make a Deposit

Teller

ATM

Mobile

Mobile.08¢

ATM.80¢

Teller$8.00


Source: Tumay, Kerim, “The Four Myths Of Branch Transformation,” Kiran Analytics, March 13, 201721

59%

52%

43% 41%

0%

10%

20%

30%

40%

50%

60%

70%

Face To Face Interaction New Account Opening Brand & Reputation Convenient Access

Why Branches Are Important for Your Institution


Source: Marous, Jim, “The Financial Brand – Banking Desperately Needs A Relationship-Based Selling Strategy,” The Financial Brand, September 4, 201722

21%

58%

66%

79%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Account Holders Increasingly Lead & Execute Sales Process

Offers Become Increasingly Personalized To Account Holder Needs

Sales Approach Will Be Omnichannel

Move Away From Product Selling To Create Relationships

Evolving Sales Approach


23

63%

59%

47%

40%

40%

0% 10% 20% 30% 40% 50% 60% 70%

Lack Of Real-Time Specific Insight About Account Holders

Increasing Competition For Our Account Holders

Insufficient Account Holder Profiles

Lack Of Technology Adoption

Lack Of Third Party &/or Big Data To Create Profiles

New Challenges for Relationship-Based Selling

Source: Marous, Jim, “The Financial Brand – Banking Desperately Needs A Relationship-Based Selling Strategy,” The Financial Brand, September 4, 2017


24


Source: Harland Clarke – Mobile Deposit Survey 201825

I use a mobile banking application 3 or more times per week

23%

How Often Do You Use Your Mobile Banking Application?




23%

I use a mobile banking application 3 or more times per month

15%





23%


15%

I use a mobile banking application a few times a year

7%





23%


15%


7%I have a mobile banking application

on my phone but I don’t use it

3%





23%


15%


7%I have a mobile banking application

on my phone but I don’t use it

3%

I do not use a mobile banking application at all

52%



Source: “Understanding Consumers In The Digital Era, A Survey and Perspective on Emerging Financial Consumer Trends,” CGI, 2014 30

81%

61%58%

55%52%

0%

25%

50%

75%

100%

Reward Me For My Business Give Me "Any Time and Any Place"Access To Balances

See Me As A Person Provide Me With Wealth BuildingAdvice

Tell Me What I Am Spending MoneyOn And How I Can Save

Top 5 Ways My Financial Institution Could Improve My Lifestyle


Source: “Understanding Consumers In The Digital Era, A Survey and Perspective on Emerging Financial Consumer Trends,” CGI, 2014 31

81%

61%58%

55%52%

34%

84%

55%

37%34%

0%

25%

50%

75%

100%

Reward Me For My Business Give Me "Any Time and Any Place"Access To Balances

See Me As A Person Provide Me With Wealth BuildingAdvice

Tell Me What I Am Spending MoneyOn And How I Can Save

Top 5 Ways My Financial Institution Could Improve My Lifestyle


Source: “New Account Customer Experience: Reason for Choosing the Institution,” Bancology, Bancography, Volume 62, April 2017 32

Competitive Rates/Fees - 12%

Convenience -16%

Divorce/Marriage - 2%

Existing Relationship - 25%Moved - 3%

Needed An Account - 14%

Recommendation - 16%

Reputation - 10%Advertising - 2%

Why I Opened a New Account


Source: “2017 U.S. Mobile Banking Landscape,” S&P Global Market Intelligence, 2017 33

17%

32%

28%

33%

28%

58%

48%

15%

25%

27%

33%

47%

50%

45%

0% 10% 20% 30% 40% 50% 60% 70%

Better Hours

More Branches

Better Mobile App

Service

Higher Interest Rate

Lower Fees

Incentive Offer

What Would Influence Your Choice of a New Financial Institution?

More Than $10K In Savings Less Than $10K In Savings



14.6%

19.7%

41.3%

24.4%

How Often Do You Use Your Primary Checking Account's Mobile Banking Application?

More than Once Per Day Once Daily A Few Times Per Week Once Per Week Or Less



18.9%

52.8%

28.3%

How Many Times In the Last 30 Days Have You Visited A Branch Of Your Primary Financial Institution?

None 1-3 Times 4 Or More Times



37.7%

46.2%

52.4%

65.5%

83.3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

RDC

Pay Bills

Transfer Money Between Accounts

Review Transactions

Check Balance

What Mobile Banking Features Do You Use The Most?



19.2%

25.0%

29.3%

32.8%

36.7%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Travel Notification

View Balance W/O Logging In

Turn Debit/Credit Card On/Off

Fingerprint Login

Credit Score Tracking

What Mobile Banking Features Are Missing?



Yes10%

No90%

Did You Switch Your Primary Checking Account

In the Past Year?



Yes10%

No90%


In the Past Year?

Yes40%

No60%

Would You Continue Using Your Mobile Banking

Application If Your Financial Institution Charged

$1/Month?



Yes10%

No90%


In the Past Year?

Yes40%

No60%


Application If Your Financial Institution Charged

$1/Month?

Yes22%

No78%


Application If Your FinanciaIInstitution Charged

$3/Month?

• It’s all about data

• The banking model is changing

• The account holder interaction revolves around the smartphone … for now

To Sum It Up

41

42

Type your question in the chat panel

Stephen NikitasSenior Market StrategistHarland Clarke

Presentation materials and video replay will be provided within one week.

Visit harlandclarke.com/webcasts for this and previous events.harlandclarke.com/LinkedIn

harlandclarke.com/Twitter

www.harlandclarke.com/webcasts

http://www.linkedin.com/company/harland-clarke

http://twitter.com/harlandclarke

Thank You

43 MKCOM-2456-01

the future of customer engagement in banking · 2018-08-22 · the future of customer engagement in...

Documents