MIT Center for eBusiness Annual Sponsors’Conference and CIO Symposium

June 20 – 21, 2006

Glen L. Urban, MITYoshio Tokoro and Tetsuya Yuge, Suruga Bank

VIRTUAL FINANCIAL ADVISORS AT SURUGA BANK

AGENDA

• Strategic Perspective -- USA– Growth of Customer Power– Applications – GM, Credit Unions

• Will It Work In Japan?• Suruga Loan Advisor Research

– Advisor Design– Demonstration

• Future Research

Customer Advocacy

Relationship Marketing

TQM Customer Satisfaction

Figure 1 – The Advocacy Pyramid

APPLICATIONS -- ADVOCACY TOOLS

• MIT Research• Autos – GM• Finance -- Credit Union

CREDIT UNION RESULTS• Online advice use by 39% of members• Conversion rates as high as 54%• Mortgage volume up 60% • Auto Loans up 20%• Satisfaction up – 95% recommend to friend• Loan Officer productivity – 2X• Training telemarketing/frontline staff /Direct

Mail

Suruga/MIT Research Project

• Best Practice Study• Loan Advisor• Prototype • Future

Best Practice

• Purpose – Suruga Very Good Site, But Opportunities for Improvement

• Role of Customer Advocacy in Progress• Expert Ratings• 31 Banks in 3 Regions – 47 Elements

DIMENSIONS

• 9 dimensions: – Navigation– Design– Security and Privacy– Customer Service – Transparency and Open– Comprehensive and Full– Advice– Value– Consumer Oriented Philosophy

Best of Best vs. Best in Japan and Surug

2.0

3.0

4.0

5.01. Navigation

2. Design

3. Security and Privacy

4. Customer Service

5. Transperancy and Open6. Complehensive and Full

7. Advice

8. Value

9. Customer Oriented Philosophy

JPBoBSRG

Lead

Catch-up

Catch-up

Catch-up and Big Lead

Lead

Big Catch-up

Catch-up

Smal Catch-up

Comparison of Suruga, Best Banks in Japan, and World Best of Best (BOB) Banks

OPPORTUNITY

• Places for Further Progress– Transparency and Openness– Design– Navigation– Comprehensive and Full Information– Advice

• So this guides Suruga Bank/MIT Project

TRUSTED ADVISOR

• Virtual Branch• Personal Trusted Advisor for Loans• Questions with Education• Recommended Suruga Product• With Competition versus Without – Norm

in Japan is Not to Make Competitive Comparisons

• Picture versus Cartoon Character – Many Sites Use Cartoon Characters

CONTINUING WORK• Consumer Research in Japan• Compare Loan Advisor to

– Existing Loan Site– Advisor with Competitive Rates, Cartoon

• Analyze Data– Good Addition to Suruga Site?– Understand Trust Cue of Competitive Comparison in

Japan versus USA and Europe• Morph Site for Cultural Differences and

Cognitive Style