what banks will have to work on in the next years
DESCRIPTION
What banks will have to work on over the next couple of years: in 2013, bank customers have spent 400 minutes per year in the digital channels, but only 1 minute per year on average in direct contact with their bank advisor. 60% of the European population just never went into any bank branch at all (excluding ATM usage). However 90% of the sales still comes from the branches. Banks will have to fundamentally address this challenge and see how they can become more relevant to consumers and how to sell online. This keynote addresses the fundamental issues of banks from three perspectives: - The challenges the users want to have solved - The challenges coming from an external, market / competitive environment - The challenges the business has to solve internally The presentation is fun and thought provoking containing many fresh ideas on the future of banking. Feel free to get in touch!TRANSCRIPT
© Copyright 2014 Digital Leadership GmbH!Digital Leadership
Services & Consulting for
Digital Leadership
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What banks will have to work on over the next couple of years!Stefan F. Dieffenbacher, 8th of Ocober 2014"
© Copyright 2014 Digital Leadership GmbH!Digital Leadership
The business lens.!
The User perspective!
The external environment!
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How much time did the average bank customer spend in 2013 …!
In the branch! In the digital channels!
Data source: hard data from 5 out of the top 20 banks in Europe 2013!
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What % of customers were going at all to a branch in 2013?!
Branch visitors! Digital Channels only!
59.6%!40.4%!
Data source: hard data from 5 out of the top 20 banks in Europe 2013!
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Channel usage intensity and frequency by 2015 in % *!
Desktop / browser Banking!
Mobile Banking!
Software (i.e. Quicken)!
Cash / non-cash ATMs!
Branches!*by usage frequency and usage intensity!
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!
The Digital Channels are already today #1.
The branch network is the alternative channel.
Really?!
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Sales (by numbers and volume) compared!
Branch! Digital Channels!
Data source: hard data from 5 out of the top 20 banks in Europe 2013!
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Final conclusion: banks don’t manage to make money
out of their online customers. !
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The User perspective!
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Coralie „Youngster distant functionalist“!
2!Top Prio: 5
Banking behaviour and attitude !Number of banks 1 Primary bank Fortis Banking likes No personal relationship, as long as the bank does a good job doesn't need
specialists currently, and prefers a distance with bank employees, likes simulations, access flexibility, general flexibility, simplicity
Banking dislikes No interest in banking and the financial world in general, banking must not take up too much time, doesn't want to be confused by her bank, modern atmosphere, too much formality and administration
Banking fears Little fear due to small exposure to banks Service frustrations Lack of efficiency, poor quality of advice, complicated language, marketing is to
obvious, daily service is too expensive
Literacy and devices
Computer Literacy Good computer Literacy and frequent use of other digital devices (digital natives) but finance plays no major part in life as of now, heavy Facebook user
Finance Literacy Low interest in finance and little Literacy Devices PC, iPhone 3, Android tablet
Proposition Matrix!Brand affinity Brand-agnostic Products u. Mngmt Savings, some current account, Mine pack, 1-2-ring Advice type Almost no use of PC banking due to limited product usage, contact via self
service in branch and face-to-face, but high affinity towards digital channels, Need specialist help, concise, no proactivity, trusts friends
Financial evolution Towards Nexus Retail, Nexus HiPo, risk: becoming a Retail Up and cross selling Cards, current accounts, travel insurance, PFM
Key data Age: 13 Location: Charleroi Language: French Education: Primary school Salary: €0.9k Assets: €6k Segment size 160 000
Lifestyle
Background: • upper middle class
Life goal: • rather vague: go to university
Life events: • graduation, education choice, marriage, birthdays
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Customers want to have it easy!
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Customers want to have it easy!
-668,61!04!Apr!
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And be proactively informed!
14"
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They expect banks to help them understand their financial life!
15"
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… and across their family / relevant entities!
16"
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Customers look at their bank to help them understand how they spend!
17"
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And be supported in their financial planning!
18"
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Creating transparency & trust!
19"
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Creating transparency & trust!
20"
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Creating transparency & trust!
21"
+40% conversion rate for ABN AMRO.!!
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Eradicate barriers for your potential customers!
22"
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(1) Easy sign-up! (2) Photo authentication!
(3) Automatic login after sign-up!
(4) Customer does multibanking setup (! bank knows user’s
monthly income)!
(5) Bank grants !pre-approved credit!
The ideal customer sign-up process!
23"
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(4) Customer does multibanking setup (! bank knows user’s
monthly income)!
(1) Easy sign-up! (2) Photo authentication!
(3) Automatic login after sign-up!
(5) Bank grants !pre-approved credit!
The ideal customer sign-up process!
24"
The customer banks within 5 minutes!
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As a general guideline, we have to understand the customer’s problem!
25"
Is#the#customers#problem:#
" Receiving(messages(with(his(bank(advisor?(
" Sharing(messages(with(his(bank(advisor?(
" Communicating(with(his(bank(advisor?(
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The customer’s problem is really his communication with the bank. The solution is therefore an integrated communication center.!
26"
Bank Advisor Messages!
Tech Support!
Marketing Campaigns!
Targeted Offers!
Contractual (Terms, etc)!
Statements!
PFM Notifications!
Save & Invest Notifications!
Todos: Zoomit Own Reminders!
Site Outages!Maintenance!
Security!
Communication Center!Central communication clearing, tracking communication history and taking into account customer communication preferences. !
Channel Preferences!
History!
Opt-in/Opt-out!
Phone!
Skype!
Mail!
SMS!
On-Site Chat!
Secure Msg.!
Mobile Push Notification!
Onsite!Notification!
Source: Digital Leadership Strategy Framework"
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And banks should work on proactively engaging with visitors & customers!
27"Source: Woopra"
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The external environment!
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Increasing proliferation of consumer decision making processes!
29"
Need to invest!
Online purchase!
Price comparison!
website!
Website!visit!
Print!campaign!
Youtube!Channel! Facebook!
Posts!
Family!discussion!
Community!review!
Friends!recommen
dation!
Branch visit!
€
€
€
€
€ Video!review!
€
€
€ Touch points where the bank can influence (potential) customers!
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Consumers directly interact with Merchants – the banks are not in the picture!!
30"
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MicroPayment, Pay as you go & Mobile Payment - all managed online.!
31"
" Premium SMS!" Operator billing!" App billing !" In-app payments!" NFC and mobile contactless payments !" NFC trials so far !" ‘Pay by mobile’ for digital goods !" PayPal as a mobile channel !" The single-click credit card checkout !" Square and Bump: physical mobile
payments!" Mobile money and banking!" Micro Web-payments!" Gaming coins!
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Why is there now bank checkout?!
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And even sending money is being threatened.!
37"
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The business lens.!
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What business model are you going to remain in market with?!
40"
Source: HackFwD’s proposal towards business model generation used as part of the Digital Leadership Strategy Framework"
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Value disciplines!
Attributes:!" Segmented target markets!" Offering tailored to customer demands!" Long-term customer loyalty strategy!" High barriers to entry!" Front line employees empowered!" Collaborative solution development with customer!" Business decisions made on total lifetime customer value!
Attributes:!" Reliable product / service at a competitive price!" Minimize cost through efficiency measures!" Industry leader with regards to price and ease of doing
business!" Cross functional business improvement initiatives!
Attributes:!" Offers customers leading edge products and services!" Focused on speed, innovation, time to market!" Relentlessly pursues new solutions!" Encourages idea generation at all levels of the organization!
Choosing the right value discipline as a basis for defining market positioning!
Product Leadership!
Operational Excellence!
Customer Intimacy!
Source: Digital Leadership Strategy Framework"
© Copyright 2014 Digital Leadership GmbH!Digital Leadership
Value disciplines!
Attributes:!" Segmented target markets!" Offering tailored to customer demands!" Long-term customer loyalty strategy!" High barriers to entry!" Front line employees empowered!" Collaborative solution development with customer!" Business decisions made on total lifetime customer value!
Attributes:!" Reliable product / service at a competitive price!" Minimize cost through efficiency measures!" Industry leader with regards to price and ease of doing
business!" Cross functional business improvement initiatives!
Attributes:!" Offers customers leading edge products and services!" Focused on speed, innovation, time to market!" Relentlessly pursues new solutions!" Encourages idea generation at all levels of the organization!
Choosing the right value discipline as a basis for defining market positioning!
Product Leadership!
Operational Excellence!
Customer Intimacy!
Source: Digital Leadership Strategy Framework"
Note: you can precisely choose one value discipline to focus on!!
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Understanding the areas of business value in an eCommerce world!
43"
Earningspotential
`�Number of visitors
`�Conversion Rate
`�Ø Shopping basket
`�Costs of production
`�Sales & Marketing costs / Customer Acquisition Costs
`�Variable sales costs
`�Costs of payment handling
`�Shipping costs
`�Directly attributable handling costs
`�Returns
Growth
E-CommerceSuccess
```
```
Source: Digital Leadership Strategy Framework"
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3 months to launch a banner ! ROI maximized performance marketing!
44"
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Design goes beyond colours…!
45"
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Goals need to be linked through!
47"
!
Corporate Goals!
Business Goals!
Functional / product / segment / services / satisfaction ... goals!
" Clear ownership & objectives at team & personal level !
" Linked through to salary / bonus / compensation schemas!
E-Commerce style goal setting!
Permanent monitoring & real-time measurement!
Earningspotential
`�Number of visitors
`�Conversion Rate
`�Ø Shopping basket
`�Costs of production
`�Sales & Marketing costs / Customer Acquisition Costs
`�Variable sales costs
`�Costs of payment handling
`�Shipping costs
`�Directly attributable handling costs
`�Returns
Growth
E-CommerceSuccess
```
```
Mapping objectives down to individuals!
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Without data collection, no customer insights!
48"
Data from the CRM & core banking system!• Customer value!• Last branch visit!• Current residence!
Data from PFM!• Saving goals: user saves up for an own home!• Free finances: <€500 / month!• Rent: <€500 / month!
Unified Consumer Banking Data
Model!
• Last login, frequency of logins!• Which advertisements did the user click on?!• Which offers has the user been interested in?!ex
amples!
Data from analytics!
exam
ples!
exam
ples!
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… and no personalization & targeting!
49"
Drive marketing!
• Optimize On-&Offline Marketing Budget!• Targeted multichannel campaigning!
Drive product recommendations, !online marketing & sales!
• 3D realtime campaign management!
Drive advisory across the branch network!
• Advice customers holistically with consideration of their (saving) goals, lifestyle, expenses, overall financial situation and dreams!
Drive content & features!
• Drive content towards each sub-segment and potentially against real-time micro-segments!
Unified Consumer Banking Data
Model!
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What is the role of IT? (1/2)!
50"
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What is the role of IT? (2/2)!
51"
None of these companies has outsourced IT. !
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What is the role of IT? (2/2)!
52"
None of these companies has outsourced IT. !
As a leading player,!why would you?!
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IT Setup required!
53"
Outsourced waterfall IT setup i.e. in India! Local waterfall IT setup!
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IT Setup required!
54"
Outsourced waterfall IT setup i.e. in India! Local waterfall IT setup!
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IT Setup required!
55"
Outsourced waterfall IT setup i.e. in India! Local E2E agile IT setup!
The better alternative:!
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In a typical silo setup, a large number of players & departments are involved!
Strategy! Strategy Consulting! Typical gap! Typical gap – !
partially covered by internal governance!
Brand & Marketing!
Some big brand agency! Some other agency! Again some other
agency!Typical gap – !
no feedback loop!
Tech! Partially outsourced!Tech consulting & !internal tech!
Typically no long-term view!
Typical gap – !no feedback loop!
UX! Typically by tech!Some agency!Typical no strategy! Typical gap – !no feedback loop!
Product! Your own department?!Typical not aligned! Typical gap – !no feedback loop!
Strategy! Conception! Development! Go-live! Optimization!Stage!
Discipline!
Innovation! Innovation Labs etc.!Typical gap!
Source: Digital Leadership Strategy Framework"
© Copyright 2014 Digital Leadership GmbH!Digital Leadership
Strategy! Strategy Consulting! Typical gap! Typical gap – !
partially covered by internal governance!
Brand & Marketing!
Some big brand agency! Some other agency! Again some other
agency!Typical gap – !
no feedback loop!
Tech! Partially outsourced!Tech consulting & !internal tech!
Typically no long-term view!
Typical gap – !no feedback loop!
UX! Typically by tech!Some agency!Typical no strategy! Typical gap – !no feedback loop!
Product! Your own department?!Typical not aligned! Typical gap – !no feedback loop!
Strategy! Conception! Development! Go-live! Optimization!Stage!
Discipline!
Innovation! Innovation Labs etc.!Typical gap!
The art is to integrate & teach the elephant how to dance!
?!
Are we integrating what we should do?!
Source: Digital Leadership Strategy Framework"
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There is a “Not so Quiet” IT Crisis Brewing!
Time!
" Digital Opportunities & Threats!
" Customer and Management expectations!
" IT performance and contribution!
The quiet crisis!
Performance!
Source: Gartner, 2014"
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There is a “Not so Quiet” IT Crisis Brewing!
Time!
" Digital Opportunities & Threats!
" Customer and Management expectations!
" IT performance and contribution!
The quiet crisis!
Performance!
Source: Gartner, 2014"
May this be a roadmap problem?!
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Relaunch: align business & IT on the longer term! Excerpt of the Digital Leadership Strategy Framework!
60"
Stakeholders + other inputs!
Expected Benefits!
Overall Direction!
“The Product”!
Costs! Business Case!
Approach & Plan!
Stakeholder identification!!Personas!!Initial market & competitive analysis!!Other inputs to needs!
Departmental inputs!!Benefits identification!!Benefits breakdown & prioritization!!BI & Analytics review!!Initial opportunity identification!
Vision!!Goals!!Business objectives!!Project Motivation!
Key user tasks!!Cross-channel customer experience journeys!!Scope Landscape!!Roadmap!!!Content org model!Site org model!
Technical architecture! !Draft cost breakdown!!Initial project plan!!Organisational setup post launch!!Cost assumptions!
Business case!!Funding options!!Business Case presentation!
Initial draft plan till go-live!!Project plan strategy & concept phase!
1! 2! 3! 4! 5! 6! 7!
Source: Digital Leadership Strategy Framework"
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Understanding the areas of value creation!
61"
Online-Banking The Online-Banking Strategy Framework!Prioritized benefits = strategic objectives
Benefits sought
Enable Online Data for branch advisory
Marketing
Enable Online-Data for Offline-Marketing
Unified data collection
Increased customer retention
Stickiness of the site
Chat & video
Online self-advisory tooling
Multibanking
Financial literacy
Financial planning
Loyalty program
Advisory
Financial vision
Bundling
Higher share of wallet
Realtime segmentation & targeting
Improved productinformation
Connection withloyalty program
User centered scenarios
On-site & conversion measures
Increased customer acquisition
Off-site marketing
Off-site measures
Content marketing
SEM & SEO
Affiliate marketing
Recommendation mar-keting
Ratings & Reviews
Analytics, goals &AB testing
Competitive comparison
Cross-channelMultibanking core
Ajusting channel mix
Adjusting for all screen sizes
Mobile push
Online- / Offlineconversion scenarios
Creating a large screen experience
Customer support
Cost reductions
Improved maintainability
IT
Higher scalability
Centralized IT development
Improved integrability
Less customer service incidents
Improved perception of support / help
Operations
Decreased contentmaintenance effort
Improved campaign management
Professional usability
Necessities / must do’s
Move away from aging platform
Legal requirements
Mobile integration
Highest Important ComplementarySource: Digital Leadership Strategy Framework"
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Governance!
Security & complianceTechnologyIntegrationSystem Administration
Access & ChannelsRoles & responsibilitiesCollaboration & supportOrganization & structure
Brand & PerceptionMedia & ContentBehaviour & FunctionalitySite setup & structure
User needsCorporate goalsVisionObjectives, goals & KPIsFeedback mechanismsOutside of DC Governance
Digital Channels Governance Focus Areas
Direction
IT
PeopleCore c
om
ponents
Source: Digital Leadership Strategy Framework"
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Governance focuses on the discrepancy to goals!
Security & complianceTechnologyIntegrationSystem Administration
Access & ChannelsRoles & responsibilitiesCollaboration & supportOrganization & structure
Brand & PerceptionMedia & ContentBehaviour & FunctionalitySite setup & structure
User needsCorporate goalsVisionObjectives, goals & KPIsFeedback mechanismsOutside of DC Governance
Digital Channels Governance Focus Areas
Direction
IT
PeopleCore c
om
ponents
Source: Digital Leadership Strategy Framework"
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What have we done today?!
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We have considered about 25 challenges banks may have to
address!
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But which one is important?!
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A proposal for a basic prioritization framework!
Depths(of(product(/(offering(
Custom
er(nee
ds(/(bu
sine
ss(nee
d(
© Copyright 2014 Digital Leadership GmbH!Digital Leadership
1) Plotting of potential actions!
Custom
er(nee
ds(/(bu
sine
ss(nee
d(
Depths(of(product(/(offering(
Smartphone / photo !customer sign-up!
Next gen UX!Intelligent alerts!
PFM analysis of finances!Mobile payment!
Multibanking!
Financial planning!
(transparent) product reviews!
*exemplary plotting of potential actions!
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2) Understanding how these action items are likely to evolve in the marketplace!
Custom
er(nee
ds(/(bu
sine
ss(nee
d(
Depths(of(product(/(offering(
Smartphone / photo !customer sign-up!
Next gen UX!Intelligent alerts!
PFM analysis of finances!Mobile payment!
Multibanking!
Financial planning!
(transparent) product reviews!
*exemplary plotting of potential actions!
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3) Final step: Where should we focus on? Portfolios need to be better managed.!
Custom
er(nee
ds(/(bu
sine
ss(nee
d(
Depths(of(product(/(offering(
Smartphone / photo !customer sign-up!
Next gen UX!Intelligent alerts!
PFM analysis of finances!Mobile payment!
Multibanking!
Financial planning!
(transparent) product reviews!!
Continue investments!
Delete!!
Minor investments, unless important niche
clientele!!
!Invest heavily!
*exemplary plotting of potential actions!
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Services & Consulting for
Digital Leadership
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Q&A!
Stefan F. Dieffenbacher, 8th of Ocober 2014"
72"
© Copyright 2014 Digital Leadership GmbH!Digital Leadership
Services & Consulting for
Digital Leadership
© Copyright 2014 Digital Leadership GmbH!
Thank you!!
Stefan F. Dieffenbacher, 7th of Ocober 2014"
73"
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Contact details!
Stefan F. Dieffenbacher!Executive MBA, PMP, CPM, Scrum Master!Managing Director!
Digital Leadership GmbH!Landsberger Straße 217!D-80687 München!
+49 (0)176 / 638 020 11!+49 (0)89 / 748 600 [email protected]!www.digital-leadership.net!!
mobile:!office:!
e-mail:!Internet:!
Let me know how I can help!!
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