How can financial services regain consumer trust presentations

Data protection 2013

Friday 8 February

#dmadata

Supported by

How can financial services

regain consumer trust? Thursday 7 March

#dmafs

Sponsored by Insight partner

Welcome from the Chair Bill Gilbert, Chair of DMA Financial Services Council

#dmafs

Sponsored by Insight partner

Agenda

8.30am Registration and breakfast

9.00am Welcome from the Chair

Bill Gilbert, Chair of DMA Financial Services Council

9.10am Research findings

Paul Seabrook, Director and Co-Founder, fast.MAP

9.40am Using added value products to improve satisfaction

Giles Desforges, Senior Vice President for Northern Europe, Affinion

International

10.10am Visual trends in the financial services industry

Micha Schwing, Creative Planning Manager, Getty Images

10.30am Panel discussion

10.55pm Closing comments from the Chair

Bill Gilbert, Chair of DMA Financial Services Council

Sponsored by Insight partner

Research findings Paul Seabrook, Director and Co-Founder, fast.MAP

#dmafs

Sponsored by Insight partner

How can Financial Services Regain Consumer Trust?

Paul Seabrook – fast.MAP

Trust is implicit in many different ways

Trust amongst key sectors

Source: fast.MAP December 2012 N = 2,494 Q: Please rank the following industries on how far you trust them

Nov-12 vs.

Mar 11

Mobile phone companies 5%

Charities 4%

Car companies 4%

Financial industry 1%

Home media package providers 0%

Government -2%

Utilities -3%

Media (newspapers etc.) -9%

Trust in FS

Source: fast.MAP December 2012 N = 2,494

Q: How far do you agree with the following statement? ‘In the current economic climate I trust the Financial Services industry to look out for me’

3%

11%

36%

28%

22%

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Nov-12

Dec-11

Mar-11

Jun-10

Dec-09

Jul-09

Dec-089%

14%

57%

50%

Trust: Again FS seen as having good credentials

Methodology

18 questions were submitted via a self completion online survey to fast.MAP’s nationally representative Consumer Voice panel

Sample size = 2,494

Field work November 2012

Results representative of the UK population based on age and gender (18+)

Panellists were incentivised by £250 prize draw

RECOMMENDATION &

Satisfaction

Recommendation generally positive

Source: fast.MAP December 2012 N = 2,494 Q: On a scale of 0-10, how likely would you be to recommend your main bank to a friend or colleague?

17%

14%

23%

14%

11% 11%

3% 2%

1%

4%

10 – Highly likely

9 8 7 6 5 4 3 2 1 – Highly unlikely

0%

5%

10%

15%

20%

25%

Satisfaction also generally positive

Source: fast.MAP December 2012 N = 2,494 Q: On a scale of 0-10, are you satisfied with your main bank?

21%

18%

25%

13%

9% 8%

2% 2% 1%

2%

10 – Satisfied 9 8 7 6 5 4 3 2 1 – Not Satisfied

0%

5%

10%

15%

20%

25%

30%

NPS Score

Source: fast.MAP December 2012 N = 2,494

BANK NPS

First Direct 44%

Co-op 35%

NatWest 15%

Other not listed above 9%

HSBC 8%

Barclays -1%

Halifax -5%

Santander -15%

Lloyds Banking Group / Lloyds TSB -16%

RBS (Royal Bank of Scotland) -22%

Just over 1 in 10 are thinking of switching in the next 12 months

Source: fast.MAP December 2012 N = 2,494 Q: How likely are you to switch your bank in the next 12 months?

4%

8%

21%

57%

11%

Very likely Likely Unlikely Very unlikely Don’t know

0%

10%

20%

30%

40%

50%

60%

CONFUSING

Messages

Relentless news about banks….

Satisfaction

Q: On a scale of 0-10, are you satisfied with your main bank?

21%

18%

25%

13%

9% 8%

2% 2% 1%

2%

10 – Satisfied 9 8 7 6 5 4 3 2 1 – Not Satisfied

0%

5%

10%

15%

20%

25%

30%

REALISTIC &

Savvy

Free Banking

Q: Do you currently receive free banking?

Yes, 82%

No, 18%

Expectation that free banking will reduce

Source: fast.MAP December 2012 N = 2,494 Q: Do you expect free banking services from your bank in the next 2 years?

Yes, 67%

Maybe, 23%

No, 11%

WHAT TO DO

Now

Focus on the positives

Core Product Holding Score (Includes current account) – Banks with 3% or above share: Avg = 1.96

Source: fast.MAP December 2012 N = 1,714

Q: Thinking about your primary bank you have just selected, please indicate any products or services that you might CURRENTLY have with them:

Core Product Holding Score (Includes current account) Banks with 3% or above share Vs Bank: Avg = 1.96

Source: fast.MAP December 2012

Q: Thinking about your primary bank you have just selected, please indicate any products or services that you might CURRENTLY have with them:

Average

NPS Score

Source: fast.MAP December 2012 N = 2,494

BANK NPS

First Direct 44%

Co-op 35%

NatWest 15%

Other not listed above 9%

HSBC 8%

Barclays -1%

Halifax -5%

Santander -15%

Lloyds Banking Group / Lloyds TSB -16%

RBS (Royal Bank of Scotland) -22%

Core Product Holding Score (Includes current account) Vs Benefits:

Source: fast.MAP December 2012 Note: this is across all banks, not just those over 3%

Q: Thinking about your primary bank you have just selected, please indicate any products or services that you might CURRENTLY have with them:

What products do you have with your main bank?

Source: fast.MAP December 2012

Q: Thinking about your primary bank you have just selected, please indicate any products or services that you might CURRENTLY have with them:

Recommendation Vs Product Holding

Source: fast.MAP December 2012 Q: On a scale of 0-10, how likely would you be to recommend your main bank to a friend or colleague?

Satisfaction Vs Product Holding

Source: fast.MAP December 2012 Q: On a scale of 0-10, are you satisfied with your main bank?

Other FS products; market opportunities for main bank

Source: fast.MAP December 2012 N = 2,494 Q: And now please select any of these products and services that you have but NOT with your main bank

4%

4%

5%

9%

10%

10%

14%

19%

19%

23%

26%

26%

30%

33%

39%

Packaged Current Account (typically you pay a monthly…

Credit Protection

Equity Release

Loan

Standard Current Account

Stock ISAs

Stocks and Shares

Cash ISAs

Mortgage

Life Insurance

Savings Account

Pension

None of the above

Buildings Insurance

Home Contents Insurance

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Market demand for the next 12 months

Source: fast.MAP December 2012 N = 2,494

Q: Please look at the following and select any that you think you are likely to need / consider buying in the next 12 months. Please tick all that apply:

1%

1%

2%

2%

3%

3%

3%

3%

3%

5%

10%

11%

15%

20%

60%

Credit Protection

Equity Release

Packaged Current Account (typically you pay a monthly…

Pension

Standard Current Account

Stock ISAs

Stocks and Shares

Life Insurance

Loan

Mortgage

Savings Account

Cash ISAs

Buildings Insurance

Home Contents Insurance

Not in the market for any of these products or services

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

Where people will look

Source: fast.MAP December 2012 N = 1,006

Q: Where do you think you are likely to look for these products and services? Please tick any of the below that you would consider

using when searching for these products and services. Only shown for products selected in previous question

Non-core product holding

Source: fast.MAP December 2012 N = 2,494

Q: Please look at the following list of non-core financial products and services and tick any that you currently have with any company

2%

2%

3%

4%

5%

8%

10%

11%

14%

17%

27%

38%

44%

Event discount booking service

Credit management

Travel discount booking service

VIP lounge access

Gadget insurance

Card blocking and re-order service for any card

Lock and key cover

Identity theft protection

Mobile phone insurance

Home emergency cover

Travel insurance

None of the above

Motor breakdown cover

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Bank’s share of these

Source: fast.MAP December 2012 N = 1,094 Q: Of the products and services you selected below, which are through your bank?

1%

2%

2%

2%

3%

5%

5%

8%

10%

12%

13%

21%

63%

Event discount booking service

Credit management

Travel discount booking service

VIP lounge access

Gadget insurance

Lock and key cover

Home emergency cover

Card blocking and re-order service for any card

Identity theft protection

Motor breakdown cover

Mobile phone insurance

Travel insurance

No – none of them are via my bank

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

Understanding of these

Source: fast.MAP December 2012 N = 2,494 Q: Are there any of the following that you don’t understand what they are?

1%

1%

1%

3%

4%

6%

6%

9%

9%

12%

13%

15%

65%

Mobile phone insurance

Travel insurance

Motor breakdown cover

Home emergency cover

Identity theft protection

Gadget insurance

Travel discount booking service

Card blocking and re-order service for any card

Lock and key cover

Credit management

Event discount booking service

VIP lounge access

I know what all of them are

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

CREDIT PROFILE

Security

Credit Profile attitudes

Source: fast.MAP December 2012 N = 2,494 Q: Thinking about your credit profile, please select the most appropriate statement below:

I’m not currently doing anything, but plan to in

the future, 23%

I take proactive steps to protect and manage my

profile, 36%

I’m not currently doing anything and don’t plan

to, 41%

Bank’s role with credit profile

Source: fast.MAP December 2012 N = 2,494 Q: Do you think your bank should be doing more to help you manage your credit profile?

Yes, 43%

No, 57%

Technology concerns: Contactless Payment

Source: fast.MAP December 2012 N = 2,494 Q: How concerned are you about the security of the following?

27%

24%

30%

23%

27%

27%

24%

26%

22%

5%

9%

5%

6%

6%

6%

15%

8%

10%

Contactless payments using fobs

Contactless payments using card

Contactless payments using mobiles (not internet banking)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Very Concerned Concerned Neither concerned or unconcerned

Unconcerned Not concerned at all Don’t know

COMMUNICATION

Preferences

Communicating with banks

Source: fast.MAP December 2012 N = 2,494

Q: Please look at the following ways you might be communicating with your bank or credit card company and select any that you CURRENTLY do:

2%

2%

3%

4%

18%

33%

56%

75%

22%

24%

34%

38%

39%

33%

27%

12%

7%

6%

5%

6%

5%

7%

5%

2%

69%

68%

58%

51%

38%

28%

12%

11%

Use Twitter to communicate with my bank

Use Facebook to communicate with my bank

Contactless payments using fobs

Contactless payments using mobiles (not internetbanking)

Contactless payments using card

Telephone banking

Visit a high street bank at least once a month (not acashpoint / ATM outside)

Online banking / servicing

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Currently do Would consider doing Do but wish to stop Don’t know what this is

Communication received

Source: fast.MAP December 2012 N = 2,494

Q: Please look at the following ways you might be communicating with your bank or credit card company and select

any that you CURRENTLY receive:

13%

21%

43%

54%

59%

60%

28%

30%

29%

19%

22%

16%

20%

8%

6%

10%

3%

11%

39%

40%

22%

17%

16%

13%

Receive phone calls about my products and services / newones

SMS / text received from bank general communication

Receive communications via email

Receive statements via post

Receive statements online

Receive general communication via post

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Currently receiving Would consider receiving receive but wish to stop Don’t know what this is

Drivers of service. It’s not all about numbers and %s

Source: fast.MAP December 2012 N = 2,494

Q: What is most important to you when considering satisfaction with your bank. Please use the scale provided:

14%

16%

19%

20%

32%

36%

38%

40%

42%

9%

10%

14%

11%

17%

17%

19%

19%

19%

16%

14%

19%

18%

16%

15%

13%

16%

16%

12%

13%

17%

15%

9%

10%

7%

8%

9%

18%

13%

14%

17%

12%

9%

8%

7%

7%

11%

11%

9%

9%

8%

6%

5%

5%

5%

5%

4%

3%

3%

1%

2%

1%

1%

1%

4%

3%

2%

2%

1%

2%

1%

1%

0%

9%

14%

3%

4%

3%

3%

7%

1%

1%

Keep me updated about new products and services

Telephone banking experience

No queues

Choice of products available

Rates of interest offered

A branch local to me

Online banking experience

Are available when I need to speak to them

Customer service

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

10 – Very Important 9 8 7 6 5 4 3 2 1 – Not important at all

Contact channel preferences

Source: fast.MAP December 2012 N = 2,494 Q: How do you prefer to be contacted by

2012 Vs 2011

Email Letter Mobile

call

Landline

call

Text/SMS

Mortgage Lender 2% -9% 0% -1% 1%

Investment provider -1% -7% 0% 0% 0%

Building Society 1% -9% 0% -2% 1%

Pension Provider 1% -8% 0% 0% 0%

Credit Card provider 0% -3% 0% -2% 0%

Insurance provider 2% -6% -1% -1% 0%

Bank 9% -6% -1% -3% 1%

Contact channel preferences

Source: fast.MAP December 2012 N = 2,494 Q: How do you prefer to be contacted by

17%

19%

22%

21%

30%

30%

38%

23%

25%

31%

36%

38%

42%

48%

3%

3%

4%

57%

52%

43%

40%

27%

23%

7%

Mortgage Lender

Investment provider

Building Society

Pension Provider

Credit Card provider

Insurance provider

Bank

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Email Letter Mobile call Landline call Text/SMS Not applicable

WHAT TO DO

Now

The Importance of Testing – Richard Benson

There are only two rules in direct marketing.

Rule 1: test everything. Rule 2: Refer to Rule 1

Secrets of Successful Direct Mail, 1989

Decisions marketers have to make

Variable How many Possible combinations

Audience 5 5

Offer 4 20

Incentive 4 80

Endorsement 3 240

Outer envelope 3 720

PS 4 2880

Price 4 11520

There are two routes you can go down…

100 days

GO LIVE ; INVOLVE CONSUMERS

Control

Control

Traditional Campaign Testing

The problems with traditional testing…

One pack fits all

Not cost effective to segment

Control pack is very difficult to beat

Few tests a year ( 2 or 3 )

Many new initiatives fail

You might know what works but not why – so what do you learn as a

marketer from this for your other campaigns?

Therefore off line DM as a channel is not as effective as it might be.

D

D

Buried insight

• 2 x ‘D’ for DMA

• One per company

• Each one qualifies the finder to £1,000 of research

questions

• Starting from midday Thursday 7th March for 24 hours

• Open only to attendees of this conference

• Web address is www.fastmap.com

• Email EXACT PAGE AND LOCATION

paul.seabrook@fastmap.com

• 2 x winners notified Monday 11th March

Thank you

Using added value products to

improve satisfaction Giles Desforges, Senior Vice President for Northern Europe,

Affinion International

#dmafs

Sponsored by Insight partner

57

How can Financial Services

regain consumer trust?

Using Added Value Products to Improve Satisfaction

Thursday 7th March

58

• Affinion Overview

• What are Added Value Products and why are they important

• Why Customer Engagement is key

• Improving Customer Relationships

Contents

59

Affinion Overview

60

Affinion Overview Helping you Recruit. Reward. Retain.

Affinion is the leading

global provider of

customer loyalty and

engagement solutions.

We help many of the

world’s leading financial

organisations connect

and engage with their

customers, creating

rewarding relationships.

4,250 Global associates

20 Call centres providing continuous support 180

Million consumers across a wide array of product and loyalty solutions

17 Countries around the world

5,500 Clients and marketing partners

61

Retention Acquisition

Loyalty & engagement

Satisfaction

Our custom programs enable you

to better understand, engage and

fulfill customer needs leading to

significantly enhanced brand

loyalty and material value.

We have proven tools and

techniques to influence every

stage of a customer’s experience

with your brand, from acquisition

to overall level of satisfaction.

Affinion Overview

62

What are Added

Value Products?

63

Commodity

64

…to Customer Experience

65

What are Added Value Products in Financial Services?

Protection

Mobile

Gadget and personal possessions

Motor breakdown

Home emergency

Personal information (identity)

Personal credit status (credit management)

Lock and key

Warranty & repair

Purchase protection

Leisure

Dining

Travel

Shopping

Cinema

Events

Short breaks

Activities and attractions

66

The Importance of

Additional Products

67

* Average of different Affinion clients in Germany

Added Value Products Improve Key Financial Measures

Affinion research shows that added value products improve customer KPIs

68

Source: NetGain! Data analysis, First Manahattan Consulting Group Data analysis,

Affinion Checking client analysis

Research in America shows

package benefits also increase

customer, tenure, deposits and

overall lifetime value

Average difference between

free checking and an enhanced,

fee-based checking account

with Affinion benefits

… and Improved Financial Measures

69

The DMA Financial Services Tracker shows they

can Improve Satisfaction:

Source: fast.MAP December 2012

Satisfaction vs Product holding

70

…and also Improve Likelihood to Recommend

Source: fast.MAP December 2012

Recommend vs Product holding

71

Engagement is Key

72

Current Engagement is Low

Affinion research shows that awareness and engagement is low

“For a while I didn’t

realise what account

I had...and that I was

paying for it! Now I

realise, it’s good.”

Many are not utilising their benefits as they are not familiar

with what they have and what the benefit is.

Affinion /TNS Research

73

But When Awareness is High…

These customers have a strong sense of value

from their AVA - and remain loyal and satisfied

“ My account has already paid for itself this year.

I’ve had my money back. I’ve had my £12.95 a

month back on the 25% I’ve had back on

download tickets.”

“ “I use the concert tickets all the time…

that’s kind of the main reason I've got it”

“The concierge is fantastic, I get a phone call from

him saying, ‘By the way, your anniversary is coming

up, do you want us to order flowers?’, Thank you,

I’m not in trouble anymore”

“The travel benefits are a really

great perk.. Go and sit there and

have a couple of vodkas and

whatever. You know, it just makes

the whole experience nicer. You

know, you're going to get a chair,

you get a bit of service.” ”

Leisure benefits can offer real

savings and even a sense of

privilege; generating a sense of value

and strengthening loyalty

Affinion /TNS Research

74

Improving Customer

Relationships

75

Five Key Factors for Improving Customer Relationships

1. Relevant Products

2. Differentiate

3. Relevant and Personalised

Communications

4. Reduce Customer Effort

5. Choice and Evolution

76

1. Relevant Products

Changing models

within the marketplace

to enable customers

access to products

77

1. Relevant Products

Targeted products

aimed at helping

customer in specific

decisions

78

2. Differentiate

Leisure benefits can

provide real differentiation

in a commoditised

marketplace

Providing banks with increased

positive touchpoints and

engagement opportunities that

create positive brand experience

‘Customers utilising their leisure benefits

tend to be the most satisfied, as the

benefits are used in an active way,

increasing engagement and sense of

good value for money’ Affinion qualitative research 2012

79

3. Relevant & Personalised Communications

80

4. Reduce Customer Effort

Barriers to utilisation are a key concern for customers

We have recently been talking to customers about Mobile Phone Insurance

What customers say:

“I want to speak to

one person”

“My phone is my life”

“Know who I am, trust

me”

“Make it easy”

“I am reasonable, so treat me

fairly”

“Keep me informed”

“I want my loyalty to be recognised”

•Immediacy of replacement, wherever I am

•One direct call does it all

•Personalised, empathetic customer service

•Remove barriers to claim

•No bureaucratic (paper based) claims

process, no jargon

•Simple and fair excess amount / exclusions

•Proactive progress updates

•Surprise and delight me

TNS Global focus group research conducted for Affinion undertaken in October 2012

81

4. Reduce Customer Effort

82

4. Reduce Customer Effort

What should Mobile Phone Insurance look like?

83

5. Choice and Evolution

Different customers have different needs

Singles/Couples

no children Families with Children Empty Nesters

• Renting a home

• Spontaneous

• Friends are very important

• Go out often

• 1or 2 person household

• Lower asset holding

• Mortgage stretched

• On a budget

• Plan, Plan, Plan for

all activity

• 3 to 6 person household

• High asset but high debt

• High home-equity

• Visit same places

• Use a service again & again

if receive good service

• Occasions; family are

important

LOOKING FOR

• Good-value cover

• Propositions that support

a mobile lifestyle

LOOKING FOR

• Treats & affordable escapism

• “Value”

LOOKING FOR

• Reassurance of brands

they can trust

MOTIVATOR The Social Angle

MOTIVATOR Family Solution

MOTIVATOR Quality & Safety

84

5. Choice and Evolution

Evolving products to fit today’s customers

requirements

85

Conclusion

• Added Value Products drive improved customer measures

both financial and non-financial

• However it is vital to back this with engagement strategies

• There are 5 factors for improving customer relations:

Relevant Products

Differentiate

Relevant & Personalised Communications

Reduce Customer Effort

Choice and Evolution

86

THANK YOU

Visual trends in the financial services

industry Micha Schwing, Creative Planning Manager, Getty Images

#dmafs

Sponsored by Insight partner

Getty Images

The moment for a new conception

of capitalism is now; society’s needs

are large and growing, while

customers, employees, and a new

generation of young people are

asking business to step up.

Michael Porter and Mark Kramer

Creating Shared Value

In the post-commercial society,

consumption becomes one of the

most important ways of expressing

views and values, in contrast to the

commercial society where

consumption primarily expresses

lifestyle.

Tom Beckman

EDC Prime PR Stockholm

Re-Imagining Value

The New Wealth

Small Business

Responsibility

Thanks!

Panel Discussion Bill Gilbert, Chair of DMA Financial Services Council

Paul Seabrook, Director and Co-Founder, fast.MAP

Giles Desforges, Senior Vice President for Northern Europe,

Affinion International

Micha Schwing, Creative Planning Manager, Getty Images

#dmafs

Sponsored by Insight partner

Closing remarks from the Chair Bill Gilbert, Chair of DMA Financial Services Council

#dmafs

Sponsored by Insight partner