Embed Size (px)
Citation preview
The clock is ticking
Why banks need to act now to avoid running out of credit with mobile customers
22
Where once we all conducted our banking affairs from the high street or over the phone, we now check our balance, make payments, manage direct debits and apply for savings accounts via online banking services. Unfounded security concerns haven’t checked the progress of internet finances, as banks were quick out of the blocks to offer easy, safe and convenient online facilities. The result has been a landmark change in the way personal and business banking is carried out.
But technology doesn’t stand still. Consumer attitudes to technology very quickly shift from ‘wow’ to ‘so what’, and this is the case as we move from the internet age to the mobile age. Nowadays, the internet is ubiquitous: we’re connected more than we’re not, resulting in an insatiable and unrelenting demand for services that are available everywhere, all of the time.
This time around, for the next step-change in consumer banking — NFC (near-field communication), contactless payment and advanced social network integration — banks need to make sure they keep up with consumer expectations, especially the younger generation: the loyal banking customers of the future.
In spring 2012, Avanade commissioned research firm Vanson Bourne to conduct an independent survey of 30 customer service managers from UK banks and 2,000 UK consumers. The aim was to uncover the attitudes of banks and consumers towards these technological changes. The results reveal an appetite for mobile banking services and an acknowledgement from banks that mobile is the future: banks believe that by 2017 all consumers will using mobile banking in some way.
What a difference online banking has made. In the last ten to fifteen years, the average UK citizen has changed the way they handle their money.
3
What’s going wrong? Alarmingly, a lot of banks were unable to gauge exactly how many complaints they received annually, but they did know that unfair charges were the number-one reason for consumer complaints. However, the rest of the responses don’t make for pleasant reading:
• I don’t have any real relationship with my local branch (38%)
• They are always pestering me trying to sell me more services I don’t want or need (21%)
• I don’t trust my bank (18%)• The customer service I have received has been
awful (17%)• I have had several problems trying to set things up
with them (14%)• They do not provide services that are appropriate
to me (10%)
What do customers want?• Understand me better as a customer (19%)• Offer a more personalised service (19%)• Communicate with me about things that are more
appropriate to me (15%)• New/better online services/access to my
accounts (13%)• More new products or services (13%)• Provide more informed information (12%)• Communicate with me through different channels (8%)• Provide new and better mobile services (6%)
Despite the decline of high street banking, consumers want to be treated as individuals and not just as featureless account holders. They want banking services tailored to their individual needs and circumstances;
This mobility message is coupled with another area where banks can make significant competitive gains: customer service.
Let’s start with customer service The survey shows that nine in ten banks are confident that delivering excellent customer service is one of their top priorities, but this doesn’t quite square with the experiences of bank customers. The majority of consumers felt they were not getting what they wanted, with only three in ten saying that dealing with their bank was easy and pleasurable.
The disparity shows an notable gulf between the levels of customer satisfaction that banks believe they are offering and the reality of actual customer experiences. Compounding this is the fact that around a third of users have lodged an official complaint with their primary bank in the past five years. This amounts to a gigantic 30 million complaints, and is at the very least a sign that banks need to ensure they have the capabilities to deal with this deluge.
Clearly banks have the best of intentions when it comes to their customers. However, these efforts don’t always appear to be successful. According to the survey only 29% of customers feel they receive excellent customer service, while only 31% say that dealing with their bank is easier than dealing with HM Revenue & Customs. Avanade’s survey shows that banks are aware of the issue, after all, less than a quarter (23%) of customer service managers interviewed regard the customer service provided by their bank to be ‘the best in the industry’. Looked at another way, this implies that 77% know they need to improve to compete with the opposition.
4
a quarter of those surveyed went as far as saying that they want their primary retail bank to manage all of their financial services, even those that were lodged with other financial institutions. One in six consumers said they would pay their bank to manage all of their utilities payments as well — an unusual but not unsurprising response in these austere times, particularly when we consider the success of financial intelligence websites like MoneySavingExpert.com that help consumers get the best deals and cast banks in a negative light.
Demands like this can only increase. Consumers look around and see technology making inroads into other areas of their lives, streamlining and making a variety of tasks quicker and easier, and naturally they want to see it happening in their financial life.
Fickleness factor The survey found that, on average, consumers use as many as three different banks for their personal financial services, with 73% using two or more banks. Consequently, customers find themselves in the perfect position to continually compare the level of service they receive, and 37% of customer service managers in banks were very much aware of this. Consumers are much more fickle and more likely to switch banks than in the past: 57% said they had moved their current account at least once — this is likely to increase as banks start to implement account switching services in 2013, driven by the Payments Council, meaning institutions now face growing pressure to provide progressive services to retain and attract new customers.
Getting personal Thankfully, banks are responding to customers’ needs. Of those surveyed, 80% of banks said they were very much focused on customer retention, with half of those citing personalised services as a main ingredient in this drive.
However, just over half of banks do not have a comprehensive system to capture and analyse customer data in the first place, perhaps due to the number of different channels consumers use to communicate with their banks. In fact, a worrying 10% of banks were still using manual processes driven by the use of spreadsheets to capture data.
Coming from all directions Without adopting customer-centric relationship management solutions (CRM), Avanade believes banks face an uphill battle in providing targeted and personalised services. Long gone are the days when a customer’s primary form of communication with their bank was a visit to its bricks and mortar branch.
Five visions of banking from the not-so-distant futureSo, what does the near-future hold for retail banking, and how can banks better serve consumers?
1. Intelligent personal budgeting: banks don’t just hold money, they hold valuable insights into a customer’s personal finances. They’re ideally positioned to adopt the role of financial consultant to consumers, advising on savings, overdraft limits and forecast spending patterns.
2. Voice payment: you can already pay by text, but what if you could transfer funds just by telling your phone who you want to send money to, and how much? And what if it was all secured through voice authentication?
3. Frictionless banking: banks are more eager than ever to connect with consumers. When it comes to near-field communications technology they can do that literally, preloading customers’ account details on entry into any branch by connecting with their mobiles and providing instant, tailored service.
4. Self-pay: payment has already been transformed thanks to contactless solutions, notably from Barclays1 and mobile NFC technology. The next step in this evolution is self-payment; the need for tills vanishes, liberating consumers and allowing them to pay for goods themselves quickly and easily. Queuing is so last year.
5. AR banking: banking needs to as accommodating, pain-free and as flexible as possible. Imagine a scenario in which you could book an appointment on a mobile app and your personal finance manager could talk to you (in augmented reality) to chat about your finances. The future of banking is mobile.
1 http://news.bbc.co.uk/1/hi/business/8545069.stm
A surprisingly low one in five customers may have said the branch visit is still their preferred method of interaction, but online access is now overwhelmingly the most common and preferred method. Access via mobile applications is also growing in demand. In fact, banks believe that every consumer will be using mobile banking by 2017. Needless to say, failure to offer such services will ultimately result in a bank losing its competitive edge.
technologies, they can notify consumers of things like the nearest branch, or an ATM that won’t charge, or advise of the cheapest products or services in a certain location. Financial offers will come at the time and place they are needed, not when they are unwanted.
Convenience will be the name of the game. How many people have experienced the refusal of a card when travelling abroad because of a failure to notify their bank in advance? The data to remedy this is already (in many cases) readily available. Location-based social media applications enable customers to confirm their location and authorise bank transactions
to get immediate access to their cash in unfamiliar territories. In such a connected world, why should customers have to go through the palaver of phoning their bank from abroad when faced with this situation?
Personal and predictive Banks already provide moderately personalised services and marketing, but theoretically and practically this could be taken to a whole new level. Actively approximating or predicting the customers’ wants and needs before they act on them will be achievable
More mobile please Use of mobile apps currently stands at 12%, but this is to be expected given the low number of official bank apps available today (and their limited functionality). Across all age groups surveyed, 36% think that they will do all their banking through their smartphone by 2020.
Of those consumers who said their bank fails to make the most of available technology, 49% aged 18 to 25 wanted more mobile apps. This age group — which 33% of banks said were the most demanding — is a key demographic for banks; the ages of 18 to 25 are when brand loyalties can be won or lost. They will be looking for loans, mortgages, insurance and pensions, if not now, then very likely in the next 5 to 10 years. While this expectation is significantly lower for respondents aged 55 or over (17%), older consumers are more likely to want a more personalised service.
It’s hard to imagine our lives without the convenience of location-based networking and social media applications, and banks will embrace these technologies to take on the role of our trusted financial adviser on the move. Using location-based
36% of consumers believe they will do all banking through their
mobile by 2020.
6
The next step…To discuss the survey results in more detail, or talk about how CRM and mobile technologies can offer you and your customers a more switched-on banking experience, contact Avanade now using the details below. We’ve already helped financial services companies like Aviva, RSA and National Australia Bank make better use of their technology — we’d love you to join them.
020 7025 1000
@AvanadeUK
www.Avanade.com
All of this will place increasing pressure on banks to provide targeted and relevant services across a variety of different channels. First and foremost, banks need
to continue to listen to their customers, but in increasingly high-tech ways. The power of effective customer relationship management systems will allow them to do this, bringing customers and technology together to drive forward the future of banking.
with ‘acceptable’ synergies between banks and other online services. The data collected through a user’s online banking and mobile banking habits could help messages and offers to be directed more effectively.
Customers will increasingly expect tailored and intelligent advice that’s proactive, not reactive. These intelligent forecasts will know when a customer is overdrawn a month before they do, and help the customer take steps to avoid further costs. They’ll know what mortgage they should be changing to a year before they need it.
Speaking up Online banking and the collective efforts of the banking industry have already made transferring money quicker, easier and more secure — with initiatives such as faster payments, customers can now move money almost instantaneously. However, with this ubiquity and flexibility come increased security risks, so banks will look to offer great security without affecting customer experience.
Voice-authenticated, voice-controlled fund transfers could be the solution, delivering lightning speeds and flawless security, all made possible by the next generation of mobile banking applications. Customers won’t even have to touch a button.
Here today, gone tomorrow Contactless payment may have only just arrived, but don’t plan on it staying around forever. Avanade sees the next step in the evolution of payment as no payment at all. The potential of near-field communications technology combined with 4G connectivity will usher in a new era of super-speed payments, where the act of physically paying at a traditional till will vanish altogether.
Whether these scenarios are proven to be right or wrong, the survey shows that the possibilities are endless. A quarter of consumers believe banks are not making the most of the technology available to them, and over half wanted to see a greater variety of connected services. More personalised services were called for by 31% of customers and 26% wanted to see more automated services.
New demands, new relationships Everyone has their phone with them at all times, so mobile banking in particular will create important new opportunities for retail banks to build stronger, mutually productive and more complex relationships with their consumers.
31% of customers want more
personalised services.
www.avanade.com/CRM
The future is mobile
The most preferred improvements being “the bank understanding them better as a customer” (19%), offering a more personalised service (19%).
of banks are still using spreadsheets to capture data.
10%
But just 23% of banks use mobile apps to communicate with their customers.
23%of banks believe
mobile is the future.
93%
Two-thirds of consumers think
their bank can do more, 27% citing poor
customer service.
A quarter of those surveyed want their primary retail bank to manage all their
financial services.
25%
2017Banks believe that by 2017 every consumer will be using mobile banking in some form.
8
About AvanadeAvanade provides business technology solutions and managed services that connect insight, innovation and expertise in Microsoft® technologies to help customers realize results. Our people have helped thousands of organizations in all industries improve business agility, employee productivity and customer loyalty. Additional information can be found at www.avanade.com. ©2012 Avanade Inc. All rights reserved. The Avanade name and logo are registered trademarks in the US and other countries.
North America Seattle Phone +1 206 239 5600 [email protected]
South America Sao Paulo Phone +55 (11) 5188 3000 [email protected]
Africa Pretoria Phone +27 12 622 4400 [email protected]
Asia- Pacific Singapore Phone +65 6592 2133 [email protected]
Europe London Phone +44 0 20 7025 1000 [email protected]
020 7025 1000 [email protected] @AvanadeUK www.Avanade.com
Call, email or tweet us
Who we’ve worked with
