Trends in North American Digital Banking - Forrester ... In North American Digital Banking Alyson Clarke | Principal Analyst Webtrends webinar September 16, 2015

Confidential

Trends in North American Digital

Banking September 16, 2015

Today’s Presenters

1

[email protected]@forrester.com

webtrends.com/finance

Steve EarlSenior Director

PRODUCT MARKETING

Alyson ClarkePrincipal Analyst

SERVING EBUSINESS & CHANNEL

STRATEGY PROFESSIONALS

Trends In North American Digital BankingAlyson Clarke | Principal Analyst

Webtrends webinar

September 16, 2015

© 2015 Forrester Research, Inc. Reproduction Prohibited 3

Agenda

› The key strategy drivers affecting financial services

› Six recommendations: Actions digital execs should take

› Four market imperatives in The Age Of The Customer


Agenda





Key strategy drivers affecting retail banking

1. The regulatory fog is clearing

• Freeing up funding for more innovative projects

2. Better economic conditions and a low interest rate environment

• Has meant a return to prioritizing top-line growth

• The recent slowdown in China is unlikely to have a major impact on the US economy

• The Fed may increase interest rates this year

3. Digital technology will continue to drive disruption and competition

• The focus on digital technology will be front and center –throughout the organization, from the top down


Source: Forrester Research. July 16, 2014, “Digital Disruption Hits Retail Financial Services” report.

Digital disruption is hitting financial firms from every cornerInvesting

Insurance

Banking

Payments

Digitalmoney

managers

Digital investment managers

Comparison

engines

Digital financialadvice

Social lending

Crowd-funding

Socialinvesting

Digitalbanks

Digitalwallets

Mobilepoint of

sale

Mobilepayments Virtual

currencies

Socialinsurance

Digitalinsurers

Corporateforeign

exchange

Smallbusinessfunding

Digital retirement

planadvice

P2P currencyexchange

Digitallenders


Disruptors are coming for financial firms

Sources: Forrester Research; Mark Andreessen, “Why Software Is Eating The World”

All of the technology required to transform industries through software finally works.


Key strategy drivers affecting retail banking

4. Privacy and security will draw increasing scrutiny from consumers and regulators

• Its important to find the right balance between heightened security and improving the customer experience

5. Consumers’ expectations will continue to rise and be shaped by non-bank experiences

• Which means banks need to innovate faster to keep up

6. Mobile momentum will continue to accelerate

• So financial service firms need to supercharge their mobile strategy


More than one-fourth of US adults have made this mindshift – Gen Z/Y lead the way

27%

US online adults

44%

Gen Z(18 to 24)

44%

Gen Y(25 to 33)

30%

Gen X(34 to 47)

15%

YoungBoomers(48 to 57)

10%

OldBoomers(58 to 68)

4%

GoldenGeneration

(69 and older)


Forrester’s June 10, 2013, “US Online Bankers” Report edited to reflect the most current data. Base: US online adults (18+)

Source: Forrester’s North American Technographics® Financial Services Online Benchmark Recontact Survey, 2014

Online bankers using a PCNon-online bankers

of US onlineadults areonline bankers.

US Online Bankers

71%

29% are mobile bankers

25% are both online and mobile bankers


And fuels increasingly demanding expecations

Base: 4,404 US online adults (18+) who use a smartphone. Source: Forrester’s US Mobile Mind Shift Online Survey, Q3 2013


Most banks aren’t ready for the digital mindshift of today’s banking customer:

The expectation that any desired information or

serviceis available

on any appropriate device, in context,

at a person’s moment of need.


Source: AMEX mobile app

AMEX provides location based offers to customer through its mobile app


Personal: mobile services are using context drawn f rom many data sources to deliver more relevant experien ces

Source: Forrester Research. February 23, 2012, “Mobile Is The New Face Of Engagement” report.


Agenda





Six recommendations: Actions digital execs should take

1. Improve authentication to help customers feel more secure


Authentication needs to get easier for customers and harder for intruders

RBC and Halifax in the are trialing heart rate biometrics for payments verification

USAA lets their customers choose their preferred method of authentication, which includes facial recognition

St George, RBS, Natwest, Simple, Amex, Discover – are all using Touch ID


Source: Scotiabank secure website

Scotiabank helps customers be more proactive with easy to turn on security alerts




2. Weave human and digital touchpoints together to increase sales


See the November 25, 2014 “The Future Of The Branch Lies In Digitally Empowering Employees” report.

Human touch -points continue to be significant sales channels

Source: North American Consumer Technographics Online Benchmark Survey (Part 2) 2014


The touch-point most likely used to research prior to opening the account

Purchasers are also more likely to have researched in -person

Base: US Online Adults 18+ (Online Weekly or More) who applied for the mentioned product in the past 12 months were asked “How did you research each product prior to applying for or opening your account/policy?”

Source: Forrester’s North American Consumer Technographics Online Benchmark Survey Part 2 2014

Face-to-face is the most used research channel for purchasers of banking and lending products


Diagnostic tools can guide bankers through a “needs-based” sales conversation

Standard Chartered’s “iNeeds” tool helps staff engage customers and convert sales

Source: Apple Profile of Standard Chartered


Source: CommBank website

CommBank improves conversion by offering chat to certain prospects applying online

• For personal loans, online chat increased application completion rates from 13% to 20%.

• Average loan amounts applied for increased by 10%.

• Customers who were helped by online chat are approved at a higher rate, due to better quality of information provided


Source: St.George bank iPhone app

Australia’s St.George Bank proactively offers live c hat to mobile shoppers


Video banking now lets customers collaborate with an expert anywhere, from any device

Source: Cisco’s Remote Expert MobileSee Forrester’s upcoming “Implement Video Banking To Drive Digital Sales” report.





3. Use mobile sites for sales, not just service


More and more firms are making it easier to apply f or financial products via mobile apps and sites

Sources: Bank of America iPhone app


Source: Forrester’s “2015 Australian Mobile Banking Functionality Benchmark” report

CommBank targets existing customers with personalized and pre-approved offers via mobile

Existing customers complete a shorter application, that only asks for additional information the bank needs (and doesn’t already have)


Source: US bank iPhone app

US Bank cross-sells to its customers with contextua l messages embedded in its mobile banking app






4. Develop and execute a digital payments strategy


Mobile wallets will become common…

Source: CIBC website


Source: Forrester Research

Digital wallets go beyond payment with value-added services that promise new revenues

• Integrated loyalty programmes.

• Track spending and rewards.

• Streamlined redemption.

Offers & coupons

Enhancedproduct

information

Mobilepayment

Loyalty rewards

• Location-based and merchant-funded offers.

• Relevant offers (driven by analytics).

• Automatic redemption of coupons and offers.

• Barcode, QR code or NFC scans.

• Detailed product information and inventory availability.

• Multiple payment methods.

• Multiple funding options (credit, debit, prepaid, PayPal, etc.).

• Self-checkout via mobile; on-screen receipts.


Source: mBank’s Android app

Poland’s mBank integrates offers from other companies to create new value for its customers

mBank’s app has merchant-funded

offers tailored to the customer’s past

spending and current location.


Source: Commonwealth Bank of Australia Daily IQ app.

Better use of data is letting firms like CBA to give businesses insight into their customers







5. Innovate to drive continuous digital improvement


Innovation is the antidote to disruption

Source: Forrester research


Source: Forrester Research. Selected banks only.

Financial firms are tapping into new sources of innovation

Incubator

Venture fundHackathon



About two dozen retail financial-services firms stand out as consistently innovative

Americas Europe Asia Pacific







5. Innovate to drive continuous digital improvement

6. Move your digital business transformation forward with urgency


Execs know digital disruption is coming

Source: Forrester/Russell Reynolds 2014 Digital Business Online Survey


Yet too few are acting on it

Source: Forrester/Russell Reynolds 2014 Digital Business Online Survey

Using Digital To Empower EmployeesAlyson Clarke | Principal Analyst

November 13, 2014Digital businesses continuously exploit digital technologies to both create new sources of

value for customers and increase operational agility in service of customers.

We’ve Entered The Age of the CustomerWe’ve Entered The Age of the Customer



Once, technology favored companies ---Now, it empowers customers


Agenda





Four market imperatives in the age of the customer

Turn big data into business

insights

Transform the customer experience

Accelerate your digital business

Age of the Customer

Embrace the mobile mind shift



The four market imperatives for established financial services firms

Great customer experiences bolster brand equity, win loyalty, boost revenue, and drive down costs. But many financial services firms score poorly in this area.

Customer experience excellence

Mobile is the flashpoint for a much more holistic, far-reaching change. Mobile touchpoints will be the hub of financial firms’ future relationships with the majority of their customers.

Mobile mind shift

Few financial services firms even know if the customers they have are actually the kind of business that they want. Analytics exposes what financial firms don’t know about their customers.

Big data and analytic insights

Digital disruption is tearing down the barriers to entry in every business. Barriers like regulation and capital requirements won't save financial firms.

Digital business


Related Forrester Research

April 15, 2015 “Trends 2015: North American Digital Banking”

February 10, 2015 “Digital Innovation Is The Antidote To Disruption”

November 6, 2014 “Predictions 2015: Digital Banking Teams Finally Get Serious About Innovation”

November 25, 2014 “The Future Of The Branch Lies In Digitally Empowering Employees

July 16, 2014 “Digital Disruption Hits Retail Financial Services”

April 1, 2013 “Three Disruptive Payment Trends In 2013”

Thank you

forrester.com

Alyson Clarke+1 [email protected]

Video

50

Critical Success Factors in Advancing your Digital

Marketing

51

1. Turn big data into business

insights

2. Transform the customer

experience

3. Embrace the mobile mind

shift

4. Accelerate your digital

business

1. Migrate to a “customer-first” mindset

2. Get the data right

3. Develop a culture of

measurement

4. Think beyond the technology

5. Gain buy-in

6. Start small, get a few wins

Four Market Imperatives


Critical Success Factors

Framework for Digital Marketing Advancement

52

Exit intent offering

target high-value,

high-loyalty segments

with offers

Exit intent offering

target high-value,

high-loyalty segments

with offers

Act on end-to-end customer

journey: Complete loan

applications in-branch that

originated online

Act on end-to-end customer

journey: Complete loan

applications in-branch that

originated online

Tested relevant content in the

main website carousel area of

their homepage to specific

audiences

Tested relevant content in the

main website carousel area of

their homepage to specific

audiences

Segment clients based upon

product holdings & prior actions

(eg. started auto quote)

Segment clients based upon

product holdings & prior actions

(eg. started auto quote)

A lot of traditional channels,

but all tagged in a way that is

measurable. All campaign

direct traffic back to website.

A lot of traditional channels,

but all tagged in a way that is

measurable. All campaign

direct traffic back to website.

53

Your Path to

Personalization


webtrends.com/PersonalizationWhitepaper

Thank you

54

[email protected]@forrester.com


Steve EarlSenior Director

PRODUCT MARKETING

Alyson ClarkePrincipal Analyst

SERVING EBUSINESS & CHANNEL

STRATEGY PROFESSIONALS

Confidential

Thank you

Documents

Trends in North American Digital Banking - Forrester ... In North American Digital Banking Alyson Clarke | Principal Analyst Webtrends webinar September 16, 2015