tower group roundtable presentation
TRANSCRIPT
© 2010 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved.
Can You See Me Now?Building Change That Customers Will Notice
Nicole SturgillResearch DirectorRetail Banking & Cards
October 12, 2011
© 2010 The Tower Group, Inc. 2
Agenda
Welcome and introductions
Building change that customers will notice What has changed? Data, data, data on consumer preferences The need for agility and how to build it
Break for lunch
Panel discussion Building agility Q&A
© 2010 The Tower Group, Inc. 3
What has changed?
© 2010 The Tower Group, Inc. 4
Some phrases don’t change, but they take on a different meaning
Source: Bank Marketing, 1991
1. Maintaining Profitability2. Credit Portfolio Management3. Service Quality4. Regional Economy5. Cost Management..38. Electronic Banking39. Expanded Securities / Insurance40. Inflation41. New Sources of Capital42. Antitrust Backlash to Consolidation43. Economic Globalization44. International Banking
1. Service Quality2. Maintaining Profitability3. Market / Customer Focus4. Operations / Systems / Technology5. Credit Portfolio Management..38. Expanded Securities / Insurance39. Industry Overcapacity40. Off-balance Sheet Regulation41. Geographic Expansion42. Industry Consolidation43. Nationwide Interstate Branching44. Antitrust Backlash to Consolidation
1991 2015
?
© 2010 The Tower Group, Inc. 5
Everything is Additive
1951 1981
© 2010 The Tower Group, Inc. 6
To Today, When Channel Proliferation is Dizzying
© 2010 The Tower Group, Inc. 7
Tea Leaves: How do we know what to build next?
© 2010 The Tower Group, Inc. 8
In person, face-to-face Online (Web site) Mobile app Phone Mail Unsure
The Branch Is Still Preferred, At Least for Opening Accounts
Source: CEB Financial Services Customer Experience Survey, 2010
Preference to learn about financial products and services
AustraliaCanadaMexico
UKUSA
MalaysiaSingapore
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
354244
2640
2735
4440
4455
3549
40
21
22
25
5
55
52
55
3
46
27
104
8
106
388
99
Preference to purchase financial products and services
AustraliaCanadaMexico
UKUSA
MalaysiaSingapore
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
556162
4161
4751
2422
2439
1927
26
21
322
76
55
55462
11
13
33
5
1310
61011109
© 2010 The Tower Group, Inc. 9
In person, face-to-face Online (Web site) Mobile app Phone Mail Unsure
The Role That Age Plays
Preference to learn about financial products and services in the United States
18-34
35-54
55+
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
30
42
47
45
37
24
4
1
1
6
4
4
6
8
15
8
8
9
18-34
35-54
55+
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
48
63
73
30
18
10
3
2
6
4
3
5
1
3
9
11
12
Source: CEB Financial Services Customer Experience Survey, 2010
Preference to purchase financial products and services in the United States
© 2010 The Tower Group, Inc. 10
Channel Preference by Wealth Segment
Note: Mass Market = less than $100,000 in investable assets; Mass Affluent = $100,000 + in investable assetsSource: CEB/TowerGroup Customer Experience Survey, 2010
44%
38%
3% 6%
10%
Mass Market¹
In personOnlineMobilePhoneMail
37%
45%
1%4% 13%
Mass Affluent¹
Learn about financial products and services
© 2010 The Tower Group, Inc. 11
Channel Preference by Wealth Segment
Note: Mass Market = less than $100,000 in investable assets; Mass Affluent = $100,000 + in investable assetsSource: CEB/TowerGroup Customer Experience Survey, 2010
70%
21%
2%4% 3%
Mass Market¹
In personOnlineMobilePhoneMail
66%
26%
2%5%
1%
Mass Affluent¹
Make purchases of new financial products and services
© 2010 The Tower Group, Inc. 12
Contact Preferences for Addressing Issues (2010)
Source: CEB Financial Services Customer Experience Survey, 2010
31%
22%21%
8%
4%2%
7% 4%
Phone
In-person: Staff
In-person: Manager
Website
Write a letter
Satisfaction survey
None of the above
Unsure
© 2010 The Tower Group, Inc. 13
Reasons for Attrition at US Financial Institutions
24%
12%
5%16%
13%
6%
17%
5%
Moved to new location
Poor customer service
Limited access
Excessive or hidden fees
Another FI's offer more at-tractive
Inferior offerings
Wanted FI with better reputation
None of the above
Prefer not to saySource: CEB Financial Services Customer Experience Survey, 2010
Delivery issues
© 2010 The Tower Group, Inc. 14
Building Agility
© 2010 The Tower Group, Inc. 15
US Banking Delivery Transactions by Type (2008–13P)
Source: TowerGroup
Transactions (in Billions)
2009 2010P 2011P 2012P 2013P0
20
40
60
80
100
14.6 14.7 14.8 15.0 15.1
14.7 14.7 14.1 13.7 13.3
17.0 17.8 18.5 19.3 19.8
23.3 26.8 30.0 33.3 35.0
1.23.0 5.6
9.414.0 Mobile
(CAGR = 116%)
Online(CAGR = 8.5%)
Call Center(CAGR = 3.1%)
Branch(CAGR = .07%)
ATM(CAGR = .61%)
© 2010 The Tower Group, Inc. 16
Linking Financial Products to Customer Utility
Source: TowerGroup
CONSUMERS
Complex Services
Transaction (Cash) Services
Complex/Transaction
Account Opening
Check Cashing
Financial Advice
Withdrawals
Deposits
Account Inquiries
Bill Payment
Account Opening
Transaction ServicesBalance Inquiries
Payments
Complex/Transaction
Account Inquiries
Problem Resolution
Account Opening
© 2010 The Tower Group, Inc. 17
Example: The Bank Product Sales Cycle
Source: TowerGroup
Consumer request Teller/agent
recommendation
Present offer
IdentifyProspects
Make contact
Qualify leadAnswer questions
Open account
Ask questions/online help tools
Establish creditworthiness
Determine account type
Explain benefits
Complete forms Enter application
data Provide
compliance documentation
Teller referral Platform
discussion Online outreach
Discuss concerns Provide electronic
means of communication
© 2010 The Tower Group, Inc. 18
Delivery Challenges
Branch rationalizationKeep or remove?Redesign or stick with tradition?
Shifting demographics Resource availability and prioritization Competing priorities:
Lower cost of self-service vs. cross-sales and loyalty generated by face-to-face interactions
Rationalization of internal cost and revenue structures Siloed channel management
© 2010 The Tower Group, Inc. 19
Connecting Channels and Products to Provide a Consistent Experience
Channel
Deposit products
Mortgage loan
Credit cards
Consumer loans
Wealth management
Applications
•Customer Insights
• Preferred channels
• Existing products
• Demographics
• Credit Quality
•Enabling any channel, anytime, any place access
•Business Process Management
• Account origination, problem resolution, customer requests
Getting There From Here
Branch
Mobile
ATM
Online Contact Center
Source: TowerGroup
© 2010 The Tower Group, Inc. 20
Solutions and Next Steps
Understand the customer Data is useless if you don’t know what to do with it Play to the customer – Know the preferred channel(s) Know what the customer expects from you; compare existing demographics vs.
desired demographics
Organize Plan for agility — determine the vision and lay out how to get there Rationalize competing goals: utilization and financial Bring channel management under one roofTake action Make customer insights an everyday process, not a point in time analysis Review existing channel-specific processes to see what can be extended to other
channels Don’t forget the back office
© 2011 IBM Corporation
Smarter Banking for your business
IBM Confidential
What is Customer Care & Insight?
Capture& Notice
Any entry point, continuous cycle, continuous discovery and refinement
Information
Face-to-Face, Direct Voice, Self ServiceInteractionsPredict & Act
Sense & Respond
Insights
Pervasive & Quick Access to Trusted Data
Analyze & Derive
Influenceand Drive
21
© 2011 IBM Corporation
Smarter Banking for your business
IBM Confidential
Capture& Notice
Any entry point, continuous cycle, continuous discovery and refinement
Information
Face-to-Face, Direct Voice, Self ServiceInteractionsPredict & Act
Sense & Respond
Insights
Pervasive & Quick Access to Trusted Data
Analyze & Derive
Influenceand Drive
22
Example:Single View of Person
Example:Customer Analytics
Example:Multi-channel Transformation
© 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 23
Cisco Delivered Agility … Enabling you to Act Now
Backed by Cisco’s Integrated Architecture for Retail Banking
