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IND Group Seminar presentation Nov 24, 2011.The next wave in digital services for the banking industry customers: From products & transaction-focus towardsend-user-need –orientation
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© Frantic 2011
THE NEXT WAVE IN DIGITAL SERVICES FOR THE BANKING INDUSTRY CUSTOMERS: From products & transaction-focus towards end-user-need –orientation IND Seminar in Helsinki Tommi Pelkonen Strategist November 24, 2011
INSIGHT
© Frantic 2011 © Frantic 2011
35 people, Helsinki-based, 15 years of experience in digital solutions
Frantic = Digital Creations
WHAT DO WE WANT TO DO? To make services for our customers that: 1) Generate business opportunities
and additional revenues 2) Make services that people enjoy
to use and benefit of
Strategy
Design
Technology
Res
earc
h &
ana
lyti
cs
© Frantic 2011 © Frantic 2011
TOMMI IN BRIEF
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Born 1971, married, daughter M.Sc. (Econ.): 1999, Helsinki School of Economics, HSE, International Business, Finance & Accounting, Information Technology 2010->: Strategist at Frantic 2008-2010: Business Consultant at Finpro Budapest in ICT/software business 2005-2008: Strategist at Satama Amsterdam 1999-2005: Business Consultant at Satama Helsinki 1996-1999: Research at the HSE Electronic Commerce Institute, focus: digital media service companies Lecturer and author of several publications & articles in the fields digital media, internationalisation of SMEs and service business
© Frantic 2011 © Frantic 2011
BACKGROUND: THE DIGITAL REVOLUTION HAS REALISED, BUT IT STILL CONTINUES
The Internet has changed consumer and industrial buyer behavior permanently.
All business operations are influenced by the online channels and e-business..
Customers and consumers have more power than ever in economic history
Digital channel functions as transformation agent within organisations. Competences to run digital channel-drive business increase gradually.
Change process takes time – many business processes are not yet digitised nor utilise the online channel to the its potential. Solid success metrics are emerging.
Innovation and society fragmentation continues – globally.
eBusiness = Business!
© Frantic 2011 © Frantic 2011
INSIGHT The next wave in digital services for banking industry customers
• BACKGROUND: From modem noises towards real time, pan-European & always-on digital banking for all
• SOME TRENDS: Innovation happening in and outside the traditional banking/financial sector
• CHALLENGE: How to keep the trust and compete in the turbulent times?
• SO WHAT: Why should you care?
© Frantic 2011 © Frantic 2011
DIGITAL BANKING HISTORY IN BRIEF
• Videotext – Minitel – Telesampo & Infotel
• Modem dial-up banking • Telephone banking • Internet-banking • Mobile banking • … • Security major leaps –
password / security tokens & lists
• Constant fraud and phishing efforts
• … LONG-WAY BEHIND US ALREADY !
© Frantic 2011
EVOLUTION STEPS IN BRIEF
Early trials with pioneers and leading companies
Internet-boosted efficiency and self-service explosion (still going on)
New innovation and service models for banking EARLY DAYS
1980-early 1990s
Internet banking era 1995->
Mobile banking era 1999->
Product offering explosion Financial “supermarkets”
Need-based Customer empowerment Microbanking
TEST & TRY
BREAK TO THE MASS MARKETS
OFFER EVERYTHING
LEARN TO LISTEN & BE PERSONAL
EASE OF USE
EFFICIENCY
LOYALTY
JOY OF USE GUIDANCE
TEST OPPORTUNITY DRIVERS
THEMES
New sources of banking innovations are emerging from user-orientation
© Frantic 2011 © Frantic 2011
KEY MOTIVES FOR BANKING AUTOMATION
• Cost savings, cost savings, cost savings… • Freedom of time, place & location • Ease of use • Plethora of new & innovative financial products,
also for consumers • Explosive growth of the financial instruments and electronic
commerce in professional, but also in private sectors
• Increased global hyper-competition and massive investments into self-service platforms
• Reduction of churn = loyalty programs
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BUT NOW: Joy of use? Relevance? Guidance of the consumers to better benefits?
© Frantic 2011 © Frantic 2011
INSIGHT The next wave in digital services for banking industry customers
• BACKGROUND: From modem noises towards real time, pan-European & always-on digital banking for all
• SOME TRENDS: Innovation happening in and outside the traditional banking/financial sector
• CHALLENGE: How to keep the trust and compete in the turbulent times?
• SO WHAT: Why should you care?
© Frantic 2011 © Frantic 2011
BANKING IS A KEY APPLICATION AREA FOR ONLINE USERS
http://www.internetworldstats.com/stats4.htm http://www.iabeurope.eu/media/43499/mcdc%20european%20overview.pdf
476 M Internet users in Europe (2011), 58% of the European population
WE LOVE OUR SELF-SERVICE BANKS – OR
DO WE?
© Frantic 2011 © Frantic 2011
TRANSPARENCY IN BANKING IS INCREASING – BOOSTED BY BROKERS & PRICE COMPARISON ENGINES
OUTCOME: WALLED GARDENS OR
OPEN SPACES?
© Frantic 2011 © Frantic 2011
THE COMPARISON POWER IS REACHING EVEN SMALLER DOMESTIC MARKETS
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© Frantic 2011 © Frantic 2011
PERSONAL FINANCE MANAGEMENT TOOLS ARE EMERGING INSIDE & OUTSIDE THE BANKS
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Aggregate to an outside service to get better and more relevan information…
© Frantic 2011 © Frantic 2011
SIMPLICITY IN BANKING & BUDGET BANKING
Simple, easy to use, no-thrill, bare bones banking. Is the the dawn EasyJet era of banking?
© Frantic 2011 © Frantic 2011
GREAT NEW INNOVATIONS DOING GLOBAL GOOD
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Online & mobility-empoweredbanking, microfinancing and risk sharing
© Frantic 2011 © Frantic 2011
ALSO NOT-THAT-POSITIVE INNOVATIONS EMERVE (FOR THE CONSUMERS !)
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Aggressive marketing + User interface & process innovations!
Leading to consumer interest rates up 1100 % p.a.!
Case: Very short-term loans in Finland
© Frantic 2011 © Frantic 2011
INSIGHT The next wave in digital services for banking industry customers
• BACKGROUND: From modem noises towards real time, pan-European & always-on digital banking for all
• SOME TRENDS: Innovation happening in and outside the traditional banking/financial sector
• CHALLENGE: How to keep the trust and compete in the turbulent times?
• SO WHAT: Why should you care?
© Frantic 2011 © Frantic 2011
IT IS ALL ABOUT TRUST!
Below the media & beverage industries!
© Frantic 2011 © Frantic 2011
FINANCIAL CRISIS IS DETORIATING TRUST TOWARDS FINANCIAL INSTITUTIONS!
Freefall of trust!
© Frantic 2011 © Frantic 2011
ONLINE IS THE KEY SOURCE FOR COMPANY INFORMATION
And online – news, but also rumours travel fast…
© Frantic 2011 © Frantic 2011
RE-ESTABLISMENT OF TRUST IS DIFFICULT TASK
Think about Nokia and Symbian…
© Frantic 2011 © Frantic 2011
HUMANS: SOCIAL ANIMALS BY LEGACY
• Regardless how Darwinist we want to be, our DNAs and socio-cultural legacy guides us to continue good-old-proven models and habits
• How will the digital conversation change/enable/boost our old habits to change – flourish – suffer?
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4000 years of media-revolution cannot undo 2,000,000 of
programming
FUTURELAB
SO WHAT FOR ONLINE BANKING? => PEOPLE WANT TO TALK TO PEOPLE AND HEAR OTHERS’ EXPERIENCES!
© Frantic 2011 © Frantic 2011
HOW ABOUT BRINGING THE HINTS AND DISCUSSION TO YOUR OWN SITE?
© Frantic 2011 © Frantic 2011
…OR HOW ABOUT BRINGING THE RATINGS EVEN FURTHER – INTO YOUR PRODUCT OFFERINGS?
Hmm… – Haven’t we seen this happening in the travel sector already…
© Frantic 2011 © Frantic 2011
BACK TO TRUST: HOW ABOUT DESIGNING SERVICES FROM A “USERS FIRST -ANGLE”?
• Who are they? • What do they want? • What do we want them to do? • How do they behave now and will
behave soon • What makes them succeed (with us or
without? • How can we help them in their needs?
Starting point:
© Frantic 2011 © Frantic 2011
USER-ORIENTATION TO THE CORE OF (DIGITAL) PLANNING & THINKING
3. HAPPY CUSTOMERS + GOOD BUSINESS !
2. FIND AND DESIGN SERVICES TO MATCH THESE NEEDS
Try to find the need that your organisation can service and excel in within the time, budget, technology and resourcing availabel
1. RESEARCH THE ACTUAL NEEDS & BEHAVIOUR OF THE USERS
Surveys and especially with qualitative interviews
SIMPLE IDEA – BUT SO RARELY EXECUTED
© Frantic 2011 © Frantic 2011
HOW ABOUT TRYING TO ANSWER THESE QUESTIONS IN THE ONLINE BANK?
• STATUS: What do I own? • Give a great overview to the situation
• PERFORMANCE: How am I doing? • What is happening – am I loosing / winning? Am I
reaching my goals?
• ADVICE: What should I do? • If this is so, what are my options?
• ACTIONS: How can I take action? • What to do now – how to improve this? Let’s do it…
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© Frantic 2011 © Frantic 2011
INSIGHT The next wave in digital services for banking industry customers
• BACKGROUND: From modem noises towards real time, pan-European & always-on digital banking for all
• SOME TRENDS: Innovation happening in and outside the traditional banking/financial sector
• CHALLENGE: How to keep the trust and compete in the turbulent times?
• SO WHAT: Why should you care?
© Frantic 2011 © Frantic 2011
GOOD SERVICE SELLS ITSELF; BAD SERVICE SELLS ITSELF EVEN FASTER…
Good experience = I will share it with four people
! Bad experience = I will tell it 20 of my closest friends and publish a bitter update on FB for my 223 “friends”…
"
Designed for people
Stimulates the senses
Tells really good
stories
Useful
Desirable Usable
Fitting the user needs (utility)
Easy to use (usability)
Pleasurable experience
(satisfaction & feelings)
© Frantic 2011 © Frantic 2011
BETTER SERVICE EXPERIENCE AIMS FOR A POSITIVE BUSINESS CASE - TOO!
• To existing or new clients • Via enhanced marketing and conversion improvements • Via improved retention of clientele • Via measured and monitored online operations
MORE SALES = more !
• Information clarity and lead process development • Campaigning and analytical development
MORE LEADS = more !
• Decreases in customer service costs • Decreases in sales costs
COST SAVINGS = less - !
BUSINESS CASE IS A KEY FACTOR FOR GREAT DIGITAL SERVICE PROGRAMS – AND SO OFTEN NEGLECTED!
© Frantic 2011 © Frantic 2011
OUR TARGET: BEST-IN-CLASS USER EXPERIENCE
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BEST USER
EXPERIENCE
I find things where I expect them to be
I like the brand and its visual design
It is nice to do things online
I saved a lot of time doing things online
I feel the site understands me
I get things done more efficiently than offline
I got exactly what I needed know
I am impressed by the service
I want to recommend this to my friends
Fitting the user needs (utility)
Easy to use (usability)
Pleasurable experience (satisfaction)
The banking sector has already made many of these things right . Yet, there is plenty of room for improvment
WOW!
© Frantic 2011 © Frantic 2011
OUTCOME: HOW DOES A LEADING ONLINE BANKING SERVICE BEHAVE & FEEL IN 2014?
© Frantic 2011 © Frantic 2011
IN 2014, THE LEADING ONLINE BANKING SERVICE …
… offers a well-packaged multi-channel customer access to reach one’s financial service provider via the preferred method of contact…
© Frantic 2011 © Frantic 2011
IN 2014, THE LEADING ONLINE BANKING SERVICE …
… create a trusted environment into which customers want to come and share their views and plans of the their financial situation and the provider. They feel treated as respected customers…
© Frantic 2011 © Frantic 2011
IN 2014, THE LEADING ONLINE BANKING SERVICE …
…remembers and recognizes its users and offers personally customised advices and services and is present then when needed…
© Frantic 2011 © Frantic 2011
IN 2014, THE LEADING ONLINE BANKING SERVICE …
……aggregates the consumer opinions & reviews to its offerings, advices and content dynamically…
© Frantic 2011 © Frantic 2011
IN 2014, THE LEADING ONLINE BANKING SERVICE …
…increases dramatically the customer satisfaction and boost revenues with lower churn and clever cross-selling.
Outcome: Marketing budgets start shifting from acquisition to retention and loyalty programs! Quality service sells itself!
© Frantic 2011
LET’S GO AND CREATE GREAT DIGITAL SERVICES!
Tommi Pelkonen Tommi.pelkonen@frantic.com +358-40-50 50 821 http://www.slideshare.net/TommiP
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