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Putting "You" back into Value using analytics to shift antagonism to advocacy. Kevin Jury IBM Global Business Services Financial Services Sector Lead Partner 03 Nov 2011. - PowerPoint PPT Presentation
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© 2011 IBM Corporation
Putting "You" back into Valueusing analytics to shift antagonism to advocacy
Kevin JuryIBM Global Business ServicesFinancial Services Sector Lead Partner03 Nov 2011
© 2011 IBM Corporation2
Most Banks are driving simplification and modernisation activities as they progress their journey from multiple system environments
Simplification
Modernisation
DISTRIBUTION(Cust / Channel)
Application
Application Enablement
Infrastructure
People & Process
Information
OPERATIONS(Process)
MANUFACTURING(Product)
Bank Bank
DISTRIBUTION(Cust / Channel)
MANUFACTURING(Product) OPERATIONS
(Process)
© 2011 IBM Corporation3
Which is inching the Banks closer to the customer but is not maximising the value and speed of ROI
Good individual decisions made at the time Solid delivery being achieved with costs
being reduced Most of these ‘new’ offerings still have the
bank at the centre … not the customer Disparate products, processes and channel
interactions mean that customers are not reaping the rewards from the value exchange
The premier customer experience is still not being delivered nor seems achievable
The intelligence to run a business on data driven decisions has still not materialised
3
OPERATIONS(Process)MANUFACTURING
(Product)
Bank
DISTRIBUTION(Cust / Channel)
© 2011 IBM Corporation4
Why are the Banks only getting some of the potential benefits….
What is in placeEnhanced silos across the product engines
Improved Sales and Service Desktop and fulfilment engine
Faster ability to offer an off the shelf (mass) product
Improved efficiencies in operations
What isn’t in placeImprovement on the transaction based relationship, but not true relationship banking
No real enhanced end-2-end customer experience
Portfolio based offers and product bundles still not prevalent
Process to variance is some way off, ie, creating a common generic process with attributes
What this means
Customer is a customer of a product not a customer of the Bank. Customers increasingly have a portfolio of products transcending bank silos
The Bank is more efficient, but the focus is on a product being activated/delivered rather than treating “me” as a customer of the bank
Limited bundling of attributes and very few unique customer specific offers based on detailed customer relationship and understanding
Straight through processing mostly by product and re-use of business process components are still not implemented
© 2011 IBM Corporation5
Why are the Banks only getting some of the potential benefits….
What is in placeCommon user interface driving familiarity and a sense of belonging for the customer
Self service is delivering cost savings
Some re-use of data to assist the application process
What isn’t in placeLittle consistency across the channels beyond transactions - not delivering the right product to right customer at right time through the right channel
Few common processing platforms (eg, BPM/STP) across the bank leveraging reusable business components for ultimate cost reduction
But very little connection of existing data elements (eg, financial, customer and process)
What this means
Lower than desired conversion / take up rates, missed product opportunities affecting profitability, share of wallet and customer satisfaction KPIs.
The majority of efficiency gains for banks are still to be realised and there is volumes of inconsistent messaging being delivered to customers
Banks not demonstrating an understanding of customers and their needs at the right time, eg applications processing is complicated with significant requests for the same data
© 2011 IBM Corporation
6
Recent Studies show……
The customer experience is better but not as good as it can/should be but remains bank/product centric
Banks need to gain a deeper understanding of their clients – what they value, what they need and what they expect
As such, banks must find a way to reconnect with their ever-evolving clients
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“clients do not trust banks to offer products and services that are in the clients’ best interests”
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© 2011 IBM Corporation
Banks are still focused on transactions and not relationships ...
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Looking at the customer lifecycle we see banks using data primarily to segment and sell, not to generate awareness, stimulate interest and create customer “tribes”
It has been easy to get sales and segmentation data
Source: IBM Institute for Business Value, Global Chief Marketing Officer Study October 2011.
61%Segmentation/targeting
54%Action/buy
46%Awareness/education
45%Interest/desire
41%Use/enjoy
40%Bond/advocate
Missedopportunity
Transaction focused Relationship focused
© 2011 IBM Corporation8
CEOs and CIOs are both highly focused on insights, clients, process and people …
Insight and intelligence
Client intimacy
People skills
Internal collaboration & Communications
Risk management
Enterprise model changes
Revenue model changes
78%
77%
72%
62%
72%
44%
48%
Financial Services CEO focus over the next 5 yearsGetting closer to customer1
People skills
Insight and intelligence
New or different channels
Enterprise model changes
Revenue model changes
Industry model changes
89%
71%
83%
53%
67%
47%
43%
Intelligent Process
Management
Information and insight
Customer Experience
FlexibilityAgilityGrowth
Cost Containment
Social Media
SecureConfidence
Trust
Sustainability
Source: 2010 CEO Study Q13: “Which of the following dimensions will you focus on more to realize your strategy in the new economic environment over the next 5 years?” (n=1,523); 2011 CIO Study, Q13: “Where will you focus IT to help your organization’s strategy over the next 3 to 5 years?”; Global sample (n=3,018); Banking (n=311)
Industry model changes 32%
© 2011 IBM Corporation9
Bank executives want to run their business on data-driven decisions Until recently most
companies focused their analytics capabilities on reducing redundant reporting, data simplification, database consolidation and other efforts to create leaner information platforms
Business executives want scenarios and simulations to provide guidance on best actions to take
Business executives want better ways to understand, apply and communicate insights
© 2011 IBM Corporation10
The quest for better client insight?..........and barriers to gaining this insight%
Note: Question asked:. What are the biggest barriers to collecting additional client information to achieve the level of insight needed by the bank? Select up to 3
Source: IBV EIU Business Analytics in Banking Survey 2010; n = 235
Mature Markets
Emerging Markets
© 2011 IBM Corporation
So what should we be solving for?
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How do we leverage the valuable data we have? Are we creating a bespoke product variant or bundle for the client? Do the branch/contact centres have any more insight about the
client they’re dealing with than before? Is the client being treated as individual / a segment of one? Are we making better use of data to understand credit risk? Is data streamed real-time to support data driven decisions and
modelling? Are productivity improvements being identified and being applied
across all relevant processes / operations? Are clients that are affected by incidents being informed pro-
actively? Does the Bank know the best channel/mechanism to push calls-to-
action to for each client?
© 2011 IBM Corporation12
An opportunity for banks
to think and act in new ways. +
+
=Develop enterprise-wide capabilities to enable informed judgment, client-centricity and profitable growth
Achieve compliance objectives while mitigating operational risk, fighting crime and optimizing financial returns
Drive a simplified and streamlined agile enterprise that balancesgrowth, efficiency and business resiliency
As a result, IBM’s point of view is that banking solutions need to become instrumented, interconnected and intelligent…
In other words : To ultimately use information for innovation! To establish organisational DNA that strives
to supplement current data with future data and create “relevant content” for customers
To shift from a culture of decision-making by intuition to decision-making with science
To innovate and adapt, to develop products that don’t just meet, but anticipate your customers’ needs
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© 2011 IBM Corporation
13
What do we need to do? Gather less data, get better alignment to needs, be “right here right now at the right time”
© 2011 IBM Corporation
14
What do we need to do? Gather less data, get better alignment to needs, be “right here right now at the right time” Digitise the Distribution, Manufacturing and Operations platforms in a way that significantly
drives simplification across the platformsBranch
Contact Centre
Online
Mobile
Distribution
Mortgage Loan
Cheque
Shares
Personal Loan
Manufacturing
ML Process
Overdraft Process
Pers Loan Process
Savings Process
Operations
Customer / Channel
ProcessProduct
Brand AffinitySelf Service
Quick Offer to Market
Reduced CostIncreased Efficiency
VARIANCEOFFER
© 2011 IBM Corporation
15
What do we need to do?
Branch
Contact Centre
Online
Mobile
Distributin
ML Process
Fulfilment
Rules Instantiation
Brand AffinitySelf Service
Quick Offer to Market
Reduced CostIncreased Efficiency
Gather less data, get better alignment to needs, be “right here right now at the right time” Digitise the Distribution, Manufacturing and Operations platforms in a way that significantly
drives simplification across the platforms
Put the customer at the heart of everything the Bank does– Treated like an individual / bespoke offerings– Portfolio based decisioning enables the Bank
to make better offers and the client feel valued– Customer satisfaction / Emotional attachment– Desire to do more with the Bank– Why don’t you know that? -> how did
you know that?
Analytics
Needs
Financials Treatments
Analytics is the missing link that will enable the maximum benefits to be realised from all of the work that has been undertaken – without it, the results will only ever be a portion of what they could be
Branch
Contact Centre
Online
Mobile
Distribution
ML Process
Overdraft Process
Personal Loan Process
Savings Process
Operations
VARIANCE
Mortgage Loan
Cheque
Shares
Personal Loan
Manufacturing
OFFER
RELEVANCECustomer / Channel
ProcessProduct
© 2011 IBM Corporation
Lets close the trilogy and create the guided customer sales and service experience” – lets create that part Digital and part Human customer experience
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A customer logs on to online banking
The website recognises from browsing info that the customer is looking for a new Credit card
The product engine analyses the total value of the client to the Bank and assesses the suitability of the standard credit card products
The decision engine determines that a credit card with a lower annual fee and an interest rate 50bps lower than standard is appropriate and will be of interest
The customer confirms acceptance of the offer and provides a small amount of data (that the Bank doesn’t already have) to complete the application
Fulfilment is executed automatically via STP and the client is provided with a printable set of credit card details they can use immediately whilst the card is dispatched in the post
One well serviced and delighted customer
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7“The best way to get started is to stop talking and begin doing” Walt Disney
Imagine a scenario where……
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