The Transformation of Fulfillment: Seamless Integration across Diverse Businesses

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Customers are no longer satisfied being the ultimate integrator for their portfolio of financial services products. Driven by their experiences in other industries (think receiving a single household bill for voice, internet, data, wireless and other telecom services), customers now expect a seamless, blended experience when dealing with a single company—even diversified financial services companies.

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Yet, customers’ are indicating there is a significant gap between their expectations and their experience with financial services companies. For example, research ranks the insurance industry eighth among 18 industries in customer experience, according to the Temkin Group1. This poor showing appears to have consequences. Accenture research indicates that of those customers who switched insurers between 2009 and 2012, 60 percent of them left due to poor customer experience and low satisfaction with the service they received.2

Historically, operations at financial services companies are divided into distinct silos, usually by operating groups (e.g., P&C insurance, Bank, Investments). The retail banking operating group of a financial services company typically has distinct technology platforms, contact centers and distribution network, separate from its insurance operations. Sometimes this separation is due to regulatory requirements, but it may also be the result of acquisition activity or a historic business model. This separation creates a fragmented customer experience that both limits the customer’s ability to conduct activities across their products portfolio and hinders the financial services company from developing stronger customer relationships. Recognizing the problem, savvy companies are already working to become customer-driven, multi-channel enterprises that deliver an integrated channel experience within one operating group; however, that may not be enough.

As financial services companies continue to expand and diversify their product and service offerings, it is increasingly important for them to integrate across their operating groups to deliver a branded, enterprise-wide customer experience. Accenture’s research on high performance banks shows that nearly 40 percent of a company’s share price performance is directly or indirectly linked to the ability to deliver a branded customer experience, due to increased share of wallet and brand evangelism advocacy.3

One emerging strategy to begin delivering an enterprise-wide customer relationship–and thus, branded customer experience–is customer fulfillment. Financial services companies are analyzing how best to improve their fulfillment practices to offer a distinctive customer experience throughout the customer lifecycle and across the full suite of products and services. Innovation in fulfillment strategies, processes and technology rewards financial services companies with considerable operational efficiency gains. It dramatically reduces the amount of manual follow-up and rework currently needed to satisfy customer requests for each operating group and it decreases the number of handoffs between product lines that prevent a customer’s request from being fully executed at the initial time of contact.

With the appropriate strategy, financial services companies can expect two significant competitive benefits:

• Deeper and broader customer relationships with higher customer satisfaction, shifting customers from ultimately being the service integrator of their products portfolio within a single financial services company to being an advocate for the brand among their peers.

• Agile, scalable fulfillment where independent and siloed processes (both front-and back-office) are integrated, enabling the company to both execute customer requests across all operating groups and channels at the time of contact. This allows the enterprise to draw on evolving technologies, such as virtualization, predictive analytics and mobile/social media integration, to create a strong discipline for delivering customer-centric value consistently.

Leading financial services companies are pursuing these two benefits by improving their fulfillment practices and becoming multi-channel, customer-driven entities. However, no single company is achieving both, leaving the competitive advantage of being first to deliver up for the taking.

Accenture believes fulfillment models that span operating groups and are cross-channel will be critical for financial services companies to adopt, in order to meet customer expectations, achieve sustainability and realize operational efficiency gains now and in the future.

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At Accenture, we define high-performance fulfillment as the act of completing a customer request (proactively or reactively) to deliver an exceptional customer experience that yields a deeper and broader customer relationship. To achieve fulfillment excellence, many financial services companies are shifting from a vertically-aligned, siloed business model to a seamless customer-centric model that enables scalable and efficient fulfillment practices. We see a continuum of four fulfillment models emerging as a result of the shift (Figure 1):

Model 1— Channel and Operating Group Silos

The first step on the continuum, this model is the current state for many financial services companies. In this model, the customer is forced to be the ultimate integrator of his/her portfolio of products across channels and operating groups, which often results in a fragmented transactional, advisory and/or service experience. Each operating group maintains its own multiple sales and service channels. The financial services company invests heavily in a lead product line, such as personal auto insurance. Due to the lack of integration within and across operating groups, the company is unable to seamlessly cross-sell or execute next-best offers related to other products, such as vehicle loans or warranty programs—thus limiting growth in products per household. This also limits the company primarily to multiple-step fulfillment with little-to-no real-time or perceived real-time fulfillment value.

Model 2— Channel Inegration within an Operating Group

The next progression along the continuum, this model is the near-term goal of many financial services companies today. It is characterized by sales and service channels that are integrated within an operating group, enabling a seamless, operating group specific experience—for example, an integrated auto insurance experience across all available channels within the P&C insurance operating group. While it is an improvement, the customer experience as a whole is fragmented and inconsistent. Customers are still the final integrator of their own portfolio of products across operating groups. The financial services company has minimal cross-sell or next-best offer abilities to broaden its customer penetration to additional product lines.

Model 3— Channel Integration across Operating Groups with Fragmented Backend

In this advanced model, operating groups operate as if they are integrated across all channels to deliver a seamless customer experience. However, to execute this “perceived integration,” the financial services company must exert a high level of manual work in its back office to fully conduct various, necessary fulfillment activities. Still, the benefit to the company is tremendous; it is better positioned to increase the number and diversity of products sold per household.

Model 4— Channel Integration across Operating Groups with Streamlined Backend

This fully integrated model is the ultimate in customer fulfillment. In it, operating groups are unified across channels for a seamless customer experience. The customer relationship is at the enterprise level rather than with individual operating groups, eliminating the need for the customer to integrate its products and services. The model also features a high level of back-office automation and minimizes manual intervention in fully executing fulfillment activities. The channel and operating group integration further enables financial services companies to cross-sell and carry out next-best offers across product lines, positioning them to increase the number of products sold per household and broadening the customer relationship.

Fulfillment is about delivering seamless customer interactions across all operating groups

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Figure 1. Becoming a Customer-Centric Organization

Model 1—Channel and Operating Group SilosCurrent state for many financial services companies

Customer acts as ultimate integrator of his/her portfolio of products.

No integration across operating groups and channels.

Financial services company heavily invests in lead business line.

Fragmented transactional, advisory, servicing, cross-sell, next-best offer and so forth capabilities within and across operating groups.

Limited self-service and digitalization of fulfillment processes.

Model 2—Channel Integration within an Operating GroupNear-term goal for many financial services companies

Customer acts as ultimate integrator of portfolio of products.

Channels are integrated within an operating group, enabling a operating group-specific experience.

Financial services company heavily invests in integration within operating group.

Fragmented transactional, advisory, servicing, cross-sell, next-best offer and so forth capabilities across operating groups.

More abundant self-service within operating group, but limited digitalization of fulfillment processes.

Model 3—Channel Integration across Operating Groups with Fragmented BackendLong-term goal for many financial services companies

Model 4—Channel Integration across Operating Groups with Streamlined BackendLong-term goal for many financial services companies

Customer experience appears integrated across operating groups and channels.

Operating groups and channels appear integrated, but require high touch.

Financial services company heavily invests in back-end support to execute perceived, seamless customer experience.

Integrated transactional advisory, servicing, cross-sell, next-best offer and so forth capabilities within and across operating groups.

Greater self-service across operating groups, but limited digitalization of fulfillment processes.

Long-term goal for many financial services companies.

Customer experience is integrated across operating groups and channels.

Operating groups and channels are integrated with high levels of automation.

Financial services company heavily invests in back-end capabilities to execute seamless customer experience.

Integrated transactional advisory, servicing, cross-sell, next-best offer and so forth capabilities.

Self-service across operating groups, digitalization of fulfillment processes and increased operational efficiency.

Social WebMobile Phone Seamless Communication and Integration

InvestLifeP&CLocation Bank

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When evaluating fulfillment model options, financial services companies should not view them on an aggregate level. Rather, each fulfillment activity should be examined to determine which model is optimal in achieving the stated business objectives. For example, improvement initiatives around non-customer facing fulfillment activities tend to have one deciding goal in moving from one model to the next: efficiency. Moving to a fully integrated model (Model 4 in Figure 1) in this case may not be economically beneficial in light of the marginal efficiency gains. Ultimately, the company should consider adopting one model holistically and then deploy fulfillment solutions from the other three models, where feasible, based on cost-benefit analysis. Additionally, some fulfillment activities may encourage a company to integrate a model between two similar operating groups, rather than expand the model to all operating groups. Such a hybrid approach should be explored when reviewing and determining the optimal model mix.

Finding the fulfillment model sweet spot

High-performance fulfillment: the act of completing a customer request (proactively or reactively) in efficient ways to deliver an exceptional customer experience that yields a deeper, broader customer relationship

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Many financial services companies are already in the process of transforming their fulfillment strategy and subsequent fulfillment model while others are at the onset of their transformation journey. However, all are discovering how critical an integrated model is to fulfilling customer requests and delivering a more consistent customer experience with reduced cost of variance and better service quality. Historic models, designed around the needs of the company, are highly complex, presenting many barriers to holistic customer relationships. Modern models that drive high performance are designed around customer needs with a focus on financial services company scalability and sustainability.

How fulfillment transformation is unfolding

Considerations when transforming to an integrated fulfillment model

There are a few key considerations financial services companies should examine and appropriately address to improve the customer experience and drive greater efficiency through successful fulfillment transformation (Figure 2).

Each and every step in a fulfillment model transformation is challenging. Technology, regulatory requirements and cost concerns add to the complexity. From a holistic perspective, financial services companies should select their best-fit targeted model and strategically move towards it.

Key Consideration Migration Strategy

The magnitude and complexity of the change is significant; determining where to begin and what strategy to deploy is difficult.

Conduct an analysis on customer pain points and overlay results of the analysis (key moments of truth) with high volume transactions to identify the starting point or “strike zone.” Look to address fulfillment activities in the strike zone first as they represent both the greatest impact on the customer experience and the most-frequent fulfillment tasks executed by the company. Using the strike zone as the initial scope, align leadership with the strategy to limit distractions from “pet projects” that can cause scope creep.

Navigating organizational barriers in a historically siloed enterprise can be difficult.

Appoint a strong leader who is accountable for driving the change and capable of bypassing organization barriers. Establishing a robust governance model and issue resolution process, along with developing a solid business case and success metrics up front, will help reduce emotional decision making and increase organization alignment.

The regulatory environment can prohibit integration for some fulfillment activities.

Based on the selected fulfillment activities, further analysis is necessary to understand the impact of regulatory factors on delivering a seamless customer experience:

• Licensing requirements.

• Skills, accreditation and competencies needed to perform selected activities.

• Continuing education to keep licenses and skill sets relevant.

• Cost of attrition.

• Level of operational risk the company is willing to accept.

A highly-complex technology landscape with limited ability to measure return on investment may limit the desire and ability to realize the target model.

Prioritize where to focus first through an evaluation of business value and then identify the complexity of the change. Approach the migration as a journey, establishing meaningful and manageable phases that enable milestone progress towards the target state. To nurture organizational commitment, broadly communicate quick wins that offer qualitative and quantitative benefits to the customer experience and company efficiency.

Figure 2. Four key considerations when transforming fulfillment models

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Key Moments of Truth

High Volume Transactions

Initial Fulfillment Focus Areas

Customer Process Options

Single Step Process: Customer request handled at time of contact and does not appear to require further touch points with the customer

Multi-Step Process: Customer request initiated at time of contact, launching a multi-step process

A B

Real Time: Customer request and resulting fulfillment action occurs at time of request across all lines of business

Perceived Real Time: Customer request is completed in the eyes of the customer at time of request; however, manual back end processing is required by the carrier to complete the customer request and to reflect the change across all lines of business

What classifies as a fulfillment activity? To help financial services companies fully understand and answer this question, Accenture created an approach to identify fulfillment opportunities, strategies and activities (Figure 3).

Figure 3. Accenture approach for narrowing down fulfillment strategies and activities

Identifying fulfillment priorities is key

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Following this approach, companies identify common synergies that span the customer lifecycles for their various operating groups, creating a list of potential fulfillment activities. Further analysis of these activities allows the company to identify which of these activities are key moments of truth, high volume transactions or both. An activity that overlaps between a key moment of truth and a high volume transaction becomes part of the initial fulfillment focus area. For example, money management—across investments, banking, and P&C insurance—is likely a fulfillment activity that is both a key moment of truth and a high volume transaction across operating groups. As stated earlier, there may be fulfillment activities that prompt a company to integrate two similar operating groups instead of creating integration across all operating groups. For example, conducting an endorsement on a policy to fulfill a customer request may only be a pertinent activity for the P&C insurance and Life insurance operating groups.

Continuing with this approach, financial services companies can develop a fulfillment strategy and identify enabling solutions around a strategic set of fulfillment activities. Doing so will help focus efforts on the agility, consistency and scalability needed to improve customer satisfaction and deliver a seamless customer experience.

With the fulfillment focus area defined, companies can choose between two customer process options for executing fulfillment activities:

• Single Step Process, where the customer request is handled at the time of contact and does not require further interaction with the customer. For example, a customer calls or accesses an account online to make a payment. The customer expects that once payment information is provided and the payment is indicated as accepted, no additional contact or follow up is necessary.

• Multi-Step Process, where a customer’s initial request at time of contact launches a multi-step process. For example, a customer calls to complete a First Notice of Loss which initiates the claims process. The customer expects that additional contact and follow up will occur in the future to complete the process.

For each of the two customer process options, two fulfillment options are available: real time and perceived real time. In a single step process, the entire fulfillment activity can be executed in real time or perceived real time. In a multi-step process, individual tasks can be executed in real time or perceived real time; the tasks simply extend the length of the process. Based on further analysis, both fulfillment options deliver a similar customer experience:

• Real Time, where a customer request and resulting fulfillment action occurs at the time of request. For example, a customer’s name change request initiated in one operating group is automatically and immediately executed for all products in all other operating groups.

• Perceived Real Time, where a customer perceives that his/her request is completed at the time of contact. However, the financial services company must conduct manual back-end processing to fully satisfy the request across all products in the customer’s portfolio. For example, a customer request at a bank to add a spouse to life policy, banking and investment accounts requires the company to manually execute the request across all three operating groups separately because of limited system integration. In such a situation, the customer initiates a request activity in one operating group with the perception that the activity is complete across all of their products; however, if the customer accesses his/her account before the back-end processing is complete, a discrepancy will exist.

To determine which solutions are feasible for each identified fulfillment activity, financial services companies should examine the true value of a seamless customer experience and any increased operational efficiency.

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Unsure if her financial plan was adequate, a customer requests a personal financial review. When the review identified areas that needed improvement, the advisor provided recommendations for additional

Figure 4. Customer Interaction: Financial ReviewPersonal financial review performed and recommendations indicate a need for additional financial products across various operating groups.

Customer Experience Financial Services Company Experience

1. Channel and Operating Group Silos

• Customer is provided multiple phone numbers to contact financial services company to purchase recommended additional products

• Each operating group processes the product(s) sale• Consumer information is entered into each

operating group’s product sales (underwriting, credit, etc.) system making them a customer

• Customer is onboarded by each operating group and can only interact on primary financial services company channel

2. Channel Integration within an Operating Group

• Customer is provided multiple phone numbers and/or web addresses to contact financial services company to purchase recommended additional products

• Each operating group processes the product(s) sale• Consumer information is entered into each

operating group’s product sales (underwriting, credit, etc.) system making them a customer

• Customer is onboarded by each operating group, but can use multiple channels to view/manage products

3. Channel Integration across Lines Operating Group with Fragmented Backend

• Customer is provided single phone number and/or single web address and a single point of contact/advisor processes all product sales

• Advisor accesses each operating group’s knowledge management source to advise customer on financial performance review results

• Advisor captures customer’s information and manually processes each product by operating group

• Advisor enters information into each operating group’s product sales (underwriting, credit, etc.) system making them a customer

• Customer is onboarded holistically by manually collating product/policy information and distributing

4. Channel Integration across Operating Groups with Streamlined Backend

• Customer is provided single phone number and/or single web address and a single point of contact/advisor processes all product sales

• Advisor accesses each operating group’s knowledge management source to advise customer on financial performance review results

• Advisor captures customer’s information and system processes each product across operating groups

• Advisor enters information into one product sales system (underwriting, credit, etc.) through a single entry making them a customer

• Customer is onboarded holistically by automatically collating product/policy account information and distributing

Art of the possible

financial products across various operating groups (Figure 4). Depending on the financial services company’s integration between operating groups, there are four very different advisor and customer paths to achieve the same result.

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Over the next three to five years, more advanced capabilities will be necessary to deliver on emerging consumer demands—further self-servicing (mobile capabilities), the influence marketplace (social media integration), brokered product servicing and data and analytics—and, as a result, a shift in fulfillment innovation will be required. However, the financial services companies that can include fulfillment in the innovation equation will enjoy deeper customer relationships, increased operational efficiency and bottom line improvements.

The Connected Customer: An analysis of how the societal and technological trends may impact customer interactions.

• Self Service and Alternative Channels: Because the number of customers adopting direct and self-service channels and seeking better and personalized services4 [in these channels] is increasing, there is a growing need to provide integrated, collaborative, personalized, real-time and engaging experiences in direct channels.5 This trend of self-service interactions through easy-to-use direct channels is only continuing to grow as emerging virtual / alternative channels–biometrics at ATMs, micro ATMs in India6 are surfacing. Alternative channels may be the way consumers chose to interact with companies in the future and the benefits of meeting these consumer expectations not only help increase satisfaction, but also aid companies in reducing operating costs and establishing more flexible operations. Other examples particularly relevant within Financial Services, are the increasing comfort level consumers hold towards conducting transactions on their mobile devices and the monumental shift towards digital channels for what historically have been paper-based activities. In turn, the use of electronic signatures, eRecord management, electronic billing, etc will enable savings in printing and postage for the financial services company. In a recent study of 400 senior marketers from 10 countries, 68% identified the importance of creating value from digital channels; however, only 13% said their performance was leading edge and 22% of this group said digital orientation is affected most by inefficient business practices.7 Historically, flexible operating models—including fulfillment models—

An eye on the future

were thought of as too complex and difficult; however, to appropriately respond to customer expectations and the need for further digital orientation, building flexibility into operating group integration and fulfillment practices will be a critical part of making the “connected customer” part of the winning strategy and will afford the company bottom line improvements.

• Influence Marketplace: A newfound perception from financial services companies is that it is easier for customers to shop around and switch companies than ever before. This means that customers will reward/punish the company for good and bad service more than ever before. This makes the Influence Marketplace a critical component of a company’s future success. In the Influence Marketplace, a company’s success is predicated on whether its products and services are noteworthy enough for people to spread the word. Influence can be thought of as a form of currency, and can be exchanged when there is a mutual benefit. With easy access to social media and other emerging social interactions (e.g., Crowd sourcing, SoLoMo (short for social-local-mobile)), companies will face greater scrutiny in satisfying customer needs in a sustainable fashion. Evaluating fulfillment and establishing processes that are not only integrated but optimized for sustainable growth and performance will be crucial to growing and maintaining strong customer relationships.

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Brokered or Non-Manufactured Products: As more financial services companies include brokered products in their product suite, a new trend on servicing versus underwriting is emerging.

• Own the Customer Relationship; Service Brokered Products: As more financial services companies look to other areas to diversify product offerings, they see a marketplace where manufactured products are facing greater underwriting scrutiny, while bundled package price wars continue to entice customer attrition. To meet these challenges, third party product integration is becoming part of the customer acquisition and retention strategy. It is important to remember that customers still expect their trusted financial company to maintain a rich, branded experience—regardless of whether or not the customer owns products and services underwritten by a third party. At the same time, the financial services company needs to deliver the rich customer experience their customers have come to expect. For example, if a carrier offers brokered home insurance underwritten by another carrier, the primary carrier may insist on owning all customer interactions, with the third party simply underwriting the risk. This type of relationship with third party companies requires a shared system for policy administration, consistently executed Service Level Agreements, etc. Additionally, efficient fulfillment processes and self-service options will be critical to ensuring a shared customer receives a seamless customer experience that is unified across companies—not just operating groups.

Data and Analytics: Segregated operating groups also mean segregated data management leaving financial services companies without a holistic view of the customer

• Data and Predictive Analytics Driving Share of Wallet: As further integration across operating groups— and channels—becomes part of the winning strategy, creating household views of customers that leverages powerful predictive analytics will become a powerful enabler to deliver a seamless customer experience across operating groups. This data, based on historic trends and customer behavior can provide customer service employees, agents or advisors with the best offer to increase share of wallet, acquire new customers and retain

profitable ones. Predictive analytics can also be used to direct the customer to the individual with the most appropriate skills and expertise to address their need, providing greater operational efficiency while delivering the best customer experience. While a growing number of CMOs are investing in data and analytics to enhance the customer experience,8 there is still a long way to go before the use of data and analytics is being leveraged to the greatest advantage.

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Drawing on our extensive work in financial services, and our invested focus in understanding the complexities of executing fulfillment, Accenture is helping financial services companies explore, develop and deliver seamless customer experiences that satisfy the evolving needs and wants of consumers while achieving operational efficiency gains and bottom line improvements for financial services companies.

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1 Temkin Group, survey of 10,000 U.S. consumers, January 2012

2 Accenture Global Consumer Pulse Research, 20123 Accenture, survey of 3,500 retail bank customers in

North America, 2010 4 Accenture Customer Research, (Interviews with

46 Senior Executives at 35 Global Banks March— June 2010)

5 Accenture Customer 2012 Bank Executive Interviews, Spring 2010

6 Micro ATMs—Use of local shops and private business as ATMs in remote areas where Banks’ ATMs cannot be opened due to lack of skills and technology availability

7 Accenture Interactive CMO Insights Survey, December 2012

8 Accenture Interactive CMO Insights survey, December 2012

About Accenture

Accenture is a global management consulting, technology services and outsourcing company, with approximately 266,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, 2012.

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