Digital Banking

DIGITAL BANKINGNikolay SPASOV

TBI Bank Deputy Executive Director

WHAT IS DIGITAL BANKING?

Internet Banking Mobile Banking

Omni-channel Banking

NEW UNDERSTANDING OF BANKING

2

NEW UNDERSTANDING OF BANKING

INTERNET OF THINGS

(IoT)

DIGITAL BANKING

3

WHAT IS INTERNET OF THINGS (IoT)?

Device with

ON/OFF switch

Mobile Phones

Coffee Machine

Fridge

Washing Machine

Heating Systems

Lamps

Headphones

Wearable Devices

SOURCE: Gartner4

5

Alarm Coffee Machine Fridge

Reminder

Remind me to buy milk!

1 2

3

Remind me to buy milk!

6

Your Car

Calendar

1

2

3

4

Message

I am in a traffic!

Will be late with

10 min.

5

New Bulgarian University

Maps

7

AN E X P L O S I O N O F C O N N E C T E D D E V I C E S

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

50

30

40

20

0

10

Equal to Sofia City

population in that time

Increase of connected

devices in 11 years

CISCO estimates that

IoT is born in 2008-2009

US National Intelligence Council recognizes

IoT on their list with six most “disruptive“

with expected impact till 2025

Machine-to-machine will reach 18

billion by 2022 with consumer

electronics & intelligent houses

The number of connected devices

to internet exceeds twice the

population of the planet

Emerging sensors – traffic light cameras,

parking spot sensors, entertainment & smart

utility meters are all communicating to other

machines via broadband

Taking population predictions into account,

there will be about 6.6 devices per human on the

planet

DE

VIC

ES

YEARS

1992 2003

2012

2009

2013

2014

2015

2016

2017

2018

2019

2020

SOURCE: US National Cable & Telecommunications Association

Songdo, South Korea

INTERNET OF THINGS & DIGITAL BANKING

8

Users Data

9

INTERNET OF THINGS & DIGITAL BANKING

Banks

Data

IoT

Car Accident

1

Financial Data

2

3

4

Customer X

Bank

10

DIGITAL BANKING PILLARS

Digital Banking

Experience Content Data & Analytics Omni-channel 11


Digital Banking


1313

TR

AD

ITIO

NA

LC

YC

LE

ON

LIN

E

awareness information advicebecoming a

customer

servicing &

transactionsshare

BankLeaflets Bank

Officer

Bank Service

& TRNXWorth-To-

Mouth

Presence Personali-

zation

Interactive Simplicity Convinience Feedback

You’ve got to start with the

customer experience and work back

toward the technology – not the other

way around

Steve Jobs1955 - 2011

14

“

”

CUSTOMER JOURNEY MAPPING (MORTGAGE LOAN)

Young Couple

THINKING &

FEELING

BANK

TECHNOLOGY

OPPORTUNITIES

CONSIDER

ACCESS OPTIONS

DISCOVER

DEFINE REQUIREMENTS

SELECT

CHOOSE WHAT TO BUY

VERIFY

ID & FINANCIAL CHECK

PURCHASE

SALE NEGOTIATED

COMPLETE

MOVE

Decide

to buy

Learn

about the

mortgage

Calculate

the budgetProperty

search

Compare

mortgages

Apply for

mortgage

loan

Assessment

Sign

contract &

Deal

Move

15

Renting means

freedom w/o security

Buying a property is

more binding than

marriage

A real estate agency

will save money

Visiting bank for

consultation - helpful

Selecting real estate

agency – comparing &

selecting property

Form filling is time consuming

& the bank should know our

details, already

The bank

needs hard

copies

Just something

that will pass

quickly

The bank

officer will

handle

everything

Can’t this all

be online?

All parties

communicate hard

The bank

officer

kept us

updated

This took

time!We need

to clean

• Explains products

• Prepares indicative offer

• Advices to select real estate

agency

BANK CUSTOMER

SERVICE OFFICER

• Fills in application form &

copies ID Cards

• Provides list with required

documents

BANK CUSTOMER

SERVICE OFFICERBANK CREDIT

DEPARTMENT

• Performs assessment of

applicants

• Evaluates property

• Prepares approval

• Periodically updates the

customers over the

status of their

application

BANK CUSTOMER

SERVICE OFFICER

Online one-stop-

shop preposition

Online advisory,

including real estate

offer & indicative

budget

Auto data gathering

from state databases

(NSSI; GRAO; BNB;

etc.) + IoT + Social

Assessment

Software & Decision

Engine

Biometrical

electronic

signatures

software

Quick & easy

Less time &

efforts

consuming

Customer experience is the cumulative impact of

multiple touch points over time which result in a real

relationship feeling (or lack of).

Warren Buffett

Customer experience helps you drive

value, reduce cost and build

competitive advantage

16

“

”

CUSTOMER EXPERIENCE VS. BUSINESS VALUE

How often are customer insights used

to drive decision-making around the

organization? Almost

always

10,7%

Occasionally

37,3%

Frequently

30,7

Infrequently16%

Not at all

5,3%

17SOURCE: Customer Strategist, Volume 6

Top actions taken based on customer

experience metrics

1. Improve customer-facing operations

2. Review results across the organization

3. Improve channel interactions

4. Report results to the entire organization

5. Improve non-customer-facing

operations

6. Reward customer-facing employees

based on results

7. Reward executives based

on results

CUSTOMER EXPERIENCE VS. BUSINESS VALUE

What experiences are most enhanced

or modified based on customer

experience measurement?

18SOURCE: Customer Strategist, Volume 6

How difficult is it to colerate changes in

customer experience with changes in

business performance (revenue,

operating margins, customer lifetime

value)? 1. Omni-channel

experience

2. Mobile

experience

3. In branch

experience

4. Phone agent

experience

5. Web

experience

Extremely

difficult32.4%

Moderately

difficult28.2%

Somewhat

difficult23.9%

Not at all

difficult7.0%

Haven’t

tried 8.5%

CUSTOMER EXPERIENCE EQUATION

The ability of an

organization to increase

its customer base

The ability of an organization to

keep and grow the customers it

already has

Acquisition Retention Efficiency

The ability of an organization

to do more with less

GENERATE MORE

OPPORTUNITIES

INCREASE BRAND

EQUITY

INCREASE

MARKET SHARE

INCREASE SHARE

OF WALLET

DRIVE LOYALTY

DRIVE ADVOCACY

INCREASE

ROI

INCREASE

PRODUCTIVITY

19

DECREASE OPS

COST

Customer Experience

CUSTOMER EXPERIENCE METRICS

20

Acquisition Marketing Campaign

Effectiveness

Up-Sell Cross-Sell

Rate

Average Revenue

Per Customer

Products & Services

Per Interaction

Retention

Efficiency

Average Resolution

Time

Uptime Channel

Accessibility

Channel Cost

Acquisition Cost Retention per

Customer - Cost

First Contact

Resolution

Average Handle

Time


Digital Banking


22

CONTENT

“ Content isn’t just a tactic, it’s a

function of your entire marketing process.”

23

Robert Rose

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CONTENT ORGINATION

CREDIT & DEBIT

CARDS PRODUCTS

MORTGAGE &

HOUSING LOANS

PRODUCTS

CONSUMER &

PERSONAL LOANS

PRODUCTS

SAVING PRODUCTS

INVESTMENT

PRODUCTS

FINANCIAL

SERVICES

25

HOW BANKS BECAME PUBLISHERS?

75%Local

Banks

87%Affluent

CustomersRESEARCH

Local Financial Media:

1/2 – connect with PRO’s

1/3 – PRO’s content

1/4 – create PRO content

International Financial Media:

Digital Marketing Team


Digital Banking


27

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Without data you are just

another person with opinion.“”

William Edwards Deming 1900 - 1993

RECAP

Customer Experience Banking ContentFinancial Data

29

IoT Data

Data Management

30

DATA MANAGEMENT TOOLS & ANALYTICS

80%Local Banks

place customer

centricity as a top

priority

1out of

every2executives believe they do

not have mature

capabilities to support

their customer strategies

??

CONSTRAINS TECHNOLOGY

Real-time

processing of data

& analytics 59%

SOURCE: SAP “Banks Betting Big on Big Data and Real-Time Customer Insight”

Predictive analytics 59%59%

Customer Relationship

Management System 54%

PREDICTIVE ANALYTICS

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PREDICTIVE ANALYTICS is the use of data, statistical algorithms and machine-learning techniques

to identify the likelihood of future outcomes based on historical data.SOURCE: SAS “Predictive Analytics: What it is and why it matters”

DRIVERS FOR PREDICTIVE

ANALYTICS IN BANKING

Customer

Insight

Customer

Experience

Management

Channel

Execution

Business

Strategy

Risk

ManagementMarketing

☛ Sentiment analysis

☛ Social media analysis

☛ Credit analysis

☛ Customer profitability

☛ Virtual agent

☛ Next best action

☛ Relationship pricing

☛ Next best offer

☛ Profitability

☛ Sales/channel performance

☛ Product channel strategy

☛ Risk & capital modeling

☛ Risk & capital management

☛ Risk adjusted pricing

☛ Portfolio risk management

☛ Fraud / AML

☛ Lead generation

☛ Customer segmentation

☛ Campaign management

TOP 5 PREDICTIVE ANALYTICS SOLUTIONS

32

Predictive Analytics

SAP Predictive Analytics

PREDICTIVE ANALYTICS

SOURCE: Gartner Advanced Analytics Quadrant 2015: Gainers, Losers

WHAT IS CRM ?

33

system allowing businesses to manage business

relationships and the data and information

associated with them.

Customer Relationship

Management

SOURCE: Salesforce Blog

WHAT CRM AFFECTS ?

34

SALES☛ Product wise pipeline

☛ Customer on-boarding (lead capture)

☛ Real-time sales (online)

MARKETING☛ Campaign management

☛ Lead distribution to branches

☛ Campaign follow-up

SERVICE & SUPPORT☛ Listen, engage & respond

☛ Auto assignments to back office

☛ SLA’s and escalations

PRODUCT & INNOVATION☛ Product analytics

☛ New product market research

☛ Pilot product launch

COMMUNITY☛ Collaboration analytics

☛ Internal collaboration

☛ Unified employee desktop

CUSTOMER EXPERIENCE☛ 360 degree customer view

☛ Personalized offers

☛ Alerts

☛ Advisory

HOW CRM WORKS ?

35

Electricity Company

Bank

Customer X

80 BGN

Electricity Bill

Customer X

HOW CRM WORKS ?

36

Electricity Company

Bank

Customer X

80 BGN

Electricity Bill

Customer X

Account Balance

0 BGN

Customer X

HOW CRM WORKS ?

37

Electricity Company

Bank

Customer X

80 BGN

Electricity Bill

Customer X

Account Balance

0 BGN

Customer X

HOW CRM WORKS ?

38

Electricity Company

Bank

Customer X

80 BGN

Electricity Bill

Customer X

Account Balance

0 BGN

Your account balance

is 0 BGN. Do you want

100 BGN overdraft for

electricity payment?

Y

Customer X

HOW CRM WORKS ?

39

Customer X Electricity Company

Bank

Customer X

80 BGN

Electricity Bill

Customer X

Account Balance

100 BGN

CRM & SOCIAL – EXAMPLE

40Facebook


41

Boyko Borisov

CRM System


42Facebook


43Facebook


44

Boyko Borisov

Boyko BorisovMale

June 13, 1959

Bankya, Bulgaria

Single

female

FriendshipNetworking

G.E.R.B.

Christian

Bankya, Bulgaria

CRM System


45

Boyko Borisov

CRM System

TOP CRM SOLUTIONS

46


Digital Banking


OMNI – CHANNEL BANKING

48

49

OMNI – CHANNEL DEFINITIONOMNI-CHANNEL BANKING is about ensuring customers have a consistent experience of the bank

products and services irrespective of the channel they use, as well as ensuring channel integration and

seamless customer transition between channels.

SINGLE

CHANNEL

Customer

Branch

Customer and bank have a

single touch point

SOURCE: A Market Leader in Ovum's Decision Matrix – Digital Banking Trends in 2014 – Webinar Recap

MULTI -

CHANNEL

Customer

Branch WebCustomer sees brand through

multiple touch points with bank

using siloed communications

Customer

WebBranch Call

CROSS -

CHANNEL

Customer sees unified brand

through many touch points.

Bank has single customer view

OMNI -

CHANNEL

Customer

WebBranch Call Mob

Customer has holistic brand

experience. Bank leverages

unified view of customer

50

OMNI-CHANNEL ENVIRONMENT

Customer

Online Banking Mobile Banking

CRM

Call Center ATM

Corporate Website

Branch

Lending Platform

Social

Online and physical branches

are complementary, not rivals.

They must unite together to

increase turnover which is the key

to a successful omni-channel

strategy..

“

”Marc Benioff

51

BRANCH IN OMNI – CHANNEL

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CONCLUSION

64

As customers become increasingly comfortable with technology, they are

interacting with banks in multiple ways. They expect to be treated as

individuals and according to their preferences. For banks, the time is now

to take advantage of the wealth of customer information available. As the

world becomes even more digital, capitalizing on technology will make the

difference – digital banks are here.

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Economy & Finance

Digital Banking