Next Level in Online Banking:Users to the CORE OF THINKING

© Frantic 2011

NEXT LEVEL IN ONLINE BANKING: USERS TO THE CORE OF THINKING

From products & transaction-focus towards end-user-need –orientation Mobey Forum Quarterly Meeting Amsterdam Tommi Pelkonen Strategist December 1, 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 that: 1)  Generate business opportunities

and additional revenues for our customers

2)  Make services that people enjoy to use and benefit of

Strategy

Design

Technology

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TOMMI IN BRIEF

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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 Born 1971, married, daughter M.Sc. (Econ.): 1999, Helsinki School of Economics, HSE, International Business, Finance & Accounting, Information Technology Lecturer and author of several publications & articles in the fields digital media, internationalisation of SMEs and service business Industrial focus: Media, Telecoms, Financial sector, B2B Commerce, Industrial manafacturing Consulting focus: Strategy, Procesess & Innovation, Digital opportunities, Business modelling

Motto: “The most robust knowledge is created in interactions, via positive conflicts”


BACKGROUND: THE DIGITAL REVOLUTION HAS REALISED, BUT IT STILL CONTINUES

• The Internet has changed consumer and industrial buyer behavior permanently.

PERMANENT CHANGE

• All business operations are influenced by the online channels and e-business. TOTAL IMPACT

• Customers and consumers have more power than ever in economic history

EMPOWERED CUSTOMERS

• Digital channel functions as transformation agent within organisations. Competences to run digital channel-drive business increase gradually.

CHANGE DRIVER

• 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.

STILL HUGE POTENTIAL

•  Innovation and society fragmentation continues – globally. FRAGMENTATION

eBusiness = Business!


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

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

EASE OF USE

EFFICIENCY

LOYALTY

JOY OF USE GUIDANCE

TEST OPPORTUNITY DRIVERS

TEST & TRY

BREAK TO THE MASS MARKETS

OFFER EVERYTHING

LEARN TO LISTEN & BE PERSONAL

THEMES

New sources of banking innovations are emerging from user-orientation


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?








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?


CONSUMERS IN VARYING STAGES OF BEHAVIOUR

•  Forrester Research asked in 2009-2010 about consumers preference to seek & research / buy online financial products •  ITA: 11% - 4 % •  FRA: ~20 % researched / 3 % bought •  SPA: 20 % - 5 % •  GER: 26% - 11 % •  NL: 49 % - 21 % •  UK: 43 % - 28% !

Source: Forrester Research, 2009-2010

CONSTANT GROWTH IN ONLINE USAGE FOR

FINANCIAL SERVICES


THE COMPARISON & BIDDING POWER IS REACHING EVER SMALLER SEGMENTS

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Letsbuyit.com – style of consumer insurance brokering with usage of aggregated power of a B2B financial institution

Comparison engines in pure eCommerce style – transparency for standard products


PERSONAL FINANCE MANAGEMENT TOOLS ARE EMERGING INSIDE & OUTSIDE THE BANKS

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POTENTIAL: Aggregate to an outside / other bank’s online service to get richer, clearer and more relevant information…


SIMPLICITY IN BANKING & BUDGET BANKING

Simple, easy to use, no-thrill, bare bones banking. Is the the dawn EasyJet era of banking?


GREAT NEW INNOVATIONS DOING GLOBAL GOOD

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Online & mobility-empowered banking, microfinancing and risk sharing


ALSO NOT-THAT-POSITIVE INNOVATIONS EMERGE (FOR THE CONSUMERS !)

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Aggressive marketing + User interface & process innovations!

Leading to consumer interest rates up 1300 % p.a.!

Case: Very short-term loans in Finland








WE NEED TO RECOVER AND FIND MEANS TO RE-ESTABLISH THE CREBILITY

How about learning from the best practices of other sectors to improve the situation, at least a bit?

© Frantic 2011

THREE DIMENSION FOR FINANCIAL SECTOR CONSUMER INNOVATION

Organisations & processes

Social systems and networks

Systems & technology

Security Speed Access Usability Joy of use

Credibility Expertise Benefits Efficiency Transparency

Reputation Listening

Participation Attitudes & behaviour

FUNCTIONALITY TRUST

FAME

A never-ending wheel of opportunities and/or challenges in these turbulent times…

FINANCIAL SECTOR INNOVATION


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? • What do the really want – what makes them

happy?

Let’s start from this angle…


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 available

1. RESEARCH THE ACTUAL NEEDS & BEHAVIOUR OF THE USERS

Surveys and especially with qualitative interviews

SIMPLE IDEA – BUT SO RARELY EXECUTED


SOME METHODS FOR THE USER-ORIENTED THINKING OF (DIGITAL) SERVICES

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User-orientation calls for softer methods – do we have the belief believe in them in our number/fact-oriented financial industry?

Affinity diagramming Card sorting Contextual

inquiry

Data analysis (e.g. web analytics)

Design critique

Diary/Photo study Focus groups Heuristic

evaluations Interviews Meetings

Paper prototyping

Participatory design

Remote testing Task Analysis Usability

tests

Agile development

A/B & MVT testing

Continuous trial-learn-

develop loops …


QUICK HINT: HOW ABOUT FOCUSING INTO LOGICAL TIMING WHEN PEOPLE BUY FINANCIAL PRODUCTS?

This is not a marketing trick – it should become an essential part of financial service sales!

Getting a new job Retirement Marriage

Moving Layoff/loosing a job

Getting divorced/separated

Getting ill Becoming pregnant …


HOW ABOUT TRYING TO ANSWER THESE QUESTIONS IN THE ONLINE BANK?

STATUS: What do I have? •  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 now? •  If this is so, what are

my options?

ACTIONS: How can I move forwards? • What to do now – how

to improve this? Let’s do it…

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Online banking could be not only necessity – it could be pleasant, even a fun experience!

Dear Bank, Please offer me all of

this is a manner and a language that I can

understand.

I am not a financial expert, thus please

listen to me and help me to become better and

more empowered, thank you!


HOW TO EXTEND THIS TO CONTAIN ALSO THE SOCIAL DIMENSION?

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Innovation is opened up with a new angle to thinking…

Possible solutions •  Testimonials & reviews •  Peer-to-peer support •  Live support (chat, video) •  Benchmark & comparison data & tools •  Closed social circle alerts, discussions,

sharing – “my advisors” •  Life events – use content & relevant

supporting tools to trigger attention & usage

•  Bank feed – what is happening to me & around me

•  Visual appeal & analyser tools •  Financial diary functions etc. •  …








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)


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!


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!


DREAM: HOW DOES A LEADING ONLINE BANKING SERVICE BEHAVE & FEEL IN 2014?


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…

IT’S HERE!



… 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…

LET ME CONFESS



…remembers and recognizes its users and offers personally customised advices and services and is present then when needed…

NICE TO BE BACK



……aggregates the consumer opinions & reviews to its offerings, advices and content dynamically…

GOOD NEWS OF

YOU



…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!

I AM HAPPY!


SUMMARY

•  There have great potential for innovation via a new angle for online banking innovation •  There is more new ideas around than ever for banking

innovations (also outside financial industry – we need to match these to our world

•  We need to find new ways to service the more demanding online-empowered and social-advice & impact amplified consumers

•  Mobile banking/payment is not only an access technology or transaction issue – it is the always-on bank with the best of ease of use – but only if done properly

IN BRIEF: LET’S REINVENT OUR ONLINE BANKING SERVICES!

© Frantic 2011

LET’S GO AND CREATE GREAT DIGITAL SERVICES!

Tommi Pelkonen [email protected] +358-40-50 50 821 http://www.slideshare.net/TommiP

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Next Level in Online Banking:Users to the CORE OF THINKING

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