The Intelligent Payments Experience: How Banks Can Win the Payments Race Virginia Heyburn, VP of Strategy, Fiserv GBA 2020, Operations and Technology Conference February 27, 2020
The Intelligent Payments Experience:
How Banks Can Win the Payments Race
Virginia Heyburn, VP of Strategy, Fiserv
GBA 2020, Operations and Technology Conference
February 27, 2020
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The Time is Now to Embrace New Strategies
1. Celent, From Challenged to Challenger: Becoming a 21st Century Bank in an Open Banking World; 2. Wall Street Journal, 3. Raddon; 4. IDC Financial Insights, 2018
2
The banking industry will continue to be
challenged and disrupted by digital
giants and Fintechs.
Bank of America already has a
relationship with 1in5 Gen Z customers3
$1.2 billion More funds than
many U.S. banks
U.S. banking industry is losing
4 banks / week4
Gen Z and Millennials
are digital natives with
a new set of expectations
At the same time it’s in the strongest position yet to reverse the dynamic. - Celent1
is loaded on the Starbucks app at any time2
More than
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75% of Generation Z Cohorts Say “I Want to Be an Entrepreneur”
4
The lines between personal and business banking will blur – as will the lines between generations, as improvements delight all.
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Digitally social
Mobile natives
Split taskers
Entrepreneurial
Prefer images/video
Prize individuality
Curate personal brands
Financial anxiety Global
The iGeneration Custom, Conversational and Connected Now
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#crushingit with Payment Services that Make Lives Easier
Digital natives who crave personal connection
Instagram lifestyles undercut by student debt
Entrepreneurs who want to give back
Brand enthusiasts overwhelmed by too much choice
Banks still have a lot of work to do to connect with younger customers.
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85% of Consumer Interactions Will Be Managed Digitally by 2020
Sources: Domo, IBM, Google
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2,500,000,000,000,000,000 bytes of data created per day
90% of the world’s data created in just the last two years
40K searches per second just on Google
Exponential growth continues IOT will change everything again
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Bank Consolidation 2011-2019
3,615
2,551
683
566
107
2,625 (-990)
1,231 (-1,320)
656 (-10)
656 (-27)
144 (+37)
$500M-1B $1-10B
>$10B
$100 -500M
<$100M
Number of Banks 2009
Number of Banks 2019
8
Asset Size
• Source: FDIC
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Global Fintech Investments Top $39 Billion
9
885 Deals
1,153Deals
1,254Deals
1,480Deals
$39.57B Annual Global Fintech Deals and Financing 2014-2018 ($B)
$18.00B $19.29B $16.30B
$8.34B
1,707Deals
2014 2015 2016 2017 2018
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2019 Fintech Trends to watch - CBINSIGHTS
10
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Tech Companies Are Gaining Ground in Financial Services
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Would you be using a [INSERT COMPANY TYPE] to perform the specific banking needs below? / Note: In the data reported here, “comfort” is defined as the net of those selecting “somewhat comfortable” or “very comfortable” in response to the survey question.
Comfort with tech companies for transactions (among those who don’t currently use tech companies for listed services)
2017 2018
40%
55%
29%
39%
34%
43% 41%
54%
38%
52%
Pay bills Take out a loan Manage money Track budget Transfer money to others
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Disruptors Come in All Shapes and Sizes
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Attributes
• Large base of digital consumers
• Strong digital experiences
• Financial services as an extension of broader relationship
• Niche customer / member segments
• Incremental banking products
• Digitally native, purpose built for today’s digital world
• Open APIs; integration with various Fintech providers
Big Tech
Niche Tech
Digital Banks
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How are we going to put the FUN into Banking?
13
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Banks Still Hold the Key To Consumer Trust
Source: Bain & Company, Saleforce and MaritzCX Open Banking Survey of Customers, 2017 (n = >4,000)
78
63
43
0
10
20
30
40
50
60
70
80
90
Primary bank Another bank Non-bank
Percentage of customers willing to share personal data for a better current account offer
14
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More Banks Looking to Launch Digital-Only Brands
“Retail banks’ top proposition for innovation is building a new digital bank says new report released by Temenos,” Temenos press release, July 3, 2019, Survey was conducted by the Economist Intelligence Unit.
15
According to a 2019 survey of global banking executives…
of banks are looking
to build a greenfield
digital bank
36%
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Increased Efficiency
Faster Innovation
Cycles
16
%
Fiserv Proprietary and Confidential – Limited Distribution
Smarter, Simpler
Payments
Payments Modernization is a Survival Priority
Faster Payments
Everywhere
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Expectations & Experiences: Consumer Payments,
Fiserv, 2017
Real-Time Payments Are Now Expected As a Standard
76%
What matters to consumers?
Say real-time
payment delivery
is at least somewhat important
Younger consumers are most likely to say real-time is important 93% of millennials
Survey question to all qualified respondents: How important is it to you that payments you make are delivered in real-time (that is, within a few seconds)?
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59% 65%
53% 58%
45% 51%
Paid a bill online through
a financial organization
Accessed electronic
bills Made automatic
payment online
Banking Services Used in the Past 30 Days
2017 2018
Survey question to all qualified respondents: In the past 30 days, approximately how many times have you or your household used the following banking services?
Selected behaviors displayed showing significant increases from prior year.
Reverse Mentoring is Getting All Generations to Pay Digitally
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Survey question to all qualified respondents: Which of the following would you consider to be the benefits of using your voice to perform banking
functions via a voice-activated device? Please select all that apply. Not all responses shown.
Voice-Activated Banking Gaining Consumers’ Attention
Perception of Voice
Banking Benefits Growing
See any benefit
to voice banking
51%
2019 Total
41%
47%
2018 Total
2017 Total
Channels and New Entrants
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Tech Spend Reflects Focus on CX and Efficiency
Source: BankDirector 2019 Tech Survey August 2019
Bank Asset Size > $10B* 1B - $10B $500 - 1B < $500M Total
1. Improving the customer experience 75% 75% 72% 85% 78%
2. Creating a more efficient operation 88% 63% 84% 71% 72%
3. Enhancing online and mobile platforms 75% 43% 52% 38% 46%
4. Enhancing the bank’s top-line growth
(revenue and/or sales) 50% 30% 24% 29% 30%
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What are the Essential Innovation Strategies for Banks?
21
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New Expectations Demand New Success Strategies
22
Snackable To allow customers
to shift easily from
task to task and
channel to channel
Conversational Engage in dialogue
with customers and
avoid the monologue
Embedded within customers’
daily activities for easy
financial services
Fast with 24/7 service
excellence, rapid
transactions, offers,
and decision-making
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Customer Experience is Omni-Channel
Source: BankDirector 2019 Tech Survey August 2019 (*Numbers do not add up to 100% due to rounding)
60%
51% Digital and the branch are equally important
38% Digital
11% Branch
1% Other
When asked which delivery channel is more
critical to your bank’s growth strategy:
of respondents say the bank relies on the core
provider to introduce innovative solutions
23
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Widen Your Digital Footprint
24
Digital Strategy for an Always-On World
Money Service Deposits Loans
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View Money Movement as a Brand Builder
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who how
much when Invisible payments Payments apps Interoperable networks
Sender’s Bank Receiver’s Bank
Sender Receiver
Payment Network
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Real Time Value Proposition
26
Reduced
fraud and credit risk
Increased
back-office efficiency
Enhanced
customer experience
Evolution of
faster payments
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Deliver One Experience Across Touchpoints
27
Initiate
Continue
Finish
Seamless movement across touchpoints
New: Chat/App/Voice/Augmented/Virtual Reality
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Open Banking is About Helping Banks Solve the Struggle to Differentiate
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Share data to create more engaging experiences
• Create more intuitive and frictionless customer journeys
• Co-innovate with third parties to expand their service offerings
• Pursue new business models and revenue streams
• Compete with Fintech challengers and the big banks
• Accelerate growth and expand into new markets
• Increase speed to market without inviting additional risk
Help people bank
the way they want to bank...
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The Future of Banking is Fast with 5G
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Cloud Driven
Artificial Intelligence
Virtual Reality
Augmented Reality
Multimodal Audio
Live-Stream Video
Real-time Language Translation
Ambient Computing
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#goals #healthylife #happy
#love #instagood
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Thank You!
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The Intelligent Payments Experience:
How Banks Can Win the Payments Race
Virginia Heyburn, VP of Strategy, Fiserv
February 27, 2020