Re-Architecting the Bank Executive Summary

Reshaping the Bank around
Pervasive Service Design
IDC Banking Forum
Milan, January 10th, 2015
CUSTOMERS BEHAVIOURS
HAS CHANGED
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Key Customers needs are emerging
What Customers want is the ability to access banking services at any time
from any location using a better and simpler experience than in branches
Addicted to freedom
Addicted to customization
Addicted to connectivity
I am always On
I use multiple Devices
I stay in multiple locations
I want immediate and secure access
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I get better deals
I save money
I want the ultra convenient
I want personalized and customizable offers
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I am in control
I am better informed
I want more social engagement
I want more fun
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New technology trends allow adoption of Mobile channels
Laptop & Tablet
Smartphone
Feature phone
Mobile subscription (billion)
Affordable Smart
Devices
05
Mobile will become the
predominant channel
Share of
population
05
05
05
05
05
05
05
02
02
03
03
01
01
01
02
2011
2012
2013
2014
2015
2016
2017
2018
82%
88%
91%
95%
98%
101%
104%
106%
03
03
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04
Internet users (billion)
Ubiquitous
Broadband
Connectivity
By 2018, there will be
an additional 0,7 billion
internet users
Share of
population
Source: IDC, 2015
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03
03
03
2011
2012
2013
2014
2015
2016
2017
2018
32%
35%
38%
40%
42%
44%
46%
47%
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Propensity to use Digital/Mobile channels is increasing….
New Mobile technologies allow for new way of interaction and streamlines the distribution
chain of financial services for access to formerly excluded customers
Channel usage in 2010
Expected channel usage in 2015
2010, % of sales
Consumer finance products
2015, % of respondents
73%
12%
Mortgages
80%
Investments
78%
11%
Savings accounts
77%
16%
Current accounts
Source: McKinsey & Co and EFMA,
April 2011
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84%
32%
47%
4%
9%
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72%
10%
58%
38%
53%
Branches
Agents/Brokers
Call center
Direct channels
28%
59%
43%
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…highlighting a direct correlation with buy propensity
Average products with primary bank
Core deposit products
Related deposit products
Credit products
Other
7,00
6,28
6,00
0,55
5,00
1,00
5,14
0,23
0,77
4,00
3,00
3,20
2,73
2,00
1,00
1,54
• Fully engaged customers average 1,14
additional product categories with their
primary bank than do customers who are
"actively disengaged"
• Customers who are fully engaged bring
also $402 in additional revenue per year to
their primary bank compared with those who
are actively disengaged, 10% greater wallet
share in deposit balances and 14% greater
wallet share in investments
1,41
0,00
1
FULLY
Engaged
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ACTIVELY
Disengaged
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HOW BANKS CAN EMBRACE THE
MOBILE REVOLUTION
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Banks can leverage their unique asset….
Customer Trust
Awareness of
Customer Location
(POS, ATM, Branches,
Smartphones…)
Knowledge on
Spending Behavior
and Purchasing
power
Intrinsically digital
products
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Copyright © 2015 NTT DATA Italia S.p.A.
Strong Technology
Investment
(payment, internet
banking, mobile…)
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…for expanding its footprint along the whole customer journey
Leverage Mobile for expanding to the whole e-commerce journey and adopting new mobile
related services such as location-based services, rewards & loyalty and couponing
Search, evaluation of alternatives
Generate
demand
Map
places
Decision making
Price
Comparing
sites
Contacting/
searching the
deal
Purchase
decision
Effective tools
for location
based
advertisement
and marketing
couponing
services
Mobile apps
are capable of
real-time
location based
search
Certain test
applications
support
comparing
different financial
institution
New tools are
capable of
contacting and
navigating the
consumer to the
point of interest
Specialized third
party websites
can compare
prices, offers of
different financial
institution and
also the opinions
of other
customers
Cellfire
collects unique
coupons and
discounts
AroundMe
shows places of
interests around
the customers
according their
search input
Yelp helps to
find the best
retailer with
evaluations
Google Local
collects
information
Google Maps
plans routes
Segugio.it maps
the best prices
Transaction
Payment
Mobile
payment
Post-evaluation
Purchase
evaluation/
feedback
Purchase
feedback can be
shared after
transaction
Experiences,
opinions are
shareable on
social network
Loyalty/
returning
customer
Reinvented
cards are able
to collect
loyalty points
after checkout
or specific
transactions
Examples
Swipely
Foursquare is a
collects post
place to share
customer experience sales discounts
Today bank
coverage
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WHAT ARE THE MOBILE
ENABLERS
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Innovation in Bank requires a totally new Service Creation approach….
•
Products have to be decomposed into smaller Business Service Elements
•
Reusability is key for reducing time to market
•
Pervasiveness, Personalization and Simplicity are key for customer adoption
Be Aware &
Get Advice
On Board
Usage
Care
Relationship &
Channel
Model
Segmentation &
Personalization
Model
Partnership &
Referral
Model
Pricing &
Revenue
Model
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… which requires a new Operating model
Create a separate fast way of working to develop the innovation
Improve your foundation making it as efficiently as possible to keep costs down, maximize revenue
and free up funds to invest in the new
Be Aware &
Get Advice
On
Board
Usage
Care
Service
Creation
Savings for
Funding
Become Fast
Keep Basics
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…new Organizational structures….
Instead of a traditional hierarchical organization that reinforces a silos based structure, transformed
Organization will experiment loosely connected structures
This encourage self-organization into cross-organizational and multidisciplinary teams
Silo
Digital Hub
Multidisciplinary
HQ
HQ
HQ
Fast IT
Fast IT
Fast IT
Slow IT Slow IT
Slow IT
Op
Op
Slow IT
HQ
S
B
OpFast IT
Fast IT
Op
Digital
Service Provider
BU 3
BU 2
BU 1
BU 3
B
BU 2
S
BU 1
Digital change agent
S
Digital
BU 3
B
BU 2
B
BU 1
B
BU 3
S
BU 2
S
BU 1
S
Outsourced
Slow IT
Op
Slow IT
S Strategy
B Budget Op Operations
Coordination
Sharing
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…new Partnership models….
Partnership model have to move from a Traditional one (Customer – Supplier) to a more Wirearchical
model (fintech partners, Startup, VC, R&D, Universities…)
Shift the digital business from a linear relationship to a dynamic value ecosystem
Supplier
Production
Supply
Chain
Marketing
Customer
R&D
VC
Traditional
Suppliers
Fintech
Partners
Startup
OUs
Universities
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…new Investment Evaluation/Monitoring practices
Traditional financial tools are designed for stable market environments, but fail when applied to
innovation under conditions of uncertainty and rapid change.
Newer investment methodology evaluate the costs of “doing nothing” and monitor Value creation
Set a group of criteria to select the most
meaningful initiatives to start with
VALUE
IMPACTS
FEASIBILITY
Projected cash stream from
investing in an innovation
More likely cash flow resulting
from doing nothing
Monitor progress (using Coorti and
Split tests)
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…and a new Service Creation process
A reshaped Service Creation process which acts as the enterprise glue which keep together two parts
of the new Operating model using, show quickly small but concrete results and scale-up successful
projects by “contamination” of other areas monitoring agile teams for security/risk compliance
Seeding
Digital
Checkup
Horizon
Design
Sprouting
Governance
Growing
Service
Creation
Blossoming
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Digital Checkup is our approach to drive Banks towards their digital awareness
positioning them inside the Readiness Matrix through the evaluation of 2x5 drivers
Your Digital
Readiness
Products &
Offering
Customer
Value
Channels
Processes
Architecture
&
Technology
Regulation
Competitors
& New
Entrants
Third Party
Mngt
Governance
&
Approach
Organization
&
Skills
Tomorrow
Today
Your Transformation
Ability
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Our Full Lifecycle of Mobile Services Implementation & Management
Mobile Application
Development
• User Experience (UX)
• Native Device Development
(iOS, BlackBerry, Android,
Windows Phone)
• Cross-Platform
Development
• Enterprise Mobile App
Development
(SAP, Oracle, SalesForce)
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Mobile Testing Services
Mobile App Mgmt & Infra
Services
• Accelerated Mobile Test
Automation
• Mobile Infrastructure and
Hosting
• On Demand
Performance Testing/
Benchmarking
• Mobile Device
Management & Security
• Accessibility Testing
• NTT Remote Test Kit
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• Enterprise App Store
• Unified Communications
• Dual Persona
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CASE STUDY
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“Hello bank !” is part of a wider BPN Paribas / BNL Relationship strategy for 2014-2016
Private
Bank
Hello
bank!
Clients with important assets that
require a dedicated management
and ask for a one-to-one
relationship with a trustworthy
consultant
Digital Clients that do not desire
physical interaction with the Bank,
using new digital technologies
meanwhile keeping relationships
when required
Retail
Bank
Clients that use different
channels but don't avoid the
branch as point of reference for
operations/ counseling/ buying
experience
X-selling
Retention
Branch
Retention
Income
ATM
CRSC
th February 2014)
2012 NTT
DATA
Source: BNP Paribas Group FourthCopyright
Quarter©Results
(13
Relation
manager
Promoters
Affluent Clients that need a
trustworthy consultant for
their investments' choice
Acquisition
Less Costs
Internet
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Mobile
Acquisition
Income
Social
Promoters
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We help spend better…
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…and to save more in a different,
social perspective!
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The assistance model integrates
self-service management mode with
highly customizable caring & support
features thanks to synergies between
Contact Center and Hello! Team
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“Hello bank !” Business Architecture
 Lean Organization: 3 Functional Managers
 Less than 40 Operating Resources
User &
Customer
Experience
Customer
Acquisition
Customer
Development
Communication
Compliance
•
•
•
•
User Experience Design
User & Customer Interaction Design
Web & Mobile Sites Content mgmt.
Project Management (vs. IT)
•
•
•
•
Customer Acquisition Budget
Acquisition Partnership
Digital Marketing for Acquisition
Interface with Brand Communication
• Customer Relationship & Cross Selling
• Customer Satisfaction & Service Level
Excellence
• Sales Animation & Chang mgmt.
Legal
Branches
CFO
BNL
Information Technology
Operations
HR
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MAURO GIORGI, SVP FINANCIAL SERVICES
http://it.linkedin.com/in/maurogiorgi
https://twitter.com/Aqualung61
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