digital banking maturity 2020 - deloitte

Digital Banking Maturity 2020Stockholm, Sweden

© 2021. Deloitte 22

A G E N D A

Digital Banking Maturity 2020 is the

4th edition of the largest global

benchmarking of digital retail banking

channels, answering what leaders are

doing to win in the digitalization race

DBM 2020

1. W H Y I S D I G I T A L M A T U R I T Y I M P O R T A N T ?

Customer experience is key for future profitability and growth

2. W H A T A R E D I G I T A L C H A M P I O N S D O I N G

T O S T A Y A H E A D ?

Where are digital champions ahead and where are they investing

now for the future? Which innovations are gaining traction

globally?

3. H O W T O B A L A N C E A D U A L

T R A N S F O R M A T I O N ?

The main challenge is not the what but how to balance a dual

transformation (today vs. tomorrow’s priorities)


Digital Banking Maturity study at a glance

A B O U T D B M S T U D Y 2 0 2 0

Digital

adopters

Digital

latecomers

Digital

champions

Digital

smart followers

Spain

Belgium

Singapore

Turkey

Poland

Japan

Norway

Russia

Qatar

SA

Czech Republic

Greece

Mexico

Italy

Luxemburg

Netherlands

Portugal

SlovakiaGermany

France

Peru

Canada

Kuwait UAE

Sweden

Switzerland

United Kingdom

AustraliaArgentina

Chile

Romania

Serbia

Slovenia

Hungary

Ireland

Bulgaria

Croatia Uruguay

Colombia

1. To achieve comparable data, country averages are based on the results of the top 5 biggest banks in given market in terms of assets.

Countries within the four categories are not in order of market position – the position of the flag within the group is in alphabetical order.

4.9kcustomers

surveyed

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1.1k+functionalities benchmarked

6Swedish banks

included

318banks assessed

180+mystery shopper

researchers

39markets covered

DB

M in

dex1

Banks


In order to compare digital maturity between banks we assessed three components

U S E R E X P E R I E N C E S T U D Y

F U N C T I O N A L I T I E S B E N C H M A R K I N G

Assessment of 6 customer

journey steps

Analysis of digitalization of

13 core banking products

Customer preferences between channels in terms of

most common banking activities

19 UX scenarios reflecting 10 areas of

customer activity from all of the stages of

relationship with a bank

Analysis of 1108 digital functionalities through ‘mystery shopper’ approach on real retail current accounts in each bank.

Survey-based research focused on identifying 26 most important banking activities and preferred channels (branch, Internet, mobile).

Supplementing analysis of customers perception of user experience.

Functionalities library with

world’s leading practicesAn exhaustive overview of

digital maturity between

banks

C U S T O M E R N E E D S R E S E A R C H

D B M

B E N C H M A R K

Assessment of digital banking

channels from customer

experience perspective

U X

A S S E S S M E N T

UEQ survey covering a comprehensive

impression of UX of mobile apps

Note: Complementary assessment comprise KPIs and Covid-19 response surveys.

WHAT ARE DIGITAL CHAMPIONS DOING TO STAY AHEAD?


A G E N D A





Where are Digital champions ahead and where are they investing


globally?






Sweden’s high degree of digitalization has countered the global declining trend in profitability, but customer satisfaction is at risk

Net interest margin in % CSI

Squeezed profits…

• Regulations becoming more

and more complex

• Technology investments

continue to rise

• Human & organizational

transformation requiring new

capabilities

… at the cost of customer

satisfaction?

Source: Deloitte 2020 banking and capital markets outlook, Economist Business Intelligence Unit, Swedish Quality Index (SKI)

WHY IS DIGITAL MATURITY IMPORTANT?

58,0

60,0

62,0

64,0

66,0

68,0

70,0

72,0

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Sweden CSI Sweden US Western Europe


Our DBM study indicates that incumbent digital champions outperform incumbent peers in profitability metrics

1.9 p.p.

81%of Digital champions are incumbents1

Selected metrics of incumbents: average difference to incumbent peers2, p.p.

ROE

ROA

Cost/income

0.2 p.p.

-4.0 p.p.

1. Incumbents – banks with long-established position on the market. Challengers – relatively small bank competing with large long-established banks.

2. Average difference to peers – peers are incumbent banks in the same country that were covered in the DBM survey.



The study showed that there are no digital champions on the Swedish market, similarly to 2018 – but some banks have evolved since


DBM index for 313 banks of 318 that participated in 2020 edition

Digital

adopters

Digital

latecomers

Digital

champions

Digital

smart followers

Sweden avg.

DB

M in

dex

Banks


What are you experiencing as the most challenging in working towards becoming a digital champion?


Mature digital organisations differentiate in four areas

1. MINDSETDoes senior

management sponsor and incentives change?

2. FOCUSAre you clear on your digital/omni goals and

priority within your opportunity space?

3. EXPERIMENTDo you have the right processes to “test and learn” and sufficient agility in the core to

work with e.g. startups?

4. SCALEAre governance and funding structures in

place to provide growth and speed?

© 2021. Deloitte 1010

A G E N D A







globally?





© 2021. Deloitte 1111

44%

38%

44%

2%11%

61%

67%

2. Open an

account

4. Report

lost card

1. Gather account

information

71%

23%

10. Close

an account

8. Add accounts

from other banks

3. Onboarding 7. Use beyond

banking services

7%

30%

6. Buy an

insurance

65%

54%

79%

5. Make a

transfer

75%

48%

22%

45%

38%

9. Buy a credit

product

5%

Digital champions deliver better UX across the customer journey and outperform peers in terms of expanding the customer relationship

% of UX-related functionalities offered by banks Digital latecomers Digital champions

+48p.p

+37p.p

+30p.p


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Champions are focusing investments on enabling a broader and more personal experience which gives results in advantage over peers

Authorization

Account and product mgmt.

Product x-sell (complementary)

Availability of information

Card management

Opening process

Guidance for new users

Channels accessibility

Customer support

Personal finance management (PFM)

Transfers and payments

Bancassurance

Ecosystem and account aggregation

Beyond banking

Investment services

Product x-sell (basic)

Account closing

Digital

latecomers

Digital

champions

% of functionalities offered by banks

1.8x

1.6x

1.8x

2.8x

1.9x

4.8x

1.4x

2.7x

1.7x

2.9x

3.5x

5.7x

6.2x

4.2x

2.5x

2.4x

7.1x

Champions over

latecomers1

Top three categories

1. Ratio of functionalities % between Digital champions and Digital latecomers score

2. Based on the data for 152 banks which participated in 2018 and 2020 edition

4%

8%

4%

6%

15%

5%

14%

5%

15%

10%

14%

13%

16%

10%

13%

11%

10%

Priorities in last two

years 2


Key investments

2

3

1

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Personal finance management: Champions have taken the next leap and are investing in x-sell boosters

47%

17%

2.9x

Measuring

financial

health

Budget

notifications

43%

Managing

transaction

categories

Setting

financial

goals

Saving and

investing

advice

Contextual

offer

Financial

projections

41%39%

21%

16% 15%13%

Engagement drivers

X-sell boosters

Digital

latecomers

Digital

champions

% of Digital champions offering given functionalities1

% of functionalities offered by banks1

Personal Finance Management

1. Data for 31 banks classified as Digital champions and 93 banks classified as Digital latecomers which participated in 2020 edition.

1


© 2021. Deloitte 1414

PFM is advancing from aggregation to insight driven actions

Poland

ING proposes

customized advice

to improve

customer’s

financial health

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© 2021. Deloitte 1515

Ecosystems start to enable more personal and data driven insights to engage customers

Spain

BBVA provides

data that allows

customers to

compare

themselves against

other profiles

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Expanding beyond traditional banking allows some players to create completely new customer offers

Singapore

DBS has integrated

payment related

non-financial

services in their

app


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1Targeting

metrics

What business metrics

are targeted to

improve? And by how

much?

There are five key questions that can be discussed with leadership teams when working with CX transformation programs.

However, it isn’t in what champions are doing rather how they deliver customer value

WHAT ARE DIGITAL CHAMPIONS DOING TO STAY AHEAD? WHAT ARE DIGITAL CHAMPIONS DOING TO STAY AHEAD?

2Customer

journey

What customer

journeys matter the

most to our customers?

3Customer

journey part

What sections in these

journeys will we

improve? How do we

know that it will improve?

4Results

monitoring

5Identifying

the change

How will we know that

we have succeeded?

What metrics will we

monitor? How do we

re-course?

What specific segments

of customers will

experience the impact

first? When do we see

changes?

© 2021. Deloitte 1919

What are you experiencing the most challenging by working towards becoming a digital champion?


Mature digital organisations differentiate in four areas

1. MINDSETDoes senior

management sponsor and incentives change?

2. FOCUSAre you clear on your digital/omni goals and

priority opportunity space?

3. EXPERIMENTDo you have the right processes to “test and learn” and sufficient agility in the core to

work with e.g. startups?

4. SCALEAre governance and funding structures in

place to provide growth and speed?

© 2021. Deloitte 2020

Latecomers are stuck with repositioning todays challenges, meanwhile Champions are balancing todays ambiguity for tomorrows opportunity

HOW TO BALANCE A DUAL TRANSFORMATION?

AC

TRANSFORMATION B

Create tomorrow

CAPABILITIES LINK

Catalyze core assets

Finding ways in today’s

core business to maximize

resilience

TRANSFORMATION A

Reposition today

BCreating a new growth

engine outside of core

markets

© 2021. Deloitte 2121

Next time:1-on-1 sessions to deep dive in the data set

HOW TO BALANCE A DUAL TRANSFORMATION?

Compare to competition

Gain insights into the positioning of an individual bank in comparison to local and

global leaders with key gaps in our BI dashboard.

Outcome: Identification of opportunities and strategic implications based on

individual bank’s positioning versus peers.

Discuss your digital maturity & next steps for working with your CX

• Review individual performance in relation to business objectives e.g. what

business metrics are targeted to improve? And by how much?

• What customer journeys matter the most to our customers?

• What sections in these journeys will we improve? How do we know that it will

improve?

• How will we know that we have succeeded? What metrics will we monitor? How

do we re-course?

• What specific segments of customers will experience the impact first? When do

we see changes?

Digital Banking Maturity 2020

Discuss findings, conclusions and lessons learned presented in the study.

How can one consider dual transformation?

For more details, reach out to the local representative(s)

1

2

3

4

5

© 2021. Deloitte 2222

THANK YOU!

Mårten Sellgren

Partner, Financial Services

[email protected]

Aleksandar Petrovic

DBM SE Project Manager

[email protected]

Ajla Talovic

Head of Digital Innovation

[email protected]

mailto:[email protected]



digital banking maturity 2020 - deloitte

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