haydn shaughnessy on banks and ecosystems
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Adaptive Processes for Adaptive Times
Using the web to its full in the banking sector
Haydn Shaughnessy
Some drivers
THE INTERNET IS SO BIG AND
PERVASIVE and SO embedded in our behaviour IT
CHALLENGES US TO
CHANGE THE WAY WE THINK OF OTHER PERVASIVE INFLUENCES.... LIKE THE
BANK
Disruption factorsDisruption factors
The Changing Business EcosystemThe Changing Business Ecosystem
Mastering the InternetMastering the Internet
agenda
Bringing the Internet into the Organization Bringing the Internet into the Organization
Haydn Shaughnessy
Research and consult on:
Global trends
Data structuring and improving intelligence
Transitioning the enterprise
Write at HBR.org, Wikinomics.comGigaOmInnovation Management
Disruptive innovation and new platforms
DISRUPTIONMobile Internet
Customer empowermentBetter data
Disruptive innovation and new platforms
Smartphone penetration
Anticipated penetration 50% by end 2011
2014 anticipate 5 billion devices globally connected to the web Sources, ComScore and CISCO
Disruptive innovation in mobile
People using smart phones use social
networks more than regular Internet users
31%
Smart phones accelerate
and broaden
online social
interaction
The customer ecosystemThe customer ecosystem
Source: ComScore
A DECADE OF CUSTOMER EMPOWERMENT
Time in social networks is time spent building
customer-to-customer relationships in ecosystems and time not spent with brands
The customer ecosystemThe customer ecosystem
So more companies choose to be in the customer ecosystem
Joining the customer ecosystemJoining the customer ecosystem
From destination
To participation
OtherOther
ECOSYSTEM behaviour
EVERYDAY IN THE ENGLISH LANGUAGE:
500,000 BLOG POSTS
50 MILLION TWEETS
INNUMERABLE SOCIAL NETWORK POSTS
An unprecedented source of intelligence
THE INFORMATION OPPORTUNITY IS GROWING
Global mobile data increase 39-fold increase from 2009 to 2014, at a compound annual
growth rate (CAGR) of 108 percent, much of it generated by
social web activity.
Source: CISCO
THE OPPORTUNITY IS GROWING INTERNALLY TOO
Enterprise Data
Compound annual growth, transactional data
21%
Compound annual growth,
unstructured data 67%
Source: IDC
The problem of structured data
US financial institutions' customerdata deteriorates at the rate of at least
3.5% per month
US financial institutions' customerdata deteriorates at the rate of at least
3.5% per month
Source: Insight Ecosystems
UPSIDE
MORE OPPORTUNITIES TO
CONNECT WITH AN EVER
WIDER RANGE OF PEOPLE
MORE OBJECTIVE DATA,
UNTAPPED BY COMPETITORS
CONSEQUENCES
THE GROWING QUANTITY OF UNSTRUCTURED DATA ONLINE AND INTERNALLY THREATENS DECISION MAKING BECAUSE OF ITS COMPLEXITY
Data deteriorates quickly so needs
to be circulated quickly if it is to have value
EMPLOYEES NEED MORE SUPPORT IN DEALING WITH COMPLEXITY
Adaptive process for adaptive times
the
ecosystem
The Ecosystem
The porous organization or the open enterprise
Open innovation
Innovation takes place organically across companies and communities
Growth of ecosystem conversations
Source: Haydn Shaughnessy, Bearing Consulting, Global Attitudes Project April 2010
DEALING WITH COMPLEXITY
New ways to Collaborate
CommunicateInnovate
End-user communities
Apps developers
Ecosystem brands
Nokia Services
Search
Geodata/AR
MapsLocation
based services
Embedded device markets
Mobile advertising
revenues
Home device markets
OS developers
Tools developers
Device sales
Content developers
Function developers
Solutions ecosystem
AR content
Supply chain
h/ware-s/ware
interface
A partial view of the mobile ecosystem or 'distributed' enterprise
20 |
Apple
Apps store
Ovi
Operators
The broader financial ecosystemThough banks tend not to think in terms of ecosystems, the ecosystem exists
Property market
Property market
Transaction2.0
Transaction2.0
Corporateecosystem
Corporateecosystem
Municipalreceipts
Municipalreceipts
Bank ecosystem
Bank ecosystem
Attitudes
PolicyPolicy
Greenecosystem
Greenecosystem
CarbonExchange
CarbonExchangeOpen data
Open data
Trusted services
Trusted services
Receivables ecosystem
Receivables ecosystem
Equity analystecosystem
Equity analystecosystem
Customerecosystems
Customerecosystems
Risk impactsRisk impacts
Social payments
Social payments
Disruptive data
RegulatoryRegulatory
Subscription economy
Subscription economy
Distributedenterprises
Distributedenterprises
Growth of customer ecosystems in general
Customers have shown themselves
over a decade to want to contribute to their own and each other's
experiences through ecosystems
Growth of customer ecosystems in general
OVER
2/3rds of
Netflix video rentals
come thru the recommendation system
Netflix prize offered $1 million for a 10% improvement in it
Social media
200 banks globally now blog. Only one seems to realise that banks, to customers, are rather boring.... but cricket is not.
The customer ecosystemThe customer ecosystem
Growth of personal finance ecosystems
BENEFITS
CUSTOMER ECOSYSTEMS allow you to connect with customers where they are doing things they like.
Allow you to observe behaviour AND build great data to give staff more confidence in their work.
Correlate that data with customer acquisition and life-cycle management models
27 |
Some words on HOW
What we can know - about customers, competitors, markets is changing
Enabling and supporting people through what we know
PEOPLE and the role of good data
Research shows when data delivers to all 4 of an employees needs it can have a 40+% impact on the quality of decisions
Hierarchy of Knowledge Needs
Information is from known sources
Coupled to other data of relevance
Channelled to the right people for the right task
Trustworthy
Contextualised
Appropriate
TimelyAccessible and available immediately
LETS LOOKS AT THAT IN
THE EXTERNAL WORLD – OUT ON THE WEB
10S OF MILLIONS OF DATA UNITS INTERNALLY AND EXTERNALLY
HOW TO structure
CONTEXTUALISE AND
CHANNEL IT
THE DATA PROBLEM AND OPPORTUNITY
ECOSYSTEM: Structured knowledge
PERSPECTIVESTHEMES
CONCEPTSTOPICS Why bother?
Structure is easy to comprehend, add to and use
End-users have needs and desires that market research does not tap in to and
you cannot imagine
Analysts use out of date material
ECOSYSTEM: Structured knowledge
HEAT MAP OF OFFICIAL BANK BLOG THEMES GLOBALLYSource, Bearing Banking KPIs project
Note the
absence of 'customers'
ECOSYSTEM: ANOTHER VIEW OF EXTERNAL DATA
stock
assets
industry
customers
business
service
government
community
loans
local
0 10 20 30 40 50 60 70
Count
Likelihood Percent
TOP TEN EMERGING CONCEPTS DICUSSED BY BANKS AND CREDIT UNIONS SOURCE: BEARING KPI STUDY
'Likelihood' % is the relevant concept = how likely they are to co-occur with the term 'bank' taking into account their relative presence in the text, i.e. a small number of terms can still be very likely to co-occur.
STRUCTURING EXTERNAL DATA AROUND PERSPECTIVES, THEMES AND
CONCEPTS related to banking
ECOSYSTEM: ANOTHER VIEW OF EXTERNAL DATA
stock
assets
industry
customers
business
service
government
community
loans
local
0 10 20 30 40 50 60 70
Count
Likelihood Percent
TOP 10 CONCERNS IN CUSTOMER CENTRIC CONVERSATIONS ABOUT BANKINGSOURCE: BEARING BANK KPI STUDY
TOP TEN EMERGING CONCEPTS DICUSSED BY BANKS AND CREDIT UNIONS SOURCE: BEARING KPI STUDY
experience
products
service
overdraft
online
credit
business
fees
free
change
0 10 20 30 40 50 60 70 80
Count
Likelihood Percent
STRUCTURING EXTERNAL DATA AROUND PERSPECTIVES, THEMES
AND CONCEPTS related to banking
ECOSYSTEM
An initial knowledge map of banking from 1200 websites
Source: Bearing Banking KPI Project
EXTERNAL DATA STRUCTURING
TOP RIGHT IS THE EMERGING SPACE
Source: Bearing Banking KPI Project
SOCIAL
FEES
MANAGEMENT
MOBILE
ECOSYSTEMS
Knowing markets and competitors
Perception management
Online references to Android and IPhone October 2008, Jan 2009
The growth of the Android operating system's sales reflects the growth in online references from 1/12 of iPhone to 1/3rd. By March 2010 Android was catching up
in market share too.
ECOSYSTEMS
IDENTIFYING AND MANAGING
PARTNERSHIPS FOR INNOVATION
Scaled partnerships – THE API SPACE
Media Retail Auto Mobile Banking
New York Times
Zappos NG Connect Apple Paypal
Guardian Tesco Autoline Nokia Ovi Apple iPhone payments
Comcast Netflix Lemon Tree Orange
Windows Media
Etsy BMW Samsung
A-V Networks Cafe press Audi Android
Reuters Shopping.com General Motors
Droid
MTV Networks
Fiat Blackberry
Skype Ford Handango
USA Today (sport and books)
VW Horizon
Verizon
Disruptive innovation
Paypal apps program - future of money threatens banks with new
business models, already evident in transaction systems
THE INTERNAL ECOSYTEM
Bringing the web into the bank
Generating unstructured data
Growth of internal networks (Intranets, communities, wikis,
content, word files, planning documents PDFs, PPTs), call centre records, customer interactions,
CREATES A WEB-LIKE PROBLEM
Internal processes
UNSTRUCTURED DATA CREATES UNCERTAINTY AND DRIVES POOR DECISION MAKING, CREATING AT LEAST A 40% LOSS IN REVENUE IN TRADING ENVIRONMENTS; structured data is lost quickly without being used
Trustworthy
Contextualised
Appropriate
Timely
Knowledge needs these attributes
Knowledge needs these attributes
Solutions to information discovery issues
From structure From structure
Simultaneously text search is becoming far better at structuring results
To text indexingTo text indexing
A solution lies in data flow
Give people enough opportunities for discovery and sharing, means finding exactly what is needed occurs more often
Good data exploration and usage become content and
communications issues
Good data exploration and usage become content and
communications issues
diagram:usabilitynews.usernomics.com
PUTTING INSIDE AND OUTSIDE TOGETHER
AN EXAMPLE
EXPERIMENT WITH SOME CLASS OF CUSTOMER
Small to Medium Sized Business
Small to Medium Sized Business
IT
Fiscalbenefits
FP7
Loans
Bank tech
SME
What can we know from the Web?
What they talk about at any level of granularity
SaaS
Grants
Pension
Etc
Green issues
Trustedservices
EXPERIMENT WITH SOME CLASS OF CUSTOMER
Small to Medium Sized Business
Small to Medium Sized Business
IT sites
Tech. Bulletin board
EU Cordis
Sport
Trade press
What can we know from the Web?
Places they congregate and
opportunities for engagement
Socialnetworks
Travel
retail sites
EXPERIMENT WITH SOME CLASS OF CUSTOMER
IT
Manufacturing
Geography
Reasons for Non-
performance
Creditscores
Sector profiles
What can we know from internal sources ?
SMELoans
Aggregateloan
performance
Retail
Local
Regional
boughtassociated
products
Emailthemes
EXPERIMENT WITH SOME CLASS OF CUSTOMER
What can we know from internal sources ?
EVEN SME needs will be diverse
Enterprise social network as an incubator of the SME loan project
Experiment and collate data
Experiment and collate data
Participation strategy
management
Participation strategy
management
Participatorycollateral
development
Participatorycollateral
development
Develop new loan
product options
Develop new loan
product options
Evidence based product andmarketing strategy
Design web pages responsive to
DIVERSE needs –
try multiple versions
Design web pages responsive to
DIVERSE needs –
try multiple versions
An additional data loop
The wider payoff
What about innovation?
Identifying unmet custodial or transactional needs
Trusted services
Trusted services
Employees observe need for
new trusted services
Be ready to be surprised
Bank offers automated global contract validation and custody service
Online contract validation
Subscriptions replace leases
Staff also spot SMEs taking on SaaS
in place of IT loans
AUTO
Adaptive process for adaptive times
CONCLUSIONS
Conclusions
You cannot imagine what customers want because their ecosystems are fast evolving – technology and new wants drive them to innovate in their behaviour
You must acquire advantage from knowing more and through participation: the web is a participatory medium
Progress through scaling partnerships freeing yourselves to strategise new opportunities
Conclusions
Embrace the ecosystemMap the surrounding world
Take a proactive approach to what you can know
Be ready for real innovation
