how bb&t built a superior online ... - project management · figure 6 bb&t developed two...

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February 12, 2007

How BB&T Built A Superior Online Applicationby Brad Strothkamp

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© 2007, Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. Forrester clients may make one attributed copy or slide of each figure contained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usage information, go to www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. To purchase reprints of this document, please email [email protected].

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EXECUTIVE SUMMARYIn late 2005, the BB&T eBusiness group assembled a team to rebuild and rethink the online checking account application and associated processes. The team, which involved key members of the organization, rethought and redesigned long-standing processes and built a checking account application that promises to be the envy of the industry. The new application has resulted in more sales, reduced costs, and a better overall customer experience. But more importantly, the story of how the application came together is a blueprint for other eBusiness organizations.

TABLE OF CONTENTSBB&T Sets A Standard For Online Checking Applications

Project Organization And A Methodical Process Ensured Success

BB&T Overcame More Than Just Technical Obstacles

Hard Work Resulted In Short-Term Success And Long-Term Viability

RECOMMENDATIONS

BB&T Sets An Online Sales Blueprint For All To Follow

NOTES & RESOURCESForrester interviewed Paal Kaperdal, manager of BB&T’s eBusiness group.

Related Research Documents“Does The Web Have A Role In Selling Checking Accounts?”November 27, 2006, Trends

“Ten Ways To Build A Better Financial Services Sales Site” November 7, 2006, Best Practices

“Financial Institutions: Fix Account Opening”October 4, 2006, Best Practices)

“How Did Wells Fargo Boost Online Sales?”September 28, 2005, Best Practices

February 12, 2007

How BB&T Built A Superior Online ApplicationRethinking Processes And Practices Results In A Best-Practice Sales Processby Brad Strothkampwith Carrie A. Johnson and Peter Hult

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http://www.forrester.com/go?docid=40817&src=41454pdf






Best Practices | How BB&T Built A Superior Online Application

© 2007, Forrester Research, Inc. Reproduction ProhibitedFebruary 12, 2007

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TARGET AUDIENCE

eBusiness, channel, and product management professional; customer experience professional

BB&T SETS A STANDARD FOR ONLINE CHECKING APPLICATIONS

Financial firms constantly ask us for best-practice firms within the financial services industry. When it comes to online sales, a few sites stand out: E*TRADE FINANCIAL, Quicken Loans, TD Canada Trust, and Wells Fargo. Recently, we reviewed BB&T’s new online checking account application and were so impressed by the look and feel, process, and overall experience of the new application that we sat down with Paal Kaperdal, the eBusiness manager at BB&T, along with key project leaders, to understand the story behind the application. Paal and his team shared the following key elements to their success:

· Evolving a methodical, realistic application. BB&T’s foray into an online checking account application started in April 2005. What started as a basic entry form with a completely manual back end has evolved into a fully automated online application, including a streamlined application form, automated identity verification, and real-time account opening (see Figure 1 and see Figure 2). But the process is not complete. BB&T is making plans for additional enhancements, including an express account opening process for existing customers, save and retrieve functionality, and improved front-end reporting.

· Rethinking age-old processes to create a better online experience. Most bank account opening procedures are as old as the bank itself. BB&T needed to re-examine and redeploy long-standing processes like signature card stipulations, account funding procedures, and identity verification requirements — which are not a challenge when a customer is opening an account in person — for the online channel. The goal? To provide an online process that best meets customers’ online expectations, which is something that Forrester has found to be sorely lacking on many of today’s financial services sites.1

· Developing key processes as shared services. BB&T felt that it was important to build or use shared services whenever possible. The goal was for other channels to eventually leverage the new services being built for the new account opening process. These services include functions like account decisioning, identity verification, account opening workflow, and eventually account funding.2 As an example, a client identification process using LexisNexis was already in the requirements stage for use by the enterprise (see Figure 3). The BB&T technology group, led by Steven Liles, was able to integrate this enterprise solution for the new online process using TIBCO Software service layers. The result? The team saved time on the project, and the architecture is completely reusable by other channels or groups (see Figure 4).3 BB&T already has plans in place to re-engineer branch account opening processes to use the new architecture.


© 2007, Forrester Research, Inc. Reproduction Prohibited February 12, 2007

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· Making maximizing sales and cross-selling a focus. The goal of the online application was to build an enterprise application platform that would provide the basis for increasing overall sales for BB&T. To accomplish this goal, BB&T bucked the trend of almost every other financial services firm by moving up the decisioning process to earlier in the sales flow, allowing cross-selling at any point in the process and strategically cross-selling relevant services after approving customers (see Figure 5).



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Figure 1 BB&T’s Account Opening Process Has Evolved Into A Fully Automated Online Application

Source: Forrester Research, Inc.41454

A simple pre-application page explains the process and prepares the applicant to apply1-1

Streamlined pages make information entry simple1-2

Source: BB&T

BB&T effectively uses contextual help to explain fields like “Social Security Number.”



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Figure 2 BB&T Presents Disclosures Online In PDF Format To Reduce Fulfillment Costs


Source: BB&T



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Figure 3 LexisNexis Verifies The Applicant’s Identity Online

Figure 4 BB&T’s High-Level Account Opening Architecture


Source: BB&T


Online application front endJ2EE front end output to XML

PegasystemsKey services: account decisioning, BPM workflow, customer service front end

TIBCO service layer

Core banking systemsDeposit systemLoan systemCard management system

Third-party service providersLexisNexisEquifaxChexSystems

Source: BB&T



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Figure 5 Upselling Takes Place After The Customer Opens An Account

PROJECT ORGANIZATION AND A METHODICAL PROCESS ENSURED SUCCESS

BB&T started the redesign and redeployment effort in October 2005 and completed the project a year later — a short time period, considering the effort involved. The final cost of the project was less than $2 million, which slightly exceeded budget expectations but included everything from application development to the stationary used for the fulfillment packages. Along the way, BB&T followed many traditional project steps, but it also explored new ways of thinking, including:

· Gathering primary and secondary research. BB&T spent considerable time researching and learning before writing a single line of code. The group started by reading research from Celent, Forrester (we did not pay them to say this), and TowerGroup. It then spoke with vendors in the space, such as CashEdge, eFunds, and uMonitor, and finally opened accounts with key competitors and online sales leaders like Citibank, Wachovia, and Wells Fargo to understand financial firm best practices.


Source: BB&T

BB&T upsells applicants using straightforwardcost and benefit information.



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· Speaking with branch sales experts. The eBusiness team took time to understand branch sales practices. This included adding the person in charge of branch sales training to the project team — a logical but often overlooked source of information. Branch sales folks provided key insight into retail sales best practices. As a result of these discussions, the team streamlined the number of products offered online, selected the benefits to highlight about the accounts that remained, and determined how best to handle post-sales processes (e.g., confirmation emails) to leave applicants feeling satisfied with the overall process.

· Assembling an enterprisewide project team. To remain accountable yet keep the project moving, two teams were developed to oversee the project. These included an executive steering committee led by Paal Kaperdal and Teresa Rose, the online sales platform manager. The committee consisted of senior leadership from the retail deposits team, electronic delivery, and information technology. The primary role of this team was performing gate reviews and resolving project issues as they arose. It also provided visibility into the overall project (see Figure 6). The second team, the core team, consisted of 30 to 40 members, of which 10 to 15 were core to the overall project. This team included members from BB&T’s eBusiness team, retail deposits, IT project office, Web developers, deposit systems developers, branch sales, legal, and compliance.

· Developing a working prototype. Key to the success of the project was the development of a working prototype of the new online application process. Change Sciences recommended an initial wireframe and flow.4 Based on this information, BB&T’s internal design and user experience team developed basic process flows and static HTML pages. During this time, the team also evaluated prototyping software from iRise. It made a decision to put the new process into iRise to develop a working prototype and more realistically evaluate the usefulness of the iRise product suite.5 This turned out to be an important decision: The prototype was integral in helping internal stakeholders understand the new process, flow, and overall customer experience. Using iRise, the team was able to take groups like legal and compliance through a step-by-step review of the new process to ensure that it met corporate standards for customer security and privacy, along with federal regulations.



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Figure 6 BB&T Developed Two Teams To Oversee The Project


Executive steering committee organizational chart6-1

Source: BB&T

Members:Senior executive VP, electronic delivery channels managerSenior executive VP, deposit services managerEVP, IT application development and data services managerSVP, call center managerSVP, IT operations services managerSVP, IT service management managerSVP, retail depositsVP, eBusiness sales platform manager

SVP, eBusiness sales platform managerTeam leader:

Core team organizational chart6-2

Business:Retail deposits managerElectronic delivery marketingeBusiness channel sales development manager

Operations:Application and data services managersApplication and data services analystsCall center operations managerCall center support managerCall center business analyst

Technical/IT:IS systems analystIT resource plannerDistributed systems managerDistributed computing architectBSA/AML product managerClient server operations manager

Project management:Project office project managerProject office project analysteBusiness implementation manager

VP, eBusiness sales platform managerTeam leader:

BB&T Overcame More Than Just Technical Obstacles

The new BB&T online checking account application was more than just a redesign of an online form — it changed processes for purchasing, approving, and opening checking accounts. In addition to common project issues, the eBusiness team needed to:

· Change the organizational mindset. BB&T is a traditional bank, and along with that comes a traditional mindset toward sales — especially among the product groups. Since the majority of the bank’s sales today come from the branches, these groups often fail to see the opportunity that the Internet provides or the role that it does or could play in the overall sales project. The project team involved key product groups to move the process along. By using detailed prototypes, it could visually explain how an age-old offline process could work effectively online.



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· Deal with legal, risk, and compliance concerns. Changing long-standing processes meant involving legal and compliance to ensure that the new process suggestions met regulatory, risk, and privacy/security requirements. Existing account opening processes mandated that the bank block accounts until it sent disclosures and customers received signature cards. But this delay in account opening can result in dropout during the fulfillment process. BB&T worked with its legal, risk, and compliance groups to re-examine the purpose and advocacy of existing procedures. The result was to optimize the requirements for the online channel, which in turn reduced the time required to open the account.

· Handle pressure from senior management. The overall organization quickly saw the upside potential of the project, especially when faced with increased product sales goals for 2006. With this realization came increased pressure from senior management to deliver the project on time. The executive team meetings were used to keep senior management informed and set realistic expectations on delivery and benefits of the project.

HARD WORK RESULTED IN SHORT-TERM SUCCESS AND LONG-TERM VIABILITY

The new BB&T checking and savings account application has been up and running for four months, and the results are just beginning to trickle in. Initial results look very promising, with:

· A growth in started applications. The new process is drawing in more applicants. While the product mix is generally the same as the previous application, started applications have increased by 25% since BB&T installed the new application. Part of this may be due in part to the excellent customer reviews received on the new process: Nearly 25% of respondents to a satisfaction survey commented that they were referred to the application by friends.

· Reduced application abandonment. The team has seen a dramatic increase in completed applications. The number of applicants completing applications has increased by 50% over the old process. BB&T took the radical step of moving the decisioning process earlier in the process. Now, applicants need only compete four pages of the application process before receiving a decision. Once approved, they move on to choose services like debit cards and online banking.

· Increased booking and reduced rework. BB&T found that dissatisfied online applicants ended up abandoning the online channel. Worse yet, many of those applicants showed up in the branch to purchase the same product they applied for online. BB&T’s new process shaved days off the booking process. The result? Booking rates have increased exponentially. Whereas the old application had funding rates as low as 10%, nearly 75% of all approved applications are funded in the new process. BB&T has also seen positive results in a post-application survey that it is conducting: More than 90% of applicants report being either very satisfied or satisfied with the speed, look and feel, security, and ease of use of the new online application.



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· Significant reductions in back-end staffing. BB&T redeployed 75% of the back-end staff originally dedicated to account opening. The reductions in staff have come primarily from converting once-manual functions to the new automated workflow. More importantly, the workflow system allows for BB&T to manually review exception applications and then put them back into the workflow for completion by the automated system, further reducing the need for manual work and staffing.

· Large upside potential for cross-selling. BB&T built its new online application engine with the future in mind. The existing process allows it to cross-sell deposit accounts and upsell applicants to packaged accounts. Future releases will build on the cross-sell ability, including cross-selling credit cards based on information returned from the credit check and addition of certificates of deposit (CDs). Forrester has found that enhancing cross-sell can pay huge dividends: Wells Fargo has seen dramatic cross-sell success from a similar cross-selling engine.6

R E C O M M E N D A T I O N S

BB&T SETS AN ONLINE SALES BLUEPRINT FOR ALL TO FOLLOW

Results from BB&T’s new online application are extremely positive, but there is much more that eBusiness executives can learn from this story. Speaking with Paal Kaperdal and his team, we learned that it is important to:

· Get something up, learn from it, and then refine. Starting in 2005 may sound like a late entry into the game, but BB&T has quickly and methodically evolved its online application engine. Too many times, firms “build it and then leave it” or talk about a project phase two that never happens. It took more than two years to complete the process, but along the way, the team learned from customers, outside sources, and best-practice sites to deliver a superior online application.

· Challenge existing processes. Selling via the Web is unlike selling over the phone and branch. While this sounds rational, too many firms take existing processes and try to make them work for the Web. Best-practice firms understand the nuances of Web sales and define the optimal experience to accommodate a customer who is not physically present; may have never purchased a product this way before; and has high expectations for the speed, convenience, and simplicity of the online process.

· Focus on the sale, then upsell. The goal is to get the sale — then selling debit cards, online banking, and other services is the icing on the cake. BB&T asks the bare minimum of information, gets an initial approval/decline, and then upsells the applicant on additional account-related services. In addition to saving the applicant time, it also allows the bank to better personalize cross-selling, since it can make offers based on not only an approved applicant but also an applicant for whom it has credit history, ChexSystems, and other back-end information.



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· Build toward the future. BB&T’s vision is much more than just an application for checking and savings accounts, but those products are the cornerstone of the bank. The platform was built with future products in mind: Cash management, credit card, loan, and other products can take advantage of a well-built, flexible enterprise platform. Revenue comes from increased cross-selling during the sales process. Cost savings come from building functionality once and using it across various products.

ENDNOTES1 Although consumers expect the online channel to be more convenient than walking into a branch or

phoning, the opposite is often true. Forrester surveyed consumers who recently purchased a product in a branch, over the phone, or online. When consumers were asked how smoothly the process of purchasing a product online was, a mere 51% reported that their purchase went smoothly. This compares with 67% for the branch and 58% over the phone. See the November 7, 2006, Best Practices “Ten Ways To Build A Better Financial Services Sales Site.”

2 The business process engine drives the users through the individual steps and can actually guide them, leading them through each required action. The processes to apply for an auto loan and a credit card are similar, but there are some variations in data collection and fulfillment. The rules engine will define the data to be collected, and the process engine will guide the rep through the closing process of the auto loan, from document printing through funds disbursement. See the October 4, 2006, Best Practices “Financial Institutions: Fix Account Opening.”

3 TIBCO has deep experience in connecting applications. Over the years, it has built corollary management features and functions both directly into its integration products and as separate elements of its broader suite of products. Thus, as opposed to building a separate standalone solution for SOA and Web services management, TIBCO’s SOA management capabilities are built into its core integration platform, BusinessWorks, and supplemented by four additional products: Enterprise Management Advisor, Enterprise RTView, Hawk, and OpsFactor. Together, these products can provide an integrated view of service operations, including monitoring of the containers and platforms on which service implementations run. See the February 10, 2006, Tech Choices “TIBCO Software: An Integration Platform With Strong Built-In SOA And Web Services Management.”

4 Change Sciences is a consulting and syndicated research company that specializes in helping firms understand consumers’ use of Web sites. See http://www.changesciences.com/aboutus.html.

5 Next-generation requirements specification tools — like Axure RP and iRise — allow business users, systems analysts, and designers who are working alongside each other to rapidly produce a highly detailed, functional prototype. Common features include annotations that can be directly attached to user interface elements and the ability for remote users to run the prototype through a URL or standalone “player.” See June 2, 2006, Best Practices “A Web Prototyping Primer.”

6 Wells started fully cross-selling during the application process at the end of 2003 and has seen a dramatic increase in the sale of brokerage accounts, credit cards, and savings accounts. The cross-sell rate of these additional accounts is more than eight times better than the clickthrough rate of even the most successful online advertisement. See the September 28, 2005, Best Practices “How Did Wells Fargo Boost Online Sales?”








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