Omnichannel BankingEmbedding Banking in Consumers’ Daily Lives

Presented by: Marcia Tal

It’s Like Being There. Listen to the Recorded Presentation Now.

Marcia Tal delivered the original version of her presentation – “Omnichannel Banking:

Embedding Banking in Consumer’s Daily Lives” – in June 2013 as Lead Faculty for the

International Institute for Analytics (Banking Analytics Research Council).

Following the more recent publication of her Tal Solutions white paper on the same

topic, Tal updated and expanded the slide presentation and added audio narration.

VideoIf you want to hear her detailed and informative narration,

click through to the video from the next slide.

SlidesTo read the slide presentation here, just click through the slides as usual.

Where We Were

• Before Multi-channel and Omnichannel...

• We could only interact with customers at the branch or call center.

• In the 1990s, I listened to call center conversations to better understand customer needs.

• We uncovered opportunities for growth in call center interactions.

Where We Are Now

• Multi-dimensional analysis enables timely and relevant product and service offerings.

• Omnichannel banking experience will deliver many opportunities.

• Learn from looking at Omnichannel retailing.

• Aim to embed banking into consumers’ daily lives.

Where We Need To Go

In January 2014, BBC reported Barclay’s stated:

“ We have consistently been clear that over time, there will be fewer and fewer traditional branches as we move to provide banking services to customers where and when they find it most convenient.”

Background

• Customers are driving how and when they interact with their bank.

• Data integration across channels and touch points is critical to providing an omnichannel environment.

• Understanding customer intentions and uncovering insights is core to the “next generation” of customer experiences.

• Dynamic technology capabilities are transforming the industry.

Industry Context

“ Retail Banks are facing mounting pressure to execute broader

channel diversification strategies aimed at widening the bank’s

customer base, improving customer experience, and increasing

revenues through new products and services.”

Executing an omnichannel banking strategy will enable banks to provide relevant and timely offers that deepen existing customer relationships as well as create new ones.

Importance of Omnichannel

Incorporating customer choices & behaviors contributes to profitable growth (new customer acquisition, retention of engaged customers & an improved portfolio profile).

Retail has already demonstrated profitable outcomes (increased basket size, greater conversion rates & reduction of inventory losses).

PROVENSTRATEGICVALUE:

Seamlessly integrated customer experiences

Cross-functional collaboration

C-SUITE EXECUTIVES AND OPERATIONAL MODELS MUST EVOLVE TOWARD:

Vision to Reality

• Expanding Access to information & insights

• Refined models and strategies for Attracting New Target Segments

• Expanding “Eligible Universe” through specialized analytics methods and integrated data sources

• Real-time models that incorporate previous and current choices and behaviors for Deepening Customer Relationship

Building an Integrated StrategyStrategic Elements

Foundational Elements

Building an Integrated Strategy

Performance Tracking

Building a 360° View of Customer

Enabling Cross-Functional Collaboration

Ensuring C-Suite Accountability

Implementing a Business Mandate

Roadmap for

Successfully

Achieving an

Omnichannel

Banking

Experience

Necessary

Foundational

Elements

STRA

TEG

IC E

LEM

EN

TS

FOUNDATIONAL ELEMENTS

Data Technology Analytics

Integrated

Marketing

Management

Operations

Strategic Elements

• Business Mandate — broad communication from the CEO

• C-Suite Accountability — translate business mandate into organizational accountability

• Cross-Functional Collaboration — create the capabilities integral to the omnichannel banking experience; realize business mandate

• 360° View of Customer — fuel analytic models to create new offers

• Performance Tracking — measure progress and maintain accountability

Foundational Elements

• Data: What data sources need to be integrated in order to have a holistic view of the customer?

• Technology: What technology tools enable data from different environments to be shared and integrated into different customer facing systems?

• Analytics: What analytic techniques and skills are required at each step of the process to efficiently identify customer’s emotions, intent and behaviors? How to predict the “next best product offer” to improve the customer experience?

• Integrated Marketing Management: How do I utilize “hot” lists, new sources of information and analytic insights to accelerate speed to market?

• Operations: How do I prepare my customer facing employees with the tools, data and training to support business initiatives that impact the customer experience and overall business strategy?

Data

CONVERSATIONSsocial media

customer call centeronline chat

INDIVIDUALUnique

CustomerIdentifier

BEHAVIORinternal dataexternal data

INTERACTIONStransactions data

location data

Technology

Is transforming the interaction model between consumers and banks & allows for more effective engagements

3

2.3

1.9

1.8

90% 87%

84%

76%

65%

70%

75%

80%

85%

90%

95%

0

0.5

1

1.5

2

2.5

3

3.5

EARLYADOPTER

EARLYMAJORITY

LATEMAJORITY

LAGGARD

Avg monthly visits to branch % of virtual visitors

Source: Cisco IBSG, June 2012

The increase in channels has resulted in an increase in customer interactions.

Technology

Mobile — embedded in consumers’ daily lives

By 2017, more than 1 billion mobile phone users will have used their mobile device for banking purposes.

(Compared to 590 million users this year.)

DATA SOURCE

CHANNEL

PLATFORM

REVENUE GENERATOR

COST PLAY

Analytics

Product Usage Customer VoiceCreditworthiness Keyboard StrokesPsychographics Online ConversationGeography Blog NetworksDemographics Peer ReviewWealth Customer Survey

DATAELEMENTS

Customer Segmentation Unstructured Data AnalyticsPropensity Modeling Sentiment AnalysisOffer Optimization Integrated Analytics Data MartsPerformance Evaluation Integrated Client Service PlatformsClient/Segment P&L Statement Digital, Voice and Text Data MiningCompensation Modeling Pattern Recognition Evolution

ANALYTICAPPLICATIONS

EVOLUTION OF ANALYTIC CAPABILITIES

ESTABLISHED NEW ENTRANT

Analytics

CASE STUDY: THE POTENTIAL OF SEGMENTATION

Client: Global Consumer Franchise

Business Problem: Improve inbound sales process through more targeted offer strategies, reporting and measurement.

Solution: Integrated data models, segmentation, predictive models and tracking into call center process. The design and implementation of sales palette optimization tools prompted phone offers to offer customers products based on propensity modeling and economic returns. Leveraged real time triggers to optimize channel selection.

Methodology: The integrated operational and customer analytic infrastructure relied on:• Data integration management• Rapid cycle prototyping• Segmentation and targeting

• Process design and redesign• P&L forecasting and tracking utilizing

dashboards and MIS

Data Elements: Product usage • Credit worthiness • Demographics • Customer Voice • Customer Survey

Analytic Applications: Customer Segmentation • Propensity Modeling • Offer Optimization • Compensation Modeling • Profit and Loss forecasting • Integrated Data Marts • Integrated Client Service Platforms

Value: The offers generated 4x higher acceptance rates and 20% higher Net Present Value.

Integrated Marketing Management

• Understand the customer

• Make smarter marketing decisions

• Accelerate time to market

• Improve customer profitability and customer experience

• Lower the cost of marketing execution

• Improve marketing self-sufficiency and agility

Operations

Banks must empower their customer-facing employees with the

tools, platforms, information, training and incentives that ensure

a customer-centric culture.

Highlights

• Understanding customer intentions and uncovering insights through advanced analytic techniques is core to the design of “next generation” customer experiences.

• “Listening” to customers requires integrating data, technology, analytics, marketing and operations – the foundational elements of omnichannel banking.

• To fully realize the potential of omnichannel, C-suite executives and operational models must evolve.

THANK YOU!

Visit www.talsolutions.com/omnichannel for Marcia Tal’s full research report.

Tal SolutionsMarcia Tal, Founder347-478-5194Talsolutions.com

Highlights

• Understanding customer intentions and uncovering insights through advanced analytic techniques is core to the design of “next generation” customer experiences.

• “Listening” to customers requires integrating data, technology, analytics, marketing and operations – the foundational elements of omnichannel banking.

• To fully realize the potential of omnichannel, C-suite executives and operational models must evolve.