Transforming Customer Experience through Digital Capability: a Banking Customer Journey

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<p>Cx EBC Deck</p> <p>Before you beginTopic: Customer Experience Vertical: Finance/Retail Banking Purpose : - Details key problems of interest to a business decision maker - Provides high level overview of solution - Provides as a basis for further engagement</p> <p>Author: Anita Balaraman (anibalar@cisco.com)</p> <p>Target Audience: LoB VPPersonal BankingCorporate BankingPrivate BankingFinancial InclusionCXOOperationsMarketingCustomerTechnologyFor attribution details call/email Anita Balaraman (anibalar@cisco.com)</p> <p># 2015 Cisco and/or its affiliates. All rights reserved. Cisco Confidential</p> <p>October 15, 2015</p> <p>Deliver Delightful Experiences &amp; Effortless Transactions for Your Customer</p> <p>Customer Experience Digital Capability</p> <p># 2015 Cisco and/or its affiliates. All rights reserved. Cisco Confidential</p> <p> 2015 Cisco and/or its affiliates. All rights reserved. Cisco ConfidentialIts Harder to Compete Now Than Ever Before </p> <p>Finance</p> <p>3</p> <p>Retail</p> <p>Healthcare</p> <p>83% Customers Comfortable with Conducting Their Banking Through Internet and Technology Companies</p> <p># 2015 Cisco and/or its affiliates. All rights reserved. Cisco ConfidentialIts getting harder to compete now than ever before. For Example if you look at the finance industry. Rabid Innovation has led to new competition from fintech companiesIn the Payments sector the dominance of Visa has been undermined by multiple mobile payment companies such as Zopa, square, Apple pay and most interestingly by telcos airtel and Mpesa by vodafoneIn the Insurance sector you have companies like esurance redefining the cost basis and Aflac creating new categories like secondary insuranceIn Retail banking the likes of Grameen Bank with peer-to-peer lending and ING with branchless banking is revolutionalizing banking. In fact, 83% customers comfortable with conducting their banking through Internet and technology companiesThe Retail Industry which was traditionally dominated by big box retailers, now is a crowded space with online retailers who bring disruptive cost advantages such as endless inventory etcIn the Healthcare industry, traditional giants such as Cigna and Kaiser are faced with stiff competition from the likes of sutter health, uhc, full service hospitals etc. who are opening up health plans of their own tied to a full service capability</p> <p>Stories such as this has become the norm in many more industries3</p> <p>So, How Do You Differentiate?</p> <p>4 2015 Cisco and/or its affiliates. All rights reserved. Cisco Confidential</p> <p>Product Leadership</p> <p>Product Leadership</p> <p>Cost Leadership</p> <p>Cost Leadership</p> <p>Customer Intimacy</p> <p>Quicker Pace of Innovation ImpliesTransaction optimization is not a sustainable advantageTransactional banking is table-stakes</p> <p>Stricter Regulation ForcesIdentical ProcessesSimilar Operational Efficiencies</p> <p>New Competitive Battlefield</p> <p>Customer Experience is the New Competitive Battlefield for Differentiation</p> <p>**Customer Experience Emerges as the Marketers' Next Battlefield, Jake Sorofman, Oct 2014</p> <p># 2015 Cisco and/or its affiliates. All rights reserved. Cisco Confidential4So, the question for a CEO is how do you differentiate in such a crowded space?Traditionally Competitive advantage was sought by dominating in one or two of three competenciesProduct Leadership An example here would be schwab which pioneered online trading platform innovationsCost Leadership. An example here would be folks like ING Abnk and esurance who have pioneered the branchless conceptCustomer Intimacy. An example here would be the swiss banks which pride themselves in personalized service</p> <p>Product Leadership is no longer a lever but a good product is more of table-stakes today. Transaction optimization this is not a sustainable advantageand Transactional banking such as, accessing our accounts 24 hours a day, 7 days a week, moving money from point A to point B with speed and precision etc is tablestakesCost leadership is no longer sustainable since everyone has access to same economies of production and scale through outsourcingConsequently customer intimacy has become the new competitive battlefieldCompanies enhance customer intimacy by providing superior customer experience. </p> <p>SourceQuote Customer Experience is the New Competitive Battlefield for DifferentiationActual Quote Gartner's 2014 survey about marketing's role in customer experience confirms what many marketing leaders feel acutely: customer experience is the new competitive battlefield for differentiation in many cases, replacing the product-based advantages that many marketers have traditionally built their careers around. Page 2: Analysis Section in G00265877, Jake Sorofman, Oct 2014, Customer Experience Emerges as the Marketers' Next Battlefield </p> <p>Contact srrivatsan desikan sridesik@cisco.com for questions</p> <p>How Important is Customer Experience?In 201689%66%In 2013Of companies will compete based on customer experience (up from 36% in 2012)**</p> <p>*Accenture 2013 Global Consumer Pulse Survey (13,168 consumers in 33 countries )**Gartner Survey Finds Importance of Customer Experience is on the Rise; Marketing is on the Hook, Jake Sorofman, Laura McLellan, Sep 2014Companies</p> <p>5 2015 Cisco and/or its affiliates. All rights reserved. Cisco Confidential</p> <p>Consumers</p> <p>Switched brands due to poor customer experience*</p> <p># 2015 Cisco and/or its affiliates. All rights reserved. Cisco Confidential5How important is this new battlefield you may ask?Accenture surveyed ~13,000 consumers in 33 different countries and found that66% i.e 2 out of every 3 consumers switched providers due to poor customer experience Companies have realized this and hence Gartner predicts that89% ofcompanies plan to compete primarilyonthe basisofthecustomerexperience by 2016.i.e. 9 in 10 companies will compete primarily on the basis of the customer experience</p> <p>Source:66% quote Accenture 2013 Global Consumer Pulse Survey Page 10n = 13,168 consumers in 33 countries</p> <p>89% quote Gartner Survey Finds Importance of Customer Experience is on the Rise; Marketing is on the Hook, Jake Sorofman, Laura McLellan, Sep 2014Logic 89% ~ 9 in 10 companies36% ~ 4 in 10 companiesActual quote The trend is clear: the percentage of companies competing primarily on the basis of customer experience is rising from 36% two years ago to 58% today to a whopping 89% two years from now. The implication is that customer experience has become a strategic imperative.</p> <p>What is Superior Customer Experience?Next Generation Banking Model* Accenture, Banking 2016 Accelerating growth and optimizing costs in distribution and marketing</p> <p>Banking Experience Today</p> <p>Savings</p> <p>Checking</p> <p>ESPP</p> <p>Mortgage</p> <p>Trading</p> <p>401K</p> <p>529</p> <p>Banking is Moving from Transactions to Relationships</p> <p>Savings Acct.Checking/Current Accts.401KIRAHSAStocksMutual FundsBondsTrust ManagementESPP529ID MonitoringCredit MonitoringUmbrella CoverageChecks, Demand DraftsLockersCredit CardsBill PaymentsHome Equity &amp; MortgageCar LoansPersonal LoanMetals &amp; Jewels LoansCertificate of Deposit</p> <p>Identity &amp; Theft Protection</p> <p>TransactionalBankingRetirementLoansWealthManagement</p> <p>Banking Experience TomorrowUniversal Banking</p> <p>What Do Customers Want?</p> <p>Easy Access to a Full Suite of Financial Products Across All Channels</p> <p>Simple, Reliable and Quick Service Experience</p> <p>How Can You Deliver?</p> <p>Enhance Service Experience Transform into a Financial/Non-Financial Digital Bank*</p> <p>Create A Multichannel Bank*</p> <p>Personalized Recommendations</p> <p>Predict Customer Needs A Socially Engaging Bank*</p> <p>Deliver Delightful Experiences and Effortless Transactions for Your Customer</p> <p># 2015 Cisco and/or its affiliates. All rights reserved. Cisco ConfidentialSo what is this superior customer experienceIt begins by comparing how banking is done today and how it will change tomorrow Today, you have to go to a dizzying array of fragmented providers for your each financial needTomorrows Next Generation banking model is one of Universal Banking where one bank caters to all your financial needs through a single site making our ever complicated lives simplerThe key to evolving to this model is by looking what customers of tomorrow wantThey wantEasy access to a full suite of financial products across all channelsSimple Reliable and Quick Service ExperiencePersonalized Recommendations such as trading options that fit their specific risk profile and financial situationYou can deliver this by building three capabilitiesCreate an Intelligent Multichannel Bank where customers can transact across branch, mobile, web and kiosksEnhance the service experience by transforming the bank into one that provides Non-financial service in addition to a cohesive financial portfolio to increase retentionPredict your customers needs such as a need to rebalance portfolio in response to life events by becoming a Socially engaging bank</p> <p>Doing this enables you to deliver delightful experiences and effortless transactions which is key to capturing your customers unwavering loyalty</p> <p>SourceFrom Transactions to Relationships: Innovations Next Horizonhttp://jpnicols.com/2013/10/01/transactions-relationships-innovations-next-horizon/6</p> <p>The Retail Banking Experience TransformedA New Job in a New City</p> <p># 2015 Cisco and/or its affiliates. All rights reserved. Cisco ConfidentialLets take a moment to understand what are these capabilities and why do you need themId like to do this by taking you on a journey of superior customer experienceLets pick a situation we have all experienced which is to move to a new city for a new jobNote the following as we goI will be using a simple example of the financial decisions you need to make when you move to a new city for a new job, an example all of us have been through one time or the other in our livesIll first talk in detail about the capability and then showcase it in the light of the experienceAt every stage, on the top-right hand side of my slide, youll see the key moment listed, why is it important and what opportunity does this provide either to wow or to learn more about the customerOn the bottom-right, Ill showcase the key Cisco products and solutions alongside that will enable you deliver the capabilityFinally there is a statistic on the left-bottom for you to observe as a proof point</p> <p>7</p> <p>65%Customers interact with their bank through multiple channels**</p> <p>61%Of 18-25 yr. olds use Mobile Banking*</p> <p>66%Of all service contact will happen online***</p> <p>Why Create an Intelligent Multi-channel Experience?* Montise The Mobile Money Landscape: Market Statistics and Expert Views 2015** McKinsey &amp; Company: Retail Banking Insights*** Boston Consulting Group Distribution 2020: The Next Big Journey for Retail Banks</p> <p>SMS</p> <p>Chat</p> <p>Social Media</p> <p>Mobile</p> <p>Voice</p> <p>Web</p> <p>Email</p> <p>Branch</p> <p>ATM</p> <p>Kiosk</p> <p>Home</p> <p>My Bank engages with me where I spend timeMulti-Channel</p> <p>Siloed Channels</p> <p># 2015 Cisco and/or its affiliates. All rights reserved. Cisco ConfidentialI mentioned the need to build three capabilities so lets begin with the first one and examine it in detailWhy create an intelligent multi-channel bank?If you look at studies from.61%...65% 66% So clearly banking experience expected today has fundamentally changedIts moved from the olden days when we went physically to the bank for certain items, to calling a toll free number for some items and calling an advisor for others to a multi-channel experience where we would like the option to interact in multiple waysIn-fact, people no longer have going to a bank as a separate activity in the to-do list and rather want to do all banking while waiting for the train or while dinner is being served or anywhere on the moveSo you need to build an experience that matches the expectation of your customers today</p> <p>Source:61% QuoteMontise Report 2015 - The Mobile Money Landscape: Market Statistics and Expert Viewsurlhttp://thefinancialbrand.com/41465/300-mobile-banking-digital-payment-strategic-planning-statistics/65% QuoteMcKinsey &amp; Company: Retail Banking Insightsurl: https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=2&amp;ved=0CCYQFjAB&amp;url=http%3A%2F%2Fwww.mckinsey.com%2F~%2Fmedia%2FMcKinsey%2Fdotcom%2Fclient_service%2FFinancial%2520Services%2FLatest%2520thinking%2FConsumer%2520and%2520small%2520business%2520banking%2FFuture_of_US_retail_banking_distribution.ashx&amp;ei=22xyVfDJD4LjoATqvr_oAw&amp;usg=AFQjCNEqVmn4KwZyOFMulbOBEIGHEj9dTQ&amp;sig2=y6M0f5JRTpbGo2gR5RN1Qw&amp;bvm=bv.95039771,d.cGU</p> <p>66 % QuoteBoston Consulting Group - Distribution 2020: The Next Big Journey for Retail Bankshttps://www.bcgperspectives.com/content/articles/financial_institutions_sales_channels_distribution_2020/?chapter=2#chapter2</p> <p>8</p> <p>44% Chose a Bank Based on Recommendations From Family and Friends</p> <p>First Day on the JobInfluence choices madeDiscover preferences</p> <p>Choose Bank, Brokerage </p> <p>Social MinerSocial Miner monitors social media communities for questions posted, queuing them to the right expert for pro-active customer engagement</p> <p># 2015 Cisco and/or its affiliates. All rights reserved. Cisco ConfidentialNow lets look at the usecase where Ryan joins his new job in the new cityAs Ryan joins his new job, he quickly has to make a number of choices from health benefits to choosing a bank to choosing a broker for ESPP, 401K, RSUs, Insurance, Mortgage etc etcThis is the Zero moment of truth (ZeeMOT)ZMOT is that moment when in response to a stimulus, you grab your laptop, mobile phone or some other wired device and start learning about a product or service youre thinking about trying or buying. This is the first channel of information in the omni-channel experience</p> <p>Why ImportantInfluence early, the choices made by the customerDiscover customer preferences</p> <p>Cisco SolutionCiscos Remote Expert Mobile solution with Jive provides instant access to up-to-date information and peer reviews so that you can engage with the customer as he asks his friends opinion about which brokerage firm to useCiscos Contact Center Social Miners queue and workflow based conversation routing, channels comments to the right expert for pro-active customer engagement. So, if Ryan asks his relative or friend on facebook as to which bank is the best to open a checking accoutn, social miner can pick this conversation and route it to your web customer service agent who can have a rich direct conversation influencing Ryan into joining your bank</p> <p>Source:44% QuoteVOLUME IV WINTER 2014 RETAIL BANKING AMERICAS DIGEST, Page 3144 % of SWITCHERS LEAN MOSTLY ON RECOMMENDATIONS BY FAMILY &amp; FRIENDS url: http://www.oliverwyman.com/content/dam/oliver-wyman/global/en/2014/dec/Retail%20Banking%20Americas%20Digest%20-%20Volume%20IV%20Winter%2014.pdf9</p> <p>I am looking for a short term low risk investment.</p> <p>When do you plan to withdraw your money?</p> <p>I am thinking of buying a house in 2 years.</p> <p>Let me show you our tax-free bonds.</p> <p>Ok.</p> <p>83% of Consumers Wa...</p>

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