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Adding SPICE to internet banking

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Adopting the SPICE (Social, Personal, and Interactive to enable an enhanced Customer Experience) framework will help banks engage customers and understand their preferences better, improve …

Adopting the SPICE (Social, Personal, and Interactive to enable an enhanced Customer Experience) framework will help banks engage customers and understand their preferences better, improve marketing... opportunities around new products and services, and enhance their brand image, while driving up customer services.

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  • 1. Adding SPICE to Internet Banking - Kiran Kalmadi, Sukhna Dang, Rajat Gurnani Abstract Most of the internet banks today provide services and features which can largely be termed as standardized in nature. One of the key differentiators lies in providing a richer customer experience. To deliver best-in-class online customer experience, banks are embracing various ways, like- enhancements to online portal (primarily customization & personalization), creating micro-sites, using social media tools and engaging customers through online chats, customer surveys & demo’s on their websites. To achieve this objective, banks can adopt the SPICE framework i.e., go Social, make it Personal and be Interactive for enhanced Customer Experience (SPICE). Adopting this framework will help banks to engage with the customers better, understand their preferences, market new products & services, enhance the brand image and improve the customer service.www.infosys.com
  • 2. SPICE frameworkInternet banking is mainstream and is here to stay. Today, majority of the banks have joined the internet banking bandwagon. With theadoption of internet banking on the rise, it’s highly imperative for banks to differentiate themselves. Online customer experience can be akey differentiator, which can help a bank to differentiate itself. By providing a best-in-class online experience, banks can effectively engage itscustomers. Customers today are not satisfied with mere static web sites- an uninspiring web experience can be a real dampener for customers.Customers today are looking for online banking experiences which are more engaging (social), personalized and interactive. Banks who arelooking to retain their existing customers and attract the next generation of customers needs to deliver a richer online customer experience. Todeliver the next level of online customer experiences, banks should adopt strategies that leverage the 3 key elements of the SPICE framework(Refer Figure 1).The first element of the framework – Social emphasizesthat banks should integrate social media into their onlinebanking and in their website. For instance, bank’s blogs, Gowikis and twitter should be integrated to the bank’s Socialwebsite and should be an integral part of online banking.The second element of the framework – Personalization,recommends banks to go personal, in order to maintainthe personal touch even in an online environment. Make it CustomerServicing customers based on customer preferences Personal Experiencewill lead to enhanced online customer experience ascustomers get content relevant to them.The third element of the framework – Interactive, isimportant for banks as customers are always looking Befor immediate help or answers. By offering interactive Interactiveservices, banks can augment the online banking Figure 1 - SPICE Frameworkexperience of their customers.To have a strong foundation for richer customer experience, it’s highly recommended for banks to adopt the SPICE framework (Social,Personalization and Interactive). In the subsequent sections, we have provided detail explanation of each of the elements of this frameworkand also substantiated the framework by presenting a real-time example.Go SocialWith the growth in the usage of social media, banks have started to provide the same experience on their internet banking websites. Todaybanks are embracing social networking sites (Facebook, LinkedIn), blogging sites (WordPress) micro blogging sites (Twitter) etc., not only toprovide a rich customer experience; but also to improve customer service, develop products, enhance the brand image and market products& services. Banks harness the power of social media tools through the following: Creating their Providing Gaining insights own online online tools to Availability of from social communities customers content online media activity2 | Infosys
  • 3. Banks create their own online communities on social media platforms, to ensure a platform, where both existing and potential consumers can make enquiries, interact with one another and discuss about Creating their the current offerings and new products and services and also provide their views (likes/dislikes) etc. own online For example – Wells Fargo has created a fan Page on Facebook. This complements the online presence communities on wellsfargo.com and provides an additional way for individuals to interact with others. Individuals with their own personal Facebook account can become a fan of Wells Fargo to receive investing news, insights, information on new products and services etc. Banks are offering various services like personal financial management (PFM), collaborative banking etc., through various online tools (widgets). Customers prefer using personal financial management tools Providing through banking web sites over the independent PFM third party providers due to security concerns. online tools to For example; Wells Fargo has launched “My Money Map”, a free interactive online tool designed to help customers customers manage their finances and financial future. The bank has also posted a video about one of its new tool on YouTube to reach customers effectively. Social media is attractive, not because of the fruitful discussions rather content available online is of utmost importance. Hence, traditional campaign materials are being turned into online friendly versions. Banks upload videos, provide information about product launches, and advertise on forums Availability of like You Tube, Vimeo etc. They also use interactive multimedia like flip pages, links etc which are easily content online transferable among customers. For example - Fidelity Investments launched “Be the Green Line” video contest on You Tube, the contest links with Fidelity’s advertising campaign, which features the tagline “Turn Here” and a prominent green line that underscores the firm’s ability to help investors navigate all stages of life with financial guidance and appropriate investment options. To understand the user preferences and provide better customer service, banks use social media Gaining insights analytics tools that enable them to capitalize on the stream of data and information available. from social The underlying objective in all the above cases is to attract new customers and increase loyalty for better media activity customer engagement. The results are obvious, social media has redefined the customer experience model.Make it personalTo facilitate next generation online customer experience, one of the key elements available to banks is personalization. Gone are the daysof ‘one-product fits all’, today banks are moving towards ‘give customers what they want’. Banks are targeting to offer customers morepersonalized online services and also are allowing customers to customize their offerings. Personalization helps banks to tailor the content orweb experience in accordance to each individual customer’s interests and choices. As a result of providing personalized content, customersspend more time on the banks website, return more frequently and are also inclined to use the internet banking services much often. Thisprovides additional opportunities to the bank for cross-sell, thereby growing their wallet share. Personalization can be done, based on theinformation shared by customers, or as observed by the system, based on customer interaction, or pushed by the banks to the customer, whomay belong to a particular category of customer (for instance, all retirees may receive information about pension plans). Infosys | 3
  • 4. The major types of personalization available to banks can be broadly classified as: Explicit personalization • Here, customer makes the choice and sees relevant content everytime he visits the website, based on the requirements or choice he has made • Gives the customer explicit user control as the customer makes the choice • For instance, BBVA through its “Tú Cuentas” next-generation online portal lets customers design their own personal experience , so that they can view information and functionality based on their choice. Using widgets, end users can customize their layout as well. Implicit personalization • Here, banks monitors customers interests, based on the user behavior - as they navigage a website and provide the appropriate content • For instance, today most banks have personalized home pages - which greet a customer by their name, furnishes summary of accounts and promotes marketing offers that are relevant to customersBanks offer different type of personalization services to their customers. Few of the prominent personalization services provided are:personalization of login home page, account alerts, event reminders, personalized marketing offers, personalized banners, e-Statementoptions, quick links, secure email, personalized pre-approved loans, etc., Banks stand to reap a host of benefits by taking the personalization route. Few of the benefits are: • Loyal customers – Better personalized services which are tuned to the customers preferences, customers would remain more loyal with the banks • Increased trust – Benefits of Offering what the customer personally needs will increase the trust personalization • More selling opportunities – By targeting personalized products/services to customers , banks get more opportunities to cross sell or up-sell their services • Competitive differentiator – Engaging customers based on their preferences will be a key competitive differentiator for banksProviding personalized services or offering customized products to online customers helps banks to build customer intimacy. By personalizingwebsites, banks can offer its online customers a persuasive experience that differentiates itself from any other internet banking websites.4 | Infosys
  • 5. Be interactiveTo provide a richer online banking experience, banks have been focusing on providing interactive features and capabilities to its customers.The customers too want to conduct all their banking transactions via internet banking websites, which not only includes checking balances ortransferring funds but, interacting with personal advisors and watching videos for gaining more information on specific products and servicesprovided by the bank. This consumer behavior highlights the need for instant solutions and the convenience of banking anywhere anytime.Currently, banks are embracing Web 2.0 technologies—social applications, podcasts, widgets and mashups. Web 2.0 applications enable banksand their customers to interact with each other in a personalized manner. The current focus of the banks is to engage the customers throughinteractive applications and the underlying objectives are to: Provide immediate answers Reduce cost Provide offline and new products online Provide another service channel instead of the customer visiting the branch Provide convenience to customers Cross-sell products Educate customers through videos and web conferences Understand the user preferences of the customers and customize products based on such preferencesWith the help of Web 2.0, banks provide a variety of Interactive services which include:a. Live chat – It allows customers to interact with relationship e. ATM and branch locators – Most of the banks today, display managers for all their financial queries. This helps in increased information like ATM locators, branch locators using google maps conversions of existing and potential customers, leading to more and satellite tracking along with details like branch opening completed applications and start of new relationships. Banks like, information on their internet banking websites. For example, Bank of America and National City; have significantly increased HSBC provides an interactive branch locator based on google their sales volume because of live chat feature on their banking maps technology websites f. Social computing - Banks are also leveraging the Web 2.0 featuresb. Online TV services – Banks deploy online TV services to share to continuously track changing online customer behavior patterns information about financial and business events so as to continuously and are leveraging social communities like Facebook, Orkut, Digg engage with their customers. As a case in point, 1st Mariner Bank etc, along with micro blogging websites like Twitter and other has placed a video version of its annual report and often uploads social forums. For example, Wells Fargo launched Stagecoach interviews and viewpoints of its finance officers on YouTube Island, an online virtual world, in which the users can connect with their friends and at the same time learn to manage moneyc. Service requests – Through the bank’s internet website, customers can change/generate passwords, apply for new products g. Webcasts and podcasts sessions are being used by banks to share and services, order a new cheque book, add/modify their important information communication address, track their service requests, etc., This not h. Online banking Widgets – Essential widgets like calendar and only helps in saving cost to the bank (if a customer visits a branch) calculator are provided with the option of adding more interactive but also results in saving time and providing convenience to the widgets based on the preferences of the customers customer i. Search toolbar – Banks provide a search option so that if thed. Online appointment reservation – With the help of this service, customers are not able to find a particular product, service or the customers can book their appointments at the branch well in need more information, searching through keywords will help advance them in finding the information efficiently Infosys | 5
  • 6. Putting the framework into practiceAlmost all the leading banks of the world today constantly endeavor to provide the best of the internet banking features for creating a richonline customer experience. Standard Chartered Bank has launched a consumer online banking platform – Breeze, targeted towards the nextgeneration customers. Standard Chartered’s Breeze is a rich online banking, easy to use platform; that embraces Web 2.0 applications and helpsits customers to view, transfer and manage money. Standard Chartered Breeze uses plain and simple language in its entire online bankingplatform. In this section, we have used our SPICE framework to map the internet banking features introduced by Standard Chartered Bank increating the next generation customer experience. • To reach out to the Next Gen population, the Breeze platform uses social networks like Facebook and Twitter to have conversations and listen to their customers Go • Breeze also has a presence on YouTube, which is used by the bank to provide product demos/information about the platforms and it also allows customers to Social provide inputs and feedback on the videos • Standard Chartered’s Breeze, recruited many interns with the help of social media tools (Blogs, Youtube, Twitter etc.) • Standard Chartered Breeze allows personalization of accounts by assigning names and choosing visual icons and colours for all accounts • Breeze offers handy ‘Wish List ‘ function, that helps customers to plan for those activities that they wish to save for. In addition, it also provides a ‘Rainy Day’ feature Make it that helps customers to prepare financially for any emergencies that may arise in Personal future • Breeze allows customers the option to view and check their transactions in a list format, using the ‘List tool’. It allows users to set reminders to alert them for any action that they need to take. In fact, Breeze allows customers to set reminders even for actions which may not be relevant to the bank account • Breeze provides a mailbox which helps the customer to send across questions to the customer service officer in case of any assistance Be • It also provides calendar tool that makes available information on transactions, for Interactive any accounts, displayed in the form of a week or a month • Breeze helps customers to locate the nearest Branch and ATMs, which form part of their networkThe Standard Chartered Bank’s Breeze platform has created a buzz among the next generation customers. Customers view it as a comprehensivebanking platform that enables customers to personalize how they see, move and manage their money with incredible ease.6 | Infosys
  • 7. Banks have been investing in their internet banking Conclusion capabilities to augment the online experience of their customers. In fact, their investments are reaping benefits in terms of increased customer migration and retention, cost savings, process improvements, etc. With the help of SPICE framework, the banks Conclusion can understand the preferences of their customers proactively, customize and market products based on such preferences and also provide another service delivery channel. To conclude, with the increase in broadband penetration, technological advances and changing financial needs and preferences of the next generation, the banks will continue their efforts in creating a great online branch experience for their customers.About the AuthorsKiran KalmadiKiran is a Lead Consultant in the Financial Services and Insurance (FSI) unit and leads the FSI Research Center. He has around twelve years’experience in bespoke research and analysis for strategy development, consulting, marketing and business development.Kiran has worked extensively in the retail banking and payments domain and has been involved in developing research-based consultativeinsights and analysis for business pursuits and client engagement.He has a keen interest in Social Media, Payments, Analytics, Internet, and Mobile Banking and its adoption by banksHe can be reached at Kiran_kalamdi@infosys.comSukhna DangSukhna is a Senior Consultant with the Financial Services and Insurance Group at Infosys. She has more than five years of experience in financialservices. Her areas of expertise are strategic consulting, business research & analysis and business development. She has keen interest in retailbanking, online banking and social media.She can be reached at Sukhna_dang@infosys.comRajat GurnaniRajat is a Senior Consultant with the Financial Services and Insurance Group at Infosys. He has more than five years of work experience inbusiness analysis, research and domain consulting. His areas of expertise include branch and contact center banking, personal financialmanagement and analytics.He can be reached at rajat_gurnani@infosys.com Infosys | 7
  • 8. About InfosysMany of the worlds most successful organizations rely on Infosys todeliver measurable business value. Infosys provides business consulting,technology, engineering and outsourcing services to help clients in over30 countries build tomorrows enterprise.For more information, contact askus@infosys.com www.infosys.com© 2012 Infosys Limited, Bangalore, India. Infosys believes the information in this publication is accurate as of its publication date; such information is subject to change without notice. Infosys acknowledgesthe proprietary rights of the trademarks and product names of other companies mentioned in this document.