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Right Channeling

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American Banker Mobile Banking & Commerce Summit presentation - Michael J. McEvoy and Matt Wilcox

American Banker Mobile Banking & Commerce Summit presentation - Michael J. McEvoy and Matt Wilcox

Published in: Economy & Finance, Business

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  • 1. Right Channeling Matt Wilcox Senior Vice President and Director, Interactive Services and Marketing Michael J. McEvoy Managing Director ath Power Consulting Presented by:
  • 2. • More interaction means more customer engagement, opportunity to steer customer to best channel for them, for given activity (‘right channeling’) • More choices for customer, better prospects for ‘right channeling’ • More interaction = improved customer loyalty and retention How often do you use mobile banking? 48% Source: The 2013 ath Power Mobile Banking Study™ Migration to Mobile Creates New Opportunities for ‘Right Channeling’ 4% 14% 30% 21% 23% 8% Multiple Times a Day Daily 2-3 Times a Week Once a Week 1-2 Times a Month Less than Once a Month 2 © ath Power Consulting Corporation. All Rights Reserved. Not for Distribution.
  • 3. 4% 14% 30% 10% 21% 32% Multiple Times a Day Daily 2-3 Times a Week SBO Consumer SBOs 'Check-In' More Often Than Retail Customers: Implications for ‘Right Channeling’? How often do you use mobile banking? Source: The 2013 ath Power Mobile Banking Study™ 3 © ath Power Consulting Corporation. All Rights Reserved. Not for Distribution.
  • 4. 79% 21% 17% 87% 33% 52% Bill Pay Transfer Funds to Outside Accounts Remote Deposit Capture Mobile Banking Transactions Available to Users 2012 2013 Additions to Mobile Offering Will Draw Customers, Open Up New Avenues for ‘Right Channeling’ 4Source: The 2013 ath Power Mobile Banking Study™ © ath Power Consulting Corporation. All Rights Reserved. Not for Distribution.
  • 5. Most Desired Capability: Remote Deposit Capture – Still Being Rolled Out 5 Source: The 2013 ath Power Mobile Banking Study™ © ath Power Consulting Corporation. All Rights Reserved. Not for Distribution.
  • 6. Lots of ‘Mobile’ Enhancements Are Being Developed / Introduced – More Choices for Customer, Opportunities for ‘Right Channeling’ • Remote Deposit Capture • Photo Mobile Bill Pay • Voice Recognition / Assistance • Voice Authentication • Service Tracker 6 © ath Power Consulting Corporation. All Rights Reserved. Not for Distribution.
  • 7. Lots of ‘Mobile’ Enhancements Are Being Developed / Introduced – More Choices for Customer, Opportunities for ‘Right Channeling’ • Remote Deposit Capture • Photo Mobile Bill Pay • Voice Recognition / Assistance • Voice Authentication • Service Tracker 7 © ath Power Consulting Corporation. All Rights Reserved. Not for Distribution.
  • 8. Lots of ‘Mobile’ Enhancements Are Being Developed / Introduced – More Choices for Customer, Opportunities for ‘Right Channeling’ • Remote Deposit Capture • Photo Mobile Bill Pay • Voice Recognition / Assistance • Voice Authentication • Service Tracker Yes; 32% No; 55% I don't know; 14% Would voice assistance encourage you to use more mobile banking services? 8Source: The 2013 ath Power Mobile Banking Study™ © ath Power Consulting Corporation. All Rights Reserved. Not for Distribution.
  • 9. Lots of ‘Mobile’ Enhancements Are Being Developed / Introduced – More Choices for Customer, Opportunities for ‘Right Channeling’ Source: The 2013 ath Power Mobile Banking Study™ • Remote Deposit Capture • Photo Mobile Bill Pay • Voice Recognition / Assistance • Voice Authentication • Service Tracker 45% 28% 55% 45% 27% Do concerns over security discourage you from using certain mobile banking services? Would voice authentication encourage you to use more mobile banking services? Concerns Over Security Discourage Use of Mobile Services Yes No Maybe 9 © ath Power Consulting Corporation. All Rights Reserved. Not for Distribution.
  • 10. Lots of ‘Mobile’ Enhancements Are Being Developed / Introduced – More Choices for Customer, Opportunities for ‘Right Channeling’ • Remote Deposit Capture • Photo Mobile Bill Pay • Voice Recognition / Assistance • Voice Authentication • Service Tracker 10
  • 11. Which of the following banking functions would you do on your mobile device, were it a possibility? ‘Right Channeling’, ‘Mobile’ and Increased Self-Service Adoption: Banks Can Cut Expenses, Improve C-Satisfaction at Same Time 28% 29% 33% 42% 44% 44% 44% 46% 55% Access Consolidated View of Accounts Reset UserId / Password Create and Track a Budget P2P Payments Mobile Payment at Merchant Stop Payment Activate Credit / Debit Card Receive, Store Rewards Points Report Lost / Stolen CardX X X Source: The 2013 ath Power Mobile Banking Study™ 11 © ath Power Consulting Corporation. All Rights Reserved. Not for Distribution.
  • 12. 74% 10% 16% 65% 14% 21% Wanted to try it My bank suggested it Other What prompted you to become a mobile banking customer? 2012 2013 Consumers Are Driving Mobile Adoption, Expectations for Mobile 12 • ‘Right channeling’ means the customer is making the choices – not the bank Source: The 2013 ath Power Mobile Banking Study™ © ath Power Consulting Corporation. All Rights Reserved. Not for Distribution.
  • 13. Path to Loan Smartphone Tablet Desktop Call Center Banking Center Check Rate 1 Research / Select Product 2 Apply for Loan 3 Get Help 4 Check Status (Tracker?) 5 Alerts 6 Sign Contract 7 13 ‘Right Channeling’ Will Mean Something Different to Each Customer • Mobile creates more choices but also means of interacting more intelligently with customer (e.g. alerts, service trackers) © ath Power Consulting Corporation. All Rights Reserved. Not for Distribution.
  • 14. 38% 11% 27% 28% 40% None Credit line alerts Payment due alerts Fraud alerts Low-balance alerts What kinds of account alerts do you receive through your mobile device from your bank? Role for Alerts? • Potentially instant, pro-active access to customer – timely interactions — Potential undermined if push alerts, sent in batch mode, not real-time — 2-way alerts, sent in real-time: More interaction, more trust in ‘mobile’ • Guide customers to optimal channel for them 14 Source: The 2013 ath Power Mobile Banking Study™ © ath Power Consulting Corporation. All Rights Reserved. Not for Distribution.
  • 15. 13% 6% 81% 19% 13% 68% $1-2 $3+ Not Willing to Pay 2012 2013 What is the most you would be willing to pay per month for the convenience of mobile banking capabilities? Added Bonus: Revenue Opportunity – Retail Customers Indicate Greater Willingness to Pay for Mobile Since Last Year Source: The 2013 ath Power Mobile Banking Study™ 15
  • 16. 19% 13% 68% 11% 52% 37% $1-2 $3+ Not Willing to Pay Majority of SBOs Are Willing to Pay for Mobile Banking Retail Customer SBO Almost 2 Out of 3 SBOs Are Willing to Pay for Mobile 16Source: The 2013 ath Power Mobile Banking Study™ © ath Power Consulting Corporation. All Rights Reserved. Not for Distribution.
  • 17. Mobile Banking – Moving beyond basic ROI It’s no longer enough to simply save your bank money. Today, you need to deliver top line revenue from the mobile channel  Where are we with mobile banking today?  Why does mobile banking matter?  How can your bank exploit the mobile opportunity today?
  • 18. Mobile Banking Evolution - The Three Phases Innovation Cost-Saving Revenue-Bearing
  • 19. Mobile Banking – Why it matters 0 1 0 Internet 50 40 30 20 6 0 2007 2008 Source: ABA, Nielsen Research 2009 2010 2011 2012 2013 2014 2015 The Fastest Growing Channel In Bank History Mobile ATM Call Center Branch 19
  • 20. Mobile Banking – Why it matters Branch Call Center IVR ATM Online Mobile $0.08$0.17 $1.25 $0.85 $4.00 $3.75 The Lowest Cost Channel In Bank History 20
  • 21. Mobile Banking - New Channels Changing The Mix The growth of interactions indicates increased involvement of the customer, giving the Bank greater opportunity to:  Steer the customer to the appropriate channel  Empower the customer to interact through their channel of choice  Cross-sell and improve customer loyalty Current Bank Channel Mix Indstry Projections 2013 Source: Zions Bank Branch, 25.9% Contact Center, 7.5% ATM, 8.0% Online Bankin g51.2% Mobile Bankin g7.5% Branch, 15% Contact Center, 10% ATM, 15%Online Banking 47.5% Mobile Banking 12.5% 21
  • 22. Mobile Banking - Balance Checking Across Channels IVR Transfer 5% Deposit Conf. 5% Balance 90% OLB TransferOnline App 13.1% .2% Bill Pay 15.1% Balance 71.7% Open Acc’t 1% Cash Check 16% Deposit 81% Branch ATM Transfer Deposit .53% 6.08% Balance 14.3% W/D 78.8% Transfers 10.3% Bill Pay 0.7% Branch 1.5% Balance 91% Mobile Contact Center Replace Card 3% Transfer 9% PW Reset 19% Deposit 9% History 25% Balance 36% 22
  • 23. Mobile Remote Deposit Capture: Another ‘right channel’ opportunity 23 • Ask and answer 3 questions • How many total checks were deposited by clients last year in a branch (small business and consumer)? • How many of those clients have mobile banking? • How many of these clients have mobile banking, but not actively using it? (No transactions in the last 30 or more days) • Previous slide showed 81% of our branch interactions were deposit related • 14% of those interactions were done by active mobile banking users • Provides an instant opportunity to move deposit interactions to the mobile channel • Reduce operating cost • Possible fee revenue
  • 24. Mobile Banking – Why it matters The Most Valuable Customers At Your Bank Source: Zions Bank OLB Only OLB + Mobile $450 $350 Annual Profit Per Customer +29% OLB Only OLB + Mobile 1.5% 4.0% Customer Attrition Rate (63%) 24
  • 25. Mobile Banking – New Areas of Revenue 25
  • 26. Mobile Banking – Select Potential Annual Revenue Per User $20 $15 $15 $6 $8 $12 $15 $7 $98 26
  • 27. Mobile Banking - Real Revenue....Today • Increase Customer Satisfaction • Improve Cost Savings • Drive Top Line Revenue Mobile Banking is transforming the way your customers interact with your bank.
  • 28. Is Mobile Payments The Big Play? Is it another channel? Given the conflicting interests of issuers, networks, carriers, OEMs, and merchants, Mobile Payments is an exercise in ocean boiling. Phil Schiller Apple SVP Marketing “It’s not clear that NFC is the solution to any current problem.”
  • 29. Mobile Payments Industry • Mobile Payments are expected to grow at a 52% rate over the next four years, up to over $600 Billion by 2016. Banks need to position themselves as a mobile payments player. 29
  • 30. • According to Aite Group, the entire payments ecosystem is at risk of disintermediation or being replaced. This will not happen overnight, but banks do need to respond: 1. The threat of disintermediation – especially of payment networks 2. Banking services being offered by other players – such as merchants and mCommerce providers 3. Increasing competition fueling the growth of mobile money from a complementary channel to a strategic keystone 4. Erosion of the consumer relationship as consumers adopt 3rd party mobile wallets and come to associate banking with the app rather then their bank Disruption and its potential outcomes 30
  • 31. • Leverage the trusted advantage we have with existing client relationships making mobile money a seamless part of daily life • Extend the marketing loyalty strategy to enhance the client’s shopping experience so that they recognize value and appreciate it • “Play the field” and develop strategies to collaborate with merchants, mCommerce players and new intermediaries The proactive opportunity for Banks 31
  • 32. Takeaways / Recommendations 32 • Untapped opportunity to leverage ‘always-on’ attribute of mobile — potential for ‘alerts’, 2-way real-time interaction — potential for mobile to educate, steer customer to ‘right channel’ • SBOs are more engaged with mobile than retail customers, more willing to pay for it, but have higher expectations • Adding new capabilities to ‘mobile’ opens opportunities for ‘right channeling’ • Customers are driving migration to mobile & expectations for it – implications for ‘right channeling’ • Understand your data and identify short and long term opportunities • Continue to update executives on emerging channel opportunities • Identify key executive sponsor to help promote ‘right channeling’ opportunities
  • 33. Right Channeling Matt Wilcox Senior Vice President and Director, Interactive Services and Marketing Michael J. McEvoy Managing Director mmcevoy@athpower.com 617-243-9500 Presented by: