0
Adaptive Processes for
Adaptive Times
Using the web to its full in the
banking sector
Haydn Shaughnessy
Some drivers

THE INTERNET IS SO BIG AND

PERVASIVE
and SO embedded in our behaviour IT

CHALLENGES US TO
CHANGE THE WAY W...
agenda
Disruption factors

The Changing Business Ecosystem

Mastering the Internet

Bringing the Internet into the Organiz...
Haydn Shaughnessy
Research and consult on:

Global trends

Data structuring and improving intelligence

Transitioning the ...
Disruptive innovation and new platforms

DISRUPTION
Mobile Internet
Customer empowerment
Better data
Disruptive innovation and new platforms

Smartphone penetration

Anticipated penetration
2014 anticipate

50% by end 2011
...
Disruptive innovation in mobile

People using smart
phones use social
networks more than
regular Internet users

31%

Smar...
A DECADE OF CUSTOMER EMPOWERMENT

Time in social networks is
time spent building

customer-to-customer
relationships in ec...
So more companies choose to be in the customer ecosystem

Other

To

From
destination

participation

Joining the customer...
ECOSYSTEM behaviour

EVERYDAY IN THE
ENGLISH LANGUAGE:

500,000 BLOG POSTS
50 MILLION TWEETS
INNUMERABLE
SOCIAL NETWORK
PO...
THE INFORMATION OPPORTUNITY IS GROWING

Global mobile

data increase 39fold increase from 2009 to
2014, at a compound annu...
THE OPPORTUNITY IS GROWING INTERNALLY TOO

Enterprise Data
Compound annual
growth, transactional data

21%
Compound annual...
The problem of structured data

US financial institutions'
customer
data deteriorates at the rate
of at least

3.5% per mo...
UPSIDE

MORE OPPORTUNITIES TO

CONNECT WITH AN EVER
WIDER RANGE OF PEOPLE

MORE OBJECTIVE
DATA, UNTAPPED BY
COMPETITORS
CONSEQUENCES
THE GROWING QUANTITY OF

UNSTRUCTURED DATA ONLINE AND
INTERNALLY THREATENS DECISION
MAKING BECAUSE OF ITS COM...
Adaptive process for adaptive times

the

ecosystem
The Ecosystem

The porous organization or the
open enterprise
Open innovation
Innovation takes place organically
across co...
Growth of ecosystem conversations

Source: Haydn Shaughnessy, Bearing Consulting, Global Attitudes Project April 2010
DEALING WITH COMPLEXITY

New ways to
Collaborate
Communicate
Innovate
A partial view of the mobile ecosystem or
'distributed' enterprise
h/wares/ware
interface

OS
developers

Tools
developers...
The broader financial ecosystem
Though banks tend not to think in terms of ecosystems, the ecosystem exists
Distributed
en...
Growth of customer ecosystems in general

Customers have shown themselves
over a decade to want to contribute
to their own...
Growth of customer ecosystems in general

OVER

2/3rds
of

Netflix video
rentals
come thru
the recommendation system
Netfl...
Social media

200 banks globally
now blog. Only one
seems to realise that
banks, to
customers, are rather
boring.... but c...
Growth of personal finance ecosystems
BENEFITS

CUSTOMER ECOSYSTEMS allow
you to connect with customers where
they are doing things they like.
Allow you to obse...
Some words
on HOW
27 |
Enabling and supporting people through what we know

What we can know about
customers, competito
rs, markets is
changing
PEOPLE and the role of good data
Hierarchy of Knowledge Needs

Timely
Channelled to the
right people for the
right task

A...
LETS LOOKS AT THAT IN
THE EXTERNAL WORLD –
OUT ON THE WEB
THE DATA PROBLEM AND OPPORTUNITY

10S OF MILLIONS OF DATA
UNITS INTERNALLY AND

EXTERNALLY
HOW TO

structure

CONTEXTUALIS...
ECOSYSTEM: Structured knowledge

PERSPECTIVES
THEMES

CONCEPTS
TOPICS

Why bother?
Structure is easy to

comprehend, add t...
ECOSYSTEM: Structured knowledge
HEAT MAP OF OFFICIAL BANK BLOG THEMES GLOBALLY
Source, Bearing Banking KPIs project

Note ...
ECOSYSTEM: ANOTHER VIEW OF EXTERNAL DATA
STRUCTURING EXTERNAL DATA AROUND PERSPECTIVES, THEMES AND
CONCEPTS related
local
...
ECOSYSTEM: ANOTHER VIEW OF EXTERNAL DATA
STRUCTURING EXTERNAL DATA AROUND PERSPECTIVES, THEMES
AND CONCEPTS related
TOP 10...
ECOSYSTEM
An initial knowledge map of banking from 1200 websites

Source: Bearing Banking KPI
Project
EXTERNAL DATA STRUCTURING
TOP RIGHT IS THE EMERGING SPACE
SOCIAL
FEES

MOBILE
MANAGE
MENT

Source: Bearing Banking KPI
Pro...
ECOSYSTEMS

Knowing
markets and
competitors
Perception management

Online references to Android and
IPhone October 2008, Jan 2009

The growth of the Android operating...
ECOSYSTEMS

IDENTIFYING AND
MANAGING

PARTNERSHIPS
FOR INNOVATION
Scaled partnerships – THE API SPACE
Media

Retail

Auto

Mobile

Banking

New York
Times

Zappos

NG Connect

Apple

Paypa...
Disruptive innovation

Paypal apps program - future of
money threatens banks with new
business models, already evident in
...
THE INTERNAL ECOSYTEM

Bringing the web into the

bank
Generating unstructured data

Growth of internal networks
(Intranets, communities, wikis,
content, word files, planning
do...
Internal processes
UNSTRUCTURED DATA CREATES
UNCERTAINTY AND DRIVES POOR DECISION
MAKING, CREATING AT LEAST A 40% LOSS IN
...
Solutions to information discovery issues
From structure
To text indexing

Simultaneously text search is becoming far
bett...
A solution lies in data flow

Give people enough
opportunities for
discovery and sharing,
means finding exactly
what is ne...
PUTTING INSIDE AND OUTSIDE TOGETHER

AN EXAMPLE
EXPERIMENT WITH SOME CLASS OF CUSTOMER
What can we know from the Web?
Trusted
services
SaaS

Loans
Small to Medium
Sized B...
EXPERIMENT WITH SOME CLASS OF CUSTOMER
What can we know from the Web?

Facebook

LinkedIn

Sport

Small to Medium
Sized Bu...
EXPERIMENT WITH SOME CLASS OF CUSTOMER
bought
associated
products
Credit
scores
Aggregate
loan
performance

What can we kn...
EXPERIMENT WITH SOME CLASS OF CUSTOMER
What can we know from internal
sources ?

EVEN SME needs
will be diverse
Enterprise social network as an incubator of the SME loan
project

An
additional
data loop

Develop new
loan
product optio...
The wider payoff

What about
innovation?
Identifying unmet custodial or transactional needs
A
U
T
O

Staff
also spot SMEs
taking on SaaS
in place of IT loans

Subs...
Adaptive process for adaptive times

CONCLUSIONS
Conclusions
You cannot imagine what customers want because
their ecosystems are fast evolving – technology and new
wants d...
Conclusions

Embrace the ecosystem
Map the surrounding world
Take a proactive approach to
what you can know
Be ready for r...
The END

Haydn Shaughnessy haydn@cogenuity.com
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Transcript of "Haydnshaughnessyonbanksandecosystems 121214102637-phpapp02"

  1. 1. Adaptive Processes for Adaptive Times Using the web to its full in the banking sector Haydn Shaughnessy
  2. 2. Some drivers THE INTERNET IS SO BIG AND PERVASIVE and SO embedded in our behaviour IT CHALLENGES US TO CHANGE THE WAY WE THINK OF OTHER PERVASIVE INFLUENCES.... LIKE THE BANK
  3. 3. agenda Disruption factors The Changing Business Ecosystem Mastering the Internet Bringing the Internet into the Organization
  4. 4. Haydn Shaughnessy Research and consult on: Global trends Data structuring and improving intelligence Transitioning the enterprise Write at HBR.org, Wikinomics.com GigaOm Innovation Management
  5. 5. Disruptive innovation and new platforms DISRUPTION Mobile Internet Customer empowerment Better data
  6. 6. Disruptive innovation and new platforms Smartphone penetration Anticipated penetration 2014 anticipate 50% by end 2011 5 billion devices globally connected to the web Sources, ComScore and CISCO
  7. 7. Disruptive innovation in mobile People using smart phones use social networks more than regular Internet users 31% Smart phones accelerate and broaden online social interaction The customer ecosystem Source: ComScore
  8. 8. A DECADE OF CUSTOMER EMPOWERMENT Time in social networks is time spent building customer-to-customer relationships in ecosystems and time not spent with brands The customer ecosystem
  9. 9. So more companies choose to be in the customer ecosystem Other To From destination participation Joining the customer ecosystem
  10. 10. ECOSYSTEM behaviour EVERYDAY IN THE ENGLISH LANGUAGE: 500,000 BLOG POSTS 50 MILLION TWEETS INNUMERABLE SOCIAL NETWORK POSTS An unprecedented source of intelligence
  11. 11. THE INFORMATION OPPORTUNITY IS GROWING Global mobile data increase 39fold increase from 2009 to 2014, at a compound annual growth rate (CAGR) of 108 percent, much of it generated by social web activity. Source: CISCO
  12. 12. THE OPPORTUNITY IS GROWING INTERNALLY TOO Enterprise Data Compound annual growth, transactional data 21% Compound annual growth, unstructured data 67% Source: IDC
  13. 13. The problem of structured data US financial institutions' customer data deteriorates at the rate of at least 3.5% per month Source: Insight Ecosystems
  14. 14. UPSIDE MORE OPPORTUNITIES TO CONNECT WITH AN EVER WIDER RANGE OF PEOPLE MORE OBJECTIVE DATA, UNTAPPED BY COMPETITORS
  15. 15. CONSEQUENCES THE GROWING QUANTITY OF UNSTRUCTURED DATA ONLINE AND INTERNALLY THREATENS DECISION MAKING BECAUSE OF ITS COMPLEXITY Data deteriorates quickly so needs to be circulated quickly if it is to have value EMPLOYEES NEED MORE SUPPORT IN DEALING WITH COMPLEXITY
  16. 16. Adaptive process for adaptive times the ecosystem
  17. 17. The Ecosystem The porous organization or the open enterprise Open innovation Innovation takes place organically across companies and communities
  18. 18. Growth of ecosystem conversations Source: Haydn Shaughnessy, Bearing Consulting, Global Attitudes Project April 2010
  19. 19. DEALING WITH COMPLEXITY New ways to Collaborate Communicate Innovate
  20. 20. A partial view of the mobile ecosystem or 'distributed' enterprise h/wares/ware interface OS developers Tools developers Function developers Ecosystem brands Supply chain Nokia Services Apps developers Mobile advertising revenues End-user communities Ovi Apple Apps store Operators Google Search Geodata/AR Location AR Maps based content services Content developers Solutions ecosystem Device sales Embedded device markets Home device markets 20 |
  21. 21. The broader financial ecosystem Though banks tend not to think in terms of ecosystems, the ecosystem exists Distributed enterprises Regulatory Municipal receipts Open data Corporate ecosystem Policy Disruptive data Carbon Exchange Receivables ecosystem Bank ecosystem Attitudes Trusted services Property market Green ecosystem Transaction 2.0 Risk impacts Subscription economy Equity analyst ecosystem Customer ecosystems Social payments
  22. 22. Growth of customer ecosystems in general Customers have shown themselves over a decade to want to contribute to their own and each other's experiences through ecosystems
  23. 23. Growth of customer ecosystems in general OVER 2/3rds of Netflix video rentals come thru the recommendation system Netflix prize offered $1 million for a 10% improvement in it
  24. 24. Social media 200 banks globally now blog. Only one seems to realise that banks, to customers, are rather boring.... but cricket is The customer ecosystem
  25. 25. Growth of personal finance ecosystems
  26. 26. BENEFITS CUSTOMER ECOSYSTEMS allow you to connect with customers where they are doing things they like. Allow you to observe behaviour AND build great data to give staff more confidence in their work. Correlate that data with customer acquisition and life-cycle management models
  27. 27. Some words on HOW 27 |
  28. 28. Enabling and supporting people through what we know What we can know about customers, competito rs, markets is changing
  29. 29. PEOPLE and the role of good data Hierarchy of Knowledge Needs Timely Channelled to the right people for the right task Appropriate Contextualised Information is from known sources Accessible and available immediately Coupled to other data of relevance Trustworthy Research shows when data delivers to all 4 of an employees needs it can have a 40+% impact on the quality of decisions
  30. 30. LETS LOOKS AT THAT IN THE EXTERNAL WORLD – OUT ON THE WEB
  31. 31. THE DATA PROBLEM AND OPPORTUNITY 10S OF MILLIONS OF DATA UNITS INTERNALLY AND EXTERNALLY HOW TO structure CONTEXTUALISE AND CHANNEL IT
  32. 32. ECOSYSTEM: Structured knowledge PERSPECTIVES THEMES CONCEPTS TOPICS Why bother? Structure is easy to comprehend, add to and use End-users have needs and desires that market research does not tap in to and you cannot imagine Analysts use out of date material
  33. 33. ECOSYSTEM: Structured knowledge HEAT MAP OF OFFICIAL BANK BLOG THEMES GLOBALLY Source, Bearing Banking KPIs project Note the absence of 'customers'
  34. 34. ECOSYSTEM: ANOTHER VIEW OF EXTERNAL DATA STRUCTURING EXTERNAL DATA AROUND PERSPECTIVES, THEMES AND CONCEPTS related local loans community government service Count Likelihood Percent business customers industry assets stock 0 10 20 30 40 50 60 70 TOP TEN EMERGING CONCEPTS DICUSSED BY BANKS AND CREDIT UNIONS SOURCE: BEARING KPI STUDY 'Likelihood' % is the relevant concept = how likely they are to co-occur with the term 'bank' taking into account their relative presence in the text, i.e. a small number of terms can still be very likely to co-occur. to banking
  35. 35. ECOSYSTEM: ANOTHER VIEW OF EXTERNAL DATA STRUCTURING EXTERNAL DATA AROUND PERSPECTIVES, THEMES AND CONCEPTS related TOP 10 CONCERNS IN CUSTOMER CENTRIC CONVERSATIONS ABOUT BANKING SOURCE: BEARING BANK KPI STUDY to banking TOP TEN EMERGING CONCEPTS DICUSSED BY BANKS AND CREDIT UNIONS SOURCE: BEARING KPI STUDY change local free loans fees community business government credit Count Likelihood Percent online overdraft service Count Likelihood Percent business customers service industry products assets experience stock 0 10 20 30 40 50 60 70 80 0 10 20 30 40 50 60 70
  36. 36. ECOSYSTEM An initial knowledge map of banking from 1200 websites Source: Bearing Banking KPI Project
  37. 37. EXTERNAL DATA STRUCTURING TOP RIGHT IS THE EMERGING SPACE SOCIAL FEES MOBILE MANAGE MENT Source: Bearing Banking KPI Project
  38. 38. ECOSYSTEMS Knowing markets and competitors
  39. 39. Perception management Online references to Android and IPhone October 2008, Jan 2009 The growth of the Android operating system's sales reflects the growth in online references from 1/12 of iPhone to 1/3rd. By March 2010 Android was catching up in market share too.
  40. 40. ECOSYSTEMS IDENTIFYING AND MANAGING PARTNERSHIPS FOR INNOVATION
  41. 41. Scaled partnerships – THE API SPACE Media Retail Auto Mobile Banking New York Times Zappos NG Connect Apple Paypal Guardian Tesco Autoline Nokia Ovi Apple iPhone payments Comcast Netflix Lemon Tree Orange Windows Media Etsy BMW Samsung A-V Networks Cafe press Audi Android Reuters Shopping.com General Motors Droid MTV Networks Fiat Blackberry Skype Ford Handango USA Today (sport and books) VW Horizon Verizon
  42. 42. Disruptive innovation Paypal apps program - future of money threatens banks with new business models, already evident in transaction systems
  43. 43. THE INTERNAL ECOSYTEM Bringing the web into the bank
  44. 44. Generating unstructured data Growth of internal networks (Intranets, communities, wikis, content, word files, planning documents PDFs, PPTs), call centre records, customer interactions, email CREATES A WEB-LIKE PROBLEM
  45. 45. Internal processes UNSTRUCTURED DATA CREATES UNCERTAINTY AND DRIVES POOR DECISION MAKING, CREATING AT LEAST A 40% LOSS IN REVENUE IN TRADING ENVIRONMENTS; structured data is lost quickly without being used Timely Knowledge needs these attributes Appropriate Contextualised Trustworthy
  46. 46. Solutions to information discovery issues From structure To text indexing Simultaneously text search is becoming far better at structuring results
  47. 47. A solution lies in data flow Give people enough opportunities for discovery and sharing, means finding exactly what is needed occurs more often diagram:usabilitynews.usernomics.com Good data exploration and usage become content and communications issues
  48. 48. PUTTING INSIDE AND OUTSIDE TOGETHER AN EXAMPLE
  49. 49. EXPERIMENT WITH SOME CLASS OF CUSTOMER What can we know from the Web? Trusted services SaaS Loans Small to Medium Sized Business Fiscal benefits IT SME Bank Pension tech Green issues What they talk about at any level of granularity FP7 Grants Etc
  50. 50. EXPERIMENT WITH SOME CLASS OF CUSTOMER What can we know from the Web? Facebook LinkedIn Sport Small to Medium Sized Business Places they congregate and opportunities for engagement Travel Social networks IT sites Trade press Tech. Bulletin board EU Cordis retail sites
  51. 51. EXPERIMENT WITH SOME CLASS OF CUSTOMER bought associated products Credit scores Aggregate loan performance What can we know from internal sources ? SME Loans Reasons for Nonperformance Email themes Sector profiles Geography Manufacturing Retail Local IT Regional
  52. 52. EXPERIMENT WITH SOME CLASS OF CUSTOMER What can we know from internal sources ? EVEN SME needs will be diverse
  53. 53. Enterprise social network as an incubator of the SME loan project An additional data loop Develop new loan product options Participation strategy management Design web pages responsive to DIVERSE needs – try multiple versions Experiment and collate data Evidence based product and marketing strategy Participatory collateral development
  54. 54. The wider payoff What about innovation?
  55. 55. Identifying unmet custodial or transactional needs A U T O Staff also spot SMEs taking on SaaS in place of IT loans Subscriptions replace leases Employees observe need for new trusted services Be ready to be surprised Bank offers automated global contract validation and custody service Trusted services Online contract validation
  56. 56. Adaptive process for adaptive times CONCLUSIONS
  57. 57. Conclusions You cannot imagine what customers want because their ecosystems are fast evolving – technology and new wants drive them to innovate in their behaviour You must acquire advantage from knowing more and through participation: the web is a participatory medium Progress through scaling partnerships freeing yourselves to strategise new opportunities
  58. 58. Conclusions Embrace the ecosystem Map the surrounding world Take a proactive approach to what you can know Be ready for real innovation
  59. 59. The END Haydn Shaughnessy haydn@cogenuity.com
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