Online Banking Sector Trends : Users to the core of innovation
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Online Banking Sector Trends : Users to the core of innovation

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IND Group Seminar presentation Nov 24, 2011.

IND Group Seminar presentation Nov 24, 2011.

The next wave in digital services for the banking industry customers: From products & transaction-focus towards end-user-need –orientation

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Online Banking Sector Trends : Users to the core of innovation Online Banking Sector Trends : Users to the core of innovation Presentation Transcript

  • INSIGHT THE NEXT WAVE IN DIGITAL SERVICES FOR THE BANKING INDUSTRY CUSTOMERS: From products & transaction-focus towards end-user-need –orientation IND Seminar in Helsinki Tommi Pelkonen Strategist November 24, 2011© Frantic 2011
  • Frantic = Digital Creations 35 people, Helsinki-based, 15 years of experience in digital solutions WHAT DO WE WANT TO DO? To make services for our customers Strategy that: 1)  Generate business opportunities Research & analytics and additional revenues 2)  Make services that people enjoy to use and benefit of Design Technology© Frantic 2011
  • TOMMI IN BRIEF Born 1971, married, daughter M.Sc. (Econ.): 1999, Helsinki School of Economics, HSE, International Business, Finance & Accounting, Information Technology 2010->: Strategist at Frantic 2008-2010: Business Consultant at Finpro Budapest in ICT/software business 2005-2008: Strategist at Satama Amsterdam 1999-2005: Business Consultant at Satama Helsinki 1996-1999: Research at the HSE Electronic Commerce Institute, focus: digital media service companies Lecturer and author of several publications & articles in the fields digital media, internationalisation of SMEs and service business© Frantic 2011 3
  • BACKGROUND: THE DIGITAL REVOLUTION HAS REALISED, BUT IT STILL CONTINUES The Internet has changed consumer and industrial buyer behavior permanently. All business operations are influenced by the online channels and e-business.. Customers and consumers have more power than ever in economic history Digital channel functions as transformation agent within organisations. Competences to run digital channel-drive business increase gradually. Change process takes time – many business processes are not yet digitised nor utilise the online channel to the its potential. Solid success metrics are emerging. Innovation and society fragmentation continues – globally.© Frantic 2011 eBusiness = Business!
  • INSIGHT The next wave in digital services for banking industry customers •  BACKGROUND: From modem noises towards real time, pan-European & always-on digital banking for all •  SOME TRENDS: Innovation happening in and outside the traditional banking/financial sector •  CHALLENGE: How to keep the trust and compete in the turbulent times? •  SO WHAT: Why should you care?© Frantic 2011
  • DIGITAL BANKING HISTORY IN BRIEF •  Videotext – Minitel – Telesampo & Infotel •  Modem dial-up banking •  Telephone banking •  Internet-banking •  Mobile banking •  … •  Security major leaps – password / security tokens & lists •  Constant fraud and phishing efforts •  … LONG-WAY BEHIND© Frantic 2011 US ALREADY !
  • EVOLUTION STEPS IN BRIEF LEARN TO LISTEN & BE PERSONAL OFFER THEMES EVERYTHING Need-based Customer empowerment Microbanking Product offering explosion BREAK TO THE Financial “supermarkets” MASS MARKETS Mobile banking era 1999-> New Internet banking era 1995-> innovation TEST & TRY and service Internet- models for EARLY DAYS boosted banking 1980-early 1990s efficiency and self-service JOY OF USE explosion (still GUIDANCE Early trials going on) with pioneers LOYALTY and leading New sources of companies EASE OF USE banking EFFICIENCY innovations are emerging from© Frantic 2011 TEST OPPORTUNITY DRIVERS user-orientation
  • KEY MOTIVES FOR BANKING AUTOMATION •  Cost savings, cost savings, cost savings… •  Freedom of time, place & location •  Ease of use •  Plethora of new & innovative financial products, also for consumers •  Explosive growth of the financial instruments and electronic commerce in professional, but also in private sectors •  Increased global hyper-competition and massive investments into self-service platforms •  Reduction of churn = loyalty programs BUT NOW: Joy of use? Relevance? Guidance of the consumers to better benefits?© Frantic 2011 8
  • INSIGHT The next wave in digital services for banking industry customers •  BACKGROUND: From modem noises towards real time, pan-European & always-on digital banking for all •  SOME TRENDS: Innovation happening in and outside the traditional banking/financial sector •  CHALLENGE: How to keep the trust and compete in the turbulent times? •  SO WHAT: Why should you care?© Frantic 2011
  • BANKING IS A KEY APPLICATION AREA FOR ONLINE USERS 476 M Internet users in Europe (2011), 58% of the European population WE LOVE OUR SELF- SERVICE BANKS – OR DO WE? http://www.internetworldstats.com/stats4.htm© Frantic 2011 http://www.iabeurope.eu/media/43499/mcdc%20european%20overview.pdf
  • TRANSPARENCY IN BANKING IS INCREASING – BOOSTED BY BROKERS & PRICE COMPARISON ENGINES OUTCOME: WALLED GARDENS OR OPEN SPACES?© Frantic 2011
  • THE COMPARISON POWER IS REACHING EVEN SMALLER DOMESTIC MARKETS© Frantic 2011 14
  • PERSONAL FINANCE MANAGEMENT TOOLS ARE EMERGING INSIDE & OUTSIDE THE BANKS Aggregate to an outside service to get better and more relevan information…© Frantic 2011 16
  • SIMPLICITY IN BANKING & BUDGET BANKING Simple, easy to use, no-thrill, bare bones banking.© Frantic 2011 Is the the dawn EasyJet era of banking?
  • GREAT NEW INNOVATIONS DOING GLOBAL GOOD Online & mobility-empoweredbanking, microfinancing and risk sharing© Frantic 2011 19
  • ALSO NOT-THAT-POSITIVE INNOVATIONS EMERVE (FOR THE CONSUMERS !) Case: Very short-term loans in Finland Aggressive marketing + User interface & process innovations! Leading to consumer interest rates up 1100 % p.a.!© Frantic 2011 20
  • INSIGHT The next wave in digital services for banking industry customers •  BACKGROUND: From modem noises towards real time, pan-European & always-on digital banking for all •  SOME TRENDS: Innovation happening in and outside the traditional banking/financial sector •  CHALLENGE: How to keep the trust and compete in the turbulent times? •  SO WHAT: Why should you care?© Frantic 2011
  • IT IS ALL ABOUT TRUST!© Frantic 2011 Below the media & beverage industries!
  • FINANCIAL CRISIS IS DETORIATING TRUST TOWARDS FINANCIAL INSTITUTIONS!© Frantic 2011 Freefall of trust!
  • ONLINE IS THE KEY SOURCE FOR COMPANY INFORMATION And online – news, but also rumours travel fast…© Frantic 2011
  • RE-ESTABLISMENT OF TRUST IS DIFFICULT TASK© Frantic 2011 Think about Nokia and Symbian…
  • HUMANS: SOCIAL ANIMALS BY LEGACY •  Regardless how FUTURELAB Darwinist we want to be, our DNAs and socio-cultural legacy guides us to continue good-old-proven models and habits •  How will the digital conversation change/ enable/boost our old 4000 years of media-revolution habits to change – cannot undo 2,000,000 of programming flourish – suffer? SO WHAT FOR ONLINE BANKING? => PEOPLE WANT TO TALK TO PEOPLE AND© Frantic 2011 HEAR OTHERS’ EXPERIENCES! 26
  • HOW ABOUT BRINGING THE HINTS AND DISCUSSION TO YOUR OWN SITE?© Frantic 2011
  • …OR HOW ABOUT BRINGING THE RATINGS EVEN FURTHER – INTO YOUR PRODUCT OFFERINGS? Hmm… – Haven’t we seen this happening in the travel sector already…© Frantic 2011
  • BACK TO TRUST: HOW ABOUT DESIGNING SERVICES FROM A “USERS FIRST -ANGLE”? Starting point: •  Who are they? •  What do they want? •  What do we want them to do? •  How do they behave now and will behave soon •  What makes them succeed (with us or without? •  How can we help them in their needs?© Frantic 2011
  • USER-ORIENTATION TO THE CORE OF (DIGITAL) PLANNING & THINKING 1. RESEARCH THE ACTUAL NEEDS & BEHAVIOUR OF THE USERS Surveys and especially with qualitative interviews 2. FIND AND DESIGN SERVICES TO MATCH THESE NEEDS Try to find the need that your organisation can service and excel in within the time, budget, technology and resourcing availabel 3. HAPPY CUSTOMERS + GOOD BUSINESS ! SIMPLE IDEA – BUT SO RARELY EXECUTED© Frantic 2011
  • HOW ABOUT TRYING TO ANSWER THESE QUESTIONS IN THE ONLINE BANK? •  STATUS: What do I own? •  Give a great overview to the situation •  PERFORMANCE: How am I doing? •  What is happening – am I loosing / winning? Am I reaching my goals? •  ADVICE: What should I do? •  If this is so, what are my options? •  ACTIONS: How can I take action? •  What to do now – how to improve this? Let’s do it…© Frantic 2011 33
  • INSIGHT The next wave in digital services for banking industry customers •  BACKGROUND: From modem noises towards real time, pan-European & always-on digital banking for all •  SOME TRENDS: Innovation happening in and outside the traditional banking/financial sector •  CHALLENGE: How to keep the trust and compete in the turbulent times? •  SO WHAT: Why should you care?© Frantic 2011
  • GOOD SERVICE SELLS ITSELF; BAD SERVICE SELLS ITSELF EVEN FASTER… Fitting the user needs (utility) " Useful ! Bad experience = I will tell it 20 of myGood experience Tells really closest friends and= I will share it with good Designed for people publish a bitter updatefour people stories on FB for my 223 “friends”… Desirable Stimulates the Usable senses Pleasurable Easy to use experience (usability) (satisfaction & feelings)© Frantic 2011
  • BETTER SERVICE EXPERIENCE AIMS FOR A POSITIVE BUSINESS CASE - TOO! •  To existing or new clients MORE SALES •  Via enhanced marketing and conversion improvements •  Via improved retention of clientele = more ! •  Via measured and monitored online operations MORE LEADS •  Information clarity and lead process development •  Campaigning and analytical development = more ! COST SAVINGS •  Decreases in customer service costs •  Decreases in sales costs = less - ! BUSINESS CASE IS A KEY FACTOR FOR GREAT DIGITAL© Frantic 2011 SERVICE PROGRAMS – AND SO OFTEN NEGLECTED!
  • OUR TARGET: BEST-IN-CLASS USER EXPERIENCE WOW! I find things where I expect them to be I like the brand and its visual design I got exactly what I needed know Fitting the user needs (utility) It is nice to do things online BEST I feel the site USER understands me I saved a lot of time EXPERIENCE doing things online I am impressed Pleasurable experience Easy to use by the service (satisfaction) (usability) I get things done more efficiently than offline I want to recommend this to my friends The banking sector has already made many of these things© Frantic 2011 right . Yet, there is plenty of room for improvment 37
  • OUTCOME: HOW DOES A LEADING ONLINE BANKING SERVICE BEHAVE & FEEL IN 2014?© Frantic 2011
  • IN 2014, THE LEADING ONLINE BANKING SERVICE … … offers a well-packaged multi- channel customer access to reach one’s financial service provider via the preferred method of contact…© Frantic 2011
  • IN 2014, THE LEADING ONLINE BANKING SERVICE … … create a trusted environment into which customers want to come and share their views and plans of the their financial situation and the provider. They feel treated as respected customers…© Frantic 2011
  • IN 2014, THE LEADING ONLINE BANKING SERVICE … …remembers and recognizes its users and offers personally customised advices and services and is present then when needed…© Frantic 2011
  • IN 2014, THE LEADING ONLINE BANKING SERVICE … ……aggregates the consumer opinions & reviews to its offerings, advices and content dynamically…© Frantic 2011
  • IN 2014, THE LEADING ONLINE BANKING SERVICE … …increases dramatically the customer satisfaction and boost revenues with lower churn and clever cross-selling. Outcome: Marketing budgets start shifting from acquisition to retention and loyalty programs! Quality service sells itself!© Frantic 2011
  • LET’S GO AND CREATE GREAT DIGITAL SERVICES! Tommi Pelkonen Tommi.pelkonen@frantic.com +358-40-50 50 821 http://www.slideshare.net/TommiP© Frantic 2011 44