Snacking lunching and fine dining fiserv white paper


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A white paper from Fiserv on how the mobile channel is distinct from other channels, including online

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Snacking lunching and fine dining fiserv white paper

  1. 1. Executive Briefing Paper Snacking, Lunching and Fine Dining: How Mobile is Reshaping Every Banking Channel
  2. 2. Fiserv Executive Briefing Paper How Mobile is Reshaping Every Banking Channel Financial institutions have much to consider when it comes to serving their customers’ multi-channel banking needs. The addition and rapid evolution of mobile banking is impacting the way consumers are approaching banking activities. Consumers expect information to converge and be consistent across channels. Consumers also expect to interact and transact differently through each channel — mobile, online, and branch — based on the unique attributes of the access device or location. Financial institutions that develop an integrated channel strategy that leverages the unique opportunities afforded by each banking channel will be able to differentiate themselves and provide a more holistic and satisfying experience for customers. As lives become busier, consumers have less time to stop, sit, and eat a good meal. It’s easier to grab a quick snack on the way to the next appointment. Snacking has become a way of life, reshaping how people eat. The behavior of snacking can describe more than eating. Many consumers snack when it comes to other activities like shopping, getting directions or even banking. Time is precious so consumers look for quick, easy and convenient ways to check off tasks. Technology is impacting the ways simple tasks are completed. When banking, consumers have a choice of channels to conduct their financial activities and there are distinct differences in the way they use those channels. Thanks to technological advancements, consumers are increasingly interacting with their financial institutions through virtual channels such as the Internet and mobile instead of visiting branches. While the online banking channel is now the dominant channel for many consumers, the mobile channel has been growing in popularity. According to the “2011-2012 Mobile Banking Vendor Scorecard” report by Javelin Strategy & Research, consumer adoption of mobile banking grew by almost 60 percent from 2010 to 2011. With the pervasive growth in the mobile channel, many financial institutions are still working to provide their customer base with access to mobile financial services. A prevailing practice among financial institutions is to offer mobile banking as a second way to access the same information and capabilities available online. However, consumer behavior suggests that developing mobile banking as its own unique channel holds advantages for financial institutions and customers alike.
  3. 3. Figure 1: The Evolution of the Mobile Channel Source: Fiserv, Inc. Fiserv Executive Briefing Paper Keeping Up with Mobile One only has to look to recent history to see how the online channel has had a profound impact on the way consumers interact with pre-existing channels such as the branch and ATM. For many consumers, the online channel is now their primary channel for regular banking activities such as accessing account information, transferring funds, and paying bills. According to the “Integrating Delivery Channels for the Future” report by Synergistics Research Corporation, 62 percent of adults in the U.S. that have access to the Internet named online banking as their preferred banking channel. It is likely that mobile channel popularity will mimic that of online banking and gain popularity; especially for those consumers who own a mobile phone but do not have access to a computer. The mobile channel is evolving from informational to transactional (see Figure 1). Mobile banking functionality can now facilitate not only inquiries about balances and ATM locations, but also support a range of financial transactions inclusive of check deposit, bill pay, person-to-person payments, transfers, alerts and payments at the point of sale. The Banking Channel Mix: Shifts in Multi-Channel Banking Multi-channel banking, defined as the use of more than one channel to conduct banking activities, is commonplace today and consumers expect to be able to bank via any channel they desire, whether that channel is virtual or physical. There are two key phenomenons that are reshaping multi-channel banking: 1) Information Convergence: Since consumers access banking information and transact using multiple channels they expect information to be accurate, up-to-date and consistent across all channels, at all times. This means that when a consumer walks into a branch to make a deposit, they expect that they can go to any other banking channel – ATM, IVR, online and mobile – to check the balance and confirm that the deposit has processed. 2) Interaction Specialization: There are reasons why consumers use different devices or channels to access their financial information and make transactions. Consumer preferences for conducting primary banking activities in a particular channel are influenced by the unique attributes of that channel. For simple, day-to-day needs, consumers are apt to prefer the self-service digital channels of mobile and online. For more involved needs, like opening an investment account, consumers turn to the branch channel where activities can be conducted in-person. Simple tasks such as balance inquiries and transaction history confirmations still dominate channels such as IVR, online and contact centers. These tasks are well suited to the mobile channel and Fiserv predicts that as mobile banking becomes more widespread more of these simple activities will shift to the mobile channel. 1
  4. 4. Source: Consumer Trends Survey, Fiserv, Inc., 2011 Figure 2: “Listed below are some possible reasons why you use mobile banking. Please select all that apply to you.” Consumers also want to take advantage of what is unique about the mobile channel and leverage mobile capabilities that aren’t available through other channels. For example, among end-users of Fiserv mobile applications, over 80 percent of the ATM/Branch searches they conducted relied on GPS technology. Fiserv Executive Briefing Paper Similarly, over 20 percent of app users with access to remote deposit capture (RDC) capabilities used their smartphone cameras to capture images of checks to make deposits. In addition, consumers want to benefit from the geo-location capabilities of the technology to receive coupons and offers for favorite brands, nearby businesses and at the point of sale; this also creates additional revenue opportunities for financial institutions since customers will likely increase spend on their debit and credit cards. Along with the unique attributes the channel offers to consumers, supporting mobile banking creates unique challenges for financial institutions: • Infrastructure: As more consumers use mobile banking to transact more often, financial institutions may need to scale-up their infrastructures. • Display size: Financial institutions need to design for the smaller screen displays on smartphones to facilitate not only transactions but also cross selling to drive additional revenue. It is important that financial institutions remember that consumers will use the mobile channel differently and may not require access to the level of detail they have online from a personal computer. By studying consumer behavior and using that information as a guide, financial institutions will be positioned to decide the appropriate level of detail and functionality to deliver to customers via the mobile banking channel. • Proliferation of handsets and new devices: There are many makes and models of smartphones and operating systems. Financial institutions have to support what is out there now and be prepared to support hot new models and systems. In addition to smartphones, tablets also require financial institutions to determine how to deliver an appropriate banking experience to consumers that will drive usage and safeguard satisfaction. Snacking, Lunching and Fine Dining The unique interactions taking place in the three primary banking channels can be characterized as snacking, lunching and fine dining. Snacking – Mobile Channel Like snacking, the mobile channel lends itself to quick banking interactions. Typically, these interactions involve transactions that take less than 60 seconds to accomplish, or have a sense of urgency, such as checking balances, looking at an alert and paying a bill at the last minute. When consumers were asked to list the reasons why they use mobile banking, the top two reasons related to accessibility and convenience (see Figure 2). 2
  5. 5. Fiserv Executive Briefing Paper Fine Dining – Branch The in-person channel of the branch and to some extent the contact center, offers a full menu of services and is well-suited for activities where personal interaction is preferred. These types of activities include wealth management and other advisory services that require consultation. Such consultative activities typically occur infrequently, like fine dining that occurs on special occasions and involves considerable interaction and conversation. As the online and mobile channels continue to evolve and offer more rich functionality, the role of the branch will shift. While the in-person channel serves a unique purpose, mobile will begin to enhance interactions at the branch. For example, some financial institutions are giving bank associates tablets to use in engaging customers at the branch. Other financial institutions may decide to adopt the branch concept of Virgin Money in the UK where they will have no transactional capability in their branches, but still give their customers a unique, personalized experience that continues to build a relationship with the customer (see sidebar: “Virgin Money: Bank Branch of the Future?”). The future of the branch is to provide the personal touch and chance to discuss financial matters and make financial matters more palatable, almost like having dinner with your banker. • Security: Forty-one percent of those surveyed in the 2011 Fiserv Consumer Trends Survey cited, “concern about the security of financial information” as a reason they do not use mobile banking. Financial institutions must not only ensure the highest levels of mobile banking security, via SSL, encryption, and other technological measures, but also provide end- user education about best practices for keeping their financial information safe across channels such as the importance of customers locking their phones and using strong passwords. Mobile banking must stay true to its value proposition of accessibility and convenience. No matter how complex a task may be for the financial institution on the back end, it is essential that the consumer’s mobile banking experience be simple and snackable. Lunching – Online Channel Interactions via the online channel are usually more structured and routine versus the quick and ad-hoc transactions that tend to occur on the mobile channel. This makes the online channel more analogous to sitting down to eat lunch. This is because the online channel is well-suited for more in-depth self-service activities. Weekly or monthly banking activities such as managing budgets/finances, turning off paper statements and managing finances tend to be conducted via the online channel. Mobile will not replace the online channel, but it will change how it is used. As more and more consumers adopt mobile banking, they will no longer see a need to wait until they are near a personal computer for quick and simple interactions. Done right, the online channel will make consumers want to “do lunch” with their finances. 3
  6. 6. Fiserv Executive Briefing Paper This back office integration will enable banking institutions to be a one-stop shop where consumers can research products, make financial transactions, pay bills, manage finances and receive customer service and support easily across banking channels. This strategy will help financial institutions reduce overall expenses by enhancing self-servicing capabilities and promoting the shift to direct channels. Financial institutions can reduce the volume of snacking transactions – balance inquiries, account information updates and other simple tasks – within higher-cost channels by ensuring that lower-cost consumer-direct channels are able to handle the requests. To design a consistent, integrated and tailored user experience for each channel, financial institutions should employ three principles: • Know your customer: Financial institutions possess information about their customers and how they conduct their financial activities for each channel. The key is to utilize this data to optimize channels to support consumer habits and preferences. • Know your channel: Consumers expect information across channels to be consistent, however, they do not always expect the same amount of detail across channels. Financial institutions must determine how much information should be available to consumers in each channel. For example, account summary information may be adequate for the mobile channel, but more detailed information should be available online. • Know your systems: Delivering consistent information across channels requires back-end integration and real-time functionalities. Financial institutions must determine how they will achieve integration on the back-end while also enabling consistency on the consumer-facing front-end. Creating the Optimum Multi-Channel User Experience Benefits the Balance Sheet To optimize the multi-channel experience inclusive of mobile banking, financial institutions must leverage an infrastructure that integrates information across all channels. To achieve this goal, financial institutions must be able to integrate core systems with various channels easily and efficiently. Financial institutions can drive efficiency by sharing information and processes across the bank and aligning systems across channels. For example, all banking channels should pull from one common customer data repository which would reduce data duplication. Virgin Money: Bank Branch of the Future? Founded in 1995, Virgin Money is a UK-based bank and financial services company owned by the Virgin Group. Operating primarily as an online bank, Virgin Money did not have a branch network for many years. Recently, Virgin Money decided it would launch lounge-style branches in order to strengthen relationships with its customers. As reported in the Manchester Evening News, “Ahead of a full branch roll-out, we want our customers to experience Virgin Money in a physical sense,” stated a Virgin Money Spokesperson. “The lounges are one way of bringing the Virgin Money brand to life for our customers – given we have been online and over the phone so far to date.” While in the lounge-style branches, customers can check emails, have coffee and refreshments as well as watch television. They can also have a conversation with a banking specialist via video-conferencing – if you will, a virtual intimate dinner. 4
  7. 7. Fiserv Executive Briefing Paper Offering Personal Financial Management Tools Online With many consumers now using the online channel as their primary banking channel, financial institutions should enhance the functionality of the user interface to make it easier for consumers to effectively manage all of their finances. Financial institutions need to make sure their online banking experience supports structured interactions. Financial institutions can enrich the consumer experience with online banking by offering planning, budgeting and personal financial management tools. Focusing on Consultation in the Branches Financial institutions should embrace the shift in the role of the branch from transactional to consultative. Consumers will continue to value their branch experience if they are able to go there and receive high-quality personal advice that improves their financial well-being. Bank employees play a significant role in the success of a financial institution’s integrated channel strategy. They will need to buy into the change and support both consumers and the organization through the change. Financial institutions will need to train their staff on the use case for each channel so the staff can assist consumers in “right-channeling” their interactions. This will increase the engagement and retention of staff and customers alike. Although channel use is shifting and changing, customers will continue to consume banking services like they eat: by snacking, lunching and fine dining. By creating an integrated multi-channel mix, financial institutions will be sure to satisfy the hunger for banking services across all channels and make interactions more appetizing. Understanding customers, channels and systems and integrating access to information will provide consumers with experiences that meet expectations across all tasks and access methods. Holistic Multi-channel Execution Inoculates Against Non-Bank Competition Many non-banks are offering new and innovative applications that promote a range of new transaction options via the mobile channel. Non-banks, like Google and PayPal, are pushing forward with mobile payments while financial institutions are lagging behind, as are content aggregators like Mint and PageOnce. Financial institutions should not discount the potential competition from non-banks that threaten to disrupt the relationships they have with their customers. If financial institutions do not step up to the plate and provide their customers with a complete banking experience, including mobile payments, they could stand to lose a part of their customer base to non-banks. Snacking, Lunching and Fine Dining: SatisfyingYour Customers’ Appetites Financial institutions can make certain they are feeding their customers with right-sized banking channel experiences by: Deploying Mobile Banking and Payments Capabilities Consumers want to quickly and easily take care of routine and urgent business on their mobile devices. This requires rolling out balance inquiries, ATM finders, mobile alerts, transfers, bill pay, person-to-person payments, and remote deposit capture of checks. It also requires developing a strategy for near-field communications and point-of-sale payments as the industry evolves. 5
  8. 8. About Fiserv Fiserv is driving innovation in Payments, Processing Services, Risk Compliance, Customer Channel Management and Insights Optimization, and leading the transformation of financial services technology to help our clients change the way financial services are delivered. Visit for a look at what’s next, right now.
  9. 9. 800-872-7882 262-879-5322 Fiserv, Inc. 255 Fiserv Drive Brookfield, WI 53045 © 2012 Fiserv, Inc. or its affiliates. All rights reserved. Fiserv is a registered trademark of Fiserv, Inc. Other products referenced in this material may be trademarks or registered trademarks of their respective companies. 626-12-12920-COL 02/12