Beyond transactionsCreating value through customerpartnerships in banking and insuranceAn Economist Intelligence Unit whit...
Beyond transactions    Creating value through customer    partnerships in banking and insurance    Preface    Beyond trans...
Beyond transactions    Creating value through customer    partnerships in banking and insurance    Contents    Introductio...
Beyond transactions    Creating value through customer    partnerships in banking and insurance    Introduction    Banks a...
Beyond transactions    Creating value through customer    partnerships in banking and insurance    Key findings    Presenti...
Beyond transactions    Creating value through customer    partnerships in banking and insurance    The view from financial...
Beyond transactions    Creating value through customer    partnerships in banking and insurance    How well do customer-fa...
Beyond transactions    Creating value through customer    partnerships in banking and insurance    EMEA, Americas and Asia...
Beyond transactions    Creating value through customer    partnerships in banking and insurance    Conclusion    With inco...
Appendix 1               Beyond transactionsOverall survey results   Creating value through customer                      ...
Appendix 1               Beyond transactionsOverall survey results   Creating value through customer                      ...
Appendix 1               Beyond transactionsOverall survey results   Creating value through customer                      ...
Appendix 1               Beyond transactionsOverall survey results   Creating value through customer                      ...
Appendix 1               Beyond transactionsOverall survey results   Creating value through customer                      ...
Appendix 2                Beyond transactionsAmericas survey results   Creating value through customer                    ...
Appendix 2                Beyond transactionsAmericas survey results   Creating value through customer                    ...
Appendix 2                Beyond transactionsAmericas survey results   Creating value through customer                    ...
Appendix 2                Beyond transactionsAmericas survey results   Creating value through customer                    ...
Appendix 2                Beyond transactionsAmericas survey results   Creating value through customer                    ...
Appendix 3       Beyond transactionsAsia-Pacific      Creating value through customersurvey results   partnerships in banki...
Appendix 3       Beyond transactionsAsia-Pacific      Creating value through customersurvey results   partnerships in banki...
Appendix 3       Beyond transactionsAsia-Pacific      Creating value through customersurvey results   partnerships in banki...
Beyond transactions: Creating value through customer partnerships in banking and insurance
Beyond transactions: Creating value through customer partnerships in banking and insurance
Beyond transactions: Creating value through customer partnerships in banking and insurance
Beyond transactions: Creating value through customer partnerships in banking and insurance
Beyond transactions: Creating value through customer partnerships in banking and insurance
Beyond transactions: Creating value through customer partnerships in banking and insurance
Beyond transactions: Creating value through customer partnerships in banking and insurance
Beyond transactions: Creating value through customer partnerships in banking and insurance
Beyond transactions: Creating value through customer partnerships in banking and insurance
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Beyond transactions: Creating value through customer partnerships in banking and insurance is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit bears sole responsibility for this report. The Economist Intelligence Unit’s editorial team conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. Dan Armstrong was the editor of the report and Dorian Benkoil was the author. Mike Kenny was responsible for layout and design. Our thanks are due to all of the financial services executives who responded to the survey.

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Beyond transactions: Creating value through customer partnerships in banking and insurance

  1. 1. Beyond transactionsCreating value through customerpartnerships in banking and insuranceAn Economist Intelligence Unit white paperSponsored by SAP
  2. 2. Beyond transactions Creating value through customer partnerships in banking and insurance Preface Beyond transactions: Creating value through customer partnerships in banking and insurance is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit bears sole responsibility for this report. The Economist Intelligence Unit’s editorial team conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. Dan Armstrong was the editor of the report and Dorian Benkoil was the author. Mike Kenny was responsible for layout and design. Our thanks are due to all of the financial services executives who responded to the survey. September 20091 © Economist Intelligence Unit Limited 2009
  3. 3. Beyond transactions Creating value through customer partnerships in banking and insurance Contents Introduction 3 Key findings 4 Conclusion 8 Appendix 1: Overall survey results 9 Appendix 2: Americas survey results 14 Appendix 3: Asia-Pacific survey results 19 Appendix 4: EMEA survey results 242 © Economist Intelligence Unit Limited 2009
  4. 4. Beyond transactions Creating value through customer partnerships in banking and insurance Introduction Banks are being increasingly challenged by cautious regulators, higher capital costs and challenges to core business models, while both banks and insurers face weaker demand, hesitant consumers and calls to rethink both internal processes and customer-facing operations. At the same time, the turmoil offers both types of firms the incentive to move farther from a transactional mindset. When banks and insurers are trusted by their customers, they find it easier to tap into the knowledge and emotions that drive customer behaviour. By rebuilding trust, financial services firms can work consultatively with customers to help them meet their personal goals in a tumultuous economic environment. About the survey the rest from brokers, asset managers and other types of firms. Respondents spanned the globe, with 40% In July 2009, the Economist Intelligence Unit surveyed from the Asia-Pacific region, 30% from the Americas 86 executives at 86 financial services firms on the (primarily the US) and the rest from EMEA. Finance was challenges of getting customer-facing departments to the best-represented function (37%), but marketing work together consistently and effectively. Fifty-five (19%) and customer service and sales (24%) were also percent were from banking, 17% from insurance, and well represented.3 © Economist Intelligence Unit Limited 2009
  5. 5. Beyond transactions Creating value through customer partnerships in banking and insurance Key findings Presenting a consistent face to the consumer The banks and insurers surveyed feel that they need to work more effectively with customers, providing a consistent customer service approach in person, on the phone, on websites and any other means. Financial services firms are more than twice as likely to cite customer service as a core strength than operational excellence or product innovation. Nevertheless, they acknowledge room for improvement to keep nervous customers on board and build long-term relationships. The need for personal contact The role of personal contact and relationships has never been more crucial. Consumers have unprecedented levels of choice and access to information. They have come to expect more transparency than ever, with real-time data and financial advice available from free or low-cost websites. Stronger consumer protection laws and the rise of consumer-oriented websites suggest that prices and sales terms will become more transparent as well. Survey respondents acknowledge this reality when 52% say that customers see their products more as commodities than five years ago. Although most say that price is not the most important factor that customers consider, they admit that price is becoming more important. Even commodity sellers have some pricing flexibility; competitive prices are the price of admission, but the ability to compete on service, convenience and other non-price factors allows some wiggle room. Increasing customer satisfaction Most respondents say higher customer satisfaction is a top-priority objective, second only to improving efficiency. Higher satisfaction leads to more opportunities to cross-sell and upsell, two areas most in need of improvement. Another way to ensure more satisfied customers is to target the right ones—those who respond to the firm’s value proposition—at the start. Approaching the right customers allows the firm to close more sales and do a better job holding onto the customers once they have purchased.4 © Economist Intelligence Unit Limited 2009
  6. 6. Beyond transactions Creating value through customer partnerships in banking and insurance The view from financial services organisations More respondents disagree More respondents agree Customers view my organisation’s products and services more as commodities now than five years ago We are more engaged in developing products or services collaboratively with customers than we were 12 months ago Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months My organisation has more flexibility than its competitors in pricing its products Compared to our competitors, my organisation’s customers are more loyal My organisation prioritises sales and marketing resources based on each customer’s lifetime value My organisation has an accurate way to estimate the lifetime value of customers We are currently developing a social media strategy In chosing to do business with my organisation, price is the single most important factor most customers consider -40% -20% 0% 20% 40% Source: Economist Intelligence Unit survey, July 2009. The press for efficiency The companies surveyed also want to make their operations more efficient: 65% say this is their highest priority. All report having at least ad hoc co-ordination and integration among customer-facing units—marketing, sales and customer service—but few are at the highest levels of integration. Whether in gauging customer satisfaction, responding to demands or complaints, tracking leads or planning and executing campaigns, only a small minority of executives claim broad and systematic integration among departments. The problem of metrics If the old management saying, “What gets measured gets done”, is accurate, most banks and insurers are not doing enough to serve their most valuable customers. Fifty-eight percent of executives say that customer relationships have improved over the past year despite the global economic downturn. But it is not clear that the right relationships have been improved. Fewer than three in ten have devised an accurate way to measure the lifetime value of customers, and about the same proportion say that they prioritise resources based on lifetime value. In other words, 70% do not know which of their customers account for the bulk of their profits (and also5 © Economist Intelligence Unit Limited 2009
  7. 7. Beyond transactions Creating value through customer partnerships in banking and insurance How well do customer-facing departments—sales, marketing, customer services—work together? Ad hoc integration Broad and systematic integration Responding to customer demands or complaints Planning and executing campaigns Gauging customer satisfaction Developing and launching new products Generating, tracking and measuring leads Incorporating customer feedback into products/services Analysing and segmenting customers Measuring effectiveness of processes -30% -20% -10% 0% 10% 20% 30% 40% Source: Economist Intelligence Unit survey, July 2009. offer the highest potential for cross-selling and upselling). Firms that cannot scrutinise customer-level data and model the value of customers—not just customer segments, but individual customers—will fall short in their efforts to improve both efficiency and customer satisfaction. How the three regions differ In terms of core strengths, institutions in all regions put customer service first, operational excellence second and innovation third. But relatively speaking, EMEA puts the most focus on customer service, Asia- Pacific on operational excellence and the Americas on innovation. Asia-Pacific Asia-Pacific institutions are more likely to point to core strengths in operational excellence. But this strength is not always apparent to the customer: Asia-Pacific institutions rate themselves relatively poorly in terms of gauging customer satisfaction and following up on complaints. They also fault themselves on their ability to cross-sell, upsell and provide a consistent customer experience. And more so than in other regions, they believe that their customer-facing units live in silos. When asked for the biggest benefits of integration, they say “Making each unit aware of how others have interacted with the customer” and “Helping each function support the others”.6 © Economist Intelligence Unit Limited 2009
  8. 8. Beyond transactions Creating value through customer partnerships in banking and insurance EMEA, Americas and Asia-Pacific regions see different benefits in integrating customer-facing functions EMEA wants to know the customer more intimately EMEA Americas Americans wants to direct resources to the most valuable customers Knowing the customer more intimately Directing resources to the most valuable customers Asia-Pacific Breaking down internal Asia-Pacific wants to break down internal silos silos 0% 10% 20% 30% 40% 50% 60% Source: Economist Intelligence Unit survey, July 2009. EMEA EMEA institutions are most emphatic in saying that customer service is their core strength. EMEA institutions are good at following up on complaints, gauging customer satisfaction and building long-term relationships. They are intensely curious about customers. When asked about the benefits of integrating customer-facing silos, they are most likely to cite the ability to develop a rich and deep profile of customer behaviour. Of all the regions, EMEA is most focused on personal service. Americas More so than other regions, institutions in the Americas focus on measurement: they say that they are good at targeting the right customers measuring the results of promotional campaigns. However, they are frustrated by their inability to forecast the lifetime value of customers, and believe that the biggest benefit from integration will be the ability to identify and prioritise these customers. At the same time, as big institutions get bigger, many mid-size and smaller institutions in the region are having difficulty finding the capital to invest in measurement.7 © Economist Intelligence Unit Limited 2009
  9. 9. Beyond transactions Creating value through customer partnerships in banking and insurance Conclusion With incomes starting to inch up again and the financial markets stabilising, consumers are ready to trust the banks and insurers that have shown themselves worthy. In the US, many banks—as well as a few insurers—are battling the perception that they have violated their social contracts by taking government money while acting unfairly towards their customers. To retain customers, banks and insurers must present a consistent experience and message with every interaction. They need to use those interactions to identify key prospects, while gathering information to improve service and sales. In particular, these firms need to: l Align the sales, marketing and customer services departments to provide a consistent experience to customers. l Accept the realities of commoditisation and price transparency. Give customers a value proposition that goes beyond economic self-interest. l Do a better job of analysing customers, measuring lifetime value, and providing a high level of service to high-value customers. l Gain experience with social media (only 30% of institutions are doing so). Many customers, especially older customers, may not belong to online communities. But the customers of the future do, and small efforts applied consistently today can make a big difference tomorrow. In simple terms, banks and insurers need to listen to individual customers and effectively use what they’ve learned. A study published recently in the Journal of Financial Services Marketing finds that customer perception of listening effectiveness is positively and strongly associated with service quality, trust, satisfaction, purchase intentions and sales performance. By listening carefully and integrating what they learn across internal channels, financial services firms will better meet the needs of their customers, rebuild trust, and improve their own performance.8 © Economist Intelligence Unit Limited 2009
  10. 10. Appendix 1 Beyond transactionsOverall survey results Creating value through customer partnerships in banking and insurance Appendix: Overall survey results Percentages may not add to 100% due to rounding or the ability of respondents to choose multiple responses. In your view, which of the following best represents the core strength of your overall business? Select only one. (% respondents) Customer service: Providing superior service to clients 53 Operational excellence: Creating highly efficient processes 22 Product innovation: First to market with groundbreaking new products or services 15 Other 9 Each of the organisation’s customer-facing departments influences the customer via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to 5. (% respondents) 1. No coordination; 2. Ad hoc coordination; 3. Some procedures 4. Procedures 5. Broad, systematic and Don’t know units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Generating, tracking and measuring leads 7 18 22 36 9 7 Developing and launching new products 5 19 22 35 16 2 Planning and executing campaigns 2 17 23 40 14 3 Analysing and segmenting customers 8 16 27 37 10 1 Gauging customer satisfaction 7 16 26 39 9 2 Measuring effectiveness of processes 8 26 33 27 5 1 Responding to customer demands or complaints 5 11 22 46 14 1 Incorporating customer feedback into products/services 9 21 26 28 15 1 Other 5 5 11 11 11 589 Economist Intelligence Unit 2009
  11. 11. Appendix 1 Beyond transactionsOverall survey results Creating value through customer partnerships in banking and insurance Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In chosing to do business with my organisation, price is the single most important factor most customers consider 33 66 1 Compared to our competitors, my organisation’s customers are more loyal 44 37 19 My organisation has an accurate way to estimate the lifetime value of customers 30 57 13 My organisation prioritises sales and marketing resources based on each customer’s lifetime value 31 51 18 We are currently developing a social media strategy 33 48 19 My organisation has more flexibility than its competitors in pricing its products 44 42 13 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 61 32 7 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 54 33 13 Customers view my organisation’s products and services more as commodities now than five years ago 51 39 10 Our margins are higher than the margins of most of our competitors 31 47 22 In your view, which of your organisation’s activities are most Which of the following would provide the biggest benefits in in need of improvement? Select up to four. integrating your organisation’s marketing, sales and service (% respondents) activities? Select up to three. (% respondents) Cross-selling or upselling customers 35 Presenting customers with a consistent picture of the organisation Providing a consistent customer experience 42 35 Developing and sharing a detailed picture of customers, Segmenting and profiling customers behaviour and preferences 33 40 Targeting the right customers in order to close a high percentage of prospects Prioritising resources directed towards customers 33 by total value over life of customer Measuring/optimising effectiveness of marketing and promotional campaigns 37 27 Making each unit aware of how the others have Generating qualified leads interacted with a given customer 35 26 Gathering customer intelligence in the course of providing service Helping each function find and act on ways to support the others 33 26 Building long-term relationships Integrating customer tracking from lead through post-sales service 30 24 Efficiently acquiring customers (eg, reducing the cost of sales) Establishing common definitions, assumptions and data 26 22 Maximising the number of repeat sales Measuring the probability that leads will turn into sales, and using these scores to guide sales 20 16 Measuring customer satisfaction and loyalty Our company sees no need to integrate our marketing, 20 sales and service activities Ensuring that customer complaints are resolved quickly 1 15 Other Involving customers product/service development (eg, co-creation) 0 13 Don’t know/Not applicable Creating effective collateral 0 8 Other 0 Don’t know 010 Economist Intelligence Unit 2009
  12. 12. Appendix 1 Beyond transactionsOverall survey results Creating value through customer partnerships in banking and insurance Which of the following trends have had the greatest impact on Which customer characteristics does your organisation most your business over the past 12 months? Select up to three. use to segment your customer base and prioritise marketing (% respondents) activities? Select up to three. (% respondents) Global economic downturn 80 Number and type of products used Changing customer requirements 41 40 Household net worth (even if held with other institutions) Finding access to credit/capital 37 33 Length of relationship Significant demand shifts for our products/services 37 26 Average balance Emergence of new competitors 30 18 Age Focusing on sustainability efforts 22 18 Primary channel used to deal with bank (online, teller, call center) Emergence of new markets for our products and services 19 16 Gender Disruptive technology developments 10 5 Ethnicity Accessing key components or resources through our supply chain 5 5 Other Other 11 6 Don’t know Don’t know 8 0 If you expect changes in financial regulations, what do you expect the impact will be? In which of the following ways does your organisation (% respondents) empower retailers and distributors? Select all that apply. (% respondents) More customer education to inform them about the portfolio choices and associated risks Improving online or self-service product support tools 39 47 Re-alignment of internal product development and Improving usability, search and navigation of customer-facing websites marketing units to address financial regulations 43 32 Making prices and sales terms more transparent for easy comparability No impact yet on front-office customer management processes 41 13 Investing in self-service tools across multiple channels We do not expect changes in financial regulations (eg, web, mobile devices, e-mail, point of sale) 11 37 Other Building or supporting online customer communities 4 23 Other 3 Don’t know 1311 Economist Intelligence Unit 2009
  13. 13. Appendix 1 Beyond transactionsOverall survey results Creating value through customer partnerships in banking and insurance Please indicate whether you agree or disagree with these statements about the channels used by your customers. (% respondents) Agree Disagree The role of the branch channel and personal advisors facilitating in-person customer meetings has increased due to the financial crisis 64 36 The channel(s) used by customers depend(s) largely on the age of the customer 64 36 Our customers are increasingly using automated channels (rather than in-person channels) not just for transactions, but to resolve problems as well 64 36 Social networking sites ( eg, Twitter, Facebook) are influencing choices made by customers of financial services institutions 33 67 Regardless of the channel used to contact us, our customers receive a consistent brand message and quality of service 68 32 How important will each of the following objectives be to your institution over the coming year? (% respondents) Top priority objective Medium priority objective Low priority objective Not an objective Don’t know Cut costs 36 50 12 2 Raise efficiency 64 31 4 1 Increase fee-based revenues 40 36 12 9 2 Increase interest margins 18 33 26 21 3 Increase customer satisfaction 54 32 13 1 Achieve or maintain regulatory compliance 47 37 12 3 1 Improve supplier relationships 26 26 29 18 2 In which region are you personally based? In which area of financial services do primarily work in? (% respondents) (% respondents) Asia-Pacific 41 North America Banking 55 23 Western Europe Insurance 18 15 Other 27 Middle East and Africa 9 Latin America 7 Eastern Europe 412 Economist Intelligence Unit 2009
  14. 14. Appendix 1 Beyond transactionsOverall survey results Creating value through customer partnerships in banking and insurance Which of the following best describes your title? What are your organisation’s global annual revenues (% respondents) in US dollars? (% respondents) Board member 1 CEO/President/Managing director $500m or less 44 22 CFO/Treasurer/Comptroller $500m to $1bn 7 6 $1bn to $5bn 11 CIO/Technology director 1 $5bn to $10bn 8 Other C-level executive $10bn or more 29 10 SVP/VP/Director 24 Head of Business Unit 8 Head of Department 5 Manager 18 Who are your organisation’s primary customers? Other (% respondents) 5 What are your main functional roles? Business-to-business 44 Please choose no more than three functions. Consumer/retail 24 (% respondents) Both 32 Finance 35 Risk 34 General management 33 Strategy and business development 29 Marketing 19 Which perspective—consumer/retail or Customer service business-to-business—are you sharing in this survey? 14 (% respondents) Operations and production 9 Sales 9 Information and research Consumer/retail 54 8 IT Business-to-business 46 6 Legal 5 R&D 4 Procurement 2 Human resources 2 Supply-chain management 1 Other 313 Economist Intelligence Unit 2009
  15. 15. Appendix 2 Beyond transactionsAmericas survey results Creating value through customer partnerships in banking and insurance Appendix: Americas survey results In your view, which of the following best represents the core strength of your overall business? Select only one. (% respondents) Customer service: Providing superior service to clients 43 Operational excellence: Creating highly efficient processes 20 Product innovation: First to market with groundbreaking new products or services 20 Other 17 Each of the organisation’s customer-facing departments influences the customer via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to 5. (% respondents) 1. No coordination; 2. Ad hoc coordination; 3. Some procedures 4. Procedures 5. Broad, systematic and Don’t know units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Generating, tracking and measuring leads 3 13 37 40 7 0 Developing and launching new products 23 33 23 20 0 Planning and executing campaigns 10 30 40 17 3 Analysing and segmenting customers 7 30 27 23 13 0 Gauging customer satisfaction 10 13 23 43 7 3 Measuring effectiveness of processes 13 23 37 20 7 0 Responding to customer demands or complaints 3 3 33 47 13 0 Incorporating customer feedback into products/services 7 13 30 30 20 0 Other 33 6714 Economist Intelligence Unit 2009
  16. 16. Appendix 2 Beyond transactionsAmericas survey results Creating value through customer partnerships in banking and insurance Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In chosing to do business with my organisation, price is the single most important factor most customers consider 30 67 3 Compared to our competitors, my organisation’s customers are more loyal 40 43 17 My organisation has an accurate way to estimate the lifetime value of customers 23 67 10 My organisation prioritises sales and marketing resources based on each customer’s lifetime value 32 46 21 We are currently developing a social media strategy 30 47 23 My organisation has more flexibility than its competitors in pricing its products 41 45 14 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 48 34 17 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 62 28 10 Customers view my organisation’s products and services more as commodities now than five years ago 50 43 7 Our margins are higher than the margins of most of our competitors 30 40 30 In your view, which of your organisation’s activities are most Which of the following would provide the biggest benefits in in need of improvement? Select up to four. integrating your organisation’s marketing, sales and service (% respondents) activities? Select up to three. (% respondents) Targeting the right customers in order to close a high percentage of prospects 43 Developing and sharing a detailed picture of customers, Measuring/optimising effectiveness of marketing and promotional campaigns behaviour and preferences 37 40 Providing a consistent customer experience Prioritising resources directed towards customers 37 by total value over life of customer Segmenting and profiling customers 40 27 Presenting customers with a consistent picture of the organisation Cross-selling or upselling customers 37 27 Integrating customer tracking from lead through post-sales service Building long-term relationships 37 23 Helping each function find and act on ways to support the others Efficiently acquiring customers (eg, reducing the cost of sales) 33 23 Making each unit aware of how the others have Measuring customer satisfaction and loyalty interacted with a given customer 17 23 Generating qualified leads Measuring the probability that leads will turn into sales, and using these scores to guide sales 20 17 Involving customers product/service development (eg, co-creation) Establishing common definitions, assumptions and data 17 13 Maximising the number of repeat sales Our company sees no need to integrate our marketing, 13 sales and service activities Gathering customer intelligence in the course of providing service 0 13 Other Ensuring that customer complaints are resolved quickly 0 10 Don’t know/Not applicable Creating effective collateral 0 0 Other, please specify 0 Don’t know 015 Economist Intelligence Unit 2009
  17. 17. Appendix 2 Beyond transactionsAmericas survey results Creating value through customer partnerships in banking and insurance Which of the following trends have had the greatest impact on Which customer characteristics does your organisation most your business over the past 12 months? Select up to three. use to segment your customer base and prioritise marketing (% respondents) activities? Select up to three. (% respondents) Global economic downturn 80 Average balance Finding access to credit/capital 40 47 Number and type of products used Significant demand shifts for our products/services 40 30 Household net worth (even if held with other institutions) Changing customer requirements 37 27 Length of relationship Focusing on sustainability efforts 30 17 Age Emergence of new markets for our products and services 17 13 Primary channel used to deal with bank (online, teller, call center) Emergence of new competitors 17 10 Gender Disruptive technology developments 3 3 Ethnicity Accessing key components or resources through our supply chain 3 3 Other Other 20 13 Don’t know Don’t know 7 0 If you expect changes in financial regulations, what do you expect the impact will be? In which of the following ways does your organisation (% respondents) empower retailers and distributors? Select all that apply. (% respondents) Re-alignment of internal product development and marketing units to address financial regulations Improving usability, search and navigation of customer-facing websites 38 57 More customer education to inform them about the Improving online or self-service product support tools portfolio choices and associated risks 43 31 Making prices and sales terms more transparent for easy comparability No impact yet on front-office customer management processes 37 14 Investing in self-service tools across multiple channels We do not expect changes in financial regulations (eg, web, mobile devices, e-mail, point of sale) 3 30 Other Building or supporting online customer communities 14 23 Other 10 Don’t know 716 Economist Intelligence Unit 2009
  18. 18. Appendix 2 Beyond transactionsAmericas survey results Creating value through customer partnerships in banking and insurance Please indicate whether you agree or disagree with these statements about the channels used by your customers. (% respondents) Agree Disagree The role of the branch channel and personal advisors facilitating in-person customer meetings has increased due to the financial crisis 60 40 The channel(s) used by customers depend(s) largely on the age of the customer 70 30 Our customers are increasingly using automated channels (rather than in-person channels) not just for transactions, but to resolve problems as well 73 27 Social networking sites ( eg, Twitter, Facebook) are influencing choices made by customers of financial services institutions 37 63 Regardless of the channel used to contact us, our customers receive a consistent brand message and quality of service 63 37 How important will each of the following objectives be to your institution over the coming year? (% respondents) Top priority objective Medium priority objective Low priority objective Not an objective Don’t know Cut costs 37 47 13 3 Raise efficiency 57 37 3 3 Increase fee-based revenues 59 10 17 14 Increase interest margins 13 33 30 23 Increase customer satisfaction 50 33 13 3 Achieve or maintain regulatory compliance 53 37 7 3 Improve supplier relationships 17 27 40 17 In which region are you personally based? In which area of financial services do primarily work in? (% respondents) (% respondents) North America 77 Latin America 23 Banking 40 Asia-Pacific Insurance 27 0 Other 33 Eastern Europe 0 Western Europe 0 Middle East and Africa 017 Economist Intelligence Unit 2009
  19. 19. Appendix 2 Beyond transactionsAmericas survey results Creating value through customer partnerships in banking and insurance Which of the following best describes your title? What are your organisation’s global annual revenues (% respondents) in US dollars? (% respondents) Board member 0 CEO/President/Managing director $500m or less 54 28 CFO/Treasurer/Comptroller $500m to $1bn 4 3 $1bn to $5bn 0 CIO/Technology director 0 $5bn to $10bn 11 Other C-level executive $10bn or more 32 7 SVP/VP/Director 28 Head of Business Unit 7 Head of Department 3 Manager 17 Other Who are your organisation’s primary customers? 7 (% respondents) What are your main functional roles? Business-to-business 40 Please choose no more than three functions. (% respondents) Consumer/retail 33 Both 27 Risk 40 Finance 37 Strategy and business development 37 General management 33 Marketing 20 Customer service 17 Which perspective—consumer/retail or business-to-business—are you sharing in this survey? Sales (% respondents) 13 Operations and production 10 Information and research 7 Business-to-business 63 Legal 7 Consumer/retail 38 IT 3 R&D 3 Procurement 3 Human resources 3 Supply-chain management 0 Other 018 Economist Intelligence Unit 2009
  20. 20. Appendix 3 Beyond transactionsAsia-Pacific Creating value through customersurvey results partnerships in banking and insurance Appendix: Asia-Pacific survey results In your view, which of the following best represents the core strength of your overall business? Select only one. (% respondents) Customer service: Providing superior service to clients 50 Operational excellence: Creating highly efficient processes 28 Product innovation: First to market with groundbreaking new products or services 15 Other 8 Each of the organisation’s customer-facing departments influences the customer via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to 5. (% respondents) 1. No coordination; 2. Ad hoc coordination; 3. Some procedures 4. Procedures 5. Broad, systematic and Don’t know units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Generating, tracking and measuring leads 8 25 20 35 10 3 Developing and launching new products 10 18 20 40 13 0 Planning and executing campaigns 5 20 28 40 8 0 Analysing and segmenting customers 10 13 26 44 8 0 Gauging customer satisfaction 5 23 33 33 8 0 Measuring effectiveness of processes 8 30 33 23 8 0 Responding to customer demands or complaints 10 15 23 40 13 0 Incorporating customer feedback into products/services 13 28 28 25 8 0 Other 14 14 14 290 2919 Economist Intelligence Unit 2009
  21. 21. Appendix 3 Beyond transactionsAsia-Pacific Creating value through customersurvey results partnerships in banking and insurance Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In chosing to do business with my organisation, price is the single most important factor most customers consider 33 68 0 Compared to our competitors, my organisation’s customers are more loyal 40 40 20 My organisation has an accurate way to estimate the lifetime value of customers 28 63 10 My organisation prioritises sales and marketing resources based on each customer’s lifetime value 33 55 13 We are currently developing a social media strategy 40 50 10 My organisation has more flexibility than its competitors in pricing its products 45 40 15 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 65 33 3 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 55 38 8 Customers view my organisation’s products and services more as commodities now than five years ago 58 30 13 Our margins are higher than the margins of most of our competitors 36 54 10 In your view, which of your organisation’s activities are most Which of the following would provide the biggest benefits in in need of improvement? Select up to four. integrating your organisation’s marketing, sales and service (% respondents) activities? Select up to three. (% respondents) Providing a consistent customer experience 43 Making each unit aware of how the others have Cross-selling or upselling customers interacted with a given customer 40 43 Segmenting and profiling customers Presenting customers with a consistent picture of the organisation 38 40 Gathering customer intelligence in the course of providing service Helping each function find and act on ways to support the others 30 38 Targeting the right customers in order to close a high percentage of prospects Prioritising resources directed towards customers 28 by total value over life of customer Generating qualified leads 38 25 Integrating customer tracking from lead through post-sales service Measuring/optimising effectiveness of marketing and promotional campaigns 30 25 Developing and sharing a detailed picture of customers, Efficiently acquiring customers (eg, reducing the cost of sales) behaviour and preferences 30 25 Maximising the number of repeat sales Establishing common definitions, assumptions and data 28 23 Building long-term relationships Measuring the probability that leads will turn into sales, and using these scores to guide sales 20 15 Measuring customer satisfaction and loyalty Our company sees no need to integrate our marketing, 20 sales and service activities Ensuring that customer complaints are resolved quickly 3 18 Other Involving customers product/service development (eg, co-creation) 0 10 Don’t know/Not applicable Creating effective collateral 0 8 Other 0 Don’t know 020 Economist Intelligence Unit 2009
  22. 22. Appendix 3 Beyond transactionsAsia-Pacific Creating value through customersurvey results partnerships in banking and insurance Which of the following trends have had the greatest impact on Which customer characteristics does your organisation most your business over the past 12 months? Select up to three. use to segment your customer base and prioritise marketing (% respondents) activities? Select up to three. (% respondents) Global economic downturn 80 Number and type of products used Changing customer requirements 43 43 Length of relationship Finding access to credit/capital 40 25 Household net worth (even if held with other institutions) Emergence of new competitors 38 25 Age Significant demand shifts for our products/services 25 25 Average balance Focusing on sustainability efforts 25 20 Primary channel used to deal with bank (online, teller, call center) Emergence of new markets for our products and services 25 15 Gender Disruptive technology developments 18 8 Ethnicity Accessing key components or resources through our supply chain 5 5 Other Other 5 5 Don’t know Don’t know 8 0 If you expect changes in financial regulations, what do you expect the impact will be? In which of the following ways does your organisation (% respondents) empower retailers and distributors? Select all that apply. (% respondents) More customer education to inform them about the portfolio choices and associated risks Improving online or self-service product support tools 48 53 Re-alignment of internal product development and marketing Making prices and sales terms more transparent for easy comparability units to address financial regulations 45 33 Investing in self-service tools across multiple channels No impact yet on front-office customer management processes (eg, web, mobile devices, e-mail, point of sale) 15 40 We do not expect changes in financial regulations Improving usability, search and navigation of customer-facing websites 5 38 Other Building or supporting online customer communities 0 20 Other 0 Don’t know 1821 Economist Intelligence Unit 2009

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