Youbiquity Finance, Consumers, money and the branch


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This white paper Youbiquity Finance report is the second of three based on a survey of 2,000 consumers. It focuses on mobile, social media and video, and highlights changes in consumer behaviour. Includes tables and infographics and ends with Youbiquity recommendations for providers. BT did research with 2000 customers across four countries in 2011. This white paper explores the results, and coins the term “Youbiquity”, which gives identity to Financial services being ubiquitous and the importance of our services being personal to our customers.

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Youbiquity Finance, Consumers, money and the branch

  1. 1. YOUBIQUITY FINANCE 1Consumers, money and the branchMeeting the demands of consumers in the futureMarch 2012
  2. 2. Contents Summary1 Page 5 Introduction and methodology2 Page 6 Consumers and money3 Page 7 Service Context4 Page 8 Branch futures5 Page 9 Youbiquity Finance6 Page 11 3
  3. 3. 1 Consumers, money and the branchSummaryYoubiquity Finance is a new trend in retail financial services is a response to the emphasis consumers now place on timethat is playing out in markets around the world, including and speed, their willingness to adopt technology (includingGermany, Spain, the UK and USA. Many industry experts have smartphones), and their increasing engagement with financialpredicted changes in retail financial services, but our survey of services due to the consequences of the economic downturn.2,000 consumers puts many of these ideas to the people thatmatter. It has shown that consumers increasingly value access This Youbiquity Finance report is the first in a series of information, accounts and providers when they are on the It focuses on the branch and face to face communication, andmove, at work, in their homes, or wherever they may be. This highlights the following changes in consumer behaviour. ■■ Consumers are engaged in their financial futures ■■ Consumers say they have to wait too long for service, and are strongly attached to the bank branch and and more than 40% reported that purchasing a new home face-to-face communication, despite the growth of insurance product requires a high or very high effort. digital channels. ■■ Improving the branch experience would be welcomed by ■■ 57% of consumers agreed, ‘I like to constantly review consumers who compare it to other retail environments. my financial products to check I am getting the best Opportunities to research financial services online in a deal’ (Germany 66%, Spain 58%, UK 52%, USA 56%). branch are favoured by 50% consumers in Spain, 27% UK, 25% Germany and 23% USA. Free Wi-Fi access ■■ Consumers are becoming more cautious and watchful, would be popular with 41% of consumers. with 65% saying they keep careful track of their finances on paper, spreadsheets and online. ■■ When comparing banks to retailers, 34% want more knowledgeable staff and 36% want a friendly welcome ■■ After the ATM, the branch is the second most widely when you walk into a branch. used channel for our sample of online consumers. ■■ Youbiquity Finance captures the trend of consumers Going forward, the branch retains its popularity, with wanting their financial services providers to be available 64% choosing it as their channel of choice for the future. through an increasingly wide range of channels and ■■ 64% of German consumers say they have a strong locations. The average number of channels used relationship with their bank, compared with 40% to purchase a new product is 2.9, with nearly 1 in 2 of Spanish consumers, 34% UK and 55% USA. In consumers agreeing they continually change how they general, levels of active loyalty are slipping. contact financial providers. 5
  4. 4. 2 Introduction and methodologyIntroduction and methodologyPoliticians, management gurus, financial service leaders and Youbiquity Finance sets out to understand the zeitgeist intechnology leaders have discussed the future of retail financial retail financial service. This latest research covers how theservices extensively since the global economic crisis began in Autonomous Customer relates to banking and insurance across2007. This series of three papers – Youbiquity Finance – aims the vital international markets of Germany, Spain, the UK andto understand the consumer perspective on channels, finance USA. It details what consumers want from financial providers inand the future. Part 1 looks at ‘Consumers, money and the terms of service delivery, now and in the future.branch’, Part 2, ‘Consumers, contact centres and finance’,and Part 3, ‘Consumers, mobile and social media’. Davies Hickman Partners undertook a four-stage research process: BT Global Banking Financial Markets and Avaya n omprehensive C review of published sources on commissioned Davies Hickman Partners in 2012 to multi-channel CRM in financial services. complete a follow-on project from the Autonomous Customer research published in early 2011. The n ix S interviews with senior executives from leading previous research identified current and future financial providers. consumer attitudes and behaviours towards n nline O survey of 2,000 consumers: 400 in Germany, organisations across the UK and USA, including: 400 in Spain, 700 in the UK and 500 in the USA. ■■ 8% of consumers plan purchases online 7 The consumers matched a nationally representative sample in terms of age, income and employment. ■■ 59% prefer online because no one tries to sell them anything n nalysis A of the data inputs to create a presentation and white paper with key findings for retail finance. ■■ 51% trust customer forums more than organisations’ websites ■■ 60% agree they continually change how they BT Global Banking Financial Markets and Avaya are using contact organisations the results of Youbiquity Finance to improve the services and products they offer to the financial services sector. The outputs ■■ 46% say loyalty is a thing of the past. are designed to support collaboration with clients, improve decision-making and contribute to more efficient investments. research analysis Marketing Service Innovation The research, data and views in this paper have been prepared in good faith but neither Avaya, BT Global Services or the authors of the reports can be held responsible for any actions or otherwise taken by those reading the paper. 6
  5. 5. 3 Consumers and moneyConsumers and money: cautious and ‘The financial crisis drove a real spike in ourwatchful, providers must be on alert volumes and the reassurance we had to giveThe economic downturn has contributed to 57% of consumers customers.’across the four countries agreeing with the statement, ‘I like to Contact Centre Director, Bankconstantly review my financial products to check I am gettingthe best deal’. More cautious and watchful, 65% say they keepcareful track of their finances on paper, spreadsheets and More consumers are looking to financial providers for help,online. Despite leading busy lives, only 5% say they don’t have but they are attitudinally less loyal to them. Innovations inenough time to manage their finances, although this is higher Personal Financial Management Services will help, but a trustfor younger age groups. barrier needs to be overcome among some consumers. The international consumers surveyed are wary of financial services providers, although German and US customers experience higher levels of trust and better relationships than those in 50% agreed Spain and the UK. they are less loyal to banks than in the past   Germany Spain UK US I trust financial services companies to treat me honestly and fairly I like to constantly review my financial products Agree strongly 18% 20% 6% 17% to check I am getting the best deal Agree slightly 39% 28% 25% 33% Agree total 57% 48% 31% 50% I have a strong relationship with my bank Agree strongly 19% 9% 6% 24% 66% 58% 52% 56% Agree slightly 45% 31% 28% 31% Agree total 64% 40% 34% 55% If I needed financial help, I know my bank would support me Germany Spain agreeing % UK US Agree strongly 16% 7% 6% 18% Agree slightly 43% 23% 22% 29% Agree total 59% 30% 28% 47% 7
  6. 6. 4 Service contextService context: cut back customer effort towin and retain today’s consumers 48% agreedDespite the internet making it easier to research pricing of I know about good customer service becauseproducts, nearly 50% agreed with the statement, ‘I am more I provide customer service in my own joblikely to switch my bank due to bad customer service than toget a slightly better deal’. Consumers are looking for good valuerather than just good rates, fees or premiums.‘Service culture’ has been strong in the USA for many years, but Not only are customers waiting too long to be served, but overit is showing in Europe too. Consumers feel that retail finance 40% say that when purchasing home insurance, it involves tooprocesses often involve too much effort, including waiting too high or very high effort. The key issues relate to:long to apply for an account, making a complaint or speaking toa specialist. Some of this is due to regulatory requirements, but ■■ the process taking too much time (26%)consumers would value greater speed of service ■■ the forms being too long (25%) ■■ having to visit the branch or phone the call centre more than once (17%). Always or often have to wait too long… Levels of word-of-mouth recommendation in financial services are very low. The Net Promoter Score is negative, although better in Germany (-11) and the USA (-15) than in the UK (-31) and Spain (-29). While individual brands may score better, customer experience gains are a priority for many providers who are appointing chief customer officers and customer experience boards. 40% 56% 59% 32% Overall, the research shows that consumers tend not to perceive great differences between the offers of retail financial services providers, and loyalty is passive rather than active. What can be done to build stronger relationships and identify opportunities to Germany Spain agreeing % UK US help consumers and build revenue for providers? 8
  7. 7. 5 Branch futuresBranch futures: second most popularchannel, used for reassurance and inspirationDespite the growth of internet and mobile finance, customersremain committed to the branch. The decline in the number ‘… our branches are steadily becoming spaces for advice and we’re making themof transactions presents an opportunity for providers to use more like the best shops next door’the staff time and retail space to do other tasks designed to Customer Experience Director, Bankreassure and inspire customers about their financial choices. In the future, across Germany, Current channel usage in finance (last 12 months) Spain, the UK and USA,  Total Germany Spain UK US consumers chose the branch as their second mostATM/cash machine 83% 85% 88% 89% 71% important channel for futureFace to face in branch 72% 57% 77% 77% 73% contact (64%). SupportingInternet site/internet banking 51% 38% 52% 60% 47% technology is also popular,Phone call to your branch 36% 42% 50% 22% 39% with 35% preferring to use aPhone call to a call centre 30% 17% 26% 42% 26% self-service machine to depositSelf-service machine to deposit my cash or cheque 29% 22% 33% 37% 22% cash or cheques and 69%E-mail 27% 38% 37% 16% 26% preferring to use an ATM.FAQs on the internet site 12% 8% 9% 17% 11% The branch, with the phone,Secure message via your provider’s website 11% 13% 7% 13% 10% remains critical for dealing withPhone call to an automated or IVR phone service 10% 4% 8% 11% 13% complex queries. The branchWrite a letter/send forms 9% 13% 7% 11% 5% is a place to resolve problemsSmartphone Apps 8% 5% 10% 7% 10% and is often used for purchasingSend Text/SMS message 7% 7% 9% 6% 6% – particularly in the USA, SpainPhone call to a call centre in another country 6% 2% 5% 10% 4% and Germany. 62% agreed withFacebook 5% 5% 10% 3% 5% the statement, ‘I tend to use the internet for simple transactionsSmartphone web browser 4% 1% 8% 3% 6% with my bank, while going toWeb chat conversation online 2% 1% 4% 1% 4% the branch or phoning for theTwitter 2% 1% 3% 1% 3% complicated issues’. GoingGoogle Plus or other social networking site 1% 1% 2% 1% 1% forward, consumers (47%) wantVideo conferencing 1% 1% 1% 0% 1% to use the phone, either the callOnline forum for customers of the financial company 1% 2% 2% 1% 1% centre or branch depending onOnline forum run by customers on the internet 1% 1% 3% 1% 1% the preference and availability. 9
  8. 8. 5 Branch futuresThis aligns with the thinking of industry experts and banks whichare building ‘branches of the future’. These often include more 62% agreedopen friendly and modern layouts plus technology such as flat- ‘A good experience with a call centre agent orscreens, tablet computers, video conferencing, self-service branch staff impacts positively on my loyaltykiosks and better lighting. According to consumers, branches towards a bank.’could learn a few things from the retailers next door. 33%suggested a more comfortable environment, and 22% votedfor an improved design. The biggest vote was for a friendly by a continual process of communication from head office,welcome when you walk in (36%). using online resources and video conferencing.34% want more knowledgeable staff, linking to the need to Interestingly, some 32% said they would be open to ‘a systemimprove training and skills. If customers are moving away from which tells staff you are about to enter the bank so they canbasic transactions in the branch to fewer, but more complicated tailor services to you’. Consumers favoured other in-branchinteractions which are connected to sales, then more needs to technology that create a better feel and design, including freebe done to up-skill existing people. This is likely to be improved access to Wi-Fi. Customers want more in-branch technology  Germany Spain UK USAFree access to wifi 34% 61% 38% 35%Computer or PC terminals so that you can do research 25% 50% 27% 23%Ability to book appointments with advisors online (as per Apple store) 24% 25% 35% 16%Self-service machines 22% 23% 37% 24%TV screens e.g showing news, music videos, sport 18% 25% 19% 17% 10
  9. 9. 6 Youbiquity FinanceYoubiquity Finance – the future of sales Cross-channel communication means theand service contact centre is core to relationshipsOur survey has shown that consumers increasingly value Channel fragmentation is ongoing, and convergence of devicesaccess to information, accounts and providers when they are is some way off despite the efforts of Apple and Android withon the move, at work, in their homes, or wherever they may be. smartphones or tablets. Consumers prefer to switch channelsYoubiquity Finance is characterised by the following changes in depending on:consumer behavior: ■■ Channel characteristics – what the device or media are■■ time pressure, meaning speed and simplicity suited to■■ technology adoption, including smartphones, equipping ■■ Channel preference – what is available to the customer consumers to be ‘always on’ for information and services that they prefer using■■ financial engagement, which involves consumers taking ■■ Occasion – the purpose of the contact or mood of the more interest in their money. customerProviders of Youbiquity Finance now have the opportunity to ■■ Context – the situation of the customer (travelling, at work)build better relationships with consumers and therefore stronger ■■ Supplier – what the provider offers in channel capabilityand longer revenue streams. (eg out of hours service or availability of a mobile app) The upshot is that channel switching is widespread in financial services, with 37% of consumers agreeing they continually change how they contact their financial providers. With customers using 2.9 channels on average to purchase a simple home insurance product, they have high expectations of providers bringing together disparate channels and personal data. 11
  10. 10. 6 Youbiquity FinanceCustomer journey for purchasing home insuranceRead review by journalist/ expertRead online review by another customerUsed price comparison websiteUsed financial service providers websiteContacted a 3rd party brokerPhoned the providerHad a face to face meetingFilled out a paper formApplied by postApplied onlineHad a web-chat conversation 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 12
  11. 11. 6 Youbiquity FinanceThe central challenge of Youbiquity Finance is to make finance differently at national level. The contact centre, whether localservices available everywhere, and integrate them in a way or central, will become the core of these new and traditionalthat provides seamless service to customers. The different channels. Its role as the ‘eyes and ears’ of the organisation willpreferences of German, Spanish, UK and US consumers show remain crucial in understanding customers’ experiences andthat this task can have a global direction but must be executed launching proactive contact to drive up recommendation scores. The Future Contact Centre Automated calls / IDV Inbound calls Social media Complex calls Video – ‘Branch’ calls direct branch Contact Traditional Centre core call centre - Youbiquity Mobile Finance E-mails banking Web self-service Web-chats Outbound calls support Smart outbound 13
  12. 12. 6 Youbiquity FinanceYoubiquity Finance RecommendationsThe research has captured consumers changing attitudes andbehaviors towards channels and communication with financialservice providers across Germany, Spain, the UK and US.Recommendations across the three reports include: ■■ Consumers are managing their money more closely and ■■ obile banking and payments are emerging fast M expect providers to offer a wide range of new channels and although on-going usage may not match trial by (voice self-service, mobile, social and proactive or consumers, ensuring that financial providers ‘own’ the ‘smart’ outbound communications), even if traditional mobile channel will be vital to maintaining customer channels like the branch, phone and internet remain the relationships. core means of communication. ■■ Social media has been taken up slowly by consumers ■■ Providers need to integrate these channels into existing in financial services as they are reticent about sharing offers to reduce customer effort and meet consumers information about their money indiscriminately. However, demands for security, time saving and convenience. This social media is capturing consumers’ attention, and for means the contact centre may become the ‘core’ of the this reason, it should capture providers’ attention too. relationship providing better access to channels, advice ■■ Segmenting products and service delivery offers and resolution of issues. It will be essential to prioritise opportunities to improve the cost base of the provider the ability of agents to answer complex questions and while making more relevant offers to consumers. This build relationships. will demonstrate to consumers that providers care and ■■ Cross and up-selling through digital channels is less will help build trust and relationships. effective than face to face and the phone, so providers ■■ Finally, improving business processes is vital to reduce need to retain these methods to drive sales while the effort and time required of consumers (and staff improving the data analysis and proactively prompting serving them) to manage their finances. consumers during digital communication. ■■ Turning the branch into an advice centre is a clear strategy as transactions decline. However, as retailers know, attracting footfall is critical and providers need to innovate in branch to drive sales. 14
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  14. 14. Offices WorldwideThe services described in this publication are subject to availabilityand may be modified from time to time. Services and equipmentare provided subject to British Telecommunications plc’s respectivestandard conditions of contract. Nothing in this publication forms anypart of any contract.© British Telecommunications plc 2010Registered office: 81 Newgate Street, London. EC1A 7AJ Registeredin England No. 1800000.PHME: 58647