The future of banking - NextBank Sydney 2013


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The future of finance is digital. If you are a financial services company. The problem isn’t predicting whats going to happen or what you NEED to do .... its figuring out what you CAN do and HOW you are going to achieve it.

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The future of banking - NextBank Sydney 2013

  1. 1. The Future of Banking Keeping pace with Digital evolution in Financial Services Next Bank Sydney 2013
  2. 2. The Future of Banking We are in an exciting phase of change The Renaissance: ! 15th Century Da Vinci Michelangelo The Medicis The Industrial Revolution: ! 19th Century The steam engine The Digital Age: ! 1990 to ? Google Facebook Cloud computing Quantum computers
  3. 3. Recent history is littered with “game changing” technology The Future of Banking 1973 personal computer 1876 1927 phone 1987 1982 tv camcorder 1963 1895 radio mobile phone 2007 iphone 1984 vcr laptop 1979 walkman 2010 ipad 1983 cd
  4. 4. Today, financial services acknowledges the importance of digital The Future of Banking
  5. 5. Technology is changing the world we live in The Future of Banking 22.32 million people 16.2 million Australians online 72.5% : Internet penetration E-commerce market size : $37.1 billion Nielsen online landscape review january 2013.pdf
  6. 6. The Future of Banking Device ownership is changing 69% 60% 64% 67% 54% 53% 50% 46% 35% 35% 18% 2011 2011 2012 2013 2011 Desktop Source : Nielsen online landscape review january 2013.pdf 2012 Laptop 2013 4% 2012 Tablet 2013 2011 2012 2013 Smartphone
  7. 7. Mobile continues to evolve • There are 6.8 BILLION people on the planet 4 BILLION of them use a mobile phone. • 91% OF ADULTS have their mobile phone within arm’s reach 24/7 • There are 5 X as many mobile phones in the world as there are PCs • Australia has been identified in the top 6 nations that have not only adopted smartphones, but actively use them for consumer purchases The Future of Banking
  8. 8. Marketing in the digital world is more complex retail TV radio PR outdoor DM The creative idea strategy digital insight mobile The Future of Banking
  10. 10. The Future of Banking There are many digital channels to consider viral search display email social digital strategy mobile ads buy now request info downloads contact us product info
  11. 11. The Future of Banking And they continue to grow games community viral search word of mouth tagging email display RSS podcasts digital strategy mobile ads social blogs forums request info buy now online trial widgets downloads videos UGC product info click to call contact us
  12. 12. The Future of Banking Implications for financial services The problem isn’t predicting whats going to happen or what you NEED to do .... its figuring out what you CAN do
  13. 13. The Future of Banking Short fuse, big bang IMPACT SHORT FUSE, BIG BANG LONG FUSE, BIG BANG ICT & media Finance Transport Professional Services Arts and Recreation Health Recruitment Agriculture Real estate Government Utilities TIME Accommodation & food service Constructing Wholesale Manufacturing Mining SHORT FUSE, SMALL BANG LONG FUSE, SMALL BANG Source: Deloitte consulting
  14. 14. People Research products Online The Future of Banking Source: Google Think - Complete Credit cards Study 2012 ©Fusion Digital Pty Ltd + IdeaGarden Pty Ltd 2013 14
  15. 15. Social media drives customer choice The Future of Banking •83% of consumers say it would be important to read user-generated content before making a decision about banking or other financial services. •26% of consumers would never choose a bank without reading at least one piece of user-generated content •Financial Services saw the highest portion of reviews that mention "customer service" at 17%. •77% of long-term customers say they would recommend their financial firms to others •32% of total product reviews come from financial customers. Source: Kelton Research/Bazaarvoice, September, 2011
  16. 16. Increasingly, people are buying online The Future of Banking Product Purchasing by Channels 2010 v 2015 Current Accounts 84% Savings Accounts 77% Investments 78% Mortgage 80% 0 Branches Call Centres 0.375 59% 58% 4% 28% 72% 11% 10% 32% 12% 0.75 43% 38% 16% 73% Consumer Finance Production 53% 9% 1.125 1.5 0 47% 0.375 0.75 1.125 1.5 Agents / Brokers Direct Channels Source: EFMA Online Survey Across 150+ Euro Banks
  17. 17. People are interacting across many digital touch points The Future of Banking SMS email GPS devices 3G content kiosk Digital TV search Display Gaming devices Podcasting Desktop applications Websites PDA’s Digital signage
  18. 18. The Future of Banking Traditional channels have digital amplification opportunities QR code bluetooth download search enter vote send to a friend hear photograph & share send to a friend word of mouth print buy augmented reality QR code buy augmented reality QR code voice notify tweet In store/demos promotions website coupons notify competitions radio tv apps augmented photos ideas bookmark download outdoor pos social share like download coupon loyalty post
  19. 19. People have high expectations digitally •People expect 24/7 access to their money •They expect to be able to manage it through all their devices The Future of Banking
  20. 20. Their habits are predictable The Future of Banking
  21. 21. A seamless omni-channel experience is the norm The Future of Banking People expect financial services will provide Channel choice, consistency, and continuity Source: Forrester - Next-Generation Digital Financial Services 
  22. 22. The Future of Banking Right device, right service 46% consumers that start banking activity on one device continue later on another 98% will move between devices within the same day
  23. 23. Authentication is evolving The Future of Banking
  24. 24. Real time banking is inevitable The Future of Banking
  25. 25. Non-traditional competitors are the real threat The Future of Banking
  26. 26. Big Data represents big opportunities Source: US Bureau Analytics McKinsey Global Institute analysis The Future of Banking
  27. 27. The Future of Banking New Banking Relationship “We are moving away from a banking relationship defined by the goal of being a customer's primary financial institution to one where we focus on becoming their primary financial application. It's no longer about wallet share. It's about app-driven mindshare” Bradley Leimer, The Era of Engagement Banking (2013)
  28. 28. Standing out is getting harder The Future of Banking
  29. 29. Technology no longer a differentiator The Future of Banking It’s not the technology we have to adapt to It’s the way we think about “digital”
  30. 30. Value is a differentiator The Future of Banking USER NEEDS How many of How well do you our products do you own? ©Fusion Digital Pty Ltd + IdeaGarden Pty Ltd 2013 VALUE ZONE BUSINESS NEEDS know me and treat me? 30
  31. 31. Self defined fees The Future of Banking
  32. 32. Value means Simple & Useful Simple bank The Future of Banking
  33. 33. Value that really delivers The Future of Banking
  34. 34. Value the recognises our human-ness The Future of Banking
  35. 35. Value that manages our expectations The Future of Banking
  36. 36. Value that enables our passion The Future of Banking
  37. 37. Value that delivers quickly The Future of Banking
  38. 38. Value that recognises my relationships Tandem The Future of Banking
  39. 39. Value equals efficient business models Jibun Bank Mobile Only 1.5 Members 150 employees The Future of Banking
  40. 40. The Future of Banking We are now face-to-face with an engaged customer who expects a completely frictionless, personalised always on experience...... delivered on the device of their choice.
  41. 41. The Future of Banking Size The real challenges Organisational structure Core technology Incentives Culture & Communications Ownership What your customers will tolerate
  42. 42. Size matters The Future of Banking Being big can be a liability “fuck you”
  43. 43. Operational and political silos The Future of Banking CEO BOARD 12 month Marketing strategy CMO 5 year technology roadmap CXO CFO CSO CIO
  44. 44. “ The Future of Banking This is all too much, we just need to keep this simple That’s all very well but we are not there yet We have a 5 year plan that addresses that “ Avoidance strategies
  45. 45. The executive continuum The Future of Banking THE EXECUTIVE CONTINUUM LAND GRAB This is my chance to be the next CEO! DENY & BLOCK With luck, this won’t happen in my time
  46. 46. Misaligned incentives The Future of Banking
  47. 47. Layers of resistance to overcome The Future of Banking CEO “We are not a digital business we have been doing XYZ for a long time very successfully” EXECUTIVES “My KPI’s relate to profit, I do not want to put that at risk” MIDDLE MANAGEMENT “I am way too busy doing what I need to I have no time to try new things that are untested” COAL FACE “This is the way we do things around here and it has always worked well”
  48. 48. Lack of measurable attribution The Future of Banking
  49. 49. Unrealistic time frames The Future of Banking
  50. 50. Attempting to boil the ocean The Future of Banking
  51. 51. How much change will your customers accept The Future of Banking
  52. 52. The Future of Banking The Approach of the Future
  53. 53. The typical path(s) to business evolution The Future of Banking Leverage VALUE IN DELIVERY THE HOW Integrate VALUE IN PROPOSITION Create Enhance Extend THE WHAT Refine Source: IBM Institute for Business Value analysis
  54. 54. The ideal path to transformation The Future of Banking Integrate Envisage a transformed customer value proposition and operating model and build a new set of capabilities around that Leverage VALUE IN DELIVERY THE HOW END STATE E U I H K N ET R E H AL T O AL V T T VALUE IN PPROPOSITION VALUE IN PROPOSITION Create Enhance Extend THE WHAT Refine Source: IBM Institute for Business Value analysis
  55. 55. Link digital to all other strategies The Future of Banking Corporate Strategy Distribution Strategy ATM Technology Strategy PHONE CALL CENTRE ONLINE BRANCH Digital Strategy Sales Strategy Brand Roadmap Product Plan Payments Strategy People Strategy MOBILE Strategic Themes Vendor Relationships !  Digital Branch !  Architecture, Data, " !  Simplicity !  Seamlessness !  Financial Coaching !  Family Focus !  Multi-cultural " software etc !  Mobile People +" Culture !  Risk Treasury Leverage Data Product !  Marketing Technology Roadmap Retail + Advice !  Opportunity
  56. 56. Ensure digital benefits internal & external audiences e-Commerce enablement" transactional + administrative Online product acquisition The Future of Banking Drive awareness/media spend/" social sharing opportunities Digital Strategy Build and enhance" community program Enable employee education and training Demonstrate" Innovation Connect employees with members digitally
  57. 57. Define ownership and responsibility Shareholder visibility Digital Governance Board Specific digital KPI’s Inspiration, Training and mentorship The Future of Banking CEO EXECUTIVES MIDDLE MANAGEMENT COAL FACE
  58. 58. Think outside the box The Future of Banking
  59. 59. The Future of Banking BAU = Developing a business model that can embrace disruptive change
  60. 60. Engage all levels & silos of the organisation The Future of Banking board of directors (investors and advisors) audit committee DIGITALS ROLE IN THE BUSINESS CEO CFO PROFITABILITY, REVENUE STREAMS AND COST REDUCTION CIO divisions divisions president Sales Mfg R&D Res ea rch 3D p r dep inting CRM loym ent auto system syst s, sa ems mat ion, les CRM " Divis io CIO n divisions CFO Marketing Int. Cos t redu ction Finance Prod u grou ct dev " ps a nd r esea s rch Warehouse HR IT Purchasing Hum Intra War nets Res an eho ourc , All onlin ianc man use es e age train data es, men trac ing t an king ROI proc d calc syst urem ulati ems and ent ons cost redu ction s
  62. 62. Embrace a culture of change The Future of Banking Be the change you want to see in your organisation Take Business actions to shift the culture Align culture with business strategy Align culture with business strategy
  63. 63. Reward change The Future of Banking
  64. 64. Give up on perfectionism The Future of Banking
  65. 65. Look beyond short term gain The Future of Banking
  66. 66. Be realistic about what you CAN’T know The Future of Banking
  67. 67. The Future of Banking “ It’s not the disruption that decides what happens to how you It’s your company respond to it.
  68. 68. The Future of Banking THANK YOU … or find me on linked in