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Building a customer- focused digital transformation strategy
- 1. 1 1 Building a customer- focused digital transformation strategy Michelle Beetar Vice President FICO
- 2. 2 Competing for customers: traditional banks vs. fintechs CUSTOMER DATA TECHNOLOGY SOPHISTICATION High Low Traditional Banks Fintechs Low High
- 3. 3 The good news: customers want a diverse number of financial products
- 4. 4 The bad news: banks are typically organized around siloed business lines BOARD OF DIRECTORS SHAREHOLDERS AUDIT COMMITTEE STRATEGY COMMITTEE TRANSACTIONS COMMITTEE RISK MANAGEMENT NOMINATING COMMITTEE RENUMERATION & APPRAISAL BOARD OF INSPECTORS AUDIT COMMITTEE GOVERNENCE COMMITTEE ASSET MANAGEMENT TECHNOLOGY & INNOVATION CHECKING & MONITORING BRANCH 1 BRANCH 2 BRANCH 3 BRANCH 4 BRANCH 5 BRANCH 6 PRESIDENT, CHAIRMAN, & CEO HUMAN RESOURCES INTERNATIONAL BUSINESS CAPITAL OPERATIONS CORPORATE BANKING INFORMATION TECHNOLOGY RESEARCH & DEVELOPMENT FUND CUSTODY FINANCIAL STABILITY MONITOR PERSONAL BANKING MOBILE BANKING ACCOUNTING PROJECT DEVELOPMENT LEGAL AFFAIRS FINANCIAL PLANNING RISK MANAGEMENT Credit Cards Banking Accounts Other Products Home Equity Student Loans Auto Loans Mortgage
- 5. 5 Silos allow competitors to pick off banks’ business lines one by one BOARD OF DIRECTORS SHAREHOLDERS AUDIT COMMITTEE STRATEGY COMMITTEE TRANSACTIONS COMMITTEE RISK MANAGEMENT NOMINATING COMMITTEE RENUMERATION & APPRAISAL BOARD OF INSPECTORS AUDIT COMMITTEE GOVERNENCE COMMITTEE ASSET MANAGEMENT TECHNOLOGY & INNOVATION CHECKING & MONITORING BRANCH 1 BRANCH 2 BRANCH 3 BRANCH 4 BRANCH 5 BRANCH 6 PRESIDENT, CHAIRMAN, & CEO HUMAN RESOURCES INTERNATIONAL BUSINESS CAPITAL OPERATIONS CORPORATE BANKING INFORMATION TECHNOLOGY RESEARCH & DEVELOPMENT FUND CUSTODY FINANCIAL STABILITY MONITOR PERSONAL BANKING MOBILE BANKING ACCOUNTING PROJECT DEVELOPMENT LEGAL AFFAIRS FINANCIAL PLANNING RISK MANAGEMENT Credit Cards Banking Accounts Other Products Home Equity Student Loans Auto Loans Mortgage
- 6. 6 Leading performers are taking a platform approach for customer centricity BOARD OF DIRECTORS SHAREHOLDERS AUDIT COMMITTEE STRATEGY COMMITTEE TRANSACTIONS COMMITTEE RISK MANAGEMENT NOMINATING COMMITTEE RENUMERATION & APPRAISAL BOARD OF INSPECTORS AUDIT COMMITTEE GOVERNENCE COMMITTEE ASSET MANAGEMENT TECHNOLOGY & INNOVATION CHECKING & MONITORING BRANCH 1 BRANCH 2 BRANCH 3 BRANCH 4 BRANCH 5 BRANCH 6 PRESIDENT, CHAIRMAN, & CEO HUMAN RESOURCES INTERNATIONAL BUSINESS CAPITAL OPERATIONS CORPORATE BANKING INFORMATION TECHNOLOGY RESEARCH & DEVELOPMENT FUND CUSTODY FINANCIAL STABILITY MONITOR PERSONAL BANKING MOBILE BANKING ACCOUNTING PROJECT DEVELOPMENT LEGAL AFFAIRS FINANCIAL PLANNING RISK MANAGEMENT Credit Cards Banking Accounts Other Products Home Equity Auto Loans Mortgage Student Loans Customer 360°
- 7. 7 Customer 360° Customer 360° This approach makes you more competitive, efficient and profitable • 360⁰ view of every customer • Strategic, data-driven pattern of offers • Consistent, personalized service How does customer centricity improve customer retention? • Higher customer retention • Lowers cost per sale • Increasing customer retention rates How does increased retention improve efficiency ratio? Sources: Harvard Business Review, Bain & Company; Strategic Insight Inc.
- 8. 8 Breaking through the silos Customer Centricity Optimising customer interactions and delivering a “Personalized Experience” Broaden and Deepen Customer Relationships Protect Customers from Fraud Drive Engagement and Loyalty Partner with Customers in Difficulty Simplify and Streamline Onboarding Business Imperatives Enabling Technologies 360º Customer Profiling Business Led Innovation Effective Internal Collaboration ML-assisted Learning Advanced Simulation Unified Cloud Workloads KPIs Engaged Customers Customer Satisfaction (NPS) Reportable Complaints Customer Retention Revenue @ Lower Cost Decision Platform
- 9. © 2021 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. 9 A platform approach uses centralized technology to break down silos
- 10. 10 Platforms ensure synergy PEOPLE PROCESS TECHNOLOGY Credit Cards Personal Loans Student Loans Mortgage Auto Loans Investment Planning HELOCs Insurance 360⁰
- 12. 12 5 keys to customer-focused digital transformation Unify siloed data • Cloud vs siloes • Fuse all known data Empower business users Leverage decision assets Simulate and optimize Personalize customer UX • Reuse decision assets • Keep decisions explainable • Give business users tools • IT collaborate with business teams • Automate and personalize • Raise customer satisfaction • Test, improve, and validate • Use mathematical optimization
- 13. 13 80% Reduction in internal costs 25% Reduction in expected costs 60 Decision areas 100% Instant digital decisioning 5x Improvement in decision time 20:1 Y1 decision management ROI Multinational Bank EMEA Bank NORAM Bank Asia-Pacific Bank Global Processor Credit Card Company
- 14. 14 Leading Performer 1: Created new opportunities borne out of customer moments BEFORE: Traditional waterfall, product-centric approach AFTER: Order of magnitude reduction in attrition and 35% market share growth • Customer centricity means: • The comprehensive tracking of all interactions • The identification and targeting of high-potential customer moments • Simulated and orchestrated decisions, strategies and offers
- 15. 15 Leading Performer 2: 100-year-old bank grew its digital business by 10x BEFORE: Siloed decision-making was too slow AFTER: 100% digital banking experience • Platform approach sets a digital pace. • “Speedy loan, walk-in program” and new digital business • Analyzing unbanked and underbanked • Six months to live
- 16. 16 Nine ways to measure success 1 2 3 4 5 6 7 8 9
- 17. 17 17 Thank you! Michelle Beetar Vice President, FICO +27 (83) 3263023 (Mobile) michellebeetar@fico.com fico.com/DigitalTransformation fico.com/EnterpriseIntelligence