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Driving Change in Banking - Engagement in the world of empowered individuals
The document discusses the evolution of banking client engagement, emphasizing the need for personalized, immediate, and secure digital banking experiences. It highlights trends such as the impact of social media on customer behavior and the necessity for banks to improve real-time transaction capabilities while overcoming siloed experiences and inefficiencies. IBM's solutions for banking aim to enhance customer engagement and transaction security, making it a leading contender in the industry.
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Driving Change in Banking - Engagement in the world of empowered individuals
- 1. Driving Change in Banking- Engagement in the world of empowered individuals March 2015
- 2. What’s changing inthe world of Banking client engagement Customers demand a digital banking experience - immediate, relevant and personal There is an intensified focus on securely moving corporate information in and out of the bank Payments must be processed same-day and even real-time
- 3. 72% of CEOsare making major changes to understand their customers’ individual needs 35% of the general population is influenced by social media, vs. 52% of Gen Y (Millennials) The Smartphone is the omni-present channel for sharing and 91% keep the phone close and access it up to 150 X a day
- 4. Corporate Payment initiatives aregrowing globally; banks can improve service by reducing customer payments on- boarding times by up to 70% For banking, secure transfer of data is critical. Yet, only 52% of bankers say that their data exchange with corporate clients is secure and compliant
- 5. Gain a deepunderstanding of your customers to deliver personalized content in context to make moments matter Collaborate and engage with customers and improve their experience Deliver secure, intelligent and real-time transactions and payments A winning strategy
- 6. In their journeyto address these imperatives, Banking leaders have confronted challenges that face many companies Siloed customer experiences across the customer lifecycle Complexity and inefficiencies in managing the explosion of offerings Lack of a true omni- channel capability to have a continuous conversation with the customer Transactional, but not truly collaborative, integration with value chain partners and customers
- 7. IBM Commerce forbanking brings it all together Payments Onboard new customers faster and transact in real-time Integration and Connectivity Connect with your customers and your networks securely Marketing Understand your customers’ needs, desires and context while overcoming silos Online and mobile banking Create a great customer experience across all digital channels
- 8. IBM Commerce forBanking delivers personalized content in context to drive customer engagement
- 9. Collaborate and engagewith partners and suppliers with speed and flexibility
- 10. 350,000+ Global trading entities connected 5.5million Transactions exchanged through B2B cloud daily Nearly 15X ROI For every dollar spent on IBM Commerce #1 Banking tech vendor as ranked by the FinTech 100 $100 billion Commerce transactions analyzed in Holiday Benchmark Reports 100 million Messages per day powered by IBM Payments; including 30% of all SWIFT messages IBM Commerce for banking delivers value at speed
- 11. Join us May11-13th in San Diego IBM Amplify2015 – For marketing and sales professionals IBM Empower2015 – For procurement professionals Join the conversation Blog, YouTube, Twitter and Facebook
Editor's Notes
- #2 IBM Commerce – Engagement in the world of empowered individuals. Introduction Although Commerce is not a word that rolls off the tip of the tongue for bankers, as something they engage in. Rather they think of themselves as enabling commerce by providing the products and services needed to make the commerce machine go; such as loans, trade services or payments. However, banks have marketing, sales and service business process so as to enable commerce, and in that sense they need the marketing, sales and service capabilities offered by our Commerce Business Unit to help enable their bank marketing sales and services processes. Discussion of first slide Instant gratification -- that's the norm today. Whether delighting a customer in real-time, reaching new markets, collaborating with partners and suppliers across continents in the blink of an eye, all enterprises must exceed expectations to achieve a competitive edge. And it is not just about speed, it is about the experience. Every interaction is a moment of truth, and moments matter. By infusing intelligence and context into all commerce processes, you can become essential to your customers. Leaders in marketing and sales, and service deliver relevant experiences at the right time and place. Doing so requires an integrated approach, fueled by the power of cloud, mobile, social, big data and analytics to create value and profitable revenue. All this has given rise to the empowered customer – who wants what they want when and how they want it … which puts pressure on the organizations they are engaging with. That pressure ripples from the front office of an organization to the back office – and the value chain around the customer must respond in concert to meet the needs of the individual – empowered customer – or they will go elsewhere. IBM Commerce is dedicated to serving the empowered individual at the greatest point of impact – as they engage with an organization. This presentation will give you an overview of how IBM Commerce for banking, the industry trends requiring the capabilities of IBM Commerce.
- #3 External Forces: Changing Economic Environment Ever changing Regulations Changing customer needs Rapidly changing technology Challenge to Brand loyalty Social Imperatives Creating these challenges: Need to: Increase Revenues Innovate and grow the business Rationalize and streamline Operations Managing Investment Priorities Contain cost of regulatory compliance Manage Risk holistically Driving these key imperatives for Banking in Commerce: Improve Customer Insight to understand what they need and want Improve the digital banking experience; make it immediate, relevant and personal Deliver an Omni-channel customer experience to engage your customers across all interactions Integrate Business to business transactions to securely move corporate information in and out of the bank Manage Payments enabling same-day and real-time for real-world business The factors influencing the world of commerce: Customers are more empowered than ever before Customers expect immediate, relevant and personal engagement The new era of Commerce for banking begins and ends with the customer. There is no area of business that has been more disrupted by the convergence of data, cloud, mobile and social than the Commerce (marketing, selling and servicing of customers) business processes. Customers expect relevance and personalization and will abandon those who do not provide it. We have already shared the stat that in the US 32% of mellennnial customers would switch banks, if they can’t do mobile banking. And, this stat is even high in other parts of the world. (Gemalto Study: The Financial Brand, March 9, 2015) These expectations put increased pressure on banks and their entire value chain to deliver the right product and service, at the right price, time and place and leave no room for errors. New, agile competitors emerge every day, and are succeeding by innovating the customer experience across every industry we serve, be it Financial Services, Telecommunications, Retail, Manufacturing or others. What each of these companies has in common, is the vision and grit to innovate, building new business models around one thing: the customer. In response, people are opening their hearts and their wallets. Industry leaders are delivering exceptional experiences and creating enduring relationships with people. They instill confidence in their customers with secure, transparent and authentic interactions. And, they seamlessly integrate their value chains with speed and flexibility so they can see and respond to opportunities before they happen. Simply put, they are delivering value at speed and scale while treating customers as individuals.
- #4 Let’s look at data from recent Studies by IBM: As customers are railing against being dehumanized as a segment or archetype, 72% of CEOs are making major changes to understand their customers’ individual needs – Source: 2012 CEO Study IBV Almost 1/3rd of US Millennials say that would switch banks if they could NOT use mobile banking. (Source: Gemalto study as reported in the Financial Brand, March 2015) Source: 2013 Internet Trends; Mary Meeker/Liang Wu; Kleiner, Perkins, Caufield, Byers; 5/29/13 Some other insights: Look at some of these stats – mobile is becoming dominant platform – and social sites are increasingly getting more of their attention. 92 percent of customers trust word of mouth and recommendations 49% used their smart phones for mobile banking. (BST:http://www.banktech.com/channels/convenience-no-1-factor-in-customer-loya/240154006?cid=nl_bt_daily&elq=711d3825026c4c039103e4a9f864fa28 ; A Harris Interactive survey); and The survey also found a connection between mobile check deposit usage and household income. Among smartphone owners, those with a household income above $75,000 were more than twice as likely to use mobile check deposit as those with less than $35,000 (44% vs. 21%). Some consumers only go to stores for the ‘showrooming’ of the products and services and then buy online later. And, over 56% want more capabilities for self service. As a recent IBM Benchmark showed us – the trends are clear: Increased use of mobile. In November and December 2012, the percent of sales from mobile devices was up 50.66 % from 2011, and traffic from mobile devices was up 59.77%. And, social media is changing the way that customers interact with us and the global commerce landscape. Of the total time spent on the internet, 25 percent of time is spent on social sites No matter what industry you are in - whether you are a B2B or B2C business -- you have a choice – to embrace and capitalize on these changes now and thrive, or to wait and be left behind. For B2B enterprises – the same customer is doing these things in their retail, banking and media and telecom interactions and expects to have the experience at work with so this applies to all businesses. Sources: IBM Benchmark Report 2013 (to be issued at NRF by IBM Press Relations) Sales from Mobile Devices was up 50.66% in 2012 versus 2011 (2012 – 15.69 % of sales from Mobile Devices versus 10.41 % in 2011) Traffic from Mobile Devices was up 59.77 % in 2012 versus 2011 (2012 – 21.85 % of traffic from Mobile Devices versus 13.68 % in 2011) 55% of smartphone owners said they’ve used a mobile device to compare prices between retailers. 34% said they’ve scanned a QR code, and 27% have read online reviews from their devices before making purchase decisions. Emphathica—’Wave 1 2012 Key Trends’ (2012) http://www.empathica.com/consumer-insights/wave-1-2012-key-trends/ Global brands need to think about their consumers in an entirely different way. IBM data shows that mobile shoppers are even more laser focused than their PC-using counterparts: 44% of mobile users will abandon a site if they don’t find what they want on the very first page, versus an overall online rate of just over 37%. Source: What’s in a Store Anyway – The Rise of the Mobile Shopper http://asmarterplanet.com/blog/2011/11/what%E2%80%99s-a-store-anyway-the-rise-of-the-mobile-shopper.html 55% of smartphone owners said they’ve used a mobile device to compare prices between retailers. 34% said they’ve scanned a QR code, and 27% have read online reviews from their devices before making purchase decisions. Emphathica—’Wave 1 2012 Key Trends’ (2012) http://www.empathica.com/consumer-insights/wave-1-2012-key-trends/ 84% of US adults who have conducted an online transaction through a mobile device in the last year report experiencing a problem. Tealeaf—’Tealeaf Mobile Transaction Research Report 2011’ (2011): 63% of online adults are less likely to buy from the same company via other purchase channels if they experienced a problem with a transaction on their mobile phones. Tealeaf—’Tealeaf Mobile Transaction Research Report 2011’ (2011) 92% of consumers say they trust earned media, such as word-of-mouth and recommendations from friends and family, above all other forms of advertising Nielsen (Jan 2012) http://www.nielsen.com/us/en/insights/press-room/2012/nielsen-global-consumers-trust-in-earned-advertising-grows.html Social media has grown rapidly – today nearly 4 in 5 active Internet users visit social networks and blogs (80%) Social networks and blogs continue to dominate Americans’ time online, now accounting for nearly a quarter of total time spent on the Internet Nielsen—The Social Media Report, Q3 2011’ http://www.nielsen.com/content/corporate/us/en/insights/reports-downloads/2011/social-media-report-q3.html
- #5 This is from a stat with Scotia Bank using FTM, see Case Study: The IBM Smarter Commerce™ solution: To enhance its business banking solutions, Scotiabank implemented an integrated payment service using IBM Financial Transaction Manager as the foundation. Scotiabank enhanced its payment process by allowing multiple payment types in one transmission and offering greater transparency of payment status to corporate customers. The solution increased online report volumes by 350 percent with no performance lag, and it reduced new customer setup time by 75 percent, enabling faster time to market. In addition, the solution provides ongoing scalability to handle projected growth. “We are able to onboard clients within days because our business unit employees are serving our customers directly.” —Kelly Scott, vice president, global business services, Scotiabank The 52% of bankers stat is from a Vanson-Bourne study:Source: Vanson Bourne, Line of Business Priorities Survey, January 2014
- #6 We have learned by working with thousands of engagements – including 2000 leading brand name companies this starts when you put the customer at the center of your business and embrace a winning strategy for Commerce: 1. Deliver personalized content in context to drive customer engagement. Understand customers as individuals - Use data to intelligently market to individuals in context, promote relevant products and services based on behaviors, attitudes and propensities. Personalize content across channels - Do this at scale with personalization across millions of customers and all channels simultaneously to create meaningful dialogs. Create confidence with customers - Leverage insight and context about each customer and earn the right to sell, cross-sell or upsell across channels to grow revenue. Drive innovations around engagement – Leverage social sentiment to respond to market trends and engage customers in ways that are relevant. 2. Collaborate and engage with partners and suppliers with speed and flexibility. Synchronize the value chain - Manage constant change, ensure compliance, and manage risk and performance to pivot with confidence and speed. See and respond to opportunities before they happen - Sense shifts in customer demand in real-time through intelligence and optimize spend while mitigating supply risk across the ecosystem. Drive innovations around engagement - Create and deliver collaborative, always on, secure “gateways to trade” with a 360 degree view to proactively monitor and govern operations. Accelerate time to value - Extend core systems and processes through hybrid cloud approaches with speed and flexibility. 3. Deliver secure, intelligent and authentic interactions. Build security into all commerce processes – Gain trust through secure interactions as you engage with customers, partners and suppliers. Embed analytics in all commerce processes – Capitalize on analytics in real-time by embedding them in key processes for marketing, selling and fulfillment, supply chain execution and procurement. Connect the silos of the business – Deliver integrated and transparent experiences across the value chain and beyond, tailored to meet customer needs. Adopt new capabilities quickly to differentiate – Drive intelligence into key commerce processes with secure cloud solutions to jump start success with limited initial investment.
- #7 Main Message: Banking leaders from – sales, marketing, service, operations – engage in discussions about what the customer experience is like – not how many checking accounts or mortgages they will likely book, but how easy and helpful is it for them to interact with you. In large part this is a function of complexity, diversity of customer engagement models, etc. It’s also driven in many cases by a very transactional mindset – “Let’s close the business this quarter, don’t worry about the customer’s larger strategic goals”. As they do this, they are breaking down organizational silos, removing sources of unnecessary complexity and inefficiency and getting away from what in many cases is a purely transactional approach to the customer. Supporting Points: Silos – Marketing, Sales, Service, Supply Chain, Procurement orgs all play a role in determining what the end customer’s experience is with your company, but they often are not aligned Complexity – Some complexity cannot be helped, as some products are inherently complex, and large global companies are complex. The two questions here are a) how well do you hide this complexity from your customers? How easy are you to do business with? And b) have you simplified your own internal processes as much as possible so that they are not a hindrance to you closing business with your customers? Inflexible deployment – Many companies have developed systems and supporting infrastructure on a business unit by business unit, brand by brand or geo by geo basis. This creates unnecessary redundancy and inflexibility, and hinders a company’s ability to respond to new business opportunities.
- #8 IBM Commerce – brings it all together For Marketing leaders who are striving to deliver personalized messages and offers at every touch point to build engaging and enduring relationships with customers And, for Sales leaders who must present seamless omni-channel engagement as they sell and fulfill products and services to consumers and business customers. And, customer experience leaders to deliver a coordinated and seamless customer experiences. And, is impossible if you do not have an integrated, transparent and secure back office. B2B Integration where seamless integration is characterized by security, transparency and efficiency. Managed File Transfer, for moving data in/out and thru the bank securely and reliably. And on Payments, 1.) Payments is a large part of bank revenues and though its growing, banks are struggling to hold on to the revenue stream 2.) Banks are looking at addressing the payment quagmire through deployment of payment hubs in various approaches 3.) The Financial Transaction Manager suite of services can be applied to a number of selling opportunities to solve payment business problems Note: procurement where leaders are measured by optimizing spend and supplier relationships to meet the demand in purchasing goods and services for the bank, this is not a banking business function but a support function and opportunistic for us. Here are more details of what we do for these leaders. For Marketing and Sales, fulfillment and eCommerce leaders who would benefit from having the ability to deliver personalized content in context to customers and prospects across all channels so they can: engage personally with their customers and prospects drive better email marketing across all channels leveraging customer data to it’s full potential see what the customers experience is with their brand online on mobile devices optimize product price and promotion mix For procurement, compliance, IT and Supply Chain leaders that would benefit from growing business value by helping them engage in new and innovative ways with partners and suppliers with speed and flexibility who want to: transform procurement source and manage spend more effectively manage devices and spend in telecom synchronize your value chain with 100% of your trading partners more self service options for trading partners gain control and oversight of file transfers between people and devices Process a wide variety of payments securely
- #9 Banorte is delivering personalized content in context to drive customer engagement – in the branch, in the call center and in marketing campaigns – in print, over the web and email as well as SMS. Banorte is taking a customer centric banking approach and extracting insights into how its customers’ lives are changing—whether it’s time for a new car, college tuition or a different kind of checking account—and using those insights to craft highly targeted cross-selling offers that hit the mark. And, by using “next best action” decision optimization algorithms to guide local branch and call-center representatives in their interactions with customers, Banorte improved efficiencies 40% across the bank with a 20%+ return on equity expected due to their new customer centric banking model all powered by IBM Commerce Marketing and Customer Analytics. The bank is delivering precise personalized customer interaction on a very large scale. It’s using models to extract insights into how its customers’ lives are changing—whether it’s time for a new car, college tuition or a different kind of checking account—and using those insights to craft highly targeted cross-selling offers that hit the mark. The company is using “next best action” decision optimization algorithms to guide local branch and call-center representatives in their direct dealings with customers. The bank is using deeper, more personalized insights into customer needs to shape every facet of customer interaction across virtually all channels. Quantifiable benefits Banorte expects to generate a bottom-line benefit of USD200 million in the first 24 months of the project, with roughly 60 percent of that amount representing cost reduction and 40 percent signifying additional revenue. The bank anticipates increasing its operating efficiency by 40 percent and significantly boosting both customer retention and revenue per customer. This leading banking institution in Mexico offers products and brokerage services, wealth advisory services, leasing and factoring, warehousing, insurance, pensions and retirement savings. The company boasts one of the best asset quality indicators of the Mexican financial system and offers high levels of capitalization and liquidity. The organization grew rapidly, largely through acquisitions of other banks. Within the broader range of integration challenges it faced, the company recognized the need to tighten its engagement with customers to increase retention and revenue per customer by enabling a 360-degree view of its customers. Achieving this would require the institution to essentially reorganize its enterprise-wide customer data to enable one view of the customer. Additionally, the organization needed the analytical tools to translate each customer’s unique service and behavioral profile into a personalized experience and the back-end decision optimization capability to help guide the bank’s employees in their live contacts with customers. http://www-03.ibm.com/software/businesscasestudies/us/en/corp?synkey=Y662606Q00847A99 As part of a wider USD1 billion transformation project, the company engaged IBM® Global Business Services® to implement a broad-based framework for personalized customer engagement built on IBM software and optimized with the assistance of IBM Research. After integrating customer data from across the institution into a common data model, the team deployed a range of multichannel marketing and campaign management products that draw on the underlying customer data. The solution also uses decision optimization models to factor in every aspect of the customer’s relationship to the organization and, based on underlying business rules, recommend the next best action to take for the most relevant marketing channel.
- #10 Russell Investments collaborates with speed and flexibility across the value chain - With seamless and secure exchange of files and data to improve business with their trading partners and customers – and enable visibility for all parties involved is exactly what Russell did. Russell Investment Group needed a secure and reliable file transfer management system to simplify its data transfer process and improve service to its business partner community Russell Investments - Founded in 1936, $279.7 billion in assets under management*, Creator of the Russell Global Indexes, including the Russell 2000® Index Over 350 investment products Sterling B2B Integrator is the only single B2B platform to manage both electronic files and transactions in any quantity, format or protocol, applying business rules to process data feeds for security-rich data delivery, centralized control and end-to-end monitoring and management. Russell implemented Sterling B2B Integrator which served as the firm’s B2B platform for multiple management fund transfers, easily handling the growing number of key business partners and the increasing number of daily transmissions. "It’s about more than just file transfer management – it’s about business process integration and optimization. Sterling B2B Integrator helps us extend our business processes to our partners easily and efficiently, giving us a centralized system that makes all our data transfers less complex.“ http://www-03.ibm.com/software/businesscasestudies/us/en/corp?synkey=L869557N54716B18
- #11 IBM Commerce delivers value at speed and scale 100 Million Messages per day: Per IBM Payments Product Management for NACHA #1 Banking Vendor in FinTech 100…2014 Ranking report for the FinTech 100 top vendors to banking IT. We analyze over $100B of commerce transactions each year and have for 7th year running … Source: IBM Benchmark Report - that means that of all the retailers/clients we have on the digital analytics side, they collectively drive $100B in revenue through their digital efforts Nearly 15X ROI for every dollar spent - $1 = $14.79 in return based on Nucleus Research study of IBM Commerce clients For these leaders, IBM Commerce means: increased customer base; improved efficiency; stronger ROI; and improved customer loyalty. Comparable aggregate return numbers from Nucleus published this fall using the same approach include: HCM - $9.13 ERP - $7.23 ECM - $7.50 Analytics - $13.01 CRM - $8.71 B2B Network 5.5 M transactions going across our B2B Cloud based network daily - 3.5M docs/day on the VAN and 2M doc/day on GIODE. There are now 350,000 configured IDs, and we also now have 120 connections to other service providers worldwide. On average – Companies report a savings of 11% when leveraging IBM Emptoris Procurement solutions – source IBM/Emptoris reports Organizations powered by IBM Commerce solutions – not on slide but for reference Partner and Supplier Engagement Customer Stats SFG – 378, B2Bi 1509, C:D 3514, ~350 customers for Emptoris TBD # (2500) Aspera customers + Financial) B2B Network (19K) = Over 27K (which speaks to enterprises of all sizes) Customer Engagement Solutions the number 8000 was used at Launch of ExperienceOne and approved by Legal Over 8000 organizations ww depend on IBM Commerce Customer Engagement Solutions –Marketing, Selling and Fulfillment and Customer Analytics solutions – to build enduring relationships with customers. Over 27,000 organizations ww depend on IBM Commerce Partner Engagement Solutions – Procurement, B2B Integration and Payments to accelerate business value through collaborative, always on engagement with partners and suppliers.