RBS at The Chief Analytics Officer Forum, Europe

In Retail Banking
© Copyright 2016 Liam Ó Móráin
DATA DIVIDEND DEFICIT
Contact info:
+353 87 905 8386
wjmoran@gmail.com
Liam Ó Móráin
March 2016

TOPICS FOR TODAY
THE DENTIST
LOYALTY & PASSION
THE PAIN & GAIN
THE DATA DIVIDE
OVERCOMING THE DATA DIVIDEND DEFICIT

To the Bank or the Dentist?
71% millennials would prefer to go to the
dentist rather than listen to what banks
are saying*.
*Millennial Disruption Index 2013.

LOYALTY & PASSION
Source & Copyright © Interbarnd 2016

LOYALTY & PASSION
Emotional connections make great brands.
The relationship is often irrational!
Things that serve a purpose Things that people love

LOYALTY & PASSION
1.5M Apps, 100B Downloads, $30B Paid To Developers To Date
Source & Copyright © Techcruch 2015
1.5M Apps, 150B Downloads
Various web sources incl App Annie, WSJ
Both realized if they created everything themselves it would greatly constrain
the number and range of apps.
They became platforms where 3rd parties create products and services ‘apps’.
They maintain the standards for publishing the apps and pay the developers.
They are the distribution channel in this co-created ecosystem.
They get the power of data and its COMPETITVE ADVANTAGE
This ecosystem/platform and data-dividend is reflected in the market value
…. Co-Created Environments

THE PAIN and GAIN!
Capital Markets…
Information technology gives a competitive advantage
Data is critical to the business and is a competitive advantage
Algorithms and speed at its core
Retail banks (in general and especially in Britain)
Information technology is a cost not an enabler
Data is a by-product and afterthought!

THE PAIN and GAIN!
Retail banks … some getting it!
Especially in Australasia
Retail banks … some getting it in Britain
Especially at the edges
Local Insights
20 million members in
Britain (1m 7 years ago)
15 million customers in
BritainConstituency reports

THE PAIN and GAIN!
Retail banks … most not getting it
or using its core customer historical data as
a competitive advantage
but HSBC’s NUDGE using behavioural
science to influence behaviour
RBS using AI for customer support
silos of experimentation e.g. SPLUNK

THE PAIN and GAIN!
Retail banks … but, but, but
Non-traditional competitors using data to reach customers,
drive their businesses and decision making,
managing cost of acquisition and cost of serve
Data at the core and part of the DNA

THE DATA DIVIDE!
Retail banks … are numerate from a financial reporting perspective
but basically are innumerate from a business perspective
… held together by Excel not by data!
… are transactional and data intensive… but not data driven
… live in an analogue world not a digital world!

BROAD customer
data – text based
Bank Credit
Card
Day in the life of a customer What a Bank sees …
Customer: Joe Bloggs
• Withdrawal Liverpool Station. ATM
• Transaction successful
• Account: -£50
On the way to work, Joe calls his
friend in Berlin.
At work, he Googles to research
impact of BREXIT crisis on
the stock market.
Joe wakes up in the
morning. He checks the
news on his iPad.
At lunch, Joe goes to the ATM
to withdraw money.
He pays for a wedding anniversary gift
for his wife with his credit card.
Joe calls his Bank’s Relationship Manager, Shirley, to
confirm the position of his stocks given BREXIT
refugee situation . However Shirley was not available
so he left her a voice mail.
Going home, Joe uses Twitter, Facebook and
LinkedIn account, and watches YouTube.
1
2
3 4
5
6
7
8
Joe gets home and he goes online on his iPad to
read books and surf the net.
Customer: Joe Bloggs
• Credit card transaction
successful
• Merchant: Cartier
• Credit account: -£2,500
• Bank’s RM Shirley
receives phone message
to call Joe Bloggs.
Customers experience BANKS as a set of interactions through various
mediums throughout their busy lives, not as a number of “channels”.
On the other hand, a BANK sees the customer as a series
of discrete transactions with little context.
BANKS sees
these as siloed
transactions
within different
areas of the
bank…
How well do BANKS know their customers and understand their world?
DEEP customer data
Transactional Data – number based
Back end
systems
Connecting the dots...crossing the data & digital divide… understanding cu
THE DATA DIVIDE!

ARMY OF 3rd PARTY DEVELOPERS
willing and able to marry the two
data sets and discover things of
interest to bank customers
Blending numerical and text data is a
bit like trying to mix oil and water!
THERE IS HOPE…PSD 2, Open APIs, Collaboration, and Co-creation
which will yield a DATA DIVIDENDfor Banks
DATA
CHALLENGE
DATA
QUANDRY
Google, Facebook, UBER etc can be APPROXIMATE
Banks however have to be ACCUTATE,
PRECISE, and TIMELY
DATA MERGE
THE DATA DIVIDE!

OVERCOMING THE DATA DEFICIT!
Move for an analogue to a digital world
think transformation in music with move from vinyl to digital
Automate, automate, automate. Collect, collect, collect (data)
Embrace all data types not just numbers
Harvest data for everywhere: the least bit might be very
insightful!
Open up the DATA VAULT! And partner with 3rd party app
developers.
Discover what the data is saying, figure out the questions it can
answer, and VISUALIZE (a picture is worth a 1000 words)

RBS at The Chief Analytics Officer Forum, Europe

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