Banking On Mobile - Getting Ready for 2016

Banking On Mobile - Getting Ready For 2016

Tom Farrell - VP Marketing Barry Nolan - VP Strategy

Build a direct relationship with customers

Know and personally interact with every customer in one simple platform.

2

3

371K Babies born each day

4

580K iPhones sold each day

1,500K Android devices activated each day

371K Babies born each day

5

1 @facebook 2 China 3 Tencent @WeChat 4 India 5 @WhatsApp 6 @LinkedIn 7 @instagram 8 @twitter 9 U.S. 10 @Snapchat

Mobile First

https://twitter.com/facebook

https://twitter.com/WhatsApp

https://twitter.com/LinkedIn

https://twitter.com/instagram

https://twitter.com/twitter

https://twitter.com/Snapchat

When do we stop calling it a phone?

soundandvision

7

Data

Voice

The phone is one of the least used apps

8

13.0%87.0%

On mobile, people spend 87% time in-app,

versus on the mobile web. ComScore

9

7s 38s

Average Interaction Times

10

Microsoft attention spans, Spring 2015 | @msadvertisingca #msftattnspans

We know human attention is dwindling

Source: Statistic brain

The average human attention span in

2000 The average human attention span in

2013The average attention span of a

goldfish

12 seconds

8 seconds

9 seconds

6

Why the fast and frictionless win

Microsoft attention spans, Spring 2015 | @msadvertisingca #msftattnspans

We know human attention is dwindling

Source: Statistic brain

The average human attention span in

2000 The average human attention span in

2013The average attention span of a

goldfish

12 seconds

8 seconds

9 seconds

6

The future in banking in two charts

modernlove


Mobile is universal 4 bn users

source: A16Z


source: A16Z

Mobile banking apps are rewiring customer interactions

Wherearewenow?

15

Internet MobileTelephoneBranch

-15% -13% 25% 940%

Source: BBA 2010-2015

# INTERACTIONS 2010-2015

16

2%

- of payments and transfers by HSBC are now done in a branch

- the proportion of all digital banking by Halifax

now done on a mobile phone

65%

Source: BBA

17

NatWest Bank’s busiest branch is the 7:15am train from St. Albans.

This is a mobile-moment

18

Customer behavior and loyalty in retail banking | Bain & Company, Inc.

Page 10

10

15

20

25

30

35

40

45

50

55%

10 15 20 25 30 35 40 45 50 55%

Mobile interactions as a percentage of total interactions, 2013 and 2015

South Korea NetherlandsMobile exceeds online

Online exceeds mobileUS

AustraliaChina

Singapore

HongKong

Mexico

India

UK

France

CanadaPoland

Germany

Spain

Online interactions as a percentage of total interactions

Japan

Sources: Bain/Research Now NPS surveys, 2013 and 2015; Bain/GMI NPS surveys, 2013

2013 2015

0

20

40

60

80

100%

Chi

na

Sout

h Ko

rea

Indi

a

Hon

g Ko

ng

Braz

il

Pola

nd

Fran

ce

Mex

ico

Spai

n

US

Sing

apor

e

Net

herla

nds

UK

Aus

tralia

Ger

man

y

Can

ada

Japa

n

Percentage of people who would miss their phone more than their wallet, 2015

AverageUnder age 25

Age 55 or more

Source: Bain/Research Now NPS surveys, 2015

Figure 4: Mobile is displacing online in banking

Figure 3: Most consumers in most countries would miss their phone more than their wallet


Page 10

10

15

20

25

30

35

40

45

50

55%

10 15 20 25 30 35 40 45 50 55%

Mobile interactions as a percentage of total interactions, 2013 and 2015

South Korea NetherlandsMobile exceeds online

Online exceeds mobileUS

AustraliaChina

Singapore

HongKong

Mexico

India

UK

France

CanadaPoland

Germany

Spain

Online interactions as a percentage of total interactions

Japan

Sources: Bain/Research Now NPS surveys, 2013 and 2015; Bain/GMI NPS surveys, 2013

2013 2015

0

20

40

60

80

100%

Chi

na

Sout

h Ko

rea

Indi

a

Hon

g Ko

ng

Braz

il

Pola

nd

Fran

ce

Mex

ico

Spai

n

US

Sing

apor

e

Net

herla

nds

UK

Aus

tralia

Ger

man

y

Can

ada

Japa

n

Percentage of people who would miss their phone more than their wallet, 2015

AverageUnder age 25

Age 55 or more


Figure 4: Mobile is displacing online in banking

Figure 3: Most consumers in most countries would miss their phone more than their wallet

Mobile is displacing online in banking

Source: Bain Research

19


Page 11

0

5

10

15

20 20

17

1514 14 14

12 12 1211

10 10 9 9 9

6

2

Average number of routine interactions per respondent in last quarter, 2015 N

ethe

rland

s

Sout

h Ko

rea

Fran

ce

Aus

tralia US

UK

Chi

na

Spai

n

Pola

nd

Indi

a

Sing

apor

e

Braz

il

Mex

ico

Hon

g Ko

ng

Can

ada

Ger

man

y

Japa

n

Smartphone app Tablet app Mobile browser


0

5

10

15

20

25

Netherlands

South Korea

Canada

Japan

2012 2013 2014 2015

Mobile interactions per respondent in last quarter, 2012–2015

Global weighted averageChinaUS

Note: Data not available for Netherlands and South Korea for 2014, thus chart interpolates between 2013 and 2015.Sources: Bain/Research Now NPS surveys, 2012–2015; Bain/GMI NPS surveys, 2012 and 2013; Euromonitor

Figure 6: Consumers use apps more than mobile browsers

Figure 5: Mobile usage continues its rapid rise in most countries

When banking, consumers instinctively reach for an appAverage number of routine interactions per respondent in last quarter, 2015


73%

64%

20

76% use banking apps every week.

62% more than once a week

Trends in Consumer Mobility ReportBank of America

32015

Constantly connected

A majority (89%) of respondents check their smartphone at least a few times a day; 36 percent say they check it constantly. Younger millennials (ages 18-24) are most likely to constantly check their mobile phones (54%).

Mobile banking mania

I am constantly checking and using my phone

About once every hour

A few times throughout the day

In the morning and evening

Hardly ever, only when I really need it

36%

21%

28%

4%

10%

54%

36%

6%

0%

2%

Consumers’ need for constant

connectivity also extends to mobile banking. Of those using a mobile banking

app, more than six in 10 (62%) access it

at least a few times a week or more; two in 10 (20%) check once a day or more.

Total respondents

Younger millennials

A few times a week42%

Once a week14%

A few times a month17%

Once a day13%

A few times a year5%

More than once a day7%

Always On

http://newsroom.bankofamerica.com/files/doc_library/additional/2015_BAC_Trends_in_Consumer_Mobility_Report.pdf

21

Where people use mobile banking apps?

Mobile-Moments

22

Every new mobile sensor and service, has created new interaction opportunities that are avidly used.

Camera OCR - Check Deposit

Video chat GPS Location-based services

Wallets Transactions & rewards

Push Notifications Customer messaging

Biometrics (Touch-ID) Customer authentication

Headphones Accept payments

Source: Fiserve

Millennials are the battleground

youngAmericans

24Source: Tech.pinions

25http://blog.medallia.com/customer-experience/how-a-great-customer-experience-is-really-delivered/

26

27

Millennials are nearly twice as likely to switch

financial service provider

18%

10%

3%

Millennials (18-34) 35-54 55+

+80%

Source: Accenture, June 2015

Switched their primary bank last year

+600%

28

Digital Services

33%18%

of Millennials switched their primary bank within the past 12 months.

stay with their bank because of good digital services.

WINNING MILLENNIAL CUSTOMERS

Source: Accenture, June 2015

Are the biggest factor for Millennials deciding to

stay or switch.

29

When consumers bank via apps they are happier & generate more revenue

GoldenYears

30

Source: Accenture, 2015

Transactional rather than relationship driven

31


Page 5

0

4

8

12%24 28 32%

Online routine Mobileapp routine

Sixinteractions

in last quarter

ATM

Onlinesales/service

Mobilesales/service

Branchsales/service

Phone

Chat/video

Increasing likelihood to delight

Reliable

Percentage of US respondents, 2015

Decr

easin

g lik

elih

ood

to a

nnoy

Annoying

Delightful

Variable

Notes: Responses on a scale from -5 to 5 for “to what extent did the interaction increase or decrease your likelihood to recommend your bank?”; likelihood to delight=percentage of respondents answering ≥4; likelihood to annoy=percentage of respondents answering ≤-1Source: Bain/Research Now US NPS survey, 2015

Branchroutine

Mobilebrowserroutine

Figure 1: Mobile is consistently more likely to delight than other channels

to their primary bank. Interactions with bank staff, a bank’s product value proposition (including rates and fees), and the emotional connection (or lack thereof) to the brand all play important roles in loyalty. However, the role of the branch and frontline staff is changing rapidly. Our consumer surveys and evidence from leading bank initiatives all show that routine interactions work better and cost less when done digitally, without requir-ing a customer to visit a branch or call a contact center. Many banks have started down this path. In Germany, for example, banks have cut routine interactions at the branch by half over the past two years by migrating those interactions online and to ATMs.

Employees still play essential roles in more complex sales, service and advice, but the way they interact with customers is changing as well. They’re increasingly communicating not in a branch but via chat or video. Dutch bank ABN Amro, for instance, has been advising on and processing mortgages via webcam so that customers don’t have to physically hand over documents at a branch. As banks plug their frontline staff into the mobile hub, they can raise sales and service productivity by reaching more customers and reducing paperwork.

The writing is on the wall: Customers increasingly view having to use branches and call centers as an incon-venience for many transactions. We estimate that 50% to 70% of call volumes at a typical bank are bad or avoid-able. So although omnichannel customers still give higher loyalty scores than digital-only or branch-only customers, the branch as currently confi gured will not survive. At all cost, banks should avoid policies (such as ceilings on remote deposits) that force customers to go to a branch and stand in line.

Mobile apps delight more than other channels


32

Revenue is higher with mobile banking users. • 46% increase in POS card transactions. • 45% increase in monthly transaction from

$550 to $801.

Why? The app puts them more in control of their finances

Source: Fiserv Mobile Banking Adoption: Where Is the Revenue for Financial Institutions

33

+46% POS

transactions

+25% ATM

transactions

+46% ACH

transactions

-32% branch

visits

-50% customer

churn

Mobile banking versus non mobile-banking customers

Source: Fiserv Mobile Banking Adoption: Where Is the Revenue for Financial Institutions

34

The average number of product holdings, including loans, certificates of deposit, credit cards and mortgages, immediately

increased after consumers’ adoption of mobile banking.

Among banks in the study, the average unique product holdings – the number of different products held by a customer – increased by 12% in the three months after adoption of mobile banking

Average total product holdings increased by 11% post-adoption

Increased Product Holdings

Mobile banking customers at the banks in the study – not just new adopters – have higher product holdings at 2.3 products vs. 1.3 for branch-only customers. The results are similar for credit unions. Why do mobile bankers typically use more financial institution products than those who don’t use mobile banking? Consumers

who use mobile are likely more engaged with their financial institutions. As the relationship between consumers and financial institutions deepens, it enables other types of engagement. If customers have savings accounts, auto loans and mobile banking with a bank, for instance, they’re more likely to think of that

financial institution when they need mortgages or other financial services products. As consumers use more products, they turn to mobile banking to help them manage increasingly complex financial lives. This may lead them to specifically seek out mobile banking capabilities as part of an overall financial relationship.

2.3 Product

Holdings

1.3 Product

Holdings

Mobile Banking Customers

Branch-Only Customers

Deepening the Relationship

y

y

Mobile bankers typically use more bank products.

Why? Mobile users are more engaged, and have a deeper relationship with the bank, enabling more product adoption.

Source: Fiserv Mobile Banking Adoption: Where Is the Revenue for Financial Institutions?

35


82015

Mobile check deposit on the rise

More than six in 10 (63%) respondents have used mobile check deposit, with older millennials (ages 25-34) the most likely to use it (72%). More than half (52%) of those ages 50+ have used it, up 15 percent from 2014.

Staying in control

The majority (81%) of mobile banking app users are also using banking notifications and alerts. Gen X (ages 35-49) is the most likely to receive alerts in comparison to the other demographics (91%).

Have used mobile check deposit

Older millennials

Ages 50+

63%

72%

52%

35%

35%

41%

43%

41%

27%

23%

18%

12%

41%

36%

45%

50%

41%

32%

28%

23%

20%

Total respondents Gen X

Banking Behaviors

Bill payment due

Check/payment cleared

Deposit made

Low balance

Fraud/unusual activity

Account accessed via a new device

Credit card limit

New mobile banking functionality

Banking appointment reminder


Staying in control

81% of mobile banking app users use notifications and alerts.


82015



Staying in control



Older millennials

Ages 50+

63%

72%

52%

35%

35%

41%

43%

41%

27%

23%

18%

12%

41%

36%

45%

50%

41%

32%

28%

23%

20%


Banking Behaviors

Bill payment due


Deposit made

Low balance



Credit card limit



36


Page 19

Figure 14: The preference for mobile broadly applies across age groups

China

UK

US

55–64

18–24

65+

45–54

35–44

55–64

45–54

35–44

25–34

18–24

65+

55–64

45–54

35–44

18–24

25–34

0% –5 –10–10 –15 –20 –25 –30


25–34

Channel experience score relative to leading channel, which is indexed to zero, 2015

Mobile Online ATM Branch Phone

Channel experience score relative to leading channel, which is

indexed to zero, 2015

The channel experience for mobile applies across age groups.


Page 19

Figure 14: The preference for mobile broadly applies across age groups

China

UK

US

55–64

18–24

65+

45–54

35–44

55–64

45–54

35–44

25–34

18–24

65+

55–64

45–54

35–44

18–24

25–34

0% –5 –10–10 –15 –20 –25 –30


25–34

Channel experience score relative to leading channel, which is indexed to zero, 2015

Mobile Online ATM Branch Phone


37

customers who had the best past experiences spend 140% more compared to those who

had the poorest past experience.

https://hbr.org/2014/08/the-value-of-customer-experience-quantified

where are we headed?

fiveyears

39

Internet

Mobile

Telephone

Branch

2010 2015 2020 Source: BBA

# INTERACTIONS

2015 Most customers are “mobile-first”

40

Internet

Mobile

2015 2020

2020 Most customers will be “mobile-only”

41

Mobile

2020

We’ve seen this story before

42

POSIT Are the best banks mobile apps?

43

what do you do when your customers live behind an app?

44

Don’t do this

45

A shrunken website

46

There are over 20 different products on this home page. (And a hundred more startups unbundling them).

Browse and self-serve doesn’t work well on mobile.

47

Think, and act, mobile first:

Simplify banking

Solve people’s problems

Save people time

The future of banking isn’t products it’s service experiences.

48

Personalised to the customer, reflects needs

and wants

Intuitive, simple to use, simple to act.

Speaks in human, jargon-free language

Omni-channel aware, joined up experiences

Know what the data is telling you.

Deliver at, or anticipates, the moment of need


49

25% of new users will use your app once. Most 2-3 times.

Personalising onboarding transforms conversion

50

Kate was acquired via a student

campaign.

This is her first app open.

Build interactions around mobile-moments moments when your brand is most needed

52

mobile-moment

53

mobile-moment

I need an overdraft Need a €500 overdraft?

customer bank

Interact at moment of most need for the customer

54

Personalised Real-Time Interaction

Action

In-app Message

55


82015



Staying in control



Older millennials

Ages 50+

63%

72%

52%

35%

35%

41%

43%

41%

27%

23%

18%

12%

41%

36%

45%

50%

41%

32%

28%

23%

20%


Banking Behaviors

Bill payment due


Deposit made

Low balance



Credit card limit




55

56

Make banking simpler

if it can be done on a smartphone, it will be done on a smartphone.

57

58

How do you sell?

Personalised in-app campaigns have the highest conversion of ANY channel.

59

Who doesn’t have a credit card account

with us?

Swrve tells youDeliver and

complete the campaign in-

app

60

Using people’s name: Builds better brand rapport and engagement

Simple to personalise

61

Predictive: Swrve knows (through analysing passed usage) that 6:17pm is the optimal time to message Kate.

62

Targeted: Kate doesn’t have a credit card with the bank. Behavioural targeting

63

Goal focused Every time you communicate, you should track against measurable goals.

Swrve automatically tracks goalsSet message objectives

64

Goal focused Every time you communicate, you should track against measurable goals.

Swrve automatically tracks goalsSet message objectives

65

Tested A/B/n test the perfect message.

Variant B

Which message works best?

66

Every message is 1-touch programmable, making interaction (and conversion) easy.

Interactive In-App Message

67

An in-app message center saves every important message.

Inbox’s can drive engagement to over

80%.

68

Think, and act, mobile first:

Simplify banking

Solve people’s problems

Save people time


Thank you - any questions?

Tom Farrell - VP Marketing Barry Nolan - VP Strategy

Business

Banking On Mobile - Getting Ready for 2016