Driven by the top Internet players the speed of change in the financial services market is rapidly increasing. To secure their business and generate further growth the large-scale Internet players are forced to attack additional markets and the financial services market is one of them. Leading Internet players will conquer the financial services market by - utilizing their global customer base and advanced customer intelligence (data), - by connecting today separated services to an eco system using technology - and their ability to move fast. Banks will have to react to the digital threads and do their homework. Some of the core actions required to achieve a better positioning in the digital channels are proposed within this slideshare.

1. © Copyright 2014 Digital Leadership GmbHDigital Leadership
Services & Consulting for
Digital Leadership
© Copyright 2014 Digital Leadership GmbH
Why are banks not performing as well as
they could do?
Stefan F. Dieffenbacher

2. © Copyright 2014 Digital Leadership GmbHDigital Leadership
How much time did the average bank customer spend in 2013 …
In the branch In the digital channels
Data source: hard data from 5 out of the top 20 banks in Europe 2013

3. © Copyright 2014 Digital Leadership GmbHDigital Leadership
What % of customers were going at all to a branch in 2013?
Branch visitors Digital Channels only
59.6%40.4%
Data source: hard data from 5 out of the top 20 banks in Europe 2013

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Channel usage intensity and frequency by 2015 in % *
Desktop / browser Banking
Mobile Banking
Software (i.e. Quicken)
Cash / non-cash ATMs
Branches
*by usage frequency and usage intensity

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The Digital Channels are already today #1.
The branch network is the alternative
channel.
Really?

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Sales (by numbers and volume) compared
Branch Digital Channels
Data source: hard data from 5 out of the top 20 banks in Europe 2013

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Final conclusion:
banks don’t manage to make money
out of their online customers.

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The User perspective

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Coralie „Youngster distant functionalist“
2Top Prio: 5
Banking behaviour and attitude
Number of banks 1
Primary bank Fortis
Banking likes No personal relationship, as long as the bank does a good job doesn't need
specialists currently, and prefers a distance with bank employees, likes
simulations, access flexibility, general flexibility, simplicity
Banking dislikes No interest in banking and the financial world in general, banking must not
take up too much time, doesn't want to be confused by her bank, modern
atmosphere, too much formality and administration
Banking fears Little fear due to small exposure to banks
Service frustrations Lack of efficiency, poor quality of advice, complicated language, marketing is to
obvious, daily service is too expensive
Literacy and devices
Computer Literacy Good computer Literacy and frequent use of other digital devices (digital
natives) but finance plays no major part in life as of now, heavy Facebook user
Finance Literacy Low interest in finance and little Literacy
Devices PC, iPhone 3, Android tablet
Proposition Matrix
Brand affinity Brand-agnostic
Products u. Mngmt Savings, some current account, Mine pack, 1-2-ring
Advice type Almost no use of PC banking due to limited product usage, contact via self
service in branch and face-to-face, but high affinity towards digital channels,
Need specialist help, concise, no proactivity, trusts friends
Financial evolution Towards Nexus Retail, Nexus HiPo, risk: becoming a Retail
Up and cross selling Cards, current accounts, travel insurance, PFM
Key data
Age: 13
Location: Charleroi
Language: French
Education: Primary school
Salary: €0.9k
Assets: €6k
Segment size 160 000
Lifestyle
Background:
• upper middle class
Life goal:
• rather vague: go to university
Life events:
• graduation, education choice,
marriage, birthdays

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Customers want to have it easy

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Customers want to have it easy
-668,61
04
Apr

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And be proactively informed
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They expect banks to help them understand their financial life
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… and across their family / relevant entities
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Customers look at their bank to help them understand how they spend
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And be supported in their financial planning
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Creating transparency & trust
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Creating
transparency &
trust
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Creating
transparency &
trust
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+40% conversion
rate for ABN AMRO.

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Eradicate barriers for your potential customers
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(1) Easy sign-up (2) Photo
authentication
(3) Automatic login
after sign-up
(4) Customer does
multibanking setup
(! bank knows user’s
monthly income)
(5) Bank grants
pre-approved credit
The ideal customer sign-up process
22

22. © Copyright 2014 Digital Leadership GmbHDigital Leadership
(4) Customer does
multibanking setup
(! bank knows user’s
monthly income)
(1) Easy sign-up (2) Photo
authentication
(3) Automatic login
after sign-up
(5) Bank grants
pre-approved credit
The ideal customer sign-up process
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The customer banks within 5 minutes

23. © Copyright 2014 Digital Leadership GmbHDigital Leadership
24
The external environment

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Increasing proliferation of consumer decision making processes
25
Need to
invest
Online
purchase
Price
comparison
website
Website
visit
Print
campaign
Youtube
Channel
Facebook
Posts
Family
discussion
Community
review
Friends
recommen
dation
Branch
visit
€
€
€
€
€ Video
review
€
€
€ Touch points where the bank can
influence (potential) customers

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Consumers directly interact with Merchants
– the banks are not in the picture!
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MicroPayment, Pay as you go & Mobile Payment -
all managed online.
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• Premium SMS
• Operator billing
• App billing
• In-app payments
• NFC and mobile contactless payments
• NFC trials so far
• ‘Pay by mobile’ for digital goods
• PayPal as a mobile channel
• The single-click credit card checkout
• Square and Bump: physical mobile
payments
• Mobile money and banking
• Micro Web-payments
• Gaming coins

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And even sending money is being threatened.
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34
The business lens.

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3 months to launch a banner
! ROI maximized performance marketing
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Design goes beyond colours…
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Without data collection, no customer insights
37
Data from the CRM & core banking system
• Customer value
• Last branch visit
• Current residence
Data from PFM
• Saving goals: user saves up for an own home
• Free finances: <€500 / month
• Rent: <€500 / month
Unified Consumer
Banking Data
Model
• Last login, frequency of logins
• Which advertisements did the user click on?
• Which offers has the user been interested in?
examples
Data from analytics
examplesexamples

37. © Copyright 2014 Digital Leadership GmbHDigital Leadership
… and no personalization & targeting
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Drive marketing
• Optimize On-&Offline Marketing Budget
• Targeted multichannel campaigning
Drive product recommendations,
online marketing & sales
• 3D realtime campaign management
Drive advisory across the branch network
• Advice customers holistically with consideration of their
(saving) goals, lifestyle, expenses, overall financial situation
and dreams
Drive content & features
• Drive content towards each sub-segment and potentially
against real-time micro-segments
Unified Consumer
Banking Data
Model

38. © Copyright 2014 Digital Leadership GmbHDigital Leadership
Relaunch: align business & IT on the longer term!
Excerpt of the Digital Leadership Strategy Framework
39
Stakeholders
+ other
inputs
Expected
Benefits
Overall
Direction
“The
Product”
Costs Business
Case
Approach &
Plan
Stakeholder
identification
Personas
Initial market &
competitive analysis
Other inputs to needs
Departmental inputs
Benefits identification
Benefits breakdown &
prioritization
BI & Analytics review
Initial opportunity
identification
Vision
Goals
Business objectives
Project Motivation
Key user tasks
Cross-channel
customer experience
journeys
Scope Landscape
Roadmap
Content org model
Site org model
Technical architecture
Draft cost breakdown
Initial project plan
Organisational setup
post launch
Cost assumptions
Business case
Funding options
Business Case
presentation
Initial draft plan till
go-live
Project plan strategy
& concept phase
1 2 3 4 5 6 7

39. © Copyright 2014 Digital Leadership GmbHDigital Leadership
Understanding the areas of value creation
40
Online-Banking
The Online-Banking Strategy Framework
Prioritized benefits = strategic objectives
Benefits sought
Enable Online Data for
branch advisory
Marketing
Enable Online-Data for
Offline-Marketing
Unified data collection
Increased customer retention
Stickiness of the site
Chat & video
Online self-advisory
tooling
Multibanking
Financial literacy
Financial planning
Loyalty program
Advisory
Financial vision
Bundling
Higher share of wallet
Realtime segmentation
& targeting
Improved product
information
Connection with
loyalty program
User centered scenarios
On-site & conversion
measures
Increased customer acquisition
Off-site marketing
Off-site measures
Content marketing
SEM & SEO
Affiliate marketing
Recommendation mar-
keting
Ratings & Reviews
Analytics, goals &
AB testing
Competitive comparison
Cross-channel
Multibanking core
Ajusting channel mix
Adjusting for all screen
sizes
Mobile push
Online- / Offline
conversion scenarios
Creating a large screen
experience
Customer support
Cost reductions
Improved
maintainability
IT
Higher scalability
Centralized IT
development
Improved integrability
Less customer service
incidents
Improved perception of
support / help
Operations
Decreased content
maintenance effort
Improved campaign
management
Professional usability
Necessities / must do’s
Move away from aging
platform
Legal requirements
Mobile integration

40. © Copyright 2014 Digital Leadership GmbHDigital Leadership
Governance
Security & compliance
Technology
Integration
System Administration
Access & Channels
Roles & responsibilities
Collaboration & support
Organization & structure
Brand & Perception
Media & Content
Behaviour & Functionality
Site setup & structure
User needs
Corporate goals
Vision
Objectives, goals & KPIs
Feedback mechanisms
Outside of DC Governance
Digital Channels
Governance
Focus Areas
Direc
tion
IT
Peo
ple
Core com
ponents

41. © Copyright 2014 Digital Leadership GmbHDigital Leadership
Governance focuses on the discrepancy to goals
Security & compliance
Technology
Integration
System Administration
Access & Channels
Roles & responsibilities
Collaboration & support
Organization & structure
Brand & Perception
Media & Content
Behaviour & Functionality
Site setup & structure
User needs
Corporate goals
Vision
Objectives, goals & KPIs
Feedback mechanisms
Outside of DC Governance
Digital Channels
Governance
Focus Areas
Direc
tion
IT
Peo
ple
Core com
ponents

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What have we done today?

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We have considered about 25
challenges banks may have to
address

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But which one is important?

45. © Copyright 2014 Digital Leadership GmbHDigital Leadership
A proposal for a
basic
prioritization
framework
Depths(of(product(/(offering(
Customer(needs(/(business(need(

46. © Copyright 2014 Digital Leadership GmbHDigital Leadership
1) Plotting of
potential
actions
Customer(needs(/(business(need(
Depths(of(product(/(offering(
Smartphone / photo
customer sign-up
Next gen UX
Intelligent alerts
PFM analysis of financesMobile payment
Multibanking
Financial planning
(transparent) product reviews
*exemplary plotting of potential
actions

47. © Copyright 2014 Digital Leadership GmbHDigital Leadership
2) Understanding
how these action
items are likely to
evolve in the
marketplace
Customer(needs(/(business(need(
Depths(of(product(/(offering(
Smartphone / photo
customer sign-up
Next gen UX
Intelligent alerts
PFM analysis of financesMobile payment
Multibanking
Financial planning
(transparent) product reviews
*exemplary plotting of potential
actions

48. © Copyright 2014 Digital Leadership GmbHDigital Leadership
3) Final step:
Where should
we focus on?
Customer(needs(/(business(need(
Depths(of(product(/(offering(
Smartphone / photo
customer sign-up
Next gen UX
Intelligent alerts
PFM analysis of financesMobile payment
Multibanking
Financial planning
(transparent) product reviews
Continue investments
Delete
Minor investments,
unless important niche
clientele
Invest heavily
*exemplary plotting of potential
actions

49. © Copyright 2014 Digital Leadership GmbHDigital Leadership
Services & Consulting for
Digital Leadership
© Copyright 2014 Digital Leadership GmbH
Q&A
Stefan F. Dieffenbacher - Brussels, 21st of August 2014
50

50. © Copyright 2014 Digital Leadership GmbHDigital Leadership
Services & Consulting for
Digital Leadership
© Copyright 2014 Digital Leadership GmbH
Thank you!
Stefan F. Dieffenbacher - Brussels, 21st of August 2014
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51. © Copyright 2014 Digital Leadership GmbHDigital Leadership
Contact details
Stefan F. Dieffenbacher
Executive MBA, PMP, CPM, Scrum Master
Managing Director
Digital Leadership GmbH
Landsberger Straße 217
D-80687 München
+49 (0)176 / 638 020 11
+49 (0)89 / 748 600 32
sd@digital-leadership.net
www.digital-leadership.net
mobile:
office:
e-mail:
Internet:
Let me know how I can
help!