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Digitally Mutual 2014
RESEARCH INTO THE ONLINE CAPABILITY OF UK BUILDING SOCIETIES
Why?
WHY THE DIGITAL CAPABILITY OF BUILDING SOCIETIES MATTERS
3
As citizens we need challengers to compete hard against
high street banks
“Banks in the UK have failed in many respects....
4
To compete with banks, building societies must master
digital services
50%
Online is now the primary way that UK banking...
5
But most building society websites are not transactional,
usable or innovative
15% 0%
47%
MOBILE FRIENDLY?
The
majority ...
Findings 1
THE DIGITAL EXECUTION GAP IN THE BUILDING SOCIETY SECTOR
7
We tested how well building societies use digital to meet
basic customer needs
DIGITAL MATURITY
BENCHMARK
4
Our Digital ...
8
Digital maturity tests 22 factors that drive customer
experience
PRESENTING
INFORMATION
ONLINE
SALES
ONLINE
SERVICE
CHAN...
9
Digital maturity ranking
Owned by Owned by
Observations
• The top three are
Nationwide, Yorkshire and
Saffron.
• Nationw...
10
Bigger isn’t always better
10 to 120 to 1130 to 2140 to 3150 to 41
1
Rank by Total Assets
RankbyDigitalMaturity
2345678...
11
Making it difficult for users to get the information they need
from Google
Micro formats
make it easier
for both
humans...
12
Usability on a mobile device is an issue. Mobile devices now
drive 28% of traffic.
GOOD PRACTICE: Use responsive
design...
13
A third of building societies fail to present sensible
structures to help members navigate their site
GOOD PRACTICE: A ...
14
80% of building societies use site search tools that don’t
provide fully usable results.
GOOD PRACTICE: The top result ...
15
Over half of building societies don’t provide product landing
pages to allow product comparison at a glance
GOOD PRACTI...
16
53% of building society websites don’t allow members to
purchase even one product online
GOOD PRACTICE: To enable membe...
Findings 2
THE DIGITAL INNOVATION GAP IN THE BUILDING SOCIETY SECTOR
18
Building societies are accomplished product innovators
Affinity
Accounts
Clubs &
Associations
Client Accounts
Council
A...
19
But in 1775, building societies were the original Kickstarter
The first known building society was founded in 1775 by R...
20
Today building societies are missing the most significant
mutual finance innovation of the last 50 years at least
PEER-...
21
In conclusion - time is running out for building societies to
exploit digital
• As citizens we need powerful challenger...
Transform
WHO WE ARE, OUR CAPABILITIES AND CONTACT INFORMATION
23
About Transform
Digital & multi-channel consultancy, working
with clients to deliver customer-centred
change for commer...
24
Part of Engine: 11 best in class agencies under one roof with
more than 700 professionals
Brand Consulting
Strategic &
...
25
What we do
STRATEGYSTRATEGY DESIGNDESIGN DELIVERYDELIVERY
M&AM&A
Channel StrategyChannel Strategy
Proposition
Developme...
26
What makes us different
• Customer-centred – innovation and
creativity, working with clients to deliver
customer-centre...
27
Challenges we address
Customer insight – who
are our customers and
what are their needs?
Customer insight – who
are our...
28
Experience and expertise
29
Experience and expertise
30
Simon Kirby, Transform Associate
simon.kirby@TransformUK.com
07973 395 329
Transform, 60 Great Portland Street, London,...
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DIGITALLY MUTUAL - Transform research into the online capability of UK building societies

Transform’s research into the UK building society sector tested 22 factors that drive online customer experience including information presentation, online sales, service channel integration and digital innovation.

Our findings reveal that the UK’s building societies are delivering an online customer experience that fails to keep up with the demands of today’s consumers.

Analysis of the online CX of all 53 building societies in the UK found that less than half (47%) enabled customers to purchase products online and many are struggling to get the basics right.

Online search tools are delivering poor results for the majority of building society websites (80%), in one case the top result for the search term ‘savings’ was about the proximity of airport parking to the society’s head office. And although smartphone penetration is at almost 75% in the UK, only 15% have optimised their websites for mobile.

Originally great innovators, Transform’s research illustrates that building societies aren’t embracing the opportunities provided by digital. Despite a growth of 430% in the Peer-to-Peer finance market between 2011 and 2013, the modern day equivalent of the mutual principles on which building societies were founded, no building society has entered this market.

The top three performers in the study were Nationwide (16/22), Yorkshire (14/22) and Saffron (14/22). Cheshire. The Saffron Building Society is around 190 times smaller (in terms of total assets) than Nationwide, demonstrating that good, customer-centred digital performance does not require corporate scale.

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DIGITALLY MUTUAL - Transform research into the online capability of UK building societies

  1. 1. Digitally Mutual 2014 RESEARCH INTO THE ONLINE CAPABILITY OF UK BUILDING SOCIETIES
  2. 2. Why? WHY THE DIGITAL CAPABILITY OF BUILDING SOCIETIES MATTERS
  3. 3. 3 As citizens we need challengers to compete hard against high street banks “Banks in the UK have failed in many respects. They have failed taxpayers who had to bail out a number of banks … with a cash outlay peaking at £133 billion, equivalent to more than £2,000 for every person in the UK. They have failed many retail customers, with widespread product mis-selling … They have failed in their basic function to finance economic growth, with businesses unable to obtain the loans that they need at an acceptable price.” Report of the Parliamentary Commission on Banking Standards, 2013
  4. 4. 4 To compete with banks, building societies must master digital services 50% Online is now the primary way that UK banking customers transact. Research suggests that three out of five online banking customers use online banking at least once a week. Customer loyalty may also correlate with online usage.5 online banking users4 30% Building Societies will soon run out of non- internet using customer/members. Only 13% of British adults (6.7 million people) has never used the Internet. 35.7 million British adults use the Internet daily. non Internet users2 2007 2013
  5. 5. 5 But most building society websites are not transactional, usable or innovative 15% 0% 47% MOBILE FRIENDLY? The majority of Building Societies do not sell any products online. 28%3 of all Internet traffic is mobile. But only 15% of building societies a mobile friendly website. No UK Building Society has launched a digitally innovative product or service. Only 20% of Building Society websites offer fully usable site search. BUILDING SOCIETIES HAVE LOW LEVELS OF DIGITAL CAPABILITY Less than half of building societies provide a transactional website. Only 20% provide site search that is usable and meaningful to help member/customers find what they need. Only 15% provide a website that is usable on a mobile device. No building society offers any truly innovative digital product or service. ONLINE PURCHASING? USABLE SITE SEARCH? 20% DIGITAL INNOVATION?
  6. 6. Findings 1 THE DIGITAL EXECUTION GAP IN THE BUILDING SOCIETY SECTOR
  7. 7. 7 We tested how well building societies use digital to meet basic customer needs DIGITAL MATURITY BENCHMARK 4 Our Digital Maturity benchmark is a simple test of how an organisation uses digital to meet customer needs – for basic information, sales, service, etc. A website is shaped by the culture of the organisation that made it. Efficient code can be written in a silo. But it’s harder to get marketing, product, legal, compliance and IT teams to work together for coherent customer outcomes. Digital Maturity is a simple test of how an organisation has embraced digital to meet customer/member needs. CUSTOMER-CENTRIC DIGITAL BENCHMARK PRESENTING INFORMATION ONLINE SALES ONLINE SERVICE CHANNEL INTEGRATION DIGITAL INNOVATION 1 2 3 4 5
  8. 8. 8 Digital maturity tests 22 factors that drive customer experience PRESENTING INFORMATION ONLINE SALES ONLINE SERVICE CHANNEL INTEGRATION DIGITAL INNOVATION 1. Microformats for easier display on Google. 2. Information architecture that is logical and usable. 3. Responsive design for better mobile experience. 4. Compliance with EU Cookie Directive achieved through best practice mechanism. 5. Product pages are clear & actionable 6. Site search works. 7. Social media integrated on site. 8. Application forms that are downloadable. 9. OR application forms can be requested by clicking. 10. At least one product can be bought online. 11. Many/most products can be bought online. 12. Products can be bought online by new customers without first setting up an account. 13. Basic online account for balances, etc. 14. Online tools and calculators. 15. Online call back requests. 16. Community polls, forums or blogs. 17. Transactional mobile app. 18. Channel transitions from web to phone can be made without repeating information. 19. Livechat can be used for help and information. 20. Single Sign-On uses common identity credentials across channels. 21. Mobile app provides helpful (non- transactional) functionality. 22. Uses Digital capabilities to offer innovative product or service. Building societies tested 52 Average age of building society Total assets of all building societies tested 130 313 Number Years old £ Billions
  9. 9. 9 Digital maturity ranking Owned by Owned by Observations • The top three are Nationwide, Yorkshire and Saffron. • Nationwide and Yorkshire control over 70% of sector assets. But Saffron controls just 3%. • Nationwide and Yorkshire have so far had limited ‘digital parenting’ success with their acquisitions.
  10. 10. 10 Bigger isn’t always better 10 to 120 to 1130 to 2140 to 3150 to 41 1 Rank by Total Assets RankbyDigitalMaturity 2345678910 • Joint first place in Digital Maturity was held by Nationwide, Yorkshire and Saffron building societies. • Nationwide and Yorkshire are the largest building societies. They jointly control 72% of the sector’s assets. Saffron controls just 3% of the sector’s assets. • Skipton is the fourth biggest building society by total assets but came in only joint 10th place ranked by Digital Maturity. THE SIZE OF A BUILDING SOCIETY DOESN’T DETERMINE THE QUALITY OF ITS WEBSITE. Punching above their weight Punching below their weight TOTAL ASSETS VS. DIGITAL FLUENCY™ BiggestSmallest WorseBest
  11. 11. 11 Making it difficult for users to get the information they need from Google Micro formats make it easier for both humans and robots to find and use web information. PRESENTING INFORMATION GOOD PRACTICE: use micro-formatted data so that Google presents useful information such as address of nearest branch, directions, local contact number, opening hours and a status (e.g. “closing soon”). of building societies do not use good practice BAD PRACTICE: Search engine results that are not helpful to members/customers. For example, few people need to know when a society was founded or the name of its CEO. 74%
  12. 12. 12 Usability on a mobile device is an issue. Mobile devices now drive 28% of traffic. GOOD PRACTICE: Use responsive design so that the website adjusts to the screen it’s viewed on. Smaller screens require reduced content and simpler navigation. BAD PRACTICE: Squeezing a desktop-sized website onto the small screen of a mobile phone. This is simply not usable. Responsive design gracefully adjusts to fit desktop, tablet and smartphone browsers. PRESENTING INFORMATION of building societies do not use good practice 85%
  13. 13. 13 A third of building societies fail to present sensible structures to help members navigate their site GOOD PRACTICE: A logical, mutually- exclusive-collectively-exhaustive way of categorising information on the site that is focused on the things that users are most likely to be trying to find. This information architecture should be universally available across the site. BAD PRACTICE: Includes failing to break up menu into high level product areas and misleading categorisation. In the above example, a “jargon buster” is not a “product”, even though it’s listed in the “product menu”. A logical and effective information architecture and menu structure that helps users navigate the site. PRESENTING INFORMATION of building societies do not use good practice 32%
  14. 14. 14 80% of building societies use site search tools that don’t provide fully usable results. GOOD PRACTICE: The top result for a generic search term like “savings” should be a splash page or similar that summarises the society’s savings range at a glance and allows a user to click through to the relevant product. BAD PRACTICE: For a generic search term like “savings” bad practice is to present either irrelevant results or results that are overly specific towards a particular product or transaction. Site search is typically used by between 2% and 15% of users to find information on a website. PRESENTING INFORMATION of building societies do not use good practice 80% Worst top search results: For the search term ‘savings’: •‘airport parking’ (Hanley) •‘about us’ (Furness) For the search term ‘cash ISA’ •‘did you mean ‘cash is’?’ (National Counties)
  15. 15. 15 Over half of building societies don’t provide product landing pages to allow product comparison at a glance GOOD PRACTICE: Product pages should give clear features, benefits and regulatory information with a prominent call to action. Splash pages should provide at-a-glance, scannable information about products in the range. BAD PRACTICE: The example above is a product splash page that does not provide scannable information about products in the range. Site search is typically used by between 2% and 15% of users to find information on a website. PRESENTING INFORMATION of building societies do not use good practice 53%
  16. 16. 16 53% of building society websites don’t allow members to purchase even one product online GOOD PRACTICE: To enable member/customers to buy and manage many/most of the Building Society’s products online. New members/customers should not be required to set up an account before having completed a purchase. BAD PRACTICE: In the example above, the Teachers Building Society requires customers to print and post an application form for its ‘online savings account’. Many societies do not provide any online purchase capability. Online sales conversion is generally lower if customers are forced to open an account before purchasing. of building societies do not use good practice 53% ONLINE SALES
  17. 17. Findings 2 THE DIGITAL INNOVATION GAP IN THE BUILDING SOCIETY SECTOR
  18. 18. 18 Building societies are accomplished product innovators Affinity Accounts Clubs & Associations Client Accounts Council Accounts Pension Fund Accounts Credit Union Accounts Individual Accounts BUILDING SOCIETY PRODUCT INNOVATION IS STRONGLY COMMUNITY-DRIVEN Empty Homes Parental Assistance Self- build Refurbishment Affordable & Help to buy Local reduced rates Affinity mortgages Shared ownership / equity • Building Society savings products help gather and retain assets in local communities. • Building Society mortgage products often address real community issues such as housing supply, affordability and sustainability. • Pricing is frequently better than banks.
  19. 19. 19 But in 1775, building societies were the original Kickstarter The first known building society was founded in 1775 by Richard Ketley, in the Snow Hill area of Birmingham. Members paid a monthly subscription and lots were drawn to decide who got property first. This radical financial innovation brought property into the reach of working people. But if Richard Ketley had had the Internet in 1775, he wouldn’t have invented a building society. He’d have invented Peer-to-Peer finance (P2P).
  20. 20. 20 Today building societies are missing the most significant mutual finance innovation of the last 50 years at least PEER-TO-PEER FINANCE IS INHERENTLY MUTUAL Peer-to-Peer Finance allows businesses and individuals to receive loans from a pool of online savers. Peer-to-peer is inherently mutual. The UK is a world leader in peer-to- peer. Despite this, no building society has yet announced plans to enter the market. 430% | growth of peer-to-peer finance sector, UK 2011-2013 7 But Peer-to-Peer Finance requires digital capability to execute.
  21. 21. 21 In conclusion - time is running out for building societies to exploit digital • As citizens we need powerful challengers to banks. • Building societies are the natural challengers. • As financial consumers we expect a digitally mature experience; 50% of us regularly use online banking and just 6.7 million of us are non-internet users. • Building societies digital capabilities are, on average, of low quality; most worryingly less than half of building societies enable online product purchases. • Building societies are also failing to use digital technologies to innovate. No building society currently participates in peer-to-peer finance, arguably the most significant mutual finance innovation of the last fifty years. • Digital deficits are likely to be caused by cultural and skills issues rather than by resource gaps.
  22. 22. Transform WHO WE ARE, OUR CAPABILITIES AND CONTACT INFORMATION
  23. 23. 23 About Transform Digital & multi-channel consultancy, working with clients to deliver customer-centred change for commercial benefit Bringing together experts with cross-sector expertise Innovation, creativity and rigour, to define, design and deliver services relevant to a rapidly changing world
  24. 24. 24 Part of Engine: 11 best in class agencies under one roof with more than 700 professionals Brand Consulting Strategic & Digital Consultancy Advertising Full Service Digital Sponsorship Consulting & Activation Direct Digital Marketing Consumer PR PR & Public Affairs Social Media Experiential Data Strategies Digital Design
  25. 25. 25 What we do STRATEGYSTRATEGY DESIGNDESIGN DELIVERYDELIVERY M&AM&A Channel StrategyChannel Strategy Proposition Development Proposition Development IT Strategy & Planning IT Strategy & Planning Implementation Planning Implementation Planning Programme Delivery Programme Delivery Development DevelopmentCommercial StrategyCommercial Strategy CX StrategyCX Strategy Change Management Change Management Innovation Execution Innovation Execution Digital CX Digital CX
  26. 26. 26 What makes us different • Customer-centred – innovation and creativity, working with clients to deliver customer-centred change • Expert led – breadth of experience, depth of knowledge, exploit best practice across sectors by focusing on customer not product • Fishing rods not fish – bringing the expertise you need and sharing our knowledge • With you not to you – working collaboratively, recognising where expertise is needed and how to get results
  27. 27. 27 Challenges we address Customer insight – who are our customers and what are their needs? Customer insight – who are our customers and what are their needs? Multi-channel – how do we make it feel integrated from front to back? Multi-channel – how do we make it feel integrated from front to back? Customer engagement – how do we reach and connect with the right people through the right mix of channels? Customer engagement – how do we reach and connect with the right people through the right mix of channels? Innovation & prototyping – how do we quickly prove our concepts? Innovation & prototyping – how do we quickly prove our concepts? Emerging channels – how should we leverage web, social and connected TV? Emerging channels – how should we leverage web, social and connected TV? Capabilities – what do we need to support our future business? Capabilities – what do we need to support our future business? Strategic planning – how do we respond to the challenge / opportunity? Strategic planning – how do we respond to the challenge / opportunity?
  28. 28. 28 Experience and expertise
  29. 29. 29 Experience and expertise
  30. 30. 30 Simon Kirby, Transform Associate simon.kirby@TransformUK.com 07973 395 329 Transform, 60 Great Portland Street, London, W1W 7RT www.TransformUK.com Connect with us: @TransformUK

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