Data & Analytics

10:47 AM
Sonny Singh, Oracle
Sonny Singh, Oracle
Commentary
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Let Customers Have it Their Way

Following the lead of successful retailers should be the goal for financial services customer experience.

Over the last several weeks, we saw a flurry of statistics emerge about how and where shoppers planned to spend their holiday budgets. What is crystal clear is that consumers increasingly expect – and take for granted – that they can shop seamlessly across brick and mortar, online, and mobile channels.

Accenture’s 2013 Holiday Shopping Survey pointed to an increase in “showrooming” this year, with 63 percent of respondents versus 56 percent of respondents in 2012 saying that they were likely to go into a physical store to see a product and then comparative shop and purchase online. The study also revealed that just as many shoppers (65 percent) planned to participate in “webrooming,” browsing online and then going to a physical store to make a purchase.

We’re also experiencing an explosion in mobile channel use, especially among millenniums, that is sure to make financial institutions envious. Google’s 2013 Holiday Shopping Intentions Study revealed that 88 percent of all millennial smartphone owners said they would use their devices for holiday shopping and would be making more online purchases over their phones. One-in-three millennial smartphone owners planned to make a holiday purchase on their phone, up 28 percent year-over-year .

What lessons do these retail realities have for banks and their approach to the customer experience? The implications are profound and can be transformative for banks that are prepared for change.

Have it your way is the expectation, not the exception

Multiple channels are no longer an option – they are a necessity. The next wave, and one in which many retail organizations excel, is the omni-channel experience in which customers can move seamlessly and at will between channels – even simultaneously leveraging multiple channels to optimize their experience. While most banks have adopted a multi-channel strategy, few deliver the seamless experience that customers have come to expect in the retail sector. Old culprits continue to haunt many institutions – the inability to gain a single and comprehensive view of the customer due to stove-piped legacy environments remains atop the list. Banks that master the omni-channel experience stand to set themselves apart from less agile institutions.

Get to know the customer

The best retail organizations know what consumers want and need – sometimes even before they do. Consumers expect that during their online or mobile experience they will be served up products that will be of interest to them based on current browsing or past purchases. For example, when buying a camera online, one expects to see options for accessories, such as cases or additional lenses. In addition, many e-commerce sites are incredibly adept at displaying recently browsed items when a customer returns to a site, ensuring experience continuity and improving marketing precision. Similarly, brick and mortar stores can deliver highly personalized offers at point of sale and via e-mail or mobile marketing to drive immediate and future purchases.

Financial institutions are also focused on getting to know their customers and delivering highly personalized experiences. And, they would seem to be ideally suited to deliver this personalization due to the volume and diversity of customer and transactional data that they capture across their enterprises. External sources, such as social media channels hold the opportunity to capture additional rich data, such as information on life events that might drive financial purchases – including relocation, marriages, the arrival of children, and a new job. The ability to manage and analyze big data – internal and external – is essential to moving to a new level of customer intimacy. That said, many financial services institutions today are struggling in this area. In an Oracle-sponsored study, “From Overload to Impact: An Industry Scorecard on Big Data Business Challenges,” 25 percent of financial services executives gave their organization a “D” or “F” in preparedness to manage the data deluge. Fifty-six percent gave their organization a “C” or below. Only three percent of executives gave their organization an “A” in preparedness.

Make it Easy:

Consumers are busy – pulled between a growing number of competing family, career, and personal interests and commitments. They want to transact quickly and easily. One can argue that this is especially true when it comes to purchasing financial services and products – an activity that is not generally considered highly enjoyable for most individuals. Focusing on ways to make it easier for customers to get all the information they need about a product in one place (whether in a branch, on the phone, or via a mobile device) and in simple-to-understand terms, and then quickly transact, can go a long way toward customer receptivity and loyalty. The ability to effectively compare products and their costs as well as identify products best suited to a specific individual is also essential. Further, customers welcome the flexibility to begin an application or account process in one place and finish it via another channel, and are increasingly eager to access end-to-end financial services – from account opening to closure – via online and mobile channels. To make this vision a reality, financial services organizations require flexible, scalable, and extensible modern platforms and applications that support unprecedented agility. As financial institutions work to not only meet, but exceed changing customer expectations, they seek new models and strategies. The retail industry – and its leading-edge approach to customer experience – can provide important insight. Fundamental to the success of any customer experience initiative is a strong organizational commitment, willingness to think creatively and put the customer at the center of the enterprise, and an agile and robust supporting architecture that supports flawless execution.

Sonny Singh is Senior Vice President and General Manager, Financial Services Global Business Unit at Oracle.

[See Also: Risk and Finance: Joining Forces At Last?]

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thelight
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thelight,
User Rank: Apprentice
2/25/2014 | 7:00:53 PM
re: Let Customers Have it Their Way
Great Article..
There was a blog over at celent on this topic that said banks can learn from airlines. (http://bankingblog.celent.com/... I would like to state that some airlines can learn from banks. Here is my recent airline experience that highlights how some airlines can learn about customer service from banks:

While stuck at the Dallas airport last week (storms) here are the capacity
and performance calculations I ran while waiting in a huge line to check my
baggage (freezing rain so no outside check in).

Time wasted using utilization law:

I was wondering how much accumulated time my
fellow travelers wasted standing in line W=X*S (or also known as U=X*R)

X= counted 60 people in line

S= length of time I waited 30 minutes.

W=time of all requests.

For these 60 people the airline wasted 1800 minute of total customer time. If you look at the arrival rate for the whole day this would be an even bigger number for the daily waste.

LittleG«÷s Law:
I next wondered how fast people were entering my line every minute with all the flights and flight cancellations. I got a surprise for an answer:

L = A*W or A=L\W (L number of customers in
the system, W average time in the system & A the arrival rate is what I want to know)

We had only 2 check in clerks (the airlines were not prepared for storms). I observed (will post my iphone video so you can see the line):

50% of travelers check in bags taking 4
minutes each (BF 1)
50% of travels arrange a new flight (east
coast was shut down) 8 minutes each (BF 2)

So with 2 check in clerks the average person was 6 minutes at the counter. (B1+B2)\2. The business functions had about the same amount of people requesting them. Many people had weather related flight cancellations, I knew from the loud complaining there were a lot and that they came about the same rate as baggage check in's. So with 60 customers in line, the total work processing time was 60*6=360 this meant it would take 6 hours to service the entire lineG«™However for the half hour I was there the line stayed constant at about 60 people. So
L=60
W=6 minute service time
A=L\W

A new customer entered the line almost every 10 minutesG«™surprise you guessed it they could never empty the queue and more people could potentially miss flights due to the line.

In sum, limited resources = big queues!! I have never waited a half hour for a bank teller. I generally apply these formulas to banking website applications but they work anywhere so have fun the next time you are stuck in a line.

Daniel Sidman
BankTechAsia
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BankTechAsia,
User Rank: Apprentice
1/23/2014 | 12:20:22 AM
re: Let Customers Have it Their Way
I'm on the same page with you folks. There has to be a proper balance.
Kelly22
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Kelly22,
User Rank: Author
1/22/2014 | 8:01:33 PM
re: Let Customers Have it Their Way
I agree with you on that, as I see those same ads whenever I shop online and also find them annoying. If I buy a pair of sneakers, I'm not going to buy another pair because of a pop-up ad I see the next day.
Ivy Schmerken
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Ivy Schmerken,
User Rank: Author
1/22/2014 | 7:46:54 PM
re: Let Customers Have it Their Way
Privacy is very much a thing of the past in the retail world. My personal email inbox is framed by ads from web sites that I recently browsed. The online company that I bought tennis sneakers from pops up in ads on unrelated web sites that I visit. I realize this is not banking but retail site regularly use data to profile customers to the point that it's annoying. I don't think banks should go this far.
Ivy Schmerken
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Ivy Schmerken,
User Rank: Author
1/22/2014 | 7:39:53 PM
re: Let Customers Have it Their Way
You raise a key point. Customers need to look at fees being charged. There are plenty of competitors in banking and outside such as online brokers (Fidelity, Charles Schwab, TD Ameritrade) that offer checking accounts and access to ATMs as well.
Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
1/22/2014 | 6:53:00 PM
re: Let Customers Have it Their Way
Customers of any business prefer the "a la carte" option to chose products any way they want them (without having to buy a bundled package). But, keep in mind, increasingly, customers expect to have the same 'a la carte' selections available at "prix fixe" cost.
Kelly22
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Kelly22,
User Rank: Author
1/22/2014 | 6:07:11 PM
re: Let Customers Have it Their Way
Good last point there. Personally, I'd also choose privacy over something like anticipatory shipping, but I think most consumers need to find a balance between the level of personalization they want and the amount of data they're willing to share.
Byurcan
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Byurcan,
User Rank: Author
1/21/2014 | 2:32:11 PM
re: Let Customers Have it Their Way
Yes, your last point is the rub: People love having tailored, personalized products but don't like giving up data that would allow a company to do that. You must have it one way or the other. Personally, I'd choose privacy.
BankTechAsia
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BankTechAsia,
User Rank: Apprentice
1/21/2014 | 9:43:06 AM
re: Let Customers Have it Their Way
I agree, there are many strategies that bank can adopt from the retail sector.
Amazon's big data is so comprehensive that they claim they are now able to ship your product before you even order it. They call it "anticipatory shipping".

We need to have some form of "anticipatory banking" instead of random telesales guys calling up and pushing financial products that we don't want or need.

There's a slight oxymoron though, consumers want more tailored products yet there's a big paranoia going on about how much of their data is being collected.
kgordon597
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kgordon597,
User Rank: Apprentice
1/20/2014 | 6:22:22 PM
re: Let Customers Have it Their Way
We are constantly hearing about how important it is to build Big Data stockpiles, but the real value lies in being able to filter and apply data toward strategic goals. The use of customer data has become more of a requirement to ensure consumer expectations and product preferences are being met, before they even ask. The only way to ensure that happens is by collecting data and implementing it into business decisions.
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