#Payments still belong to #banks, according to #consumers—even when those payments are being made through a smartphone or an IoT device. The majority of “connected” consumers, nearly 80%, cited their bank as the “most trusted” provider for a #digital payment solution, a study by PYMNTs on behalf of Visa found. Consumers, who cited #technology #companies as […]
Bank Innovation
A majority of enterprises in financial services are undergoing a full-cycle #digital #transformation, with AI-led projects in the spotlight. That’s according to a study by Infosys released this week. More than 75% of banking and insurance companies are undergoing full-cycle transformation, while 20% are transforming partially, according to the report. The respondents that said their organizations […]
Bank Innovation
As a youngster, former U.S. President Ronald Reagan couldn’t decide what type of shoes he wanted. Unwilling to wait any longer for an answer, the local cobbler ended up giving Reagan one square-toed and one round-toed shoe. Reagan later commented, “I learned right there and then that if you don’t make your own decisions, someone else will make them for you.”
Today’s retail and commercial #banks also find themselves in need of “new shoes”. Their old business model is wearing thin and is unfit for a #digital world. It’s being eroded by inhospitable macroeconomics, new de-risking and open banking regulations, #fintech growth, consumer behavior increasingly favoring non-traditional players, and other market-specific drivers. If banks fail to make an explicit decision on evolution of their business model, other more decisive actors will decide for them.
Source: Accenture
Rather than ending up with mismatched shoes that limit their ability to compete, banks can decide to control their own path. They must map their strategic evolution and de-prioritize initiatives that don’t help them along that path. They must then have the focus and discipline to execute, rather than be tempted to hedge their bets and end up with mismatched shoes.
I invite you to read the full report, Winning in the digital economy: The urgent business model choices facing retail and commercial banks. In it, we detail each archetypal business model, offer a high-level starting point for banks to take a realistic view of their fit to each one, and identify a few key execution rules for building a bank that can win in the digital economy.
The post Four new, urgent bank models fit for winning in the digital economy…and beyond appeared first on Accenture Banking Blog.
Leading Accenture’s #FinTech programme is one of the most exciting jobs in the business. It gives me a great ringside seat on the latest innovations in this space and the #digital trends that will transform every area of banking in the next few years. In this, the second blog in my ongoing series, I want to focus on the new #channels that are opening up, and what they mean for how #banks engage with their customers.
Channels are critical. They’re nearly always the first point of contact between customers and financial services providers and, as such, they set expectations around the type of service that’s likely to be provided from then on. Over the years, we’ve seen many startups in the labs looking at this area. No surprise. Digital affords unprecedented opportunities for completely reinventing the quality of experience that customers receive.
Banks are adopting various different strategies for evolving their traditional channels. Some have focused on the branch as a primary point of contact, and branch network optimisation has been a theme for many of our clients, maintaining branches where they identify value and pulling back where they’re either unused or not economically viable.
Some new challengers are going mobile-only. But many in the middle are looking at a whole range of approaches. With #customer #engagement of such high importance, a key priority is enhancing channels to make them easier to use: making use of voice as an authentication tool, for example.
Whatever the course of action, all the initiatives we see have one primary objective: providing an easier and more convenient customer experience. The latest leap forward in this regard is the use of chatbots. These are like ‘live chat’ services that let people interact in real time with online services. The big difference? There’s a robot not a person at the other end of the proverbial line.
Chatbots have been around for years in many different forms. Old-school messengers like ICQ, for example, had a simple version of this #technology that exercised call and response based on hard-coded logic and/or guesswork.
It might seem counter-intuitive that a command line-based interface would be the next big thing. But it’s a trend that’s been prompted by platforms. Facebook’s chatbot platform, for instance, has proved particularly popular with some sectors of the population. So have the platforms offered by WeChat, Snapchat and WhatsApp. The ease of interacting with all of these via mobile has been a major factor in their uptake.
The chatbot model has evolved from answering relatively simple questions to leveraging machine learning, artificial intelligence (AI) and textual analysis APIs to answer more complex ones. These models learn over time, getting better at interpreting our intentions and executing them quicker.
Some chatbots are standalone apps. London-based startups in this space include Plum, Chip and Cleo . Plum’s been promoted as the first AI-powered Facebook chatbot that lets customers ‘micro-save’ small sums without having to think about it. It does this by connecting to users’ current accounts, learning their spending habits, predicting how much they can afford to save and automatically depositing small amounts into their Plum savings account on a regular basis.
Chip’s another micro-saving chatbot. The startup’s USP is that it opted to develop its own iOS and Android chatbot, rather than depending on an existing messaging app. Cleo, meanwhile, is an AI-powered chatbot that lets users check all their bank account and credit card data in one place. By allowing them to keep tabs on their spending, it helps users improve budgeting and get smarter with their money. The chatbot also suggests ways to improve saving, whether that’s rationalising subscriptions or identifying better value financial products.
The next big trend could see people engaging with a bank’s/partner’s third-party proprietary chatbot as a servicing platform (“tell me my balance”, “send money to X”, “tell me when my repayment is due”…etc). A number of players have been looking at how services might be provided through other people’s channels.
But will incumbent banks be willing to provide APIs so they can form part of other people’s bots/platforms (like Monzo’s done by enabling its service to be used on Amazon’s Alexa)? It’s an interesting question. Will they be comfortable with sensitive customer data being relayed through other peoples ‘walled gardens’? In some respects, PSD2 may answer this question for them.
With 2017 being touted as the ‘year of voice’, expect to see more vendors seeking to launch similar propositions to Amazon’s Alexa. As that happened, perhaps we’ll leap from text to voice even quicker than we think. For banks, this will add momentum to their push to reduce the number of calls real people need to answer.
There’s a lot of opportunity right now. But banks should exercise caution in how they expand the channels through which they engage—and as they move forward, do so consciously and strategically. Otherwise costs will continue to go up, with customers fragmented across both low- and high-cost channels. Leaders in this area will have a clear point of view on their channel strategy, and they’ll apply this thinking to their response to PSD2/open banking.
That said, people still like to talk to people. And that’ll never change. We’ll be watching closely to see how this space evolves.
Thanks for reading.
The post New channels, new voices: Customer engagement goes digital appeared first on Accenture Banking Blog.
We’ve already seen several major carmakers jump into the IoT, showcasing in-vehicle #payments tech. Most recently, Jaguar and Shell showcased fuel payments tech in the U.K.; Honda and Visa had their take on in-car payments at CES 2017, while GM teamed up with MasterCard and IBM last year to enable Masterpass #digital wallet on its […]
Bank Innovation
Microsoft’s Bill Gates knows a thing or two about #technology. As part of his foundation’s education work, Gates has also learned a lot about how technology can improve the quality of schools. One of his observations is that “technology is just a tool. In terms of getting the kids working together and motivating them, the teacher is the most important … we will still need to make sure every student has an effective teacher, and every teacher gets the tools and support to be #phenomenal.”
The same is true for banking. #Digital channels now allow most banking transactions to occur online anywhere and at any time—and at a much lower cost than face-to-face interactions in branches. Yet despite #salesforce transgressions at a few retail #banks, a human salesforce remains a critical asset in the fight to attract and retain customers.
Accenture’s recent survey of nearly 33,000 consumers in 18 countries shows that two-thirds still want human interaction in financial services, especially to deal with complaints (68%) and get advice about complex products, such as mortgages (61%). While digital channels can effectively provide information, most are still a long way from providing the type of personalized advice and guidance that converts a complex and often ill-defined customer need into a meaningful action.
Banks that want to compete and win against pure digital players need to #create differentiation and competitive advantage by investing to integrate their human salesforce and digital channels. The right digital tools and training can make #bank sales people trusted problem solvers, brand ambassadors and advisors who can orchestrate the best combination of in-person and online banking.
Apple is recognized for product innovation and design, but it’s also mastered the art of physical retailing, creating spaces where customers can both interact with products and also receive tailored, personal sales advice and on-the-spot problem resolution from engaged and well-trained staff. Those interactions have now become as essential to the Apple brand as the features and functionality of the products they sell, and that is why Apple stores have the highest sales per square foot of any major retailer in the US, including Tiffany’s.
To create a phenomenal, highly productive salesforce, banks need to adopt a markedly different talent strategy that focuses on developing new digital and social traits.
An enthusiastic, friendly and welcoming attitude will still be important, but bank executives we spoke to say that the top two attributes banking employees will need in the future are proficiency with digital technologies and an ability to quickly learn new skills.
To enable this workforce, banks will also need to equip sales people with relevant and simple-to-use digital tools that will help them create truly personalized and multi-channel customer interactions. As the digital customer experience has improved, customers have noticed that branch staff often have less access to information than the customers themselves do on their phones, hence their satisfaction with ‘seamless omni-channel’ banking has been in steep decline over the last couple of years.
To be phenomenal teachers and advisors, bank staff will need to be enabled with not only the latest technology and most up-to-date information, but also use automation to liberate themselves from repetitive back-end tasks, so they can focus on the quality and impact of their interactions with customers. They also need to work within a sales culture that values the quality of interactions and the emotional connection with customers, not just the quantity of sales made. Just as in an Apple store, bank employees need to be committed to evangelizing the digital revolution, while still recognizing the unique value added by human interactions. As technology continues to improve, the number of human interactions will continue to decline, but the value of each human touchpoint to the bank’s brand will continue to increase.
In a world where many bank staff are worried about branch closures and the migration of sales and service to digital channels, the role of leaders is to convince them that they can be phenomenal—and to provide the training, tools and incentives to lead the digital revolution in banking, not be victims of it.
To find out more, read the recent Efma and Accenture report, The banking sales force—now what?, which summarizes the outcomes of three interactive think-tank meetings with senior bank executives.
The post Using digital to create a phenomenal bank salesforce appeared first on Accenture Banking Blog.
Read the full report
In the new world of #digital #payments, many #technology developments are driven by #customer #experiences. #Banks are investing heavily in technological innovations and #Fintech relationships to provide better payments experiences to their customers. Even so, there is a stark contrast between the payments experiences of retail customers and #corporate customers. While retail consumers can enjoy seamless, immediate, always-available payment services with advances such as mobile and contactless payments, corporate customers struggle with rigid paper-based processes, fragmented products and relationships, poor visibility into payment flows and more.
However, I see a shift starting to happen in the corporate payments landscape as corporates start demanding the ability to transact in real-time, in an omni-channel environment, 24/7. Banks such as HDFC, HSBC, and others are already launching their corporate mobile solutions in areas including cash management, trade services, reconciliation, authentication and operational support.
Market dynamics are driving corporates to restructure their operating models, and are driving banks to adapt their corporate payments offerings to meet these new expectations (as shown in Figure 1):
Figure 1
The (re)emergence of virtual accounts is a key trend to watch, with banks such as BNP Paribas, RBS and Barclays leading the way in offering virtual accounts to their corporate customers. Virtual accounts provide corporates with better control over their cash management accounts, reduce administrative costs and optimise the number of real bank accounts, thus eliminating the need for cash management products such as notional pools (at least in the same currency). Banks can also consider extending virtual account management features in a multi-bank environment for the corporates who bank with multiple banks.
Corporate portals are another product that banks such as CitiDirect, J.P. Morgan and Barclays have in their corporate payments service portfolio. A corporate portal presents corporate customers with a single view of all their banking services and activities, and for banks it can support greater cross-sell of products, making it easier to roll out new and enhanced digital services.
As banks strive to deliver against corporates’ expectations, they need to invest in new payments technologies, move closer to corporate customers, and integrate themselves into their value chains. If banks themselves don’t move quickly to seize this opportunity, then somebody else will do it first—thus relegating banks to back-office utilities running accounts for others’ front-office payments offerings.
Accenture recognizes the challenges banks will have in balancing innovation with handling ‘run-the-bank’ issues such as regulation and the inflexibility of legacy systems. Those banks that can execute on both fronts most effectively will win out in the race to forge durable, profitable relationships with their corporate customers.
Read more in the full report, Transforming the corporate payments landscape
The post Corporate payments: Catching up with the customer experiences of digital transactions appeared first on Accenture Banking Blog.
Any device can be a commerce device, according to Mastercard’s Kiki Del Valle, senior vice president of #digital payments and labs. “At the end, the IoT can become the internet of payments,” she said. &8220;We want to provide that secure commerce experience that consumers can benefit from: shop wherever they want to shop, pay in […]
Bank Innovation
How do you choose where to focus your #innovation team? Marie Floyd, senior vice president of #digital customer experiences for #Wells Fargo, has some tips. Floyd, who joined Wells Fargo in 2015, has worked in the tech industry for more than 30 years, and for companies like Intuit, eBay, and IBM. In her time at […]
Bank Innovation
BNP Paribas Wealth Management is testing a new mobile #investment #advisory #tool, myAdvisory, the company said yesterday. The app offers investment advice, except instead of using robos – like the SigFigs of the world – the advice is written entirely by humans. The app offers a personalized financial advice based on investment guidelines set by […]
Bank Innovation
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