What Role Does PFM Play In Online Banking's Future?

As a new analyst researching vendors for digital banking, I wanted to share an observation as eBusiness and Channel Strategists are making decisions about digital financial services investments. In the last few months, I’ve interviewed personal financial management vendors and banks about their PFM implementations. One notable theme is bubbling up to the surface, what role does PFM play in online banking’s future? 

 With notable success in driving higher engagement, vendors and banks report that customers spend between a 2-4x more time in PFM than online banking. While both online banking and PFM have similar goals to increase retention, cross-sell, loyalty, and provide customers with greater insight into their financial picture, both offer different customer experiences. Functionally, the main difference is that online banking supports transfer and self-service capabilities, while PFM does not support transferring capabilities and may loosely, at best, integrate self-service. The biggest difference is customer experience.

  • Online banking is transactional in nature. You go there to view your balance, schedule payments, and make transfers. You get in, you get out. Most institutions have masters pushing high volume, low complexity account maintenance tasks to digital channels. The focus has mainly been on automating these capabilities to reduce manual processing to gain further cost efficiencies.
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Will 2012 Be The Year Financial eBusiness Teams Fully Embrace Video?

I love video as a communication media. The combination of sound and moving pictures so much more engaging and more memorable than text.

We wrote in our research last year about how we're starting to see video being used more and more by eBusiness teams as an efficient and effective way to educate customers about products, encourage sales and deliver customer service.

With the Academy Awards coming up, we thought it would be both fun and helpful to highlight some of the best examples we've seen of online video in retail financial services in the past year.  With the help of the rest of team, I've drawn up a list of our favourites in five categories:

Product marketing video
DNB's S for Savings Plan video (Norway).
PayPal’s future of shopping video.

Service marketing video
Commonwealth Bank of Australia's Welcome to NetBank video.
E*Trade's Take Control In 3 Easy Steps video (US).
Mint.com's 90-second overview (US).
Lloyds TSB's money manager video (UK).

Educational (‘how to’) video

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Brands Are Increasingly Selling Direct Online . . . In New Global Markets

Back in 2010, we wrote a report that looked at how and where US online retailers were expanding internationally. Today we published a related report that focuses on brands that have extended their international offerings by launching transactional websites. Establishing A Global Direct Online Sales Footprint looks at the countries where brands are choosing to focus on with their eCommerce offerings, and some of the tactics they’ve used to keep costs in check.

A handful of findings from the report:

Brands rarely enter a market by selling direct on their websites. Most brands enabling eCommerce on their global websites today already sell in these markets through traditional retail channels — the online sales channel simply becomes a new way to reach consumers.

Country selection is not always dictated by market size. Brands expanding their online offerings in Europe, for example, often focus first on the UK, France, and Germany. After the big three, however, the ease and convenience of serving other markets often trumps market size.  

Online sales strategies differ by market. Rare is the brand that has an identical offering in every international market. Most brands that offer eCommerce-enabled sites also provide informational sites in other markets, with little consistency in how the informational sites direct online shoppers to the brands’ retail partners.

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Raining On Ron Johnson's Parade

Ron Johnson, the new CEO of JCPenney, had a dog-and-pony show in New York this morning to discuss the company’s go-forward strategy. The major change: fewer sales and a move toward an everyday low price (EDLP) program. He also mentioned some store redesigns that would create boutiques to make JCPenney more akin to European department stores. There was also an allusion to services (similar to Genius Bar). While that should help to weed out cherry-picking shoppers and improve JCP’s assortment and experience (which already has significantly improved before Mr. Johnson thanks to partnerships with Mango and Sephora), it is unlikely to reverse JCPenney’s downward revenue slide or to grow the challenged mid-tier department store sector. This is because the biggest problem with JCP is something that is very difficult to fix (the same challenge that Sears has, by the way) which is that it has over 1,000 stores mostly located in bad malls with declining foot traffic. The question I have isn’t so much, can JCP reinvent its stores or the store experience, but how will it drive traffic back to those stores? Only the small fraction of its stores located in prime locations will even have the opportunity to re-engage shoppers; in fact, by our count, only 84 of JCPenney’s 1,100 stores are co-tenants of Ron Johnson’s old employer and the premier retailer today, the Apple Stores. 

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Customer Service Satisfaction Challenges Stereotypes

Data tells a story and sometimes it’s a story with an unexpected plot twist. Such is the case with online customer service data we have just published in my report called “Understanding Customer Service Satisfaction To Inform Your 2012 eBusiness Strategy.”

Online customer service channel usage has shifted dramatically from two years ago. There are also significant differences in satisfaction between channels, particularly among different generations.

“Understanding Customer Service Satisfaction To Inform Your 2012 eBusiness Strategy” challenges some long-held assumptions about online customer service and customer behavior including:

  • Not everyone prefers the telephone. I have been writing for some time that call deflection is win-win when it gives other options to consumers who prefer support channels other than the telephone. This is echoed in our data that shows Generations Z and X have higher satisfaction chatting with a live agent rather than speaking on the telephone with a live agent.
  •  Social support is not just for younger consumers. While community support and Twitter are most widely adopted among younger consumers, don't assume social support is the domain of younger consumers: online community support is also used by 30% of consumers between the ages of 32 to 45 and 20% of online consumers between the ages of 46 to 55. 
  • Don’t underestimate the high demand of the senior segment.While we may stereotypically associate impatience with youthful generations, there is a higher likelihood of impatience among Older Boomers and Seniors when it comes to wanting quick answers online and the likelihood to abandon if a website fails to deliver.  
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How To Prioritize Your eCommerce Technology Investments

2011 is in the books, and I certainly hope your business in 2011 reflected the macro trends favoring online and mobile commerce. But as the calendar rolls over and we (quickly) fire back up after the holidays it is time to look at 2012’s plans and ensure we are laying the foundations for a successful year and beyond. But that begs the question of how best to manage the prioritization of technology investments in an environment of increased budget, and increased visibility. Some of you may be done with this, but many of you are still in the midst of making your decisions. As you complete your prioritization of projects for 2012, some things to keep in mind:

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Thinking of launching a daily deal? Just hold that thought and read this first...

In November 2011 Sucharita Mulpuru published a very well read Forrester research document entitled “The Myths and Truths About Daily Deals”. In this document she led with the line…

“While significant media and investor interest in daily deals has fueled the hype around this business model, data from consumers indicates that daily deals are significantly challenged models.”

The daily deals concept is receiving just as much press coverage in Europe as it is in the US, so with that in mind we have taken a similar look at the state of the market of deals, flash sales and coupons and found that while there is a great deal in common, there are some notable differences.

Much of the differences stem from a combination of the local players and the geographical complexity of operating across Europe.  Many of the big players like Grouponand Living Socialare present in Europe, with significant market presence in many countries, though a range of other national companies like DailyDeal.deand SecretSales.comoperate in only one country. So while at a national level the situation is reasonably easy to understand, eBusiness executives operating in a pan-European company have a maze of different options to navigate through.

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The Co-Operative Bank Comes First In Forrester's 2011 European Bank Customer Advocacy Rankings

For the second year in succession, the UK's Co-operative Bank has come top in our European Bank Customer Advocacy Rankings, just ahead of Poland's ING Bank Śląski, with Germany's Sparda-Banken in third place.

Customer advocacy is the perception among customers that a firm does what’s right for them, not just what’s best for its own bottom line. Customer advocacy matters because in every country we survey in our Consumer Technographics® research, we’ve found that customers who view their main bank as a customer advocate have more accounts at their main bank, are more likely to consider their bank for their next financial purchase, and are more likely to recommend it to others.

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A Unified Digital Europe. Is It Possible?


Yesterday the European Commission outlined its ambition to create a “genuine Digital Single Market” by 2015. You can read the whole text here if you have some time to kill . . .


It has the bold aim of “doubling the shares of the internet economy in European GDP and of online sales in European retail by 2015.”

Bold? Not half!

Like many EU documents of this sort, it’s big on ambition but frustratingly light on the “how.” In short, the document outlines 5 key blockers to cross-border growth in the EU, as follows:

·         The supply of legal, cross-border online services is still inadequate.

·         There is not enough information for online service operators or protection for internet users.

·         Payment and delivery systems are still inadequate.

·         There are too many cases of abuse and disputes that are difficult to settle.

·         Insufficient use is made of high-speed communication networks and hi-tech solutions.

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A Look Ahead At eCommerce Technology in 2012

As the calendar flips to 2012 we all seem to feel the urge to assess the near past and look to the near future. 2011 was a year full of industry rattling M&A and meaningful growth in eCommerce channels in the face of tough economic head winds. But, we have all already read too many posts recapping and listing 2011’s big events. Besides, we lived it already, time to move on. So what is 2012 bringing the world of eBusiness technology? A few things to look for:

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