It’s that great time of year when I finally get to talk publicly about Forrester's Forum For Customer Experience Professionals in New York at the end of June. If you’ve ever been to one of our events, you know that we always have a theme, and this year that theme is “Why Good Is Not Good Enough.”
We picked our theme because of the good news/bad news story told by our Customer Experience Index (CXi) results this year. First, here’s the good news: The number of brands in the “very poor” category of the CXi is down to one out of 175 brands we studied. What’s more, only a handful of brands — 10% — are in the “poor” category. Together, those findings show that as customer experience improvement efforts got traction over the past year, the number of truly awful experiences dropped like a rock.
Now for the bad news: Just 11% of brands in the CXi made it into the “excellent” category.
Taken together, those two pieces of news mean that most brands are bunched up in the middle of the curve — not awful in the eyes of their customers but not differentiated either. I think of this situation as “okay is the new poor” or, in my darker moments, “the year of ‘meh.’” Regardless, it adds up to the same thing: A merely good customer experience is no longer good enough if you want incremental sales, positive word of mouth, and better customer retention.
Our report lays out many commonly-encountered obstacles to mobile banking execution success and how digital teams can overcome these obstacles. Here are a few of the areas the report looks at:
Overly ambiguous — or nonexistent — business goals. Clearly articulated business goals should be part of a bank's mobile strategy. But a successful road map also lays out the business objectives and records specific goals for each initiative. As one eBusiness executive at a bank told us, "We literally have a section we call 'What's in it for us?' and we use sticky notes to write out what we think we can gain from each action."
Legacy systems and back-end integration. Technology may well be the largest obstacle to executing a mobile banking strategy — especially for larger, traditional banks. As such, successful mobile road maps need to outline how initiatives will plug into existing or soon-to-come platforms and systems.
Yuebao is a hot topic in China, and has even gotten international attention. But what is it? Yuebao is a value-added service that customers of Alipay (China’s version of PayPal) can use to earn interest and to make payments and transfers. An individual can start a Yuebao account with as little as RMB 1 (US$0.17).
The Alibaba Group launched Yuebao in June 2013. By mid-February 2014, 61 million people had invested money in Yuebao, and total fund skyrocketed to RMB 400 billion (US$65 billion) – making it the largest fund in China.
People are drawn to Yuebao because of its:
High yield. The average annualized return is around 6% — much higher than similar funds and banks’ financial products.
Good liquidity. Yuebao offers great flexibility; investors can deposit and withdrawfunds anytime. Other financial institutions require lock-in periods and much higher initial investments.
Ease of use. Yuebao offers a much easier way to invest. People can see the value of their assets anytime, anywhere on their smartphones.
A version of this post originally appeared on Re/code.
The rollercoaster ride for Bitcoin enthusiasts continued this week: There was good news from UK regulators, who have taken a relatively progressive stance on virtual currencies, and bad news with the latest heist of 890 Bitcoin (roughly $600,000) and the resulting demise of Flexcoin, a Bitcoin storage service. The breaking news frenzy perhaps reached a new peak with the claim that the real Satoshi Nakamoto has been identified. There’s no doubt that additional revelations are on the horizon when it comes to the first crypto-currency, and with that, the debate about the longevity and usefulness of Bitcoin will continue. In our new report on Bitcoin, we address the following questions:
1. What is Bitcoin?
2. Who are the main players?
3. What headway has Bitcoin made?
4. How viable is Bitcoin as a consumer payment alternative?
5. Should I worry about crypto-currencies like Bitcoin disrupting my business?
6. How can I outsmart crypto-currencies?
Here’s the bottom line: Bitcoin is deeply flawed as an alternative currency or payment method for mainstream consumers. It will, however, be a catalyst for a more efficient global payments system because it demonstrates one way to tackle the many embedded inefficiencies.
Bitcoin Is Not A Viable Payment Alternative For Mainstream Consumers
Forrester began surveying global banking platform deals in 2005. For 2013, we evaluated about 1,600 banking platform deals submitted by 29 vendors and located in about 130 countries. Shortly, we will publish the final results of this evaluation. Today, I want to offer some initial trends:
Counted deal numbers are the second highest ever. The number of counted new named deals is the second level we have yet recorded. The number of new-named deals shrunk; extended business deals increased and the banking platform market grew.
The banking platform market shifted gears again. Top 10 vendors still represented the vast majority of new named deals that we counted, but fewer vendors than in 2012 enjoyed more than ten percent of all counted deals.
Banks' total assets indicate three vendor categories. One group of vendors won very small banks only and another group’s projects reached up to medium sized-banks. Only six vendors’ clients touch the total assets range of tier 1 banks (and go beyond it).
All the details will be available with a series of forthcoming reports focusing on the success of the participating vendors, the regional success perspective, as well as delivered functionality. If you do not want to wait: I will share some of the results during a Forrester Teleconference on February 27 As always, let me know your thoughts: jhoppermann (at) forrester.com.
Hello, and a somewhat belated Happy New Year, dear readers! As we prepare for the upcoming year — and start to think about the digital banking space in 2014 — it is worth taking stock of where banks’ secure websites are today.
Canadian banks excel at cross-selling. Canadian banking providers may well be among the best in the world at cross-selling on secure sites. In our reviews, Canadian banks earned scores that were significantly higher than US firms in our cross-selling category. In fact, every Canadian bank we ranked earned high marks for digital cross-selling. They accomplish this by embedding marketing and calls to action for additional products and employing merchandising tactics within "products and services" tabs.
US banks shine when it comes to money movement and alerts. All six US banks did well in our money movement category, which includes bill pay, transfers, and P2P payments criteria. The US banks also scored well across the board for alerts by offering extensive account, transaction, and security alerts across a range of delivery endpoints including email, SMS, and in-app alerts.
At a time when mobile banking and mobile payments dominate the financial news, it is easy to forget about the humble automated teller machine (ATM). Customers take them for granted, until an IT glitch prevents them from withdrawing their money, that is. Only a couple of weeks have passed since the latest media uproar caused by a computer failure at the UK’s Royal Bank of Scotland and NatWest. The Daily Mail responded immediately with an alarming title, “'Cyber Monday' computer meltdown EMPTIES customers' accounts and leaves millions unable to access cash.”
For my money, the most surprising high-value secure website feature is search (here we mean natural language keyword search that lets a user find what he or she is looking for on the site). In fact, our research revealed search to be one of the few bank website features that customers rate as above-average in importance, yet search is either nonexistent or poor on most banks’ secure sites. So we wrote an entire research report about it. Here are some highlights:
Online banking customers want search… We asked consumers who bank online to "rate how important it is to you that your bank's website has each of the following features" and asked them about 14 different features, including search. The majority of online bankers — 68% in the US and 63% in Canada — say search is important to have on their bank's secure website.
…but few banks offer search on their secure website…Just seven of the 25 largest banks in North America include search functionality on their secure websites.
The bank I mainly use for my daily banking needs does not offer that many examples of great customer experiences. The two reasons why my family continues to use that bank are the high number of ATMs in the area where we live and a very customer-oriented branch advisor. Our most recent interaction with that bank (but not with that advisor) delivered yet another example of “great” customer service across channels, an experience that will likely cause us to look for a new bank. The chances that this yet-to-be-determined bank can offer better cross-channel capabilities at least at some point in the future are not bad at all: Many financial services firms are evolving beyond using just a single channel to get in touch with their customers (see the figure below).
First, Discover has been a consistently strong performer in our Customer Experience Index, in a virtual dead heat with American Express. Yet Discover’s customer experience story is not nearly as well known as the American Express story, so we’ve been dying to bring it to a Forrester stage.
Second, Harit blew me away in our first forum prep call. Not only does he really get the concept of a customer experience journey, but also he’s been living it. What’s more, he brings results in terms of metrics like customer loyalty scores, wallet share, and J.D. Power scores as proof that what Discover has been doing actually works.
In the run-up to the forum, Harit recently took the time to answer questions about what Discover is doing and why it's doing it. It’s my pleasure to be able to share his answers with you, and I hope to see you in Los Angeles where we’ll all get to meet Harit in person.
Q. When did your company first begin focusing on customer experience? Why?