I attended FinovateSpring 2013 last week to get a preview of new products from digital technology vendors for financial services. For those of you that have not been to Finovate, it’s a little like innovation speed dating – where 72 vendors have 7 minutes to win the hearts of the audience to secure the “Best of Show” Award. At last year’s conference, a few new topics emerged: Personal Financial Management, payments, rewards, coupons, and mobile banking services for Pre-Paid Visas customers. This year the focus was still on PFM and payments, but one new topic hit the stage full force: authentication, which is this year’s new black. Sexy, I know!
While there was plenty of interesting and innovative demonstrations, Forrester attended the conference to identify trends and solutions relevant for our retail digital financial services clients. My "Best of Show" picks included innovative solutions that helped our clients either deliver on a customer need or solve a core customer problem in the retail banking realm. At this year’s conference, I noticed that:
Big data and PFM got married...And,had a little MoneyDesktop. Money Desktop, the best in show winner, debuted their Insight and Target platforms—providing financial institutions the ability to create and send targeted marketing content and product offerings based on customer relevancy.
Mobile banking success is a moving target: Customers needs and expectations are changing rapidly, and eBusiness teams at banks are sprinting to get ahead of their customers’ expectations. To achieve this, firms are rolling out new features, optimizing existing services, and enhancing mobile experiences.
To understand which firms are leading in mobile banking — and to better gauge the mobile banking landscape overall — we used our Mobile Banking Functionality Benchmark to evaluate and rank the mobile banking efforts of 15 of the largest banks in North America, Western Europe, and Australia.
Highlights of this research include these findings:
Chase takes the top spot overall. Chase received the highest overall score among the banks we evaluated, netting a score of 71 out of 100. The bank offers mobile banking services across a range of touchpoints ranging from smartphone apps, strong mobile websites, and two-way SMS. In addition, Chase also has strong mobile money movement features such as bill pay – including the ability to add a payee – and mobile transfer capabilities.
Banks get a bad rap for not being innovative enough. But at least one provider is proving the haters wrong: Early this year, U.S. Bank launched Mobile Photo Bill Pay, a feature that lets mobile bankers add a new payee simply by taking a picture of a paper bill or statement.
This mobile feature – powered by technology solutions company Mitek – goes beyond “nifty” With it, U.S. Bank offers customers an easier, more convenient, and more elegant cross-channel experience for a common activity. It helps the bank by increasing the number of customers who use digital bill pay – and deepening relationships with customers. According to Niti Badarinath, SVP and head of mobile banking at U.S. Bank, “Getting people to become active users of bill pay is key to our digital strategy, because we recognize the value and stickiness of the relationship when people pay bills." (taken from a recent article in American Banker)
How it works
When U.S. Bank launched mobile photo bill pay, I immediately pulled up my U.S. Bank iPhone app and took this new feature for a test drive (see screenshots below). Put simply, this is an innovation that delivers: A customer can go from opening a bill he got in the mail to enrolling a brand new payee to paying that bill in under 150 seconds (a.k.a. less than 2 minutes and 30 seconds). This is without setting up any bill payment options in advance, or entering any information manually – the mobile photo bill pay feature even corrects for image distortion, reads relevant data and auto-populates all the information.
The rapid development of customer touchpoints and rising customer expectations turn up the pressure on eBusiness professionals at retail banks to continue investing in digital channels. Even with the rising pressure, few eBusiness executives report having the resources needed to execute a strategy that supports customers who use multiple channels. Forrester partnered with the Consumer Bankers Association for the second year to survey digital banking executives for the “The State Of North American Digital And Multichannel Banking 2013” report. The goal of the research was to better understand how digital banking teams are focusing their strategic energy, investing in digital channels, building multichannel capabilities, and measuring the digital business. We found that:
Consumers are increasingly using multiple channels. Almost one-third of eBusiness executives we surveyed believe that more than half of their customers regularly use more than one channel. Yet few banks have connected their multiple channels to create an integrated multichannel experience -- allowing customers to seamlessly move between channels.
While most banks have a multichannel strategy, few have the resources to execute. Most eBusiness executives indicate they have a digital strategy, yet only a few report having the budget or dedicated multichannel teams to support executing a strategy. Without dedicated resources, multichannel will remain a pipe dream.
When we look at our Technographics data on mobile banking adoption by bank, it’s clear that some banks are doing much better than others. Why?
Some banks are lucky. Some banks have distinctive brands or propositions that have earned them a customer base that is younger, better educated and higher income than the population as a whole. These customers are more likely to own smartphones, more like to use the mobile Internet, and more likely to be technology optimists. That makes them pre-disposed towards using mobile banking and so relatively easier to persuade to adopt mobile banking.
Others have just worked hard. The rising tide of mobile Internet adoption is not raising all boats at equal speed. Some banks have persuaded far more of their customers to use mobile banking than others. The secret of their success? The digital banking teams at the most successful banks have worked long and hard to design, build and promote mobile banking services that meet their customers’ needs.
Late last year, Forrester reviewed and ranked the secure websites of the 12 largest retail banks in the US and Canada. The full reports can be found here (US) and here (Canada). Overall, banks' secure websites earned an average score of 70 points (out of 100), demonstrating a level of quality that meets customers expectations but also leaves room for improvements. Here are some of the highlights:
Citi moves to the top of the US rankings with a website overhaul. In July 2011, Citi launched its first tablet banking app. Based in part on insights gleaned from that process, the bank rolled out a newly redesigned secure website, followed by additional digital features and functionality for online bankers, mobile bankers, and tablet bankers. As a result, Citi moved from second-to-last in our ranking to the top spot this year.
RBC pulls off a historic sixth-straight win among Canadian banks' secure sites. For a record sixth year, RBC earned the top spot in our Canadian rankings. Two factors drive RBC’s digital banking success: First, the bank's secure website offers a wide array of secure site features, including eBills, tax management tools, and more; second, the bank continues to innovate, this year adding customizable money management dashboards and new mobile features such as foreign exchange and mortgage payment calculators on its iPhone app.
My latest research on Building Next Generation Mobile Banking Solutions has been published for a few days now. I’ve already gotten phone calls from clients stating this research is not only timely, but speaks to the very challenges their organization is facing when considering how to build next generation mobile banking solutions. The resounding theme, as my latest research uncovers: Even the best mobile strategy can be a victim of poor execution. Digital banking executives are feeling the pain of their current mobile banking platform. While most are plagued with the realization that their current mobile banking platform may not be scalable or flexible enough to deliver next generation mobile banking solutions, others are facing a more disruptive challenge—dealing with the vendor acquisition and consolidation aftermath. Regardless of your current plight, digital banking teams should consider the following as they build next generation mobile banking solutions:
A well-defined strategy can fall short in execution. Technology can make or break even the best mobile banking strategy. The pressure is on to get something out the door, but too much focus on short-term delivery has meant that some banks have sacrificed the ability to deliver long-term capabilities.
A vendor relationship can hinder or enhance your mobile banking strategy. Banks that are using a vendor that has been recently acquired are burdened with the task of understanding how that acquisition will affect their mobile banking strategy and roadmap. Specifically, banks are trying to determine if acquisition will require migration to a new platform, dedicated internal resources to support migration activities, or a new vendor altogether.
Whether you’ve been naughty or nice this year, you probably have a wishlist for your business. We thought it would be fun and interesting to find out what some of your wishes are, so the Digital Banking Strategy team at Forrester reached out to some of our eBusiness clients at banks and asked them “What one ‘wish’ do you have for your team’s digital banking efforts or strategy in 2013?”
Here are some of the answers we got back:
“We wish we could transform every branch and call center employee into an advocate for marketing and educating customers on our digital capabilities.”
“I wish that our execs would understand how understaffed we are.”
“I wish we had better live help for our digital banking customers.”
“I wish I knew which area of mobile payments to focus on and what is going to ‘shake out’ and actually ‘stick,’ so to speak.”
“We wish for a digitalized branch pilot that focuses on advice and guidance.”
“We wish all of our customers – including the most skittish and skeptical – would try out our digital banking capabilities (online, mobile, and tablet)… and those who already use them would do so even more regularly.”
“I wish I could spend 3 hours with our CMO – and have his full attention – to show him how much impact our online and mobile banking efforts have.”
“I wish we could sort through the clutter of mobile wallet vendors and offerings to know which will actually pan out.”
“I wish I could snap my fingers and have great secure site search and intelligent cross-selling on our secure site.”
Over the past decade, BBVA has worked hard to become more customer centric and match its offerings to its customers’ needs. Given the pace of technology change, customers’ rising expectations and the digital disruption those forces cause, innovation is a critical part of the role of eBusiness and channel strategy executives. I thought I would share a few of Gustavo’s insights here for those of you who couldn’t attend. BBVA has become systematically innovative, launching a continuous succession of innovations many of which were a first in Spain, in Europe or in the world, such as:
Earlier this week I caught up with Discover’s Mike Boush to talk about his keynote at the upcoming eBusiness Forum, where he’ll explore innovations in eBusiness at Discover. Here’s a snippet of our conversation, and a sneak peak of Mike’s session at the event:
Q: What digital initiative have you undertaken in the last 12 months that you're most excited about?
A: I love what we're doing with partnerships online. It's creating a whole lot of value for customers and, frankly, getting us out of the "must be built at Discover" mentality. It started with an integration with PayPal in order to deliver peer-to-peer payment services. The program leverages PayPal’s huge delivery platform, and customers love it. Then we introduced an integration with Amazon that lets customers pay for their Amazon.com purchases with the cash they earned through our Cashback Bonus rewards program. This really highlights the difference between competitors' "points" programs and our straightforward cash, and the transparency shows just how great our program is. And recently, Google announced our integration of Discover card enrollment into the Google Wallet from our website, which is convenient for customers and helps position us in the mobile payments space. These integrations are just a sample of what we've done, but they become powerful illustration of what we can do when we team up and innovate with other great companies.
Q: What gets in the way of delivering the right experience to your customers?