Companies of all stripes are getting bot happy, rolling out bots for third-party platforms like Facebook Messenger, Kik, WeChat, Slack, and more. Firms like Yahoo, H&M, KLM Airlines, and others use these chat bots — software built to simulate human conversation and to help consumers complete tasks — in an effort to better win, serve, and retain customers.
A few banking providers are beginning to dip their bank-shaped toes into the bot space: Capital One allows customers to take actions like paying bills via Alexa on Echo devices; Bank of America has announced plans to roll out a bot on Facebook Messenger; and numerous Chinese providers offer banking services via WeChat.
But while a few banks are in a position to experiment, digital business executives at most banks must decide whether to use precious resources to build or buy a chat bot offering. Forrester’s brand-new research report argues that most of these executives should hold off on launching chat bots for messaging platforms. This is because:
Today’s bots often lead to uneven — or worse — experiences for customers. In our research, we found many instances where a chat bot offered a quick and effective answer to a consumer’s question; however, about one-third of the time, existing chat bots either failed to complete the consumer’s request or provided a clunky, awkward experience.
Too few digital banking teams allocate significant resources to their alerts efforts — as evidenced by the mixed results in the Alerts category of Forrester’s Digital Banking Benchmark scores. But some banks have recently sought to improve their email, SMS, and in-app alerts (also called “push notifications”).
Bank of America has now launched the latest updates to its alerts. Just a couple of years ago, the bank’s email alerts were text-heavy, unwieldy, crowded messages with little clear guidance for customers. But through multiple iterations, Bank of America redesigned its alerts to be clean and simple with a clear call to action based on the purpose of the alert (see images below).
Forrester spoke with Alex Wittkowski, VP and senior product manager of mobile banking and commerce at Bank of America, who discussed how the bank redesigned its email alerts “to focus on just those few crucial elements” at the heart of an alert’s value to the customer. According to Wittkowski, the redesigned alerts are now:
Despite being geographically far away from the rest of the world, Australia's financial services sector has found its place on the world stage. Australian banks are some of the most innovative in the world. As our 2016 Global Mobile Banking Functionality Benchmark has shown, some Australian banks have overtaken their global counterparts, with Westpac taking the coveted top spot.
The question that I often get asked from Australian digital banking teams is, "so what's next in financial services?"
And I think that's a great question. As uncertain economic conditions, wavering markets, and tight budgets continue to increase the pressure on Australian digital teams to deliver better experiences and increased sales through digital touchpoints, we believe that digital business executives have to drive digital transformation. And this means far more than simply developing a "digital strategy".
Digital banking executives must make mobile the hub of customer interactions, and not treat mobile as if it were just another channel. They should develop mobile banking as a platform to engage customers. To continue to win and retain mindshare and increase wallet share, the next step digital banking teams must focus on are ways to create new sources of value for their customers, not just meeting their basic needs.
Mobile banking adoption has reached critical mass. Rapid progress in mobile technologies and consumers' ever-increasing expectations and changing behavior have left many banks around the world playing catch-up. In the meantime, a cluster of banks is racing forward by putting customers at the center of their strategy, striving to anticipate customers' emerging needs, and by embracing an agile and iterative approach to speed up the development of new mobile capabilities that differentiate them from their peers. Today, these banks are delivering outstanding services to their customers in mobile, and in 2016, Westpac in Australia is leading the pack.
To help digital business strategy leaders better understand the landscape of mobile banking, identify best practices, and benchmark their own capabilities in this area, Forrester conducts an annual functionality benchmark applying 40 criteria. This year, we evaluated 46 leading retail banks from more than a dozen countries across four continents, and have just published the findings in our "2016 Global Mobile Banking Functionality Benchmark" report.
Here are some of the highlights from the global benchmark report:
As former New York Mayor Michael Bloomberg once tweeted, “If you can’t measure it, you can’t manage it and you can’t fix it.” Digital executives at banks must understand and gauge the drivers of mobile banking in order to boost engagement. To help executives and their teams accomplish this, Forrester recently built a driver analysis model to identify which factors increase mobile banking app use (as measured by the number of days used and the average duration of a session). This model included two categories of potential drivers: perceptions and behaviors. The full results of this research are detailed in our new report here.
Here are three key takeaways from our research:
Feelings of accomplishment fuel mobile banking use. The degree to which a mobile banking app helps a customer feel positive and accomplished has the largest impact on how often that customer will use mobile banking. This is further evidence that architecting positive emotional experiences is crucial to maintaining an engaged mobile banking audience. At leading providers, digital business execs and their teams will accomplish this, in part, by focusing on bank customers' mobile moments.
Two weeks ago, I was lucky enough to spend 10 days in Italy on a vacation with my wife and some friends. As we walked the Path of the Gods, made our own Neapolitan pizze, and enjoyed the gorgeous views of the Amalfi coast, different people in our group would pay for a limoncello here or a glass of aglianico there. As such, our financial activity was a mix of different individuals spending various amounts for a range of stuff. But our group was often too busy having fun to carefully track who paid how much for what and when.
Enter Splitwise* a non-bank mobile app that lets groups of people easily track their spending and settle their short-term debts to each other (see screenshots below). We used it throughout our trip, and it was a breeze.
But why didn’t a bank build this kind of convenient digital offering first? Or why don't more financial providers integrate with Splitwise and other disruptors to build ecosystems of values for their customers? Many bank executives and digital banking teams say their goal is to help customers better manage their finances (and increase retention and engagement by doing so). But too few financial institutions have focused on what Forrester calls the shared finances opportunity. Forrester defines shared finances as:
Any situation in which a person acts as an observer of, partner in, or proxy for another person's finances.
For the second year in a row, Spain’s CaixaBank tops our review of European banks’ mobile banking services. Not only CaixaBank delivers the basics superbly when it comes to transactional features, it also excels in offering a wide array of touchpoints including a smartwatch app and a fully-optimized mobile website with product research tools, as well as best-in-class alert services, and outstanding marketing and sales functionality.
Forrester has just published its 2016 European Mobile Banking Functionality Benchmark, revealing important insights about the current state of European mobile banking. We evaluated the mobile banking services of 11 of the largest retail banks in Europe, and found out that CaixaBank in Spain, Garanti in Turkey, and Bank Zachodni WBK in Poland continue to lead in mobile banking. The three banks achieve mobile banking success by offering both strong basic functionality and a wide range of next-generation features. For example, CaixaBank lets customers make mobile contactless payments in store by providing a digital wallet integrated into the main mobile banking app. Garanti offers an interactive, voice-activated virtual assistant that customers can use to search the app for functionality and various task like finding a past transaction. Bank Zachodni WBK helps customers reach human help easily by offering video banking through their mobile banking app.
[Image Below: Bank Zachodni WBK Offers Video Banking Through Its Mobile App]
The other day, I stopped by my bank’s ATM to get some cash. After entering my card and PIN and while waiting for my money (during which I was a captive audience), I was presented with an ad for a new service from the bank. Unfortunately, the ad’s call-to-action was a message telling me to call the bank’s 1-800 number to find out more.
I had just encountered one of the broken or inadequate cross-channel experiences that millions of customers face every year.
This is a lose-lose situation: In this case, the bank knew — or should have known — a heck of a lot about me as a customer, yet it failed to use context* to design a better experience and guide me seamlessly across touchpoints. And as a result, the bank also failed to cross-sell me any products or services.
Forrester defines cross-channel behavior as any instance in which a customer or prospect moves from one touchpoint to another when completing an objective. Today, cross-channel goes way beyond online-to-offline transitions; going forward, these interactions will only increase in frequency and importance. Digital executives at banks are left with a tangle of customer journeys across various touchpoints (see image below).
Digital wallets appear to be so compelling – simplifying life for the customer (check), always present (check), location marketing (check), loyalty and rewards (check), multiple payment types (check), digital delivery (check) adoption…hmmm, not so good.
So why are consumers not flocking to the promised land of Apple Pay, Android Pay and other digital wallets?
Well they are...sort of. You have to look to China to see the promise of a wallet fulfilled, where Alipay has left its humble payment origins behind and now moved into smart cities. It lines up alongside the lifestyle platform WeChat; as well as shopping, paying bills and taxes with WeChat Pay, you can also schedule hospital appointments, order a taxi, apply for a visa or file your taxes. The numbers are staggering: according to this article by The Drum, 420 million people used WeChat to send 8.08 billion “red envelope” digital payments over Chinese New Year alone, almost double the transactions that PayPal had during the whole of 2015. But China is a special case – born straight in to a digital world, wallets arrived without legacy, without competition. Head back to the West and you start to understand some of the challenges – highly competitive markets, fragmented providers, disintermediation fears from banks and card issuers, trust issues from consumers – it’s just not China.
As a preview of the report, here are two of our predictions for 2016:
APIs and open platforms will take center stage. APIs are becoming the most powerful technology in digital business design. Done right, APIs open new angles for business strategy. Financial services providers have been relatively slow to recognize and act on APIs as an opportunity to transform their businesses and, ultimately, better win, serve, and retain customers.* This will change in 2016, as digital executives collaborate with CIOs to champion big investments in internal, B2B, and product APIs. APIs won’t only help firms increase agility and provide services to clients and partners: They will enable financial firms to build dynamic ecosystems of value, reconnecting a fragmented value chain. They will be part of a wider, and longer-term, shift to open platforms as the foundation of digital financial services strategy.