Banks: Your Customers’ Cross-Channel Experiences Are Shoddy (Or Worse)

Peter Wannemacher

Note: If you’re a Forrester client, you can jump straight to the full report here.

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).

In our new report, Design Better Cross-Channel Banking Journeys, we show that:

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Where Will Disruption Happen Next In Financial Services?

Zhi-Ying Ng

Digital disruption has hit retail financial services in Asia Pacific (AP). In 2014, fintech investments in AP totaled US$880 million and skyrocketed to a staggering US$4.5 billion last year. Just as payments innovation has been a darling of venture capital investors in the US, the picture is not so different in AP as payments took the largest share of fintech investment deals at 40%. This is followed by lending at 25%. However, the next frontier of disruption doesn't lie in payments and lending. FF16, AP's first fintech competition, featured an array of fintech finalists offering a wide array of capabilities that signal what is to come in digital disruption in financial services.

We observe that the next frontier of digital disruption for the financial services sector will take place in investment, security and authentication as:

  • Data access, predictive analytics, and machine learning drive investment innovation. Exploding volumes of data are driving new, disruptive products and services in retail financial services. While predictive analytics isn't new, it has now entered the mass market, becoming more ubiquitous to retial investors. Smaller, nimbler players such as 8 Securities are now using algorithms to help customers derive insights from data, making predictive analytics more affordable and accessible. There are also B2B fintech companies such as BondIT and ShereIT that help financial advisors and brokers maximize their clients' portfolios. 
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Facebook F8: Important Takeaways For Digital Business Pros (Hint: Keep Calm About Bots!)

Julie Ask

Facebook held its annual developer conference in San Francisco this week. Analysts at Forrester collectively fielded a lot of questions from the media, but most of them focused on bots and the Messenger platform. Here are my top takeaways from the event:

  1. It's still early days for developer tools: Facebook approached F8 with a humble, honest tone and message about the state of its applications, platforms and tools for developers. Facebook didn't over promise. Every executive on the main stage to the breakouts in the "Hacker X" and "Hacker Y" pavilions offered an honest portrayal of where Facebook is today. Where is it? Facebook holds a very strong position in terms of total minutes of use and monthly active users across its various apps and platforms (e.g., Facebook, Whatsapp, Instagram, Facebook Messenger, Oculus, etc.), but they are just beginning to offer tools to developers. Developers of mobile apps want to borrow mobile moments on Facebook's apps/platforms because they don't own enough mobile moments themselves. Facebook is just in the earliest of stages of giving tools to these developers to help them borrow mobile moments effectively.
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The Age Of The Customer Will Drive Four Actions That Insurers Need To Take In 2016

Ellen Carney

Talk about interesting times in the business of insurance.  The year 2015 saw the attention-getting launch of Google Compare and its hibernation about 12 months later.  Traditional insurers like Mass Mutual and Shelter Mutual got busy and launched their own direct-to-consumer digital quoting and sales businesses.  State Farm was busy filing patents for by-the-trip car insurance and the means to measure just how stressed drivers were behind the wheel and rate their insurance accordingly. Prudential recognized that previously scary diseases were now chronic conditions that could be medically managed, launching life insurance coverage for HIV positive customers. AOL saw an opportunity and is now selling insurance to its members.  And we at Forrester have been busy keeping track of over 700 disrupters across FinTech that have been capturing market attention and venture capital. Some of these firms like Lemonade are returning to the social roots of insurance.   Lemonade's founders also  appreciate that consumers are irrational economic animals and decided to hire a  behavioral scientist to help them anticipate the crazy actions of homo sapiens.  And yet some people out there still call insurance a boring industry!

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Bots: The Next Big Thing In Mobile? Not So Fast.

Julie Ask

Everyone is buzzing this week about bots with Facebook/Messenger’s anticipated launch of bots on its messenger platform. What is a bot you ask? A bot is a chat-based interface that helps consumers complete tasks -- ordering take-out food, chatting with their doctors, or checking the score of a big sports game. Many believe that this next step -- bots in conversation with consumers -- is imminent. We agree, but not so fast.

There are a few trends playing in favor of bots becoming the next big user interface:

  1. Apps put a huge burden on consumers. The app ecosystem forces consumers to orchestrate getting the content and services that they need -- sometimes in a single app, most times through a composition of many. And this doesn’t even address individual app quality -- too many of them are simply awful. We're forced through processes translated from online that make no sense on the go or on our mobile phones.
  2. Bots foster natural communication. Having a bot is like having an assistant. You can chat with the bot, ask the bot to do things for you -- like order take-out or get a new lipstick. They are a natural extension of how we communicate and use our mobile phones.
  3. Consumers spend 84% of their time in just five apps each month. Chances are that one or two of those are social media, instant messaging,etc., as a handful of mobile giants like Facebook, Google and Apple in the US own a disproportionate number of customers mobile moments, measured both by time and data. Consumers are asking for a better experience.
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Digital Wallets Are Poised For Growth – But Adoption Will Be Slower Than You Think

Jacob Morgan

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.

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Forrester's Inaugural FSI Summit In Singapore: Accelerating Digital Business And Innovation In Financial Services

Zhi-Ying Ng

Faced with increasingly empowered customers, together with mounting pressure from existing and potential digital disruptors in the financial services sector (such as Alipay in China and Codapay in Southeast Asia), many banks across Asia Pacific have launched mobile banking apps to enable customers to make mobile transactions. Initally, these mobile banking apps suffered from abysmally low customer adoption and delivered poor customer experience. However, mobile banking apps have come a long way over the past five years, going from little more than an extension of online banking to what one digital banking executive calls “the most important part of my job.”

Through conversations with our FSI clients, we have observed a positive transformation in how eBusiness executives think about and execute on their mobile strategy, which contributed to rising adoption levels and better customer experience. The most notable shift that eBusiness executives have made is to perceive mobile as a crucial part of their organization’s broader business transformation imperative linked to specific business objectives and outcomes — this is fundamentally different from the early days when some eBusiness executives equated a mobile app to a mobile strategy.

Our exclusive FSI summit in Singapore on Friday, April 15 will bring together an intimate group of senior executives from banks, insurance companies, and selected fintech firms. At the event, my colleagues and I will share Forrester’s FSI digital business research, and facilitate discussions with industry leaders.

My presentation, “Who Does Mobile Banking Well In Asia Pacific?”, will explore:

  • Key mobile banking trends across Asia Pacific
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Brace Yourself For The 2016 Digital Re-Org.

Martin Gill

Our annual organizational and staffing survey of digital professionals heralds change in 2016. The meteoric growth in digital team sizes has plateaued, and as line-of-business teams take on responsibility for digital execution and technology management teams step up to manage digital development, the nature, makeup and role of the digital team is shifting. The demand for skills like analytics, customer experience and product management is growing as digital teams take on end-to-end ownership of their firm’s digital experience. Our latest report, Trends 2016: Staffing And Hiring For Digital Business, outlines the key organizational trends and benchmarks for digital teams in the coming year.

Our key findings from the survey are:

  • Headcount Growth Plateaus As Operating Model Shifts. Digital headcount growth has plateaued, with teams averaging 94 people, down from 95 in 2014 and 103 in 2013. As technology and line-of-business teams step up to the digital plate, digital teams focus their resources on strategy and governance, channeling execution headcount into operational teams.
  • Technology Skills Aren’t The Biggest Headache Anymore. Technology skills are still hard to find, but roles like analytics and product management are increasingly vital, and much harder to source. As the role of digital teams shift from being operators and executors to strategists and coaches guiding line of business teams as they embrace digital, so to does the nature of the skills in digital teams. This way of operating demands more strategic and consultative skills than operational or technical specialists.
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Why A Tax Law Change In Australia Could Impact Online Revenues For US Online Retailers

Lily Varon

In August 2015, the Australian government announced an impending change to their tax structure that will impact online retailers serving the market via international shipping. Today, Australian consumers can import up to A$1,000 duty-free when they buy from a foreign retailer. The A$1,000 duty-free exemption is known as the low value threshold (LVT) and it has driven a large cross-border shopping habit among online shoppers in Australia. But change is afoot and retailers should know that:

  • Goods and services tax (GST) will be added to cross-border transactions previously exempt. As of July 2017, the Australian government will be expanding its GST collection to purchases previously exempt under the A$1,000 threshold. Additionally, the government stipulates the onus is on retailers to collect and remit the tax: According to the Australian Treasury Department, "For goods with a value of A$1,000 or less, GST is applied at point of sale. Overseas vendors with an Australian turnover of $75,000 or more will be required to register, collect and remit GST on low value goods."* 
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Fixing the Mobile Shopping to NFC Payment Adoption Gap

Brendan Miller
NFC is Ready For Prime Time, but Merchants and Consumers are Standing By
Mobile in-store shopping hasn't translated into mobile in-store paying. Seventy-two percent of smartphone-owning US online adults have used their phone in-store as a "trusted advisor," to check prices, find product information, or locate an item, but meanwhile adoption rates of Apple Pay still hover around 5% for eligible transactions*.  In the past year, two market factors started to shape the next phase for mobile payments in-store. First, tech giants like Apple, Google, and Samsung released new NFC-based payment systems. Second, in an effort to avoid new fraud liability with the EMV liability shift, US retailers began implementing new EMV terminals that are also NFC ready. Yet despite consumers having the right technology in hand — and merchants now technically ready to use that technology for mobile payments in-store — consumers haven't changed their tried and true payment behavior.  
 
Merchants Need to Take The Reins
Merchants who have NFC can bridge the gap by being much more proactive in getting consumers to try "tap and pay" at the POS.  The mobile payment systems:Apple Pay, Android Pay, Samsung Pay and PayPal  have made strides to make the act of paying simple, but more needs to be done at the merchant to fully crack the convenience code.  Forrester has a framework called the Convenience Quotient**: to be fully adopted, any new product’s benefits have to be greater than its barriers to use.   Most merchants who have NFC still have not overcome the convenience quotient and therefore consumers default to their plastic card.  
 
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