The first email I received at work in 2014 was from a bank; along with a festive new year’s greeting, the email touted the bank’s new mobile app and a new feature that let customers set up travel notifications directly from the bank’s website. Later that day, I was in an airport reading a friend’s Facebook post about how she wished “more apps were like Uber.”
These are just a few small anecdotes about ongoing digital trends impacting businesses and banks both large and small. I recently spoke with a banking executive who put it simply: “Digital is what we do now.” (This quote is now the header of my Twitter feed.)
Forrester recently published our Trends 2014: North American Digital Banking report, in which we identify major forces impacting banks and lay out five actions that we recommend digital strategists take to prepare for the future of digital banking. Here’s a sample of some of our findings:
Banks will face a sustained – yet unclear – regulatory environment. In both the US and Canada, banks are confronting an uncertain regulatory future. The Dodd-Frank Act was signed into US law on July 21, 2010, but a large number of the rules and regulations remain unwritten. It's unclear when they'll be finalized, and the fact that 47% of deadlines have already been missed – according to the law firm Davis Polk & Wardwell – doesn't bode well.
Social lending, or peer-to-peer (P2P) lending, is not even ten yet, but it has caused a great deal of commotion already. Consumers, regulators, and banks continue to be perplexed by a business model which is so emblematic of the digital economy, or of digital disruption. Thanks to digital tools, potential lenders and borrowers can interact with each other online without the involvement of banks, credit unions, and other traditional financial institutions. And nothing epitomizes the confusion about how banks should respond to the phenomenon better than the initial ban of Wells Fargo on its employees investing in P2P loans, lifted only a few months down the line. So is P2P lending a threat to banks or not? We think it is.
Forrester first wrote about peer-to-peer lending in 2006, soon after the launch of the first P2P lending marketplace Zopa. We argued that lending would never be quite the same again and indeed, it hasn’t been. As we write in our new report, a lot has happened in those eight years:
The chief marketing officer’s (CMO’s) role is shifting from a two-dimensional world of outbound marketing communications vehicles to a multidimensional world that encompasses every interaction a customer has with a brand. These CMOs must not only craft the perfect marketing communications message but also ensure that their customers’ experience is consistent with the brand promise.
Why does this matter? Because Forrester’s TRUE brand compass research shows that having a consistent experience across all brand touchpoints is a key driver of brand trust. For example, consumers tell us that both Microsoft and Amazon.com deliver a consistent experience every time they interact with those brands. This helps both brands secure high levels of brand trust, which in turn drives strong brand resonance.
To build a trusted brand, marketing leaders must ensure that brand messages sync with achievable expectations to deliver the brand promise. Many airlines now routinely offer a swift response to customers’ on-the-go travel needs via Twitter; this real-time travel support serves to enhance the brand experience. Delta sees the opportunity; the airline is investing more than $3 billion to enhance the customer experience in the air, on the ground and online.
One word describes the state of US health plan digital strategists at the end of 2013: exhausted! The October 1, 2013 open enrollment milestone for the public exchanges became not an event but an epic saga. Integration failures, wobbly deadlines, and substandard policies that became the walking dead stymied large numbers of potential plan buyers, who either gave up or stood on the sidelines. But through a lot of persistence, 8 million Americans had managed to enroll in the public exchanges by mid-April 2014.
But with the enrollment process behind them, these tired digital strategists can’t rest. It’s time to shift attention from getting customers to keeping them. And not surprisingly, what matters to consumers when it comes to picking health plans is whether their doctors are “in-network”. But other practical aspects of the health insurance experience also matter, like:
Ease of resolving problems. When it comes to handling the nit-natty issues of plan maintenance issues like claims and payments, consumers want easy. That means that health plans have to make it easy for them to view their payment history, get their individual plan bills paid, monitor claims status, and access statements and tax documents online and increasingly through a plan’s mobile site, especially for that critical “young and healthy” segment.
April 22, 2014, was not just a regular Earth Day. It was also the 50th anniversary of the 1964 World’s Fair, one of the most amazing wonders of the world for its time. The 1964 World’s Fair, along with the famous Isaac Asimov, set people’s imagination on fire with a glimpse of the future of technology and a series of predictions of what our life would be like in 2014. And as we reflect back to what the fair and Isaac prophesized about life 50 years into the future (or exactly where we are today in 2014), it’s uncanny how much of what was showcased and predicted are now a part of our everyday life. From satellite phones to multimedia communication, interactive 3D TV, and driverless cars, our world has definitely changed. But sadly, the infrastructure that supported it all, the fairgrounds themselves complete with the iconic 140-foot-tall unisphere, has remained stuck in the past, a relic of that historic point in 1964. And for marketers, this tale provides an important lesson to learn.
Have you ever stopped to think where your last online order came from and how it got to your house? We might assume that the package on our doorstep has probably just made a lengthy and complex journey across the country (courtesy of the belly of a UPS freighter, a handful of trucks, a few miles of conveyor belts and some good old human muscle) from a large, nondescript distribution center located in the suburbs of a city we've barely heard of. You may be surprised to learn then, that today it is increasingly likely that the package at your door came no further than a few miles down the road from a locally based store of the retailer you ordered online from. Of course, as consumers, we don’t really care where our purchases came from or how they found their way to our doorstep - as long the right merchandise arrives damage-free and on time.
As my colleague Benjamin Ensor wrote some time ago, innovation often happens in clusters.This means that innovation by one company causes its competitors to not only match it but also to try to leapfrog it — resulting in rapid cycles of innovation. This is what is happening in Poland right now. During my trip there last week, a few bank executives told me of the increasing internal and external pressure not to fall behind digital innovation. There a couple of other reasons why Poland is a great testing ground for new financial services ideas; it has:
When Satya Nadella assumed his role as CEO of Microsoft, he shared a profound statement in a companywide email: “I truly believe that each of us must find meaning in our work. The best work happens when you know that it’s not just work, but something that will improve other people’s lives. This is the opportunity that drives each of us at this company.” Nadella’s message speaks to the importance of employee satisfaction in driving organizational success.
Research demonstrates that psychological and social fulfillment directly influences an employee’s commitment to staying with a company and contributing to the firm’s overall success. For example, a report by Deloitte shows that corporate teams that foster a sense of diversity and inclusion among employees outperform others by more than 80%.
Even in business, feelings are facts — employees’ feelings about their company are a corollary to their productivity. And when it comes to the Asia Pacific workforce, those strong emotional connections that yield employee engagement vary greatly across the region. Forrester’s Business Technographics® data shows that India has the largest share of “engaged employees,” while Japan has the smallest:
Facebook, the social media giant that has already made a large dent in the mobile ad ecosystem, today showed it has no plans to stop the momentum: Welcome, Audience Network.
Before today, there were already several factors working in Facebook’s favor: its reach among avid social users, its engaged and captive audience, and its trove of affinity data, which my colleague Nate Elliott talks more about in his blog post here.
After its Audience Network announcement today, Facebook is breaking the application of its tools and its data out of its own silo, and this could benefit several players:
Other developers and publishers could make more money by offering Facebook data-infused mobile ads.
Advertisers can dip into Facebook’s rich affinity data to target their ads across other mobile properties.
And of course, Facebook itself just extended its potential revenue base and faces a new competitive set with the likes of Google AdMob and MIllennialMedia.
It’s been clear for a while now that the greatest value of social media to marketers won’t come from placing ads on social sites — it’ll come from using social data to improve the ads marketers place everywhere else. We call this idea the database of affinity, and we believe it could be the Holy Grail for more-effective brand marketing. For nearly a year, Google has helped marketers use the database of affinity to improve the targeting of their online display ads. And today Facebook has finally started to build the database of affinity that has always been its birthright, launching a mobile ad network.
This move is fantastic, if long overdue, news for marketers. It has the potential to improve the performance of all mobile advertising. And if Facebook grows its ad targeting business into other channels and works to better analyze and utilize its data (something it’s lagged at in the past), it could revolutionize brand advertising.