What Financial Services Execs Can Expect In 2017

Every fall, more than a dozen Forrester analysts across multiple roles meet to discuss what executives and leaders at financial services firms should anticipate over the next year. Driven by our ongoing research, the result of this brainstorm is now available as the just-published “Predictions 2017: Pioneering Financial Providers Will Partner With Fintech To Build Ecosystems” report. Forrester clients can read the full predictions report by clicking the button here:

               

For non-clients, here are three of the 16 predictions we outline in our new report:

  • Leading providers and fintech firms will partner to build ecosystems. Dynamic ecosystems of value threaten traditional, vertically integrated financial firms that want to stick with the old-school value chain. But ecosystems also offer opportunities to financial providers that think carefully about the roles they want to play in the ecosystem — and by extension, the role they want to play in customers’ lives. Pioneering financial providers like BBVA have built ecosystems with fintech firms like OnDeck, and we predict that in 2017, more leading firms will follow suit and build dynamic ecosystems of value.   
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Why Most Banks Should Not (Yet) Roll Out Bots

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.
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Bank of America Redesigns Email Alerts

Few things are as unsexy as emails from a financial services company. But email alerts play an important role in the world of digital banking: Forrester’s new research report shows that alerts drive mobile banking usage and engagement.

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:

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What Drives Mobile Banking Engagement?

This blog post is a collaboration between Peter Wannemacher and Nicole Dvorak, who also collaborated on Forrester's brand-new report on this topic.

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.  
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Splitwise Is A Fintech Disruptor That Shows The Potential Of Shared Finances

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

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.

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

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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In 2016, Financial Services Executives Will Bet Big On APIs

We’ve just published our Predictions 2016 report, outlining eight shifts that banks and their partners can expect by December 31 of next year. I encourage you to read the full report with all of our predictions here.

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.
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Which Banks Lead In Mobile: Forrester Benchmarks 41 Providers Around The World

Over the past seven years, mobile banking has gone from little more than an extension of online banking to what one digital banking executive now calls “the most important part of my job.” eBusiness and channel strategy professionals at banks are under intense pressure to differentiate by offering mobile features, content, and experiences that meet — or exceed — customers’ needs and expectations.

To help executives and digital leaders better understand where mobile banking is today — and where different banking providers stand in terms of their mobile offerings — Forrester conducts an annual mobile banking benchmark. This year, we evaluated 41 different banks from more than a dozen different countries across four continents. We recently published the findings in our 2015 Global Mobile Banking Benchmark report.

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Scotiabank Uses Mobile Messaging To Increase Digital Sales

[Note: This blog post is based on a new Forrester research report; clients can read the full text here.] 

Two years ago, digital executives at Scotiabank looked at the state of mobile banking and recognized the opportunity to roll out targeted mobile marketing to existing customers using the firm's mobile apps. At the time, too few banks were leveraging mobile as a marketing, sales, and cross-selling touchpoint — a problem that is still evident among US banks.

But rather than simply throwing random banner ads at mobile banking users, the digital team at Scotiabank opted to take a targeted approach that served up relevant offers in the user's context, made the "buy" task flow as convenient as possible, and put the bank in position to expand the effort in future years.

As a result, digital executives at Scotiabank have seen mobile cross-selling rates — as measured by year-over-year growth in unit sales via mobile banking — more than double, up 165% since the firm launched this effort.

Scotiabank’s mobile cross-selling initiative is just one example of a brand embracing the idea of mobile moments. Forrester’s wider research shows that mobile moments are becoming a major battlefield in banks’ efforts to win, serve, and retain customers.

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Competition Remains White Hot In The Canadian Mobile Banking Market

[this blog post was co-authored by Rachel Roizen]

Forrester has just published its 2015 Canadian Mobile Banking Functionality Benchmark. The report reveals important insights about the mobile offerings from the five largest retail banks in Canada: BMO, CIBC, RBC Royal Bank, Scotiabank, and TD Canada Trust. Forrester clients can find the full benchmark report here:

The Canadian mobile banking market has been highly competitive for years, ever since CIBC became the first Canadian bank to roll out robust mobile banking services more than five years ago. Our benchmark research shows that this remains true today: All of the banks have solid mobile banking functionality that meets customers’ most common needs and expectations.

But different banks excel in different areas of mobile banking. CIBC and Scotiabank received the highest overall scores, each earning an impressive 75 out of a possible 100 in our benchmark. The two banks achieve mobile banking success with strong core banking features plus enhancements in key areas: For example, CIBC offers excellent product research tools, while Scotiabank recently launched a best-in-class help service within its mobile apps (see image below).

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