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NEXT GENERATION
OF BANKING.
CUSTOMER EXPECTATIONS ARE EVOLVING
& BANKS NEED TO KEEP UP
THE LATEST INSTALLMENT OF OUR:
Near...
ABOUT.
At LHBS, we believe in continuously observing and
learning from what’s happening in the market.
We’ve created our N...
CONTENTS.
CONTEXT
CHAPTER 02: BANKS NEED TO BE FASTER
- BE OBSERVANT
- BE RESPONSIVE
- BE QUICK
EXPLORE YOUR OPPORTUNITIES...
LHBS is a marketing & innovation firm with
offices in Berlin and Copenhagen. We help
clients to understand today's emerging
...
CHAPTERS
INTRODUCTION.LHBS // NFO: NEXT GENERATION OF BANKING
- 05 -
BANKS NEED TO
BE BOLDER.
BANKS NEED TO
BE FASTER.
BANKS NEED TO
BE SMARTER.
CHAPTER 1 CHAPTER 2 CHAPTER 3
CONTENT.LHBS // ...
In chapter 01, we explored the five key expectations defining today’s generation of consumers.
Here we will dive deeper in...
CONTEXT OF CONSUMER
EXPECTATIONS.
CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING
- 08 -
BANKS NEED TO RE-EVALUATE HOW THEY
MONITOR THESE EXPECTATIONS, BECAUSE
TODAY, CONSUMER EXPECTATIONS ARE
CHANGING AT AN INC...
THE RATE OF CHANGE
TODAY IS EXPONENTIAL.
“translates to us experiencing 20,000 years of
change in the 21st century.”
CONTE...
SPEED ITSELF HAS EVEN BECOME AN
EXPECTATION OF BRANDS BY CONSUMERS.
IT QUICKLY MADE THE TRANSITION
FROM ‘NICE-TO-HAVE’ TO ...
EXAMPLES OF EXPECTATION-
DRIVING SERVICES.
Netflix are the No.1 example of always
providing customers with new content
to ...
Send money in
minutes within
banking apps.
Quick transfer of
money worldwide.
Financial information
and comprehensive,
per...
So what’s contributing to this
ever-growing expectation for
brands to deliver value faster?
CONTEXT.LHBS // NFO: NEXT GENE...
50%
MOBILE APPS
Over 50% of Millennials use
mobile apps exclusively.
30%
DISRUPTORS OFFERING
ALTERNATIVE SOLUTIONS
30% of ...
ALWAYS LOOK BEYOND YOUR
INDUSTRY FOR TOMORROW’S
EXPECTATIONS OF BANKS.
REMEMBER:
CONTEXT.LHBS // NFO: NEXT GENERATION OF B...
You are no longer competing only within
your industry, but with every business in
the world on customer experience,
regard...
“We try to
reimagine how a
bank should work
and we tried to
build something
that is like using
Uber or Spotify or
any of t...
87%
OF CONSUMERS NO LONGER MEASURE
BRANDS’ EXPERIENCES AGAINST THEIR
COMPETITORS, BUT AGAINST A SELECT
FEW, SUPERIOR BRAND...
HOW CAN BANKS BEST
PREPARE FOR CHANGING
EXPECTATIONS?
CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING
- 20 -
02.CHAPTER
- 21 -
02.
BANKS NEED TO
BE FASTER.
“It’s no longer the big beating the small, but
the fast beating the slow.”
Legacy companies n...
WHAT GOALS CAN BANKS SET TO
KEEP UP WITH THE PACE OF CHANGE
OF CONSUMER EXPECTATIONS?
BANKS NEED TO BE BOLDERLHBS // NFO: ...
BANKS SHOULD BE OBSERVANT TO
EVOLVING TRENDS AND SUBSEQUENT NEW
COMPETITORS, AND ACTIVELY RESPOND
WITH INNOVATIONS.
TO KEE...
BE
OBSERVANT
BE
RESPONSIVE
BE
QUICK
THREE KEY BUSINESS GOALS:
1
To accelerated shifts in
customer experience with
effectiv...
GOAL 01.
BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
BE OBSERVANT
To accelerated shifts in customer ex...
Observing behavioral shifts, changing
expectations and even willingness of
consumers to adopt new solutions
should be a da...
JEFF
YABUKI.
“The only thing
advancing faster
than technology is
consumer
expectations.”
PRESIDENT
AND CEO,
FISERV.
BANKS ...
BANKS CAN TAKE THREE STEPS TO
ENSURE THEY STAY RELEVANT TO
THEIR AUDIENCE, AND AVOID
BEING NEGATIVELY SURPRISED.
BANKS NEE...
ROUTINELY
TALK
ACTIVELY
LISTEN
STORE &
SHARE
WITH YOUR
CUSTOMERS
DIRECTLY.
TO YOUR
CUSTOMERS ON &
OFFLINE.
YOUR INSIGHTS
W...
ROUTINELY
TALK
ACTIVELY
LISTEN
STORE &
SHARE
WITH YOUR
CUSTOMERS
DIRECTLY.
TO YOUR
CUSTOMERS ON &
OFFLINE.
YOUR INSIGHTS
W...
To keep up with changing expectations, and
to predict those greater shifts in societal
trends, banks need to connect with ...
WHY ROUTINELY TALK WITH CUSTOMERS?
After direct engagement with
customers, especially face-to-face
interactions it’s hard ...
Part of Zipcar’s rebranding scheme
saw them begin hosting regular
“member roundtables” which
brought together real custome...
Banks let their customers design
product experiences - they are now
product developers instead of just
end users.
Challeng...
ROUTINELY
TALK
ACTIVELY
LISTEN
STORE &
SHARE
WITH YOUR
CUSTOMERS
DIRECTLY.
TO YOUR
CUSTOMERS ON &
OFFLINE.
YOUR INSIGHTS
W...
Changing consumer behavior - particularly
online - is affecting the way banks are used to
operating.
Today banks - and eve...
CHANGING BEHAVIORS.
“We’re finding it challenging to adapt to our customers’
behaviors. They tweet, they chat, they text; ...
Why listening and not always
engaging directly? Well…
96%OF THE CONSUMERS
DISCUSSING BRANDS
ONLINE DON’T FOLLOW
THOSE BRAN...
WHY SOCIAL LISTENING?
This helps businesses to measure
brand popularity and overall
sentiment, within an environment
where...
JetBlue are now able to monitor all
social media channels in one place,
enabling the airline to be more
responsive and les...
Coka-Cola have systems in place
that can identify when their product
name or that of a competitor is
mentioned or posted w...
SOCIAL LISTENING =
SOCIAL INTELLIGENCE
FOR BRANDS.
REMEMBER:
BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKI...
ROUTINELY
TALK
ACTIVELY
LISTEN
STORE &
SHARE
WITH YOUR
CUSTOMERS
DIRECTLY.
TO YOUR
CUSTOMERS ON &
OFFLINE.
YOUR INSIGHTS
W...
A COLLABORATIVE TREND PLATFORM FOR
TEAMS BRINGS TOGETHER ALL THE MOST
RELEVANT AND IMPACTFUL INNOVATIONS AND
BRAND MOVES I...
On this platform should be an
aggregation of the latest brand
moves and consumer insights to
keep teams up-to-date.
From t...
TRENDS ARE SIGNS
OF CHANGE.
Here’s some examples…
BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
- 47 -
WHAT’S
HAPPENING.
In an effort to increase adoption and
security of their fingerprint
authentication cards, Mastercard are
...
MyPiggy is the new digital service
for families to begin teaching
children about the value of money
and financial responsib...
The Plynk app allows small amounts
of money to be transferred between
friends with emojis, photos and GIFs -
to avoid thos...
FABIOLA
LEWANDOWSKA.
“Passively observing consumer trends is not enough.
Businesses should never stop asking “why is this
...
Employees already recognize
the benefit of having frequent
insights within their team.
Source: LHBS Survey
BANKS NEED TO BE...
KEEPING THE TEAM INSPIRED
& INFORMED ENCOURAGES A
CULTURE OF INNOVATION FOR
CONTINUOUS CREATION OF
NEW SOLUTIONS.
REMEMBER...
GOAL 02.
BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
BE RESPONSIVE
To accelerated shifts in customer e...
Responding to the evolving needs identified
through observing trends and expectations is
more important than ever because o...
“RESPONSIVE” MEANS FASTER WITH
INNOVATIONS - NOT IN SPEEDING UP
ALL PROCESSES.
It’s important to note:
BANKS NEED TO BE FA...
1. THEY INNOVATE IN THE RIGHT PLACES
2. THE INTERNAL CULTURE SUPPORTS
ACCELERATED INNOVATION
TO SPEED UP THE PROCESS OF
IN...
IDENTIFY
STARTING
POINTS
THE GREATEST
NEEDS WILL GIVE
OPPORTUNITY FOR
INNOVATION.
CULTIVATE
CUSTOMER
FOCUS
CULTIVATING A
C...
BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
IDENTIFY
STARTING
POINTS
THE GREATEST
NEEDS WILL GIVE
OPPO...
WHERE CAN BANKS IDENTIFY
STARTING POINTS FOR
INNOVATION?
BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
-...
The following survey saw
consumers’ rank their
“top wants” from banking brands:
Asking customers directly
what they want f...
81%“Reward me for my business"
61%“Give me ‘anytime, anyplace’ access to my balance”
58%“See me as a person”
55%“Provide m...
This can give banks starting points for innovations. A problem with
this is that often customers will make general suggest...
Identifying the greatest pains and
frustrations can be a way to more
accurately pin-point specific needs
and innovation opp...
Here’s the top pain points of
traditional banking customers today…
BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF...
The journey towards
achieving a goal does
not seem linear and
customers don’t feel as
though they’re moving
forward.
Bank ...
BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
IDENTIFY
STARTING
POINTS
THE GREATEST
NEEDS WILL GIVE
OPPO...
A CUSTOMER-FOCUSED CULTURE DOES
NOT MEAN MAKING ALL YOUR
EMPLOYEES EXPERTS IN COLLECTING
THE RIGHT CUSTOMER DATA, RATHER T...
THE RIGHT CUSTOMER DATA
MAKES THE DIFFERENCE.
90%OF DEVELOPMENT
EFFORTS FOR NEW
PRODUCT INNOVATIONS
FAIL.
When key custome...
Changing cultural mindsets within a legacy
organization is not a simple task, particularly within the
financial services in...
PRESTON
THORNTON.
SENIOR
DIRECTOR &
PRODUCT
MANAGEMENT
AT INLET.
“There's always going to be some
level of fear of the unk...
Ultimately, the benefits of a
customer-centric approach will
outweigh the concerns and
arguments against transforming
banks...
HOW DOES A CUSTOMER-CENTRIC
CULTURE ACCELERATE INNOVATION?
EMPOWERS EMPLOYEES
TO DO WHAT’S BEST FOR
THE CONSUMER AT ALL
TI...
Here’s some examples of how some banks
have made moves to instill a customer-centric
culture and encouraged employee innov...
SUPPORTING &
ENABLING INNOVATION.
First National Bank (FNB) based in South Africa say they’re all about
people and being c...
MERGING EMPLOYEE &
CUSTOMER EXPERIENCE.
Macquarie Bank wanted to make a move towards a more high-
performance culture and ...
Here’s some more examples from
outside of the finance industry.
BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BAN...
CUSTOMER DELIGHT
ABOVE ALL ELSE.
Intuit’s innovation catalyst “Design for Delight” enables the
company to put the customer...
SHOWCASING REAL
USE-CASES.
A leader in commercial storage and shelving, Spacesaver began
putting up giant posters of their...
OFFICE DESIGNED FOR
CUSTOMER-CENTRICITY.
Rackspace have designed their unique office space around the way
their employees ...
GOAL 03.
BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
BE QUICK
With building, sharing and developing th...
BANKS NEED TO NOT ONLY INNOVATE, BUT
FIND WAYS TO SUSTAIN AND ACCELERATE
THE PROCESS OF INNOVATION TO KEEP UP
WITH THE INC...
This can be achieved through changing
internal ways of working and adapting
new technologies to automate and
reduce effort...
However, banks’ processes and systems simply
weren’t built for being sped up or adapted.
Often legacy cores are wrapped in...
DISRUPTIVE TECH.
Technology has massively impacted the banking industry, to
name just a few, the rise of mobile, the intro...
TRADITIONAL BANKS ARE NO LONGER
ONLY UP AGAINST FINTECH STARTUPS,
BUT NOW EVEN LARGER TECH FIRMS
OUTSIDE OF THE BANKING IN...
TODAY’S BIG TECH FIRMS ARE POISED TO DISRUPT
THE BANKING INDUSTRY.
EXPLORE SIGN
AMAZON PILOT BANK
ACCOUNTS FOR TEENS
FACEB...
Generation Z are coming to
expect financial solutions from
the big tech players:
44%EXPECT TO CONDUCT
FINANCIAL BUSINESS WI...
BAIN & CO.
PARTNER AND
LEAD OF THE
BANKING
SECTOR.
GERARD
DU TOIT.
“It’s just a matter of time before
we see the big tech ...
SO WHAT CAN BANKS DO?
BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
- 90 -
‘Competitors’ of traditional banks today are often not competing in the traditional sense. Startups especially are likely ...
MIKE
SIGAL.
“Incumbents that
don’t seek to
partner will die.”
EARLY-STAGE
INVESTOR,
ENTREPRENEUR
& CORPORATE
INNOVATION
AD...
Fintechs are succeeding today due to their fast and
flexible working processes and foundations built on
technology. But onc...
Collaboration with Fintechs is an approach
already tried and tested by a number of
traditional banks to start adapting pro...
Royal Bank of Scotland (RBS) has
partnered with Ezbob to offer
automated lending platform, Esme
Loans.
RBS unveiled a digi...
Morgan Stanley is partnering with
Twilio to digitize communications
between financial advisors and
clients.
The partnership...
Santander partnered with several
content businesses to launch
“Prosper and Thrive”, a content hub
to help millennials navi...
Fintechs are ready - and
waiting - to collaborate,
and banks should grasp
the opportunity. 75%
OF DIGITAL
DISRUPTORS / STA...
WHY FINTECH COLLABORATION?
Evolving expectations of consumers is something
Fintechs are not only prepared for, but built f...
CAUTIONS OF FINTECH COLLABORATION.
To get the most from any collaboration, the
strengths - and more importantly - the
weak...
“When banks and fintechs collaborate, innovation
and speed-to-market foster a better customer
experience like never before....
Be observant to evolving trends
and shifting expectations through
frequent customer engagement,
social listening and makin...
NOW IT’S YOUR TURN.
- 103 -
BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
- 104 -
signmesh is the collaborative platform created for
teams. Tailor your hub to any department, industry
and interest...
ABOUT.
A marketing & innovation firm, we work primarily with
legacy organizations to adapt their customer value
proposition...
THANK YOU.
You can explore more industry insights
reports on our website.
- 106 -
BANKS NEED TO BE FASTER.LHBS // NFO: NEX...
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Next Generation of Banking: Faster

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Once run by a few large banks, it has been taken over by smaller, more nimble and technology-driven disruptors who are putting the power back into the hands of consumers.

Banks need a more customer-centric way to do business and to differentiate themselves in new ways.

This report series will explore the most crucial changes happening in the finance industry, and how legacy banks need to act today to be around tomorrow.

This is part 2/3, exploring how traditional banks can react, respond and adapt to keep up with the pace of change.

- How banks can observe trends and expectations with effective monitoring
- How banks can respond with innovations their audience need and want
- How banks can quicken their ways of working for sustainable and accelerated innovation through seeing new competitors in a collaborative light

Veröffentlicht in: Wirtschaft & Finanzen
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Next Generation of Banking: Faster

  1. 1. NEXT GENERATION OF BANKING. CUSTOMER EXPECTATIONS ARE EVOLVING & BANKS NEED TO KEEP UP THE LATEST INSTALLMENT OF OUR: Near Future Of Series
  2. 2. ABOUT. At LHBS, we believe in continuously observing and learning from what’s happening in the market. We’ve created our Near Future Of (NFO) series which consists of inspiration and insights reports designed to highlight what is happening today and how it can share tomorrow for brands, businesses and entire industries. This issue explores the key challenges of traditional banks, and evolving consumer expectations in the world of banking and finance to help legacy organizations to identify opportunities for differentiation and adding customer value. We hope you enjoy this deck and find inspiration for your innovation process. DISCOVER DEFINE DEVELOP DELIVER LHBS // NFO: NEXT GENERATION OF BANKING INTRODUCTION. - 03 -
  3. 3. CONTENTS. CONTEXT CHAPTER 02: BANKS NEED TO BE FASTER - BE OBSERVANT - BE RESPONSIVE - BE QUICK EXPLORE YOUR OPPORTUNITIES P 08 P 26 P 54 P 81 P 103 - 03 -
  4. 4. LHBS is a marketing & innovation firm with offices in Berlin and Copenhagen. We help clients to understand today's emerging customer expectations and to shape their business offerings for tomorrow. www.lhbs.com Kathleen McCaffrey Analyst at LHBS lhbs.com | kmc@lhbs.com Once run by a few large banks, it has been taken over by smaller, more nimble and technology-driven disruptors who are putting the power back into the hands of consumers. Banks need a more customer-centric way to do business and to differentiate themselves in new ways. This report will explore the most crucial changes happening in the finance industry, and how legacy banks need to act today to be around tomorrow: • Banks need to be bolder by standing for a value or experience that differentiates them from the crowd. • Banks need to be faster by identifying changing trends and expectations, and applying insights to quickly innovate around new opportunities. • Banks need to be smarter by harnessing their mass of customer data for more personalized experiences and adapting external technologies and knowledge. THE FINANCE INDUSTRY IS EVOLVING.INTRODUCTION. INTRODUCTION.LHBS // NFO: NEXT GENERATION OF BANKING - 04 -
  5. 5. CHAPTERS INTRODUCTION.LHBS // NFO: NEXT GENERATION OF BANKING - 05 -
  6. 6. BANKS NEED TO BE BOLDER. BANKS NEED TO BE FASTER. BANKS NEED TO BE SMARTER. CHAPTER 1 CHAPTER 2 CHAPTER 3 CONTENT.LHBS // NFO: NEXT GENERATION OF BANKING - 06 - Download chapter I here Coming soon
  7. 7. In chapter 01, we explored the five key expectations defining today’s generation of consumers. Here we will dive deeper into one of the fastest growing and most challenging expectation of real- time services, and how exactly traditional finance brands can react, respond and adapt to this. CHAPTER 01 RECAP. IN CHAPTER 01 WE EXPLORED 5 KEY EXPECTATIONS OF TODAY’S CONSUMERS. - 07 -
  8. 8. CONTEXT OF CONSUMER EXPECTATIONS. CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING - 08 -
  9. 9. BANKS NEED TO RE-EVALUATE HOW THEY MONITOR THESE EXPECTATIONS, BECAUSE TODAY, CONSUMER EXPECTATIONS ARE CHANGING AT AN INCREASINGLY FASTER PACE. CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING - 09 -
  10. 10. THE RATE OF CHANGE TODAY IS EXPONENTIAL. “translates to us experiencing 20,000 years of change in the 21st century.” CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING Google’s head of engineering, Ray Kurzweil recently stated that this… - 10 -
  11. 11. SPEED ITSELF HAS EVEN BECOME AN EXPECTATION OF BRANDS BY CONSUMERS. IT QUICKLY MADE THE TRANSITION FROM ‘NICE-TO-HAVE’ TO ‘NEED-TO-HAVE’ AS WE BECAME ACCUSTOMED TO AN ON-DEMAND ECONOMY. CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING - 11 -
  12. 12. EXAMPLES OF EXPECTATION- DRIVING SERVICES. Netflix are the No.1 example of always providing customers with new content to discover, personalized for their likes, dislikes and past actions. CUSTOM RECOMMENDATIONS FOR NEW CONTENT Prime dramatically changed how consumers thought of delivery for products, introducing next-day delivery and quickly turning it into a standard. NEXT-DAY DELIVERY AS STANDARD Now seen across a multitude of industries, one to look to is airlines. Real-time notifications around flight information is becoming the norm. INSTANT NOTIFICATIONS OF ACTIVITY CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING - 12 -
  13. 13. Send money in minutes within banking apps. Quick transfer of money worldwide. Financial information and comprehensive, personalized financial plan in minutes. AI for mortgages - streamlining on- boarding and generating best offers. When it comes to the banking industry, here’s just a handful of the businesses that exist to solve the pain-point of traditionally slow processes: Speeding up the tenancy deposit system. CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING - 13 -
  14. 14. So what’s contributing to this ever-growing expectation for brands to deliver value faster? CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING - 14 -
  15. 15. 50% MOBILE APPS Over 50% of Millennials use mobile apps exclusively. 30% DISRUPTORS OFFERING ALTERNATIVE SOLUTIONS 30% of Millennials already have at least one financial product from an institution that isn’t their bank. 80% PERSONALIZATION 80% of consumers said they’d be more likely to do business with a company who offered personalized experiences. OVER Being smaller, simpler versions of desktop sites essentially makes the mobile app a shortcut for users. Start-ups arose to replace traditional solutions with specific solutions minus the pain points, and to enhance usage of financial services. Personalizing the CX is at the forefront of many businesses, which to consumers means the most relevant products and info is reached faster. CONTRIBUTORS. Source: Anatomy report, CCG Catalyst, Epsilon CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING - 15 -
  16. 16. ALWAYS LOOK BEYOND YOUR INDUSTRY FOR TOMORROW’S EXPECTATIONS OF BANKS. REMEMBER: CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING - 16 -
  17. 17. You are no longer competing only within your industry, but with every business in the world on customer experience, regardless of industry. Newer finance businesses are already acting on this in their design and user experiences. CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING - 17 -
  18. 18. “We try to reimagine how a bank should work and we tried to build something that is like using Uber or Spotify or any of these apps you love to use.” VALENTIN STALF. CO-FOUNDER AND CEO, NUMBER26. CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING - 18 -
  19. 19. 87% OF CONSUMERS NO LONGER MEASURE BRANDS’ EXPERIENCES AGAINST THEIR COMPETITORS, BUT AGAINST A SELECT FEW, SUPERIOR BRANDS (E.G. AMAZON, NETFLIX, STARBUCKS ETC.). Source: Wunderman: Wantedness - 19 -
  20. 20. HOW CAN BANKS BEST PREPARE FOR CHANGING EXPECTATIONS? CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING - 20 -
  21. 21. 02.CHAPTER - 21 -
  22. 22. 02. BANKS NEED TO BE FASTER. “It’s no longer the big beating the small, but the fast beating the slow.” Legacy companies need to focus on increasing their speed in not only monitoring, but also reacting to trends and changing customer expectations with innovations. New disruptors - particularly fintechs - built on modern technologies have influenced consumers’ expectations of what banks can and should be doing. While it’s not often the processes themselves which are expected to be sped up, consumers do expect that their banks are responsive in their innovations that answer real needs or reflect current trends i.e. paying via mobile, international payment options etc. LHBS // NFO: NEXT GENERATION OF BANKING - 22 -
  23. 23. WHAT GOALS CAN BANKS SET TO KEEP UP WITH THE PACE OF CHANGE OF CONSUMER EXPECTATIONS? BANKS NEED TO BE BOLDERLHBS // NFO: NEXT GENERATION OF BANKING - 23 -
  24. 24. BANKS SHOULD BE OBSERVANT TO EVOLVING TRENDS AND SUBSEQUENT NEW COMPETITORS, AND ACTIVELY RESPOND WITH INNOVATIONS. TO KEEP UP WITH THE INCREASING PACE OF CHANGE THEY SHOULD CONTINUOUSLY EXPLORE WAYS TO SUSTAIN AND QUICKEN THIS INNOVATIVE WORKFLOW. CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING - 24 -
  25. 25. BE OBSERVANT BE RESPONSIVE BE QUICK THREE KEY BUSINESS GOALS: 1 To accelerated shifts in customer experience with effective monitoring. With building, sharing and developing these innovations through new ways of working and effective collaborations. With innovations that answer these trends and expectations. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING 2 3 - 25 -
  26. 26. GOAL 01. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING BE OBSERVANT To accelerated shifts in customer experience with effective monitoring. - 26 -
  27. 27. Observing behavioral shifts, changing expectations and even willingness of consumers to adopt new solutions should be a daily event. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 27 -
  28. 28. JEFF YABUKI. “The only thing advancing faster than technology is consumer expectations.” PRESIDENT AND CEO, FISERV. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 28 -
  29. 29. BANKS CAN TAKE THREE STEPS TO ENSURE THEY STAY RELEVANT TO THEIR AUDIENCE, AND AVOID BEING NEGATIVELY SURPRISED. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 29 -
  30. 30. ROUTINELY TALK ACTIVELY LISTEN STORE & SHARE WITH YOUR CUSTOMERS DIRECTLY. TO YOUR CUSTOMERS ON & OFFLINE. YOUR INSIGHTS WITH THE ENTIRE TEAM. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 30 -
  31. 31. ROUTINELY TALK ACTIVELY LISTEN STORE & SHARE WITH YOUR CUSTOMERS DIRECTLY. TO YOUR CUSTOMERS ON & OFFLINE. YOUR INSIGHTS WITH THE ENTIRE TEAM. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 31 -
  32. 32. To keep up with changing expectations, and to predict those greater shifts in societal trends, banks need to connect with their audience directly and often. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 32 -
  33. 33. WHY ROUTINELY TALK WITH CUSTOMERS? After direct engagement with customers, especially face-to-face interactions it’s hard to disregard customer needs. This kind of regular, personable interaction are powerful ways to keep employee mindsets focused on delivering value that directly meets the needs of the customer. Through connecting frequently with customers, more customer data can be collected to create a more complete audience profile. “The person who holds the consumer data has the power” Robert Bonwell, CEO EMEA, JLL. Power in this context meaning the power of a successful product with relevant marketing to customers, in turn meaning a successful business. By making direct engagement with customers a habit, banks can build a reputation of being a brand that actively involves customers in their development and decisions. As customer experience becomes the next competitive battleground, simply talking with customers regularly demonstrates a brand is not just talking the talk, but walking the walk. BECOME KNOWN FOR CUSTOMER CARE THE POWER IS IN THE CONSUMER DATA DON’T LOSE TOUCH WITH AUDIENCE BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 33 -
  34. 34. Part of Zipcar’s rebranding scheme saw them begin hosting regular “member roundtables” which brought together real customers and Zipcar staff to interact directly about their needs, desires and experiences. Customers were selected from their new target audience - millennials - and it created a powerful experience that quickly changed their employees’ mindsets and thus their behaviors. ZIPCAR HOST MEMBER ROUNDTABLES. EXPLORE SIGN BEST PRACTICE. LHBS // NFO: NEXT GENERATION OF BANKING // BANKS NEED TO BE FASTER. - 34 -
  35. 35. Banks let their customers design product experiences - they are now product developers instead of just end users. Challenger banks like Monzo are rolling out labs that involve users in the testing of new features. This customer- involvement is part of designing new, relevant customer journeys and releasing product iterations to growing customer groups.  CUSTOMERS ARE CO-DEVELOPERS. EXPLORE SIGN BEST PRACTICE. - 35 - A STEP FURTHER… LHBS // NFO: NEXT GENERATION OF BANKING // BANKS NEED TO BE FASTER.
  36. 36. ROUTINELY TALK ACTIVELY LISTEN STORE & SHARE WITH YOUR CUSTOMERS DIRECTLY. TO YOUR CUSTOMERS ON & OFFLINE. YOUR INSIGHTS WITH THE ENTIRE TEAM. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 36 -
  37. 37. Changing consumer behavior - particularly online - is affecting the way banks are used to operating. Today banks - and every brand - need to do less talking and pushing, and more seeking out and listening - to customer needs, opinions and complaints. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 37 -
  38. 38. CHANGING BEHAVIORS. “We’re finding it challenging to adapt to our customers’ behaviors. They tweet, they chat, they text; they don’t want to go online and log a case.” A recent quote from a customer support executive sums up the shifting behavior of consumers when it comes to engaging with businesses. Consumers are no longer coming to brands with feedback and complaints, but instead going direct to social channels. Businesses now need to go to where their audience are - and listen. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING THE IMPACT ON BANKS - 38 -
  39. 39. Why listening and not always engaging directly? Well… 96%OF THE CONSUMERS DISCUSSING BRANDS ONLINE DON’T FOLLOW THOSE BRAND OWNED SOCIAL PROFILES. Source: 188Bet Survey BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 39 -
  40. 40. WHY SOCIAL LISTENING? This helps businesses to measure brand popularity and overall sentiment, within an environment where customers are more likely to speak their honest opinions. Direct engagement, while it has it’s benefits, can elicit less valid findings as consumers are likely to not be completely honest, especially when it comes to criticism of the brand. KNOW WHAT PEOPLE ARE SAYING ABOUT YOU Brands can discover genuine reactions and feedback to products & services. Brands can take these real reactions from customers and react quickly with improved service and campaigns reflecting current trends, events and societal issues their audience care about. With the greater number of people talking about brands but not actively following any of their profiles, brands should avoid ‘vanity measurement’ (counting brand followers or likes) as a metric for determining visibility and success. Exploring beyond a following with social listening can bring brands to more accurately benchmark their business. AVOID MISSING THE FULL PICTURE PERFORM PRODUCT RESEARCH BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 40 -
  41. 41. JetBlue are now able to monitor all social media channels in one place, enabling the airline to be more responsive and less likely to lose track of conversations. JetBlue have collaborated with startup Gladly, to help them consolidate all their social channels into one feed. Their new system incorporates emails, phone messages, and texts, as well as tweets and Facebook Messenger conversations together. CROSS-PLATFORM CUSTOMER SERVICE. EXPLORE SIGN BEST PRACTICE. - 41 - LHBS // NFO: NEXT GENERATION OF BANKING // BANKS NEED TO BE FASTER.
  42. 42. Coka-Cola have systems in place that can identify when their product name or that of a competitor is mentioned or posted within a photo - anywhere in the world - and algorithms then determine the best way to serve advertisements in response. It’s been found that ads created in this highly targeted way are four times more likely to be clicked on than other methods of targeted advertising. COCA-COLA’S INTELLIGENT ADS. EXPLORE SIGN BEST PRACTICE. - 42 - A STEP FURTHER… LHBS // NFO: NEXT GENERATION OF BANKING // BANKS NEED TO BE FASTER.
  43. 43. SOCIAL LISTENING = SOCIAL INTELLIGENCE FOR BRANDS. REMEMBER: BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 43 -
  44. 44. ROUTINELY TALK ACTIVELY LISTEN STORE & SHARE WITH YOUR CUSTOMERS DIRECTLY. TO YOUR CUSTOMERS ON & OFFLINE. YOUR INSIGHTS WITH THE ENTIRE TEAM. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 44 -
  45. 45. A COLLABORATIVE TREND PLATFORM FOR TEAMS BRINGS TOGETHER ALL THE MOST RELEVANT AND IMPACTFUL INNOVATIONS AND BRAND MOVES INTO ONE PLACE, INSPIRING TEAMS TO INNOVATE AROUND OPPORTUNITIES AND ANSWER CHALLENGES. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 45 -
  46. 46. On this platform should be an aggregation of the latest brand moves and consumer insights to keep teams up-to-date. From this platform users will begin to see patterns in behavior emerging - or trends. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 46 -
  47. 47. TRENDS ARE SIGNS OF CHANGE. Here’s some examples… BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 47 -
  48. 48. WHAT’S HAPPENING. In an effort to increase adoption and security of their fingerprint authentication cards, Mastercard are enabling people to set up and verify biometric identities from home. Mastercard’s new battery-powered sleeve can be sent to customers’ homes where they can set up the fingerprint identification, without having to go into a branch. Mastercard see this new possibility as a step towards encouraging more people to adopt the biometric verification feature - inexpensively and conveniently. WHAT BRANDS ARE DOING ABOUT IT. MASTERCARD SCALE BIOMETRICS FINANCE SERVICE CUSTOMERS WANT CONVENIENT SECURITY WHY IT’S HAPPENING. 90% 60% The two most important factors when opening a new account online was “secure” and “easy". SECURE EASY Source: IDology report EXPLORE SIGN BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 48 -
  49. 49. MyPiggy is the new digital service for families to begin teaching children about the value of money and financial responsibilities. MyPiggy consists of a physical piggy- bank with a digital display, where kids can save money as cash or digitally, both instantly showing up on their account balance. Parents have a connected app so they can always keep an eye on how their children are progressing with their savings.. MYPIGGY FOR FINANCE EDUCATIONYOUNGER PEOPLE ARE SEEKING FINANCIAL ADVICE WHY IT’S HAPPENING. WHAT’S HAPPENING. This demonstrates an increased reliance from younger generations on their parents to teach them crucial finance skills. 84%of Gen Zers rely on parents or family for financial information. WHAT BRANDS ARE DOING ABOUT IT. EXPLORE SIGN BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 49 -Source: Raddon
  50. 50. The Plynk app allows small amounts of money to be transferred between friends with emojis, photos and GIFs - to avoid those awkward moments. The app can be described as a cross- over between a messenger and a money transfer app - made for friendship groups. It is aimed at younger people and students with the goal of being used to split small bills such as restaurant checks and taxi fares. Users are also able to use their Plynk account online, and receive a virtual Mastercard when they sign up. YOUNGER GENERATIONS WANT FASTER TRANSACTIONS TRANSFER MONEY WITH AN IMAGE WHY IT’S HAPPENING. WHAT’S HAPPENING. AVG .PO PULATIO N M ILLENNIALS G EN XERS 76% 85%93% Younger generations expect faster payments, saying it is at least somewhat important that payments they make are made in real-time. WHAT BRANDS ARE DOING ABOUT IT. EXPLORE SIGN BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 50 -Source: Fiserv, Harris Poll 2016
  51. 51. FABIOLA LEWANDOWSKA. “Passively observing consumer trends is not enough. Businesses should never stop asking “why is this happening” and predicting how will it shape their own clienteles’ expectations. Seemingly non-related shifts in consumer needs, expectations or new definitions of value can have the biggest impact on your own business. After all, remember that once your customer experiences a better level of service or convenience, it will be almost impossible for them to accept the way things were before. This is how you avoid being disrupted out of the blue.” LHBS CONSULTANT & SIGNMESH PRODUCT MANAGER. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 51 -
  52. 52. Employees already recognize the benefit of having frequent insights within their team. Source: LHBS Survey BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING 97%BELIEVE THAT AN EFFICIENT METHOD OF SAVING, SHARING AND DISCUSSING INSIGHTS WITH TEAM MEMBERS CAN IMPROVE THE QUALITY OF THEIR WORK. - 52 -
  53. 53. KEEPING THE TEAM INSPIRED & INFORMED ENCOURAGES A CULTURE OF INNOVATION FOR CONTINUOUS CREATION OF NEW SOLUTIONS. REMEMBER: BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 53 -
  54. 54. GOAL 02. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING BE RESPONSIVE To accelerated shifts in customer experience with effective monitoring. - 54 -
  55. 55. Responding to the evolving needs identified through observing trends and expectations is more important than ever because of the increasing pace of change. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 55 -
  56. 56. “RESPONSIVE” MEANS FASTER WITH INNOVATIONS - NOT IN SPEEDING UP ALL PROCESSES. It’s important to note: BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 56 -
  57. 57. 1. THEY INNOVATE IN THE RIGHT PLACES 2. THE INTERNAL CULTURE SUPPORTS ACCELERATED INNOVATION TO SPEED UP THE PROCESS OF INNOVATION, BANKS MUST FIRST ENSURE: BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 57 -
  58. 58. IDENTIFY STARTING POINTS THE GREATEST NEEDS WILL GIVE OPPORTUNITY FOR INNOVATION. CULTIVATE CUSTOMER FOCUS CULTIVATING A CUSTOMER-FOCUSED CULTURE MAKES INNOVATION THE NORM. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 58 -
  59. 59. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING IDENTIFY STARTING POINTS THE GREATEST NEEDS WILL GIVE OPPORTUNITY FOR INNOVATION. CULTIVATE CUSTOMER FOCUS CULTIVATING A CUSTOMER-FOCUSED CULTURE MAKES INNOVATION THE NORM. - 59 -
  60. 60. WHERE CAN BANKS IDENTIFY STARTING POINTS FOR INNOVATION? BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 60 -
  61. 61. The following survey saw consumers’ rank their “top wants” from banking brands: Asking customers directly what they want from their bank can be one approach. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 61 -
  62. 62. 81%“Reward me for my business" 61%“Give me ‘anytime, anyplace’ access to my balance” 58%“See me as a person” 55%“Provide me with wealth-building advice” 52%“Show what i’m spending on and how to save” Source: CGI Group BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 62 -
  63. 63. This can give banks starting points for innovations. A problem with this is that often customers will make general suggestions about how they would like their experience to feel and more added-value features. Therefor banks need to read between the lines and identify the underlying need from what the customer is saying. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 63 -
  64. 64. Identifying the greatest pains and frustrations can be a way to more accurately pin-point specific needs and innovation opportunities. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 64 -
  65. 65. Here’s the top pain points of traditional banking customers today… BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 65 -
  66. 66. The journey towards achieving a goal does not seem linear and customers don’t feel as though they’re moving forward. Bank processes don’t follow their customers’ logic, instead they follow industry logic. Products and services are not based on needs. Having to re-enter information more than once. The biggest pain points of navigating banking processes are: - 66 - Expectations are not clearly managed and so there is a difference between what the customer expects of a process and what they receive. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
  67. 67. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING IDENTIFY STARTING POINTS THE GREATEST NEEDS WILL GIVE OPPORTUNITY FOR INNOVATION. CULTIVATE CUSTOMER FOCUS CULTIVATING A CUSTOMER-FOCUSED CULTURE MAKES INNOVATION THE NORM. - 67 -
  68. 68. A CUSTOMER-FOCUSED CULTURE DOES NOT MEAN MAKING ALL YOUR EMPLOYEES EXPERTS IN COLLECTING THE RIGHT CUSTOMER DATA, RATHER TO MAKE THEM EXPERTS AT USING THE RIGHT CUSTOMER DATA. It’s important to note: BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 68 -
  69. 69. THE RIGHT CUSTOMER DATA MAKES THE DIFFERENCE. 90%OF DEVELOPMENT EFFORTS FOR NEW PRODUCT INNOVATIONS FAIL. When key customer-centric knowledge is not agreed on or adhered to when it comes to new product innovations, it’s highly likely the development will fail - as it so often does. 86%OF COMPANIES UTILIZING CUSTOMER INSIGHTS TO DRIVE PRODUCT INNOVATIONS SUCCEED. By applying customer insights, and specifically driving innovations with the desired outcomes of customers, companies see a success rate which is five times the industry average. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 69 -
  70. 70. Changing cultural mindsets within a legacy organization is not a simple task, particularly within the financial services industry. The risk-taking nature of an innovation culture very often challenges the DNA of the finance industry, which focuses on minimizing risk and always being cautious of strict regulations. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 70 -
  71. 71. PRESTON THORNTON. SENIOR DIRECTOR & PRODUCT MANAGEMENT AT INLET. “There's always going to be some level of fear of the unknown. Senior management ultimately has to set the tone by being completely brought in to the future direction. They must also demonstrate that the evolution in culture ultimately puts customers first, which will have lasting benefits for the organization and all stakeholders.” BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 71 -
  72. 72. Ultimately, the benefits of a customer-centric approach will outweigh the concerns and arguments against transforming banks’ traditional cultures and processes. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 72 -
  73. 73. HOW DOES A CUSTOMER-CENTRIC CULTURE ACCELERATE INNOVATION? EMPOWERS EMPLOYEES TO DO WHAT’S BEST FOR THE CONSUMER AT ALL TIMES. Handing over more decision- making power to employees gives them the feeling of being trusted, leading to higher productivity and greater quality of work as the responsibility for their decisions will lie with them. INSIGHT-DRIVEN DEVELOPMENTS MEANS HIGHER SUCCESS RATES OF NEW PRODUCTS. A higher success rate naturally leads to a more positive and motivated team as they have confidence in their ability to serve customers and that the work they’re doing will not got to waste on a failed product or service. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 73 -
  74. 74. Here’s some examples of how some banks have made moves to instill a customer-centric culture and encouraged employee innovation within their organizations. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 74 -
  75. 75. SUPPORTING & ENABLING INNOVATION. First National Bank (FNB) based in South Africa say they’re all about people and being connected. The began their innovation efforts years ago with a reward program for employees’ innovations, and since then have only grown the opportunities for employees with learnings, knowledge sharing and trainings - even via a YouTube channel. They built up a supportive infrastructure that includes implementation teams as they believe experimentation is crucial. Their focus on innovation is all to keep up with the rapidly changing needs of their customers, and their desire to always deliver them something new and valuable. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 75 -
  76. 76. MERGING EMPLOYEE & CUSTOMER EXPERIENCE. Macquarie Bank wanted to make a move towards a more high- performance culture and organization through delivering on customer experience. They aligned everything they did and focused on helping employees to understand the role they played, personally, in delivering the strategy. They fostered enterprise agility as a bank to deliver quicker decisions and decrease levels of bureaucracy. By also focusing on encouraging engagement from employees and including them in all customer experience research, trainings and brainstorms, they felt more secure to raise concerns, bring crazy thoughts and ideas to the table and ultimately feel partly responsible for the CX. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 76 -
  77. 77. Here’s some more examples from outside of the finance industry. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 77 -
  78. 78. CUSTOMER DELIGHT ABOVE ALL ELSE. Intuit’s innovation catalyst “Design for Delight” enables the company to put the customer first with Design Thinking methods. Their three basic pillars are: “deep customer empathy” - a deep understanding of what the customer needs or wants to achieve “go broad to go narrow” - collecting many ideas first (divergent thinking) and then narrowing them down (convergent thinking) “rapid experiments with customers” - testing new prototypes as early as possible with target groups and iterating to make them better. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 78 -
  79. 79. SHOWCASING REAL USE-CASES. A leader in commercial storage and shelving, Spacesaver began putting up giant posters of their products in use by various customers. This included the huge storage system used by the Field Museum in Chicago to store dinosaur bones and fossils. This gave every employee the often missed line of sight from innovation to end product and customer experience, motivating behavior daily. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 79 -
  80. 80. OFFICE DESIGNED FOR CUSTOMER-CENTRICITY. Rackspace have designed their unique office space around the way their employees work best and how they communicate with customers. They realized it needed to reflect this approach to really embed the culture in the place they carry out this work everyday. Their office’s unique design reflects that of a ‘home’ feel with spaces specifically for different working styles, as well as creating a visually pleasing and welcoming space when customers visit. Their designated client hub was designed to the needs of their customers, all demonstrating that they really do listen and act on the needs of their customers as well as their employees. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 80 -
  81. 81. GOAL 03. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING BE QUICK With building, sharing and developing these innovations through new ways of working and effective collaborations. - 81 -
  82. 82. BANKS NEED TO NOT ONLY INNOVATE, BUT FIND WAYS TO SUSTAIN AND ACCELERATE THE PROCESS OF INNOVATION TO KEEP UP WITH THE INCREASING PACE OF CHANGE. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 82 -
  83. 83. This can be achieved through changing internal ways of working and adapting new technologies to automate and reduce effort of certain processes. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 83 -
  84. 84. However, banks’ processes and systems simply weren’t built for being sped up or adapted. Often legacy cores are wrapped in new layers and only some processes are moved to newer systems - anything to avoid a complete core replacement. But the need for greater change due to disruptive technologies is imminent. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 84 -
  85. 85. DISRUPTIVE TECH. Technology has massively impacted the banking industry, to name just a few, the rise of mobile, the introduction of cryptocurrency and the explosion of social media has shaken traditional banks into rethinking their business models. Today, it’s not only about ‘beating’ these tech-savvy start-ups. Traditional banks still have the sticky customer base and image of security and stability on their side, and combined with an adoption of new technologies could become more worthy competitors. However, even the larger tech corporations are moving into the world of banking, which would bring about even greater challengers to banks. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING THE IMPACT ON BANKS - 85 -
  86. 86. TRADITIONAL BANKS ARE NO LONGER ONLY UP AGAINST FINTECH STARTUPS, BUT NOW EVEN LARGER TECH FIRMS OUTSIDE OF THE BANKING INDUSTRY ARE MOVING IN. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 86 -
  87. 87. TODAY’S BIG TECH FIRMS ARE POISED TO DISRUPT THE BANKING INDUSTRY. EXPLORE SIGN AMAZON PILOT BANK ACCOUNTS FOR TEENS FACEBOOK CONNECT TO USERS’ BANKS PAYPAL MOVE INTO BANKING EXPLORE SIGN EXPLORE SIGN BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 87 -
  88. 88. Generation Z are coming to expect financial solutions from the big tech players: 44%EXPECT TO CONDUCT FINANCIAL BUSINESS WITH AN ORGANIZATION LIKE APPLE, AMAZON OR GOOGLE RATHER THAN WITH A TRADITIONAL BANK. Source: Raddon BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 88 -
  89. 89. BAIN & CO. PARTNER AND LEAD OF THE BANKING SECTOR. GERARD DU TOIT. “It’s just a matter of time before we see the big tech players enter retail banking in the U.S. You’re going to see a Darwinian battle between banks and tech firms, and some surprising combinations on how they get to market.” BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 89 -
  90. 90. SO WHAT CAN BANKS DO? BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 90 -
  91. 91. ‘Competitors’ of traditional banks today are often not competing in the traditional sense. Startups especially are likely competing on segment or intention-specific products or services, and both sides would benefit from either the technology know-how or deep industry knowledge of the other. Opportunities for collaborations with new competitors should always be considered by traditional banks. BANKS SHOULD RE-EVALUATE HOW THEY LOOK AT NEW COMPETITORS, AND SEE A COLLABORATIVE RATHER THAN A COMPETITIVE LANDSCAPE. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 91 -
  92. 92. MIKE SIGAL. “Incumbents that don’t seek to partner will die.” EARLY-STAGE INVESTOR, ENTREPRENEUR & CORPORATE INNOVATION ADVISOR. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 92 -
  93. 93. Fintechs are succeeding today due to their fast and flexible working processes and foundations built on technology. But once the big tech firms move into their space they may find their lack of a stick customer-base a great weakness and be disrupted themselves along with legacy banks. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 93 -
  94. 94. Collaboration with Fintechs is an approach already tried and tested by a number of traditional banks to start adapting processes to the connected customer without having to drastically re-structure the core organization. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 94 -
  95. 95. Royal Bank of Scotland (RBS) has partnered with Ezbob to offer automated lending platform, Esme Loans. RBS unveiled a digital site named "Esme". The platform will allow small and medium-sized businesses to obtain loans quickly, even outside working hours, and including those who are not customers of RBS. Starting with the lending site, RBS wants to step up the efforts in digitizing banking services. EXPLORE SIGN DIGITAL LENDING PLATFORM FOR SME. BEST PRACTICE. - 95 - LHBS // NFO: NEXT GENERATION OF BANKING // BANKS NEED TO BE FASTER.
  96. 96. Morgan Stanley is partnering with Twilio to digitize communications between financial advisors and clients. The partnership focuses on advisor- client communications, but is part of a broader mission to digitize communications company wide. The partnership with Twilio suggests the company is investing in improving the digital experience for existing clients as well.    EXPLORE SIGN MORGAN STANLEY DIGITIZE THEIR COMMS. BEST PRACTICE. - 96 - LHBS // NFO: NEXT GENERATION OF BANKING // BANKS NEED TO BE FASTER.
  97. 97. Santander partnered with several content businesses to launch “Prosper and Thrive”, a content hub to help millennials navigate the financial world. The aim is to give them access to practical advice for financial well- being and digestible descriptions of financial jargon without it sounding like it’s coming from a traditional bank. They partnered with several content businesses including SapientRazorfish, Contently and Newscred.    EXPLORE SIGN SANTANDER’S CONTENT HUB FOR MILLENNIALS. BEST PRACTICE. LHBS // NFO: NEXT GENERATION OF BANKING // BANKS NEED TO BE FASTER. - 97 -
  98. 98. Fintechs are ready - and waiting - to collaborate, and banks should grasp the opportunity. 75% OF DIGITAL DISRUPTORS / STARTUPS SAY THEIR PRIMARY OBJECTIVE IS TO COLLABORATE WITH BIG BANKS. Source: Capgemini Their main reasons being to gain visibility, achieve economies of scale, earn customer trust and establish a better distribution infrastructure. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 98 -
  99. 99. WHY FINTECH COLLABORATION? Evolving expectations of consumers is something Fintechs are not only prepared for, but built for. Often working with an Agile approach, or a similar customer-focused process they can easily adapt internal systems and products to suit these changing needs, and even to engage with traditional banks’ existing ecosystems, as they’ve always found ways to leverage what currently exists.. This offers traditional banks a secure outlet for trialling new innovations with minimal risk to the core business. Consumers are already aware of and actively using Fintech products and services, even more so in the last few years. Awareness of Fintech capabilities rose from 62% in 2015 to 84% in 2017, and adoption of money transfer and payment Fintech solutions rose from 18% in 2015 to 50% in 2017. Startups benefit from being connected to a more stable (in terms of funds and infrastructure) organization to gain distribution and general industry expertise and can more easily scale to sustain their business in the long run. Traditional banks have access to valuable know-how, particularly digital knowledge and a data-driven way of approaching the banking experience. This approach is more informative but comes with lesser costs and increased efficiency - banks can learn a lot for what is on their part a small investment. WIN-WIN: INDUSTRY KNOWLEDGE FOR STARTUPS & DIGITAL KNOW-HOW FOR BANKS ADOPTION OF FINTECH SERVICES IS RISING FINTECHS ARE BUILT FOR FLEXIBILITY BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 99 -
  100. 100. CAUTIONS OF FINTECH COLLABORATION. To get the most from any collaboration, the strengths - and more importantly - the weaknesses of both sides should be understood from the start. One positive outcome of this is that final decisions can then be designated for various steps in the project to those with greater expertise without a feeling of unfairness. Plus, when a business can look honestly at their own shortcomings, better, more effective improvements can be made sooner to benefit business. As Fintechs are so advanced when it comes to customer experience, both sides need to be aware that while this is the right focus for today’s market, management of risk (the primary focus of most traditional banks) should be taken into consideration, and perhaps given more attention by Fintechs. To increase the chances of a successful collaboration, both Fintechs and traditional banks should continuously share their market insight throughout the collaboration. BE AWARE OF THE DIFFERENCE IN FOCUS KNOW BOTH STRENGTHS & WEAKNESSES Fintechs often run into problems as a result of not being sure about which regulations apply to them within the finance industry. This is particularly true when it comes to privacy and security measures. Banks should be prepared to educate Fintech partners on the regulators and governing bodies they should be aware of for a more seamless and open collaboration. FINTECHS MAY LACK REGULATORY KNOWLEDGE BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 100 -
  101. 101. “When banks and fintechs collaborate, innovation and speed-to-market foster a better customer experience like never before.” Sankar Krishnan 101 PARTNER AT CAPGEMINI, AUTHOR. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
  102. 102. Be observant to evolving trends and shifting expectations through frequent customer engagement, social listening and making these insights accessible and applicable by the entire team through a collaborative platform, such as signmesh. SUMMARY. BE OBSERVANT. Be responsive to the observed trends and expectations through an accelerated innovation process. Extracting needs and pain-points from your consumer insights gives your team specific opportunities and starting points to begin innovating on new solutions. Be quick in identifying these opportunity areas, developing and executing new innovations. As the pace of change grows legacy organizations will find it more and more difficult to keep up with changing consumer behaviors and wants without restructuring existing processes. Collaboration with tech-based fintechs is a great place to start without a complete systems overhaul. BE RESPONSIVE. BE QUICK. GOAL 01 GOAL 02 GOAL 03 BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING - 102 -
  103. 103. NOW IT’S YOUR TURN. - 103 - BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
  104. 104. - 104 - signmesh is the collaborative platform created for teams. Tailor your hub to any department, industry and interests and receive the most recent, curated signs each day to stay inspired. SIGNMESH DEMO. START YOUR START DEMO TODAY FABIOLA LEWANDOWSKA Product Manager +49 151 6462 0741 fl@lhbs.com Agile Sprints is an approach to accelerated innovation we take with many legacy clients, enabling them to uncover their full potential in a short time, with real, tangible results they can move forward into development. AGILE INNOVATION. SCHEDULE TODAY WORKSHOP STEFAN ERSCHWENDNER Managing Partner +49 151 6462 0729 se@lhbs.com BOOK YOUR FIRST TO BE OBSERVANT. TO BE RESPONSIVE & QUICK. BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
  105. 105. ABOUT. A marketing & innovation firm, we work primarily with legacy organizations to adapt their customer value proposition to meet emerging customer expectations. Together with our clients we discover business opportunities and deliver integrated customer offers for products, services, experiences and communication.DISCOVER DEFINE DEVELOP DELIVER Explore further on our website, and discover more industry insight reports. - 105 - BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
  106. 106. THANK YOU. You can explore more industry insights reports on our website. - 106 - BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING

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