Reshaping the Bank around Pervasive Service Design

Reshaping the Bank around
Pervasive Service Design
IDC Banking Forum
Milan, February 12th, 2015

Copyright © 2012 NTT DATA 2Copyright © 2012 NTT DATA 2Copyright © 2014 NTT DATA Italia S.p.A. 2
CUSTOMERSBEHAVIOURS
HASCHANGED

Key Customers needs are emerging
Addicted to connectivity
I am always On
I use multiple Devices
I stay in multiple locations
I want immediate and secure access
Addicted to customization
I get better deals
I save money
I want the ultra convenient
I want personalized and customizable offers
Addicted to freedom
I am in control
I am better informed
I want more social engagement
I want more fun
What Customers want is the ability to access banking services at any time
from any location using a better and simpler experience than in branches

New technology trends allow adoption of Mobile channels
Source: IDC, 2015
01 01 01 02 02 02 03 03
05
05 05
05
05
05
05
05
2011 2012 2013 2014 2015 2016 2017 2018
Mobile subscription (billion) Laptop & Tablet
Smartphone
Feature phone
02 03 03 03 03 03 04 04
2011 2012 2013 2014 2015 2016 2017 2018
Internet users (billion)
Affordable Smart
Devices
Mobile will become the
predominant channel
Share of
population
32% 35% 38% 40% 42% 44% 46% 47%
Ubiquitous
Broadband
Connectivity
By 2018, there will be
an additional 0,7 billion
internet users
Share of
population
82% 88% 91% 95% 98% 101% 104% 106%

Propensity to use Digital/Mobile channels is increasing….
84%
77%
78%
80%
73%
9%
16%
11%
4%
12%
Current accounts
Savings accounts
Investments
Mortgages
Consumer finance products
53%
38%
58%
72%
32%
43%
59%
28%
10%
47%
Branches
Agents/Brokers
Call center
Direct channels
Channel usage in 2010 Expected channel usage in 2015
2010, % of sales 2015, % of respondents
Source: McKinsey & Co and EFMA, April 2011
New Mobile technologies allow for new way of interaction and streamlines the distribution
chain of financial services for access to formerly excluded customers

…highlighting a direct correlation with buy propensity
• Fully engaged customers average 1,14
additional product categories with their
primary bank than do customers who are
"actively disengaged"
• Customers who are fully engaged bring
also $402 in additional revenue per year to
their primary bank compared with those who
are actively disengaged, 10% greater wallet
share in deposit balances and 14% greater
wallet share in investments
1,54 1,41
3,20
2,73
1,00
0,77
0,55
0,23
0,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
1 2
Core deposit products
Related deposit products
Credit products
Other
FULLY
Engaged
ACTIVELY
Disengaged
Averageproductswithprimarybank
6,28
5,14

HOWBANKSCANEMBRACETHE
MOBILEREVOLUTION

Banks can leverage their unique asset….
Strong Technology
Investment
(payment, internet
banking, mobile…)
Customer Trust
Intrinsically digital
products
Knowledge on
Spending Behavior
and Purchasing
power
Awareness of
Customer Location
(POS, ATM, Branches,
Smartphones…)

…for expanding its footprint along the whole customer journey
Examples
Generate
demand
Map
places
Price
Comparing
sites
Contacting/
searching the
deal
Purchase
decision
Payment
Purchase
evaluation/
feedback
Loyalty/
returning
customer
Effective tools
for location
based
advertisement
and marketing
couponing
services
Mobile apps
are capable of
real-time
location based
search
Certain test
applications
support
comparing
different financial
institution
Specialized third
party websites
can compare
prices, offers of
different financial
institution and
also the opinions
of other
customers
Mobile
payment
New tools are
capable of
contacting and
navigating the
consumer to the
point of interest
Purchase
feedback can be
shared after
transaction
Experiences,
opinions are
shareable on
social network
Reinvented
cards are able
to collect
loyalty points
after checkout
or specific
transactions
Cellfire
collects unique
coupons and
discounts
AroundMe
shows places of
interests around
the customers
according their
search input
Yelp helps to
find the best
retailer with
evaluations
Google Local
collects
information
Google Maps
plans routes
Segugio.it maps
the best prices
Foursquare is a
place to share
customer experience
Swipely
collects post
sales discounts
Search, evaluation of alternatives Decision making Post-evaluationTransaction
Today bank
coverage
Leverage Mobile for expanding to the whole e-commerce journey and adopting new mobile
related services such as location-based services, rewards & loyalty and couponing

WHATARETHEMOBILE
ENABLERS

Innovation in Bank requires a totally new Service Creation approach….
Be Aware &
Get Advice
On Board Usage Care
Relationship &
Channel
Model
Segmentation &
Personalization
Model
Partnership &
Referral
Model
Pricing &
Revenue
Model
• Products have to be decomposed into smaller Business Service Elements
• Reusability is key for reducing time to market
• Pervasiveness, Personalization and Simplicity are key for customer adoption

… which requires a new Operating model
Become Fast
Keep Basics
Service
Creation
Savingsfor
Funding
CareUsage
On
Board
Be Aware &
Get Advice
Create a separate fast way of working to develop the innovation
Improve your foundation making it as efficiently as possible to keep costs down, maximize revenue
and free up funds to invest in the new

…new Organizational structures….
HQ
BU1
BU2
BU3
Fast IT
Slow IT
Fast IT
Slow IT
Fast IT
Slow IT
HQ
BU1
BU2
BU3
Fast IT
Slow IT
Digital change agent
HQBU1
BU2
BU3
Slow IT
Digital
Fast IT
HQ
BU1
BU2
BU3
Digital
ServiceProvider
Silo MultidisciplinaryDigital Hub Outsourced
Coordination
Sharing
Op
S
B
S
B
S
B
Op Op
S B
OpSlow ITOp
S
B
S
S Strategy B Budget Op Operations
Instead of a traditional hierarchical organization that reinforces a silos based structure, transformed
Organization will experiment loosely connected structures
This encourage self-organization into cross-organizational and multidisciplinary teams

…new Partnership models….
Partnership model have to move from a Traditional one (Customer – Supplier) to a more Wirearchical
model (fintech partners, Startup, VC, R&D, Universities…)
Shift the digital business from a linear relationship to a dynamic value ecosystem
Supplier Production
Supply
Chain
Marketing Customer
Universities
Startup
R&D
Fintech
Partners
VC
Traditional
Suppliers
OUs

…new Investment Evaluation/Monitoring practices
Set a group of criteria to select the most
meaningful initiatives to start with
VALUE
IMPACTS FEASIBILITY
Projected cash stream from
investing in an innovation
More likely cash flow resulting
from doing nothing
Traditional financial tools are designed for stable market environments, but fail when applied to
innovation under conditions of uncertainty and rapid change.
Newer investment methodology evaluate the costs of “doing nothing” and monitor Value creation
Monitor progress (using Coorti and
Split tests)

…and a new Service Creation process
A reshaped Service Creation process which acts as the enterprise glue which keep together two parts
of the new Operating model using, show quickly small but concrete results and scale-up successful
projects by “contamination” of other areas monitoring agile teams for security/risk compliance
Seeding
Blossoming
Horizon
Design
Digital
Checkup Sprouting
Governance
Service
Creation
Growing

Your Digital
Readiness
Your Transformation
Ability
Digital Checkup is our approach to drive Banks towards their digital awareness
positioning them inside the Readiness Matrix through the evaluation of 2x5 drivers
Products &
Offering
Customer
Value
Channels Processes
Architecture
&
Technology
Regulation
Competitors
& New
Entrants
Third Party
Mngt
Governance
&
Approach
Organization
&
Skills
Today
Tomorrow

Our Full Lifecycle of Mobile Services Implementation & Management
Mobile Application
Development
• User Experience (UX)
• Native Device Development
(iOS, BlackBerry, Android,
Windows Phone)
• Cross-Platform
Development
• Enterprise Mobile App
Development
(SAP, Oracle, SalesForce)
Mobile Testing Services
• Accelerated Mobile Test
Automation
• On Demand
Performance Testing/
Benchmarking
• Accessibility Testing
• NTT Remote Test Kit
Mobile App Mgmt & Infra
Services
• Mobile Infrastructure and
Hosting
• Mobile Device
Management & Security
• Enterprise App Store
• Unified Communications
• Dual Persona

CASESTUDY

“Hello bank !” is part of a wider BPN Paribas / BNL Relationship strategy for 2014-2016
Source: BNP Paribas Group Fourth Quarter Results (13th February 2014)
Retail
Bank
Private
Bank
Hello
bank!
Promoters
Clients that use different
channels but don't avoid the
branch as point of reference for
operations/ counseling/ buying
experience
Clients with important assets that
require a dedicated management
and ask for a one-to-one
relationship with a trustworthy
consultant
Affluent Clients that need a
trustworthy consultant for
their investments' choice
Digital Clients that do not desire
physical interaction with the Bank,
using new digital technologies
meanwhile keeping relationships
when required
Branch ATM CRSC Internet Mobile Social PromotersRelation
manager
Acquisition
Less Costs
Acquisition
Income
Retention
Income
X-selling
Retention

We help spend better…

…and to save more in a different,
social perspective!

The assistance model integrates
self-service management mode with
highly customizable caring & support
features thanks to synergies between
Contact Center and Hello! Team

Communication Compliance Legal Branches
Information Technology
CFO
Operations
HR
User &
Customer
Experience
Customer
Acquisition
Customer
Development
BNL
• User Experience Design
• User & Customer Interaction Design
• Web & Mobile Sites Content mgmt.
• Project Management (vs. IT)
• Customer Acquisition Budget
• Acquisition Partnership
• Digital Marketing for Acquisition
• Interface with Brand Communication
• Customer Relationship & Cross Selling
• Customer Satisfaction & Service Level
Excellence
• Sales Animation & Chang mgmt.
“Hello bank !” Business Architecture
 Lean Organization: 3 Functional Managers
 Less than 40 Operating Resources

COPYRIGHT 2015 NTT DATA ITALIA S.P.A.
MAURO GIORGI, SVP FINANCIAL SERVICES
http://it.linkedin.com/in/maurogiorgi
https://twitter.com/Aqualung61

Reshaping the Bank around Pervasive Service Design

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