Recent Accenture surveys conducted at global level indicate that one out of two customers use social media as an appropriate source of product information and view shopping as an experience rather than a mere transaction. With regard to the banking sector, 20% of customers switched retail bank in 2012 while 26% added banking providers. In this interview, originally published on Banking Boulevard, I discuss how banks can maximize the value they bring to customers in the new digital era.
How is customer behavior evolving in the banking industry?
The banking industry is impacted by evolutions in social media and mobile technologies in combination with the consequences of the 2008 financial crisis. Furthermore, the business proposition of major digital companies is disrupting traditional consumer patterns.
What Accenture sees is that:
- Some of these companies propose highly targeted advisory services (including time and geography tailored) allowing proactive interactions and services (such as Google’s AdSense services)
- -Whereas others deliver a personalized experience and excellent customer care based on an open platform (such as Amazon)
- -Some have developed groundbreaking social media that results in peer-influencing behavior (such as Facebook)
- -And others have created new consumer ecosystem models (such as Apple)
Can you comment on the emergence of new players who are starting to challenge traditional bankers in some of their key lines of business?
We are seeing a marked increase in new digital competitors contesting specific banking business areas. According to our analysis at global level, as much as 32% of banking revenues will be at risk by 2020. Traditional banks are being challenged by alternative online providers and merchants as well as by other new players, such as price comparison portals.
These new entrants are challenging traditional bankers in some major business lines including:
- Deposit and current accounts
- Payments and credit cards
- Lending
- Asset management and insurance
So bankers are at a new crossroads. How can they maximize the value they bring to their clients and mitigate the risk of commoditization of their services? Are we talking about making existing products available on digital media, or is there more to it than that?
Banks are indeed at a crossroads and they face the risk of becoming utility-like providers. Alternatively, they can develop a unique value proposition and become part of the everyday life of their customers by leveraging digital technologies.
Digital transformation goes far beyond making existing products available on digital media. It’s about creating new products and services that fit the expectations of digital customers. This can be achieved by making complexity approachable and human, by making product features modular and configurable, by proposing real-time and efficient delivery and eventually by being open to distribute third-party products.
Another key element in successful digital transformation is delivering an outstanding customer experience through coherent messaging, modern and relevant brands, real-time support, a passion for service quality, a simple and elegant look and feel, and obviously a great design.
In Accenture’s view, the great leap forward for banks will consist of extending their ecosystem by positioning themselves as Value Aggregator, Advice Provider and Access Facilitator.
This obviously requires a bit of explanation:
- Access Facilitator positioning consists of supporting the customer in his/her “everyday/everywhere” buying process, for example, with services such as polymorphic payments and ticketing solutions.
- Advice Provider positioning, on the other hand, consists of providing specific buying suggestions based on deep customer knowledge and purchasing algorithms.
- Banks will eventually act as Value Aggregators when creating integrated financial and non-financial solutions for own and third parties. One example of this is supporting clients in the delivery of couponing, vouchering and loyalty solutions.
Finally, customers should also benefit from this digital transformation when visiting their local bank branch. Financial institutions should leverage advanced advice tools and create space specifically designed to facilitate a new relationship model based on transparent and collaborative interactions between customers and staff.
Can you give an example of a major digital transformation project in which Accenture is involved?
In Belgium, Accenture has supported Belgacom and BNP Paribas Fortis in creating a viable business plan and collaboratively launching a mobile banking initiative to bring in-app commerce to merchants and consumers.
In a preparatory phase, Accenture worked closely with both companies to create a solution that was practicable from a technical and commercial point of view. This solution was tested and validated with a number of industry players, potential future clients and partners before being presented to both company executive committees for validation.
After formal approval from both company CEOs, Accenture proceeded to launch the project execution, which included, but was not limited to:
- Setting up program governance between the companies involved, and across the different Accenture geographies involved in delivering the project (Brussels, Rome, Manila)
- Supporting the creation of a new company: monitoring the progress of contractual discussions, filing with the anti-competition authorities, opening bank accounts, appointing auditors, etc.
- Supporting the launch of company operations: operating model, staffing and recruitment plan, process descriptions, training material, selection of tools, etc.
- Marketing and sales support for the new company: brand creation, communication plan, target client selection, pricing strategy, etc.
- Leveraging Accenture Mobility assets to build the platform for running company operations
- Building the mobile app that will be used to put the Belgian Mobile Wallet solution on the market
- On-site support for composing business requirements and testing the solution
- Application maintenance services for both the mobile app and the back-end platform
Accenture is using its extensive mobile technology experience and resources for the solution’s implementation including loyalty programs, couponing, ticketing and payments through generally accepted payment instruments. The Accenture team is leveraging the Accenture Mobility platform for back-end and client-side applications, thus serving as the basic building block for the Belgian Mobile Wallet now called Sixdots. The Accenture Mobility platform is being used for running all the business transactions (payments, loyalty, tickets and coupons) as well as customer identification and security.
This interview was originally published on Banking Boulevard
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