Changing the game:
The new face of customer experience
1
Why should you care?
I’m so close to dropping my bank, because they keep having
promos to get new clients, but what are they doing to keep
me happy? This loyalty thing isn’t working for me when
I’m no longer their key concern.
I was with a big bank, but the client service was abysmal.
I like my new bank’s approach and flexibility. Even though
they don’t have brick and mortar operations, they keep
me happier.
Bill Gates famously said that we need banking, not banks.
If we look at buying behaviours, customers across
generations are starting to think like that and disruptors have
taken note. Superior products and services are now a given.
It’s customer experience and putting the customer at the
heart of everything you do that can help you stay relevant
and differentiated.
The question is: Are you prepared?
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Index
Tap the icon or page
number to jump to
each section.
Missing the mark:
Who to call
What today’s customers want and how
the banks are falling behind
Customer expectations 23
5
Customer Satisfaction Index 6
Why does it matter? 7
How to build trust 8
Disruptors are here
Why should you care? 9
10
Shaking things up:
Five trends in banking disruptors
and what the banks can learn
Disruptors are taking over 12
Products 13
Transactions 14
Analytics 15
Funding
16
Brand and experience 17
3
Why should you care?
Missing the mark:
What today’s customers
want and how banks are
falling behind
Index
4
Customer expectations are being shaped by global trends, new technology, and innovative consumer offers
Companies have developed
the capabilities to personalize
services in real time. Now
customers expect companies to
serve them directly and to suit
their own unique needs.
Index
ct
ed
Con
re
di
hn
ol
og
y
lf
tt
ec
Customer
expectations
Cu
th sto
e
cu miz
st ed
om t
er o
Customers have more devices
than ever and are empowered
to make demands anytime
and anywhere.
Pro
Se
Sm
ar
O
m ne e
an x
y pe
ch r i
an en
ne ce
ls ,
Customers do their own
research and comparisons
which leads to more informed
purchase decisions.
Customers interact with
businesses over multiple
channels and expect the right
experience to be delivered
on their preferred channel.
5
Customer Satisfaction Index
The customer
satisfaction gap
among the
big 5 banks is
closing1
BMO RBC
BNS
CIBC
Overall Satisfaction Index
TD
780
770
760
750
740
730
720
710
700
690
Average Gap: 22
Average Gap: 31
2006
2007
2008
TD
1
2009
RBC
2010
BNS
2011
BMO
2012
2013
CIBC
J.D. Power and Associates. Canadian Retail Banking Satisfaction Study. 2014
Index
6
Why does it matter?
38.3%
40
30.8%
47.1%
41.1%
43.9%
50
51.8%
54%
60
50.1%
70
42.3%
+ TRUST
+ CONFIDENCE
59.7.3%
+ EXPERIENCE
54.6.4%
Customer likelihood to change banks
vs. customer satisfaction1
65.3%
There is a strong correlation
between a customer’s
experience and the level of
trust and confidence they
have in their bank.
30
20
10
According to statistics:
Likely to change
1
2
Middle East & Africa
92.8%
42.1%
Central Europe
92.1%
38.3%
Asia-Pacific
91.3%
37.6%
Latin America
89.8%
28.2%
North America
89.6%
45.7%
Western Europe
86.7%
27.1%
North America
Central Europe
Western Europe
Of the banking customers with a
negative experience, what percentage
HAVE trust and confidence in their banks
Middle East & Africa
Of the banking customers with a positive
experience, what percentage HAVE trust and
confidence in their banks
Latin America
Correlation between customer experience and the trust and
confidence that customers have in their banks1
Asia-Pacific
0
Unsatisfied customer
Poor customer service is one
of the top two reasons why
customers leave or switch banks2
Capgemini. World Retail Banking Report 2013, April 23, 2013.
Corporate Executive Board. Financial Services Customer Experience Survey, December 2010.
Index
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How to build trust
us
lik
T h e y tr
t
The best differentiator to
attract and retain customers
is no longer the products
and services you offer, but
by the relationships you build.
Customers prefer
doing business
with banks...
e
They know
e
y
Be authentic - original, real, distinctly meaningful
2 Be honest - transparent, make intentions clear
3 Be empathetic - understand their needs, desires, and lives
4 Support them - be helpful, act on their behalf
1
Th
Studies show that customers
build relationships similar
to how they build friendships.
Brand loyalty
Brand advocacy
Index
Providing good products and services at the right
price is table stakes, banks today need to focus their
efforts towards selling lasting relationships and
creating advocates for their brand.
8
Disruptors are here and they’re changing the game!
Disruptors are emerging
from all angles of your
value chain.
The rise of disruptors
are challenging
Canadian banks to be
more proactive in their
efforts to attract and
retain customers.
Disruptors understand
the value of building
trusted relationships
with the customers.
Disruptors leverage the
changing landscape of
customer expectations
as the platform for their
business models.
Disruptors in the market today
$
Peer-to-peer
lending
Index
Large technology
companies
$
$
Crowd
funding
Invoice
trading
9
?
Why should you care?
Disruptors
are here to
stay and are
competing
against you.
Midsize bank
segment avg.
Big 5 bank
segment avg.
7662
7493
Experience in travel, music and retail
shows how quickly players can be
marginalized if they fail to respond
to new ways of doing business.
Traditional banks are
stuck in a competitive
battle with each other
J.D. Power and Associates. Canadian Retail Banking Satisfaction Study. 2014
Ibid.
The Big Five banks (RBC, CIBC, TD, Scotiabank and BMO) scored an average customer satisfaction
rating of 749 out of 1,000 while midsize banks (Tangerine, PC Financial, Manulife Bank, National Bank
of Canada, Laurentian Bank, ATB Financial and HSBC Bank Canada) scored an average rating of 766.
2
3
Index
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Why should you care?
Shaking things up:
Five trends in banking
disruptors and what
the banks can learn
Index
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Disruptors are taking over critical links in your value chain!
New and compelling value propositions are disrupting the traditional banking chain.
Non-banks are entering the
financial marketplace and
are providing additional value
for customers.
io ns
F u n din
Disruptors
an
g
sact
Br
an
d
Pro
du
ct
s
Some companies have redefined
bank interactions, making banking
simpler, more transparent,
socially connected and engaging.
ience
r
e
p
ex
d
an
Tr
New non-conventional platforms
and social communities for
funding removes the traditional
bank from the process.
Alternative transaction
platforms provide companies
and individuals other means
to transfer funds back and forth,
which reduces the number of
interaction opportunities for
traditional banks with their
customers.
A n alytics
Sources are leveraging vast
amounts of customer information
to anticipate individual customers
needs and tailor services.
Index
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Products
Trends in banking disruptors
2
4
Index
Banking
without
a bank
account
Banking
products
from less
regulated
competitors
Product disruptors are using their existing
brand and large customer base to directly
compete with the core business of
traditional banks, with services like
credit cards, insurance and payments.
Retailers and
technology
companies are
now providing
banking
services
1
Pre-paid cards and mobile apps are
allowing companies to offer banking
services without a standard chequing
account to under-banked customers.
The one-size-fits-all approach to banking
is being challenged by companies offering
standard banking products that are tailored
to individual customer needs.
Tailoring
of products to
each individual
customer
3
Non-standard financial institutions are
encroaching by offering their own banking
products. They’re aggressive and can offer
products to a broader customer base due
to less regulation.
13
Transactions
Trends in banking disruptors
Growth of the
mobile wallet
and digital
currency
The global mobile wallet market is expected to grow by 35% a year between 2012
and 20171, allowing users to pay virtually using online credits, disrupting the core
business of traditional banks and plastic payment companies (Visa, MasterCard etc),
with little or no processing costs.
Simplified
payment
platforms
Simplified payment platforms require consumers to input personal information
only once for multiple online and mobile merchants, offering enhanced
convenience, speed and security. Mobile transactions are becoming table
stakes to compete—sales topped $235 billion last year.
Reinvention
of old models
Partnerships
and
collaborations
1
Digital platforms allow for traditional commerce models to be reinvented online.
From technology-enabled brokers to P2P forums, lending has become accelerated
and more accessible for consumers.
Non-industry players are partnering to coexist and deliver value to the
customer (e.g. Google Wallet is the transaction, while the merchant holds
the loyalty program attached to it).
1
2
3
4
Gartner, 2012
Index
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Analytics
Trends in banking disruptors
1
Aggregating
data
Non-banking competitors—like tech giants—are using data sources,
including external research companies, social media monitoring tools
and open data sources, in tandem with internal data, for competitive
edge in customer intelligence.
Today’s leaders use data-driven techniques to personalize and market
products and services based on user preferences, current location and
timing. This allows them to make the right offer at the right time, through
the right channel globally.
3
A single
consistent and
integrated
view of the
customer
2
Leaders are integrating multichannel capabilities with technology
solutions to capture consistent and standardized data across systems,
which helps provide better customer experience through intelligent
insight and predictive analytics.
Banks are evolving to a more service-oriented architecture where data
is shared and used in real time. Leaders are already offering personalized
services based on complete customer profiles, by eliminating silos and
integrating systems and data across product lines.
Index
Customer
insight
Real time
analytics
and offers
4
15
Funding
Trends in banking disruptors
1
2
3
4
Index
Integrating the social perspective in funding
Funding is no longer viewed as just a business transaction.
Many funding projects are aligned to a community or a social
cause, and individuals have become personally invested
in what they fund.
Funding from individuals
Funding has expanded beyond institutional funding,
and is now being provided by individuals using collateral
and personal assets.
The power of many
Obtaining large capital doesn’t require an institution with
deep pockets or large reserves, with crowdfunding enabling
companies and individuals to raise substantial capital by
tapping into a pool of individual investors.
Personal investing
Banks are no longer the only investment channel,
with individuals becoming more willing to take
on riskier investments by putting their own money
in non-conventional investments.
16
Brand and experience
Trends in banking disruptors
2
1
Focus on the customer
Today, bank customer’s are
digitally connected, highly
informed and demand very
personalized and improved
products, services and
engagement. If done well,
the reward—more
consumer data.
Simple Engagement
Easy payments, quicker sales
processes and banking solutions
with a simplified mobile-first
strategy are the strongest
competitors for customer
business.
3
4
Index
Iconic brands
Services with personalized and
brand-differentiating experiences
increase retention and loyalty,
keeping customers away from
the competition. The problem?
Consumers view most banking
brands as undifferentiated
and complacent.
Drive towards digital
Consumers want to research,
purchase and manage their
financial services on demand, using
the device of their choice. This will
erode silos of traditional retail
delivery channels and
require a holistic digital
banking experience.
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Who to call
For a deeper discussion on
customer experience, please contact:
John MacKinlay
National Financial Services
Consulting & Deals Leader
416 815 5117
[email protected]
Karen Forward
Partner, Consulting & Deals
416 687 8116
[email protected]
Anthony Klick
Partner, Consulting & Deals
416 815 5257
[email protected]
Sasan Parhizgari
Director, Consulting & Deals
416 947 8903
[email protected]
Kim Vander Aerschot
Director, Consulting & Deals
416 814 5893
[email protected]
Debbie Dimoff
Senior Advisor, Consulting & Deals
416 407 9641
[email protected]
Yair Weisblum
Partner, Consulting & Deals
416 814 5892
[email protected]
Index
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