Posts Tagged ‘Customer experience’

Post 2 on Transformational Banking: Big Data Not Banking Data

April 8, 2016

As everyone in the banking industry is well aware, banks hold a lot of data and many have spent several years utilising it. Some banks I know have been mining, analysing and really making their data work for them for over 25 years…but there aren’t as many banks like this.

Banking data has been used broadly: sales targeting, fraud, credit scoring, retention etc. And now in the era of “Big Data” more banking data is being collected, especially through online and mobile channels. All good? Yes, and here comes the “but”; it’s all “banking data”. Some may argue that clickstream data is not banking, but it is if the clicks are on bank pages, whether it’s internet banking or the banks web page.

Initiatives like PFM (Personal Finance Management), whilst useful, have further legitimised the collection of financial data only. However, for transformational digital banking, banks have to be more voracious about collecting data and more creative in its use.

For example a bank’s typical approach to credit scoring involves financial analysis of the customer’s income, outgoings and payments history. This approach assumes you need to check financially a person’s ability to pay. Companies like FriendlyScore and Veridu turn this model on its head and use social media data to validate a person’s identity and trustworthiness to pay. Similarly, last year China launched an initiative which will be rolled out nationwide by 2020 to create a “Social Credit” system. Initially, 8 companies have been invited to define scoring approaches, and these vary from analysing online spend (Allibaba/Sesame) to scoring on online dating (Baihe).

Imagine how much more customer service can be improved by understanding the customer’s emotional state when they are contacting you. Companies like Affectiva.com are leading the way in providing emotional detection and analytics. Similarly, several years ago Samsung demoed a prototype phone with in-built emotional detection that worked with several sensors. Their analytics worked on things such as the speed of typing, errors made, pressure and vibration. Microsoft have also demoed “mood sensing” couches and even a “mood” bra.

Some banks have investigated the use of geo-location, for example to highlight the nearest ATM or branch. Some have gone further with geo-fencing, using “beacons” to present offers in real time, or to change electronic billboards as customers walk by locations pinpointed to 5m2.  But how about using Google image search to help you identify where a picture was taken. How could this be useful to a bank? If you could identify the location, you may understand the kind of holidays the customer takes, providing you with an idea of their lifestyle. Customers that use sites like Instagram will also give away how frequently they go on holiday.

The sources and use of data that banks can access are clearly vast, and with the Internet of Things the growth of data is about to explode further still. It will soon be possible to record a person’s entire life: what they saw, what they ate, where they went, how they felt, what they like/dislike, their heart rate, how often they brush their teeth, even how often they wear the same socks before they are washed, and more.

The key to using big data to transform a digital bank will be to gain the customer’s trust, giving them reason to volunteer the data to you, and this will happen more easily if the customer sees value for themselves in the way you use data. For example, being able to extend a credit facility instantly and easily whilst out shopping, getting discounts on things the customer likes, or even just helping them to manage the privacy of their data online.

For some time, one of my favourite sites (I wish a bank would do this for the UK) has been http://peoplelikeu.com.au/ launched by UBank, which allows you to compare how you spend your money with people similar to you (by age, earning, location, marital status etc). It recognises that either consciously or sub consciously we make comparisons and decisions based on other people. This site can be used by anyone, not just bank customers.

Going back to China’s social credit system. Some of the feedback from users was that they were happy to give up their data as it simplified processes; for example they could make a hotel booking without having to pay a deposit. Also, as less than half the people in China have a financial credit history, something that works on data broader than financials will also allow people access to credit.

It is clear there is a huge amount of data available and that with the right value for the customer in providing it, they will volunteer data to you. Even regulators with initiatives like PSD2 are pushing for data to become more openly available with the aiming of improving service and products for customers.

To drive digital transformation it time for banks to think broader thank bank data and really get creative about big data, before somebody else does!

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How banks can use digital expertise to increase sales, engender loyalty and push up profits.

October 22, 2015

Up to 90% of interactions between banks and customers now take place over a mobile phone, leaving banks with little face time, the time they traditionally used to sell their products.

But this massive shift should not be a threat. It can play to a bank’s digital strength, creating opportunities to sell better, in a more timely and targeted manner, create more loyalty, and generate greater long-term profitability.

Digital banking delivers a consistency of service, depth of customer knowledge and the facility to make real-time reactive offers. Combined, these make for a powerful sales opportunity.

A sales team will always have good and poor performers. The good seller reacts to the customer, gains and uses insight into the customer’s needs and adapts the offer accordingly. When someone walks into a branch to deposit a large cheque, a good teller will work out whether to offer savings and investment products versus maybe mortgage deals or insurance by seeking to understand more about the deposit. A less successful teller will just take the cheque, missing the up-sell opportunity.

A digital system can be programmed to behave like the good seller, to spot an opportunity and make suitable offers. It can even be self-learning, working out that something didn’t work the first time and adapting accordingly.

Not only does the bank benefit from a more comprehensive sales programme, the selling behaviour will be consistent across the entire client base, maximising each opportunity with relevant offers – even the best sellers can’t know all their employer’s offers all the time. In addition, it eliminates the chances of selling customers products they don’t need.

Digital systems allow any offers to be made in real time, directly in response to customer action. A bank can analyse spending and saving patterns and deliver timely offers that correlate to those patterns, or even to an aberration within a pattern.

In this way, online banking will become an advisory service, rather than just a transactional operation, as the banks draw on a complete picture of their customers and access their full histories instantaneously.

Finally, the digital experience will help banks to build loyalty, offering targeted rewards directly related to recent spending patterns. For example, a customer who usually buys a Starbucks coffee every day suddenly goes to Costa for a week; the bank can send a free Starbucks coffee voucher to the customer, on Starbucks’ behalf, enticing them back. It’s a relevant, targeted reward that is likely to be taken up and engender goodwill towards the bank.

The opportunities offered by digital banking are possibly the most exciting development in banking for decades. While the mobile revolution is clouding the picture right now, it’s a cloud that really does have a silver lining.

It’s up to banks to disrupt the disruptors

March 10, 2015

Being ‘omnipresent’ and making the most of different channels means banks can yet fend off Amazon and Apple in financial services

 There’s a pervasive fear that a number of new “disruptors” are going to Balkanise the financial services market in coming years, eating into banks’ traditional revenue and profit sources.

The second annual survey of retail banks, released 10th March 2015, conducted by The Economist Intelligence Unit (EIU), on behalf of Temenos, might reinforce that sentiment. It found that 35% of the 200-plus senior bankers surveyed thought new entrants and competitors would have a major effect on the market in the next five years. That figure rose to 52% in North America.

Over one third believed that the biggest threat would come from tech and e-commerce giants like Apple and Amazon. They are disruptors by nature and experts at exploiting customer data and extracting additional retail dollars.

The newcomers, with deep pockets and the best IT platforms and skills, will certainly want to nibble at certain profitable dishes. But banks should be confident that they can remain at the head of the table if they respond in a smart and measured way, making the most of their inherent strength in data and forging new strategies for different channels.

The survey forecasts that the disruptors will grab market share from current accounts (24%), deposits (14%) and savings lines (25%). Electronic wallets and foreign exchange and remittances are merely the start. Of course, we’ve already seen that happening with Amazon Payments, Apple Pay, Google Wallet, PayPal, Samsung Wallet and so on.

The advantage for the likes of Apple is that their customer data is already refined, meaning they know client preferences and can target relevant offers. Most Apple users have long abandoned fears of surrendering data in exchange for convenient service and quality products.

Facebook is also well placed to take advantage of its huge potential customer base, already corralled inside its ecosystem and likely to stay there for the free services that are put to daily use.

The disruptors might next consider targeting the “underbanked” market. This refers broadly to those digitally savvy consumers who have less trust of traditional financial institutions and a view of banking that differs greatly from their predecessors. They are young now, but will be tomorrow’s financial decision makers.

Already, the “underbanked” conduct some of their financial transactions outside the mainstream banking system. According to one KPMG study from a few years back the “underserved” segment represented more than 88 million individuals and nearly $1.3 trillion in wages in the United States.

It’s important though not to overstate the overall trend. We’ve seen a number of false dawns before, for example mobile banking was apparently poised to dominate the market around the turn of millennium.

To be clear, banks retain inherent strengths. Clearly, the tech newcomers don’t have the local networks, the spending and savings data, the Basel-compliant capital buffers or the regulatory structures to wholeheartedly enter the universe of universal banks.

And banks are still in a great position to respond digitally. In the US, about 90% of retail banking transactions now occur online or via mobile. Banks can easily get to know their customers better by mining this data.

To do that, they will need to become omni-present and place themselves where the consumer is online, while also developing channels, allowing them to track customers better and communicate with them in a timely and relevant way. The banks can leverage their data via personal financial management and create new data-driven services like digital passports, digital vaults and digital wallets.

The survey showed that some banks are starting to think this way. For example, BNP Paribas Fortis, KBC, ING and Belfius have set up Belgian Mobile Wallet, operating as Sixdots. Wells Fargo and Standard Bank have created their own labs to test new technology and apps. And the Spanish bank BBVA acquired the Big Data firm Madiva and the digital bank Simple.

Or take ICICI Bank in India, which has launched Pockets, an app-based digital wallet which, on installation, generates a virtual Visa card that can be used for payments with numerous online merchants. Pockets also offers the option of a physical card.

The next step would be for banks to better use the data, for example by deploying real-time, tailored marketing or guidance that offers the right product at the right time, whether that’s services, products or financial advice.

In the future there are likely to be two main types of banks: those that provide core banking transactions will compete on scale and cost and be happy for others to manage and own customer relationships; others will focus on customer relationships – they differentiate themselves via experience and intimacy with new uses of data and online channels, moving away from the previous model of interaction via branches and call centres.

Future of mobile: Part 3

May 13, 2012

Today I have 3 GPS devices, 4 Cameras, 3 Video cameras, 3 movie players, 5 music players and the list goes on. All of these are in a variety of devices that I use in different places for different purposes.

Drilling down into the detail what I actually have is a phone, a desktop home PC, a laptop, an iPod, a car stereo, in-car GPS, a TV+HD/DVD Player, a digital SLR, that’s just me and not including what the family has.

This presents a number of challenges, risks as well as a lot of cost…

Most of us want as little duplication of cost as possible. Already even though cars come with stereos many people are now plugging in their MP3 players, utilising the speakers in the car only. Many people will also use their phone’s GPS rather than the car’s. Newer TV’s have wireless access to browsing and social apps. I’m tempted by the hype of tablet computing, but have to ask myself, why? I have all the compute options I need?

More devices mean more synchronisation issues for personal settings and personal data. While cloud based services will resolve many of these issues, it is still early days to move everything into the cloud as users of MegaUpLoad found.

In 1999 I went to a tech show in Vegas, where I saw a potential solution to the problem from Sony. They were demonstrating the concept of “apps on sticks”. Basically these were memory sticks (max 32mb at the time) with other devices, like GPS, radio and even camera on the stick. The idea was simple you’d simply plug your GPS stick into your phone, laptop, car or any other device, rather than have that function in multiple devices. This approach would have required a lot of standardisation and clearly is a concept that never came to fruition.

More recently Asus have launched their PadFone, this is a smartphone that comes with a tablet screen. When you need to work with a bit more screen estate, you simply slot your phone into the back of the screen and hey presto you have a tablet that can use the 3G or wireless connection on your phone. Apart from being able to charge your phone, the tablet screen also integrates with the phone itself so voice and video calls can be made/received using the tablet screen.

This concept really works for me, and I could see myself buying into the family of products: TV, Car Stereo, projector. This with the ability to have my data in the cloud so losing the phone is not the end of the world, makes for a great solution. Whether the phone slots in, or connects wirelessly the ability to drive a different screen from my phone, either works for me as a concept. Maybe the idea could be taken even further so that the circuitry for the device could be slotted into the phone itself?

As I’ve discussed in my previous blogs there are many new avenues for phones, in shape, size and function. It would be difficult to predict the future with so many possibilities, but one thing for sure is that for gadget geeks like me, the phone is going to be the constant source of innovation we thrive on

Click, touch, wave and talk: UI of the future

May 10, 2012

First there was the Character User Interface (CUI, pronounced cooo-eey) typified by green letters on a black background screen. Then the Graphical User Interface (GUI, pronounced goo-eey) came along with a mouse and icons. Pen interfaces existed in the era of GUI, but now smartphones and tablets are driving many more interaction approaches using touch interfaces.

Now the GUI itself is going through a re-birth on mobile platforms with many more new types of user interface controls than we have seen in the past, we have gone way beyond simple buttons, drop-down lists and edit fields.

Many devices also support the ability to support voice driven operations, and although voice recognition has been around for over two decades, the experience is poor and more recently drastically oversold by the likes of Apple. However this is an area that will is likely to improve radically in the coming years.

The Microsoft Kinnect gaming platform provides yet another innovation in user interaction, a touchless interface using a camera to recognise gestures and movement. Microsoft are already making moves to take this form of user interaction into the mainstream outside of gaming (http://www.bbc.co.uk/news/technology-16836031), as are many other suppliers and we should see phones and TV’s supporting these this year.

However even some old methods of interaction are being given a new lease of life such as Sony’s inclusion of a rear touchpad and dual joysticks.

So, with all these modes of interaction what does this mean to User Interface Designers? Shouldn’t they really be called User Interaction Designers? How do you decide what is the best mode of interaction for an application? Should you support multiple modes of interaction? Should you use different widgets for different interaction? Should the user choose their preferred mode of interaction and the application respond accordingly? Should the mode of interaction be decided by what the device supports? Are there standards for ALL these modes of interaction?

This emerging complexity of different user interaction methods will raise many more questions than I’ve listed above. So far I have only found little research in this area, but this is a moving target. The other evidence from the mobile world is the rapid change in user behaviour as users get used to working in different ways.

Initially I would imagine most applications to use basic interactions like touch/click so that the widest possible range of devices can be used. However those targeting specific devices will be the “early adopters” for the common interaction mode for that specific device (e.g. 3D gestures on Xbox Kinnect).

In the very long term standards will evolve and interaction designers and usability experts will combine to design compelling new applications that are “multi-interactive”, choosing the most appropriate interaction method for each action and sometimes supporting multiple types of interaction methods for a single action.

Multi-interactive interfaces will make users lives easier, but are you ready to provide them?

Is apple Siri-ous about voice?

May 4, 2012

When I first saw the new iPhone ads that featured voice interaction all I thought was WOW, Apple have done it, they have mastered voice interaction. What appeared to be natural voice interaction is the nirvana many people have been waiting for to replace point and click interfaces.

Speech recognition is not new and certainly both Microsoft and Android had speech driven interfaces before Apple. However it was the ability to talk naturally without breaks and without having to use specific key words that seemed to set Apple apart from the competition.

Instead we were all fooled by another Jobs skill, his “reality distortion field”. Indeed one person went as far as to sue Apple for selling something that did not perform as advertised.

What exactly is the difference? Well both Windows and Android recognise specific commands and actions rather like just “talking the menu” e.g. Saying “File, Open, text.doc”. The Apple promise was that you could simply talk as you would normally speak e.g. “File, Open, text.doc” would be the same from Apple if you said “get me text.doc”.

So why aren’t we there? The challenge is creating a dictionary that can understand the synonyms and colloquialisms that people may use in conversational speech as opposed to the very specific commands used in menu’s and buttons in graphical user interfaces.

Whilst this may seem like a daunting task, I believe the first step to solve this puzzle is to reduce the problem. So rather than creating this super dictionary for absolutely any application, dictionaries should be created for specific types of applications e.g. word processing or banking. This way the focus on creating synonyms and finding colloquialisms and linking them is more manageable.

The next step would be to garner the help of the user community to build the dictionary, so that as words are identified, the user is asked what alternatives could be used so that synonyms/ colloquialisms are captured.

I know this is not a detailed specification but this is an approach that Apple might use to give us what they promised – and what the world is waiting for… speech driven user interfaces.

Is the dream of re-use outdated?

April 12, 2012

Since the early days of programming developers have chased the dream of creating code that can be used by other developers so that valuable time can be saved by not re-inventing the wheel. Over time, there have been many methods of re-use devised, and design patterns to drive re-use.

Meanwhile the business users are demanding more applications and are expecting them delivered faster, creating pressure for IT departments. Sometimes this pressure is counter-productive, because it means that there is no time to build re-usability into applications, and the time saved is just added on to future projects.

Could we use the pressure to take a different approach? One that focuses on productivity and time to market, rather than design and flexibility as typically sought by IT?

I’m going to draw an analogy with a conversation I had with an old relative that had a paraffin heater. This relative had the heater for many years, and is still using it today because it works. When I questioned the cost of paraffin over the buying an energy efficient electric heater which was cheaper to run, the response was this one works and it’s not broken yet, why replace it? Now for most appliances we are in a world that means we don’t fix things, we replace them.

This gave me the idea, which I’m sure is not new, of disposable applications. Shouldn’t some applications just be developed quickly without designing for re-use, flexibility and maintainability? With this approach, the application would be developed with maximum speed to meet requirements rather than elegant design knowing that the application will be re-developed within a short time (2-3 years).

So can there be many applications that could be thrown away and re-developed from scratch? Well in today’s world of ‘layered’ applications it could be that only the front end screens need to be ‘disposable’, with business services and databases being designed for the long term, since after all there is less change in those areas generally.

Looking at many business to consumer sites certainly self-service applications and point of sales forms typically could be developed as disposable applications because generally the customer experience evolves and the business like to ‘refresh the shop front’ regularly.

My experience of the insurance world is that consumer applications typically get refreshed on average every 18-24 months, so if it takes you longer than 12 months to develop your solution it won’t be very long before you are re-building it.

When looking at the average lifetime of a mobile app, it is clear that end users see some software as disposable, using it a few times then either uninstalling or letting it gather dust in a dusty corner.

So there may be a place for disposable apps, and not everything has to be designed for re-use. This is more likely in the area of the user experience because they tend to evolve regularly. So is it time you revised your thinking on re-use?

Is the growth of Mobile Apps overhyped?

March 22, 2012

There are numerous statistics on the growth of mobile apps in the various stores, and also about the number of downloads. Apple claims over 500,000 apps in its store and Google claims over 450,000 (this time last year it had only 150,000). The number of apps, downloads and rate of growth is phenomenal.

Is this just a temporary fever or will this growth continue, and if so what will drive it?

I believe this growth has only just started and that there are two key trends that will drive this growth further.

Firstly, development for smartphones will get simpler. VisionMobile’s latest survey profiles over a hundred development tools for creating mobile apps. My guess is that is a very conservative estimate of the actual number of tools out there.

A common goal for many of these providers is to make programming simpler so that more people can code. For some, this goes further, to the extent that tools are being created for children to develop apps at school. So more developers will mean more apps!

Secondly and this for me is the more exciting aspect, is that phones will do more, which means that apps will get more innovative.

Today there are a wide variety of apps already, some of which use features of the phone itself like the camera, GPS or microphone. Coming down the line are many more features that will get embedded into phones, for example the ability to detect a user emotions and the ability to monitor a users health. Such features will drive yet more applications and innovations from personal healthcare to fraud detection.

Apart from new features, phones will start interact with other devices such as your TV. At a simple level, your smartphone can be already be used as a remote control for your TV or to join in with live TV quiz shows. Already phones are interacting with cars, and this integration will inevitably go further, so that your engine management system feeds your phone with data that an app can use.

Recent surveys from recruitment agencies highlight the growing demand for mobile developers, and more interestingly the re-skilling of developers to position themselves for this growth.

Exciting times are ahead for developers and entrepreneurs who will show that Angry Birds isn’t the only way to make big money in mobile.

Mobile Apps: When to go native

March 15, 2012

Let me say from the outset, that there is no right answer for everybody. The battle between cross-platform solutions and native mobile applications is going to continue for years to come; I know I have blogged about this before, and probably will again.

For many corporate applications, native code offers the marketing group richer customer experiences, the business the chance to innovate solutions using device-specific solutions, and IT some new development tools.

However, if an organisation has to support the widest range of phones possible, the development of native apps becomes cumbersome, since you then need to write apps for each of the major mobile platforms available.

Part of this decision depends on whether you decide to support older phones, i.e. non-smartphones. For non-smartphone support you’ll need to build in support for features from SMS text services to basic text browsers.

Typically this is aimed at operating in developing countries. In developed countries like the UK, the growth of smartphones means that there is now a critical mass of users crowding out lower-featured handsets.

If you decide to target smartphones, then you still have a choice. You can either:

  1. Build for each platform, using it’s own development tools
  2. Use a cross platform mobile development solution, or
  3. Write your app as a browser solution.

So how does an organisation decide which way to go?

I found this useful little questionnaire developed by InfoTech. It takes you through a set of questions about your needs, and then suggests the best way forward between a native solution and a web-based solution.

As a quick guide to review a specific tactical requirement, I thought it was pretty good and asked very pertinent questions. Obviously this is something that an IT department could expand or specialise for their own needs, and so provides a useful structured approach to making impartial decisions without any emotional bias.

Where support for multiple platforms is crucial, a more difficult decision will be whether to use a cross-platform mobile development solution or to go for a pure web (and possibly HTML5) solution.

I’ll discuss this issue in a future blog, but for the time being, check out the questionnaire to start thinking about your mobile approach.

Future of mobile phones (part 2)

March 8, 2012

Previously we looked at the form factor, what shape phones could be in the future. But what will phones do?

Clearly phones are getting smarter and able to do more, so here are some thoughts on the changes that could occur.

Phones replace your laptop/PC

Sometime this year we should see phones with quad-core processors, making them as powerful as some PCs. Following Moore’s law, they will get more and more powerful. And the same goes for storage/memory, although as “cloud applications” improve you will need less on your device.

With this in mind, you could easily see a phone that slips into the back of a tablet which is only a screen. Already, the Motorola Atrix shows that you can have a dockable phone that could replace the need for a PC.

Phones replace your wallet

This one’s not really news at all. Already there are a whole lot of mobile cash/payment solutions, so I won’t go further into this just now. However with NFC (near field communication) expect to be able to pay for things simply by tapping your phone on a till or another phone (e.g. to give your friends money).

Phones replace your keys

Again, NFC could quite easily be used to allow your phones to open car doors, your front door at home and even replace security badges at work. It might be that phones will have multiple slots for NFC chips.

Phones replace your brain

Not literally, but they will save you having to remember things. Growth in memory capacity means that you could have chips that store everything: what you see, say, hear and do. Coupled with powerful search capability you’ll never forget people that you met, actions from meetings and the name of the little restaurant you loved on holiday.

Phones replace your doctor, mechanic…

Google has toyed with the concept of phones with monitoring capability, immediately alerting you of heart, blood pressure and maybe even sugar level issues. Ford have toyed with phones alerting you of servicing needs in a car and other advanced telemetry. Following on from this, there’s no reason why your phone won’t become your central processing unit for anything: your home security, your gas boiler servicing and more. Expect a future where there is a lot more device to device interaction than today (I will write more about this soon).

Phones replace your personal assistant

Already there are apps to help you with everything from planning your train journey to scheduling parties. In the future, your phone will also tell you when you’re close to shops you like or that have offers on things you might like based on your personal tastes.

You may be on holiday, and your phone will let you know where the nearest bathrooms are or how to navigate through a city to make sure you see all sites of interest with the most efficient route possible.

So with all these capabilities phones could be very important. How will be secure something that can so easily be lost? It could be that they move towards biometric security: voice, fingerprint or facial recognition. Or it could be that a secondary NFC chip that is in some jewellery or even embedded inside you grants you access.

This all sounds very futuristic, but some of the features discussed are either already here, or could be within the next five years. It seems phones are going to be part of an important and exciting future for us all.