BLS White Paper - What can banks do to build a closer relationship with their customers _ V4

WHITE PAPER

What can Banks do to build a closer relationship with their

customers?

A look into the dynamics of banking in the digital era, and how leveraging the smartphone, payment

technologies and corporate partnerships could unlock new opportunities for customer engagement

Intelligent technology that gives you the edge

5 ways to better engage with your customers using a Mobile Marketing strategy

Is your Loyalty Programme working? 5 common mistakes and how to get it right

A new opportunity to leverage brand affinity with your Corporate and SME clients

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SOME INDUSTRY FACTS & CHALLENGES

We are seeing traditional Financial Services providers being forced

into major business transformation for the following reasons:

A Demographic Power-shift?

The Millennial segment is our future. A generation that has grown up using the

latest technologies, who will always look online for ‘digital solutions’ and whom

represent the largest opportunity within the un-banked population to grow the

customer base. This is a segment that is very much ‘Mobile-First’ and demand

digital enablers to control their life through their smartphone. Mobile Banking

uptake is set to grow even further as forecast by a 2016 TSYS study:

Declining Consumer Trust?

A 2015 study from Ernst & Young found that the number of customers using

only one single bank has dropped from 41% to 31% since 2011. In the same

period, people distributing services across three or more banks has increased

from 21% to 32%. This tells us a lot about consumer trust during a changing

global economy. A Survey from NGData in 2015 showed the below responses

when people were asked whether they felt the banks understood their needs:


63% of Millennials

have shown a

willingness to

download and use a

Mobile App for

product enrolment or

bill payment

Only 18% said they

wouldn’t and 19%

were ‘Not Sure’

Market Saturation, Convergence & Increased Attrition?

In the majority of countries around the world, the consumer is presented with a

plethora of banking options, and until recently the average lifetime of a banking

customer has been relatively good. Surveyed customers, quite predictively, placed

the most value on Customer Service as being the key characteristic when

choosing their bank:

Today though, we are seeing a number of other industries encroaching on the

banking world. Many telecommunications providers are offering Mobile Money

services…especially in emerging markets, and many retailers are offering loans,

financed purchases and store credit cards. Interestingly, the attrition rates for

banks…those that have switched their banking providers…almost directly

correlates with the uptake of digital banking in terms of generation:

A Technology-driven Business Threat?

The rise of the mobile application has seen many industries suffer from the

creativity and ingenuity of innovative, disruptive, digital companies. For example,

consider how Uber has fundamentally challenged the taxi business, and how

Airbnb is impacting hoteliers and B&B owners.

The same trend presents a threat to banking with apps like Venmo, LendUp and

Zopa starting to appear on the market giving customers new options for financial

services. This is all happening at a time where 79% of the general consumer sees

the relationship with their bank as being simply transactional rather than providing

meaningful value to them:

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A survey from the

Millennial Disruption

Index found that 71%

of millennials:

“Would rather go to

the dentist than listen

to what banks are

saying”

…and 33% believe

that in five years they:

“Won’t need a bank”

WHITE PAPER

1. Make Mobile the priority for digital customer experience

Take advantage of the 140 times per day that a customer engages with their

mobile device. Ensure your content is what they engage with and that it provides

them value by being purposely designed as a mobile experience.

2. Enhance your Loyalty Programme

Many of today’s Programmes are not performing as desired. Ensure that your

Points Programme is engineered towards retention rather than acquisition. Our

experience has shown that customers are happier when they get smaller benefits

more frequently.

3. Build a content and community relationship with your corporate & SME banking partners

Consider hosting a multi-wallet loyalty scheme with your SME and corporate

customers, where the retailer’s points as well as the bank’s points are

automatically earned when they use your card to pay. Say ‘goodbye’ to a wallet

full of loyalty cards and stimulate habitual customer engagement.

4. Gamify the customer experience

Customers feel more satisfied when something is achieved, and putting fees on all

services tends to block service adoption. Consider creating visible status levels

within each of your products where service adoption, usage and loyalty leads to

increased benefits, but where the basics are free. This is the way that mobile

games are monetizing their developments very effectively.

5. Make contextual offers available across all customer touchpoints

Maximise the value potential from within your data by using actionable insight and

personalizing your offers accordingly. Make the right offers visible when a

customer engages with your services on your ATM, Internet Banking, Mobile Apps

and your Call-Centre.


In 2016, ‘Millennials’

are set to overtake

‘Baby-Boomers’ as the

largest living

generation.

Millennials are

becoming one of the

most influential, yet

challenging, consumer

groups for the banking

industry

SO WHAT CAN WE DO TO BETTER ENGAGE TODAY’S CUSTOMERS?

Make Mobile the priority for digital

customer experience

Mobile is not only reshaping the consumer journey, it is

reinventing the entire consumer experience for all businesses.

How and when consumers transact with a brand or service

throughout the lifecycle is trending to mobile-first. For research-

to-purchase, service & support, through to loyalty and

feedback/advocacy, mobile is now the primary channel

customers turn to. LinkedIn recently informed BLS that 50% of all

profile & job views globally are now through their App or on a

mobile browser.

For many traditional and established businesses it has proven to

be a challenge to provide mobile-first consumers with an end-to-

end digital experience on one screen. Users are frequently

forced, for multiple reasons, to engage with a branch, outlet or

call-centre to accomplish a desired task or goal. Some 90% of

consumers move between devices to accomplish a goal, using

an average of three different screen combinations each day.

Customers tolerate this less than optimal experience because

most strategies don’t consider the user experience elements of

device and native behaviour to that device as a journey in itself.

Consumers deal with it because most brands don’t cater to their

mobile needs through every stage of the customer lifecycle … so

they have no choice.

Businesses that are able to start-up or adapt to providing a

seamless, end-to-end digital process flow for their customers are

winning in today’s innovative world and this is forcing marketing

strategists to think beyond mobile-first and start thinking about

mobile-only campaigns tied to mobile-only ecosystems. Gone

are the days when your mobi-site was just considered as an

extension of your main website…it’s almost the opposite today.

In many businesses, mobile tends to exist without a dedicated

owner to take accountability for the customer experience. As a

result, mobile strategies for the most part, are focused on an

isolated aspect of customer engagement, whether it’s marketing,

m-commerce or loyalty.

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The average

consumer

engages with

their Mobile

an average of

140 times

per day

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Enhance your Loyalty Programme

Is your Loyalty Programme performing as well as you would like?

5 common mistakes in the Loyalty Programmes we see in the

financial services industry are:

They tend to be designed for acquisition rather than

retention, advertised strongly to attract new customers

Benefits are often too far away for a customer to see

immediate value…too much has to be spent in order to

get anything useful in return

Businesses confuse the generic reward or status options

that are bundled as part of a product package as

engendering ‘Loyalty’.

Visibility of points balances has to be searched for rather

than being in front of the consumer at all times

All customers are treated the same within the

programme…there are no milestones, achievements or

social interactions to keep the users interested

All of the above can be addressed by designing your programme

around the mobile, with an app made available for existing

customers, simplifying and digitalising the redemption process

and adding gamified milestones to your programme to stimulate

the customer engagement.


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Build a content and community

relationship with your corporate &

SME banking partners

Many of us collect cards and open loyalty accounts with

brands…whether it’s a coffee shop, a supermarket, a gas

station…there are many forms of points, stamps and badges out

there today. The cards go into our wallets where we tend to

forget about them until the next time we happen to go into the

store. Just like the airlines and hotels, retailers strive to drive

footfall or repeat online purchases and blast us with generic

emails, whilst they carry all the cost of card production and back-

end IT systems to support their own rewards programme.

An Opportunity for the Banks

As the hosts of both consumer debit and credit card accounts as

well as corporate & SME business accounts, banks are uniquely

positioned unlock a new revenue stream…the hosting of a multi-

wallet, digital loyalty platform as part of the SME business

banking package.

Retailers need no longer worry about the production of cards or

the accounting of the rewards as that will all be taken care of

directly within their business banking package.

Customers, when they pay with their debit or credit card (or

indeed Mobile Wallet), can earn points automatically to both their

bank and retailer loyalty accounts, and view and manage their

points all from a single mobile application.

The customer experience is the key. Real-time access to their

wallets on their smartphone through a Mobile App or Browser.

They can view the accumulation of their reward currencies

across the partner network and have the freedom to spend the

amounts by transferring and burning the points or get access to

digital coupons using downloaded barcodes and QR codes as

directly from their smartphone.


InTelestage™ i-CLP

The engine behind

a Multi-Wallet,

Digital Loyalty

Ecosystem

www.businesslogicsystems.com

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Gamify the customer experience

It is well-known that mobile and social games have an addictive

and viral quality….especially amongst the millennial segment.

The reason they can be so addictive is the simple pleasure that

humans derive from competition and achievement. There is a

powerful psychological impact in taking something mundane or

outside the realm of something one typically enjoys, and turning

it into something engaging.

As technology advances, we are seeing heavy investment,

research and development going into augmented or virtual reality

experiences and connecting anything and everything within the

‘Internet of Things’, but is this relevant for the banks?

In the world of Mobile, everything has the potential to be

‘gamified’ and there are many simple things that can be done to

turn your services into a ‘game’ that has in-app purchases and

social media story sharing.

Take for example your current card accounts. Aside from having

the different card options that each come with their own status

benefits, what if we gave customers that sense of achievement

and status by using tiers and levels within the account?

Consistently showing the customer how far away they are from

the next level and what they get when they get there is, in

essence, ‘gamification’.


59% of

Millennials, aged

18 – 34, open

their banking app

on a daily

basis…even if

they don’t do any

transactions

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Make contextual offers available

across all customer touchpoints

Keeping paying customers is the most important thing for a bank, and

there’s nothing more important when engaging this segment than

providing the best customer service. This includes knowing the right

time to proactively engage with your customers, as well as having the

right information at your fingertips when they engage with you.

Being ‘Contextual’ means having the right offer visible, to the right

customer, at the right time…for them! Too often we see businesses

sending generic templated emails to their customer base with

irrelevant offers, which get deleted almost instantly.

Email can be difficult channel to get a good response rate and so

stimulates us to look at other potential channels for automated

customer interaction. In telco, the mobile data advancement has seen

a significant reduction of the use of SMS as a communication channel

as we turn to WhatsApp, Facebook or Skype to have P2P text

conversations. The unexpected benefit of this is that SMS is once

again emerging as a very useful, trusted and almost exclusive B2C

notification channel.

Contextual customer engagement comes from identifying

actionable insight from transactional data

Analysis of transactional and customer profile data is already at the

disposal of financial institutions and it can be used to uncover powerful

insights into customer needs, preferences and behaviours. Often

though, this insight comes too late to use.

The key for financial institutions delivering a superior customer

experience is to have access to this data when it is most

needed…when the customer engages with you on any channel.

In the call-centre, typically a CRM will tell an agent everything about a

customer’s account, their last transactions, their credit rating, the

products and services they hold with you…etc. A well-trained agent is

able to turn this into a good customer engagement. Can the same be

achieved when the customer engages with your services on your

Mobile App or at an ATM?

Enabling these digital channels to present personalised offers that can

be accepted there and then can be a very powerful tool to increase

both customer satisfaction as well as revenue at the same time.


In a recent study, 34%

of customers surveyed

had contacted their

bank to resolve an

issue, and 1/3 were

left un-satisfied by

the resolution.

Empower your agents

with quantified offers to

present to the

customer…and make

the same offers visible

to the customer on the

mobile and ATM.

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Your business benefits

businesslogicsystems.com

businesslogicsystems.com

About Business Logic Systems

To find out more about Business Logic Systems’ comprehensive

portfolio of Campaign & Loyalty Management Solutions, Data

Management Technology, and Customer Value Management expertise:

Call: +40 264 590703

Email: [email protected]

Visit: www.businesslogicsystems.com

Our partners significantly stimulate incremental usage and extend the average

lifetime value of their customers

Every day 125 Million customers are contacted and/or serviced by BLS solutions

> 10 years’ experience enabling Loyalty Programmes in high-volume, digital data

environments

We design, develop, implement integrate and support our solutions…all services

from a single supplier

InTelestage™ - An end-to-end architecture with open interfaces for Data

Management, Trigger Generation, Business Rules Automation, Omni-Channel

Communications and Integrated Provisioning

BLS White Paper - What can banks do to build a closer relationship with their customers _ V4

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