Enabling Branch Innovation: The Powerful Role of Self-Service Technology. Liam van Beek Sr. Manager, Physical Channel Strategy, BMO

Transcription

1 Enabling Branch Innovation: The Powerful Role of Self-Service Technology Liam van Beek Sr. Manager, Physical Channel Strategy, BMO 1

2 Agenda A changing landscape Understanding shifts in customer behaviour and their impact on the banking industry The response Branch transformation Case study BMO Harris Smart Branch The Smart Branch concept Executing with the customer in mind The role of the ATM in the future The challenge addressing key customer experience drivers: Simplicity Convenience Meeting needs Levers: Capability & Innovation Industry Opportunities 2

3 The world is changing and it s having a significant impact across industries, including in banking Disruptors: How are we responding to the impact of non-financial retailers and digital disruptors? Bridging the gap: How are we creating a better omni-channel experience and more effectively integrating digital technologies? Changing Customer Behaviour: How are we responding to shifts in banking behaviour? The future of cash: How are we adapting to the rise of P2P payments, contactless payments, virtual currency and mobile wallets? 3

4 A big part of the shift we re seeing is centred on changing customer behaviour Accessibility & Innovation Digital Natives Individuals who are most comfortable interacting digitally. Value convenience over direct personal assistance Seeking innovative and engaging options High usage of digital channels Comfortable with virtual relationships and communication Digital Immigrants Individuals who have adapted to varying degrees to the use of digital technologies. Digital adoption is not universal Fuller adoption can be facilitated by increased exposure to digital options Selectively engage across channels with continued value placed on physical channels. Personal Assistance & Convention Traditionalists Individuals who have not adapted to the use of digital technologies. Little to no digital adoption Derive value from direct personal assistance and face to face relationships High usage of the physical channel 4

5 As customers evolve how they choose to bank, their expectations are also becoming more dynamic Data/CRM Mobile Call Centre Customer Online Branch Customers are looking for a more seamless and consistent experience across channels. There is growing expectation that the customer experience will be personalized. Customer journeys do not always start and end in the same channel. ATM Satisfaction across incremental touchpoints does not reveal overall satisfaction with the cumulative experience. 5

6 The impact of this is reflected in evolving channel preferences which see increasing reliance on digital channels to complete banking transactions Canada Online Banking 55% cite online banking as their primary method and 77% report using online banking within the last year. Payments are a key online activity. Mobile Banking 31% reported using mobile banking in the last year. Usage of mobile banking is increasing. Physical Channels Banking 13% of those surveyed considered the branch as their primary method for banking with 40% reporting a reduction in their use of in-branch banking. 18% cite the ATM as their primary method for banking. 85% of those surveyed use ATMs when making cash withdrawals. United States Online Banking 31% cite online banking as their primary method and 74% report using online banking within the last year. Mobile Banking 35% reported using mobile banking in the last year. The most common use was to check account balances or recent transactions. Physical Channels Banking 21% of respondents in one survey considered the branch as their primary method for banking. In another report 87% stated that they had visited a branch in the last year. 14% cite the ATM as their primary method for banking. Sources: CBA How Canadians Bank (2015), Federal Reserve - Consumers and Mobile Financial Services (2015), ABA Survey: More Consumers Embracing Mobile Banking (2014) 6

7 Despite these changes the branch continues to be the focal point for advice based sales While customers have embraced multichannel access, they also expect higher value from face-to-face interactions at their bank branch Sales Advice Make deposit Buy / sell investments Report a problem / obtain status Administration Branch Call Centre ATM Online/Internet Mobile Another Way Bill Payment / Transfers Balance Inquiry 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Sources: McKinsey The Future of US retail-banking distribution (2014), Ernst and Young Global Consumer Banking Survey July 2015 Digital Banking Report 7

8 Given the context, we can expect a material shift in how FIs leverage their channels going forward Changing Customer Behaviour 1. In-branch banking, though on the decline, continues to be valued in principal, if not practice, by many customers. 2. Customers no longer bank in channel isolation, they complete tasks across physical and digital locations. 3. Customers prefer to deal with a person for complex and advice driven transactions and opt for digital or self-serve when completing basic transactions. Branch Digital Self-Serve Call Centre The branch will remain critical to driving customer acquisition and advice based sales but its role in fulfilling basic sales/service transactions will begin to diminish. Digital channels (with an emphasis on mobile/tablet) will grow in importance for driving customer acquisition/share of wallet and fulfilling basic sales/service transactions. The role of self-service channels in fulfilling basic sales/service transactions will increase as technology advances and we develop a wider suite of allowable transactions/services. The call centre will shift to a supporting role for other channels and will become a core location for issue resolution. 8

9 Assisted Service While many FI s are investing to enhance their digital capabilities, we are also seeing a dramatic transformation in the branch landscape Established Emerging Aspirational Transaction Focused In the current state ATMs are transaction focused. Self-Service Relationship and Advice Focused 9

10 In 2015 BMO Harris introduced The Smart Branch Concept as a way to engage customers with innovative ways to bank Smart Branch is a small footprint, technology enable format with a focus on consultative sales. 10

11 With customer experience in mind, we equipped the branch with key convenience features, including: Integrated sales and service space with universal bankers capable of meeting both simple and complex needs sales and service needs. Innovative self-serve technologies including enhanced ATM (e.g. customer selected bill mix, mobile cash) and Live Teller capabilities (ITM) to manage basic transactions. Digital displays to engage and delight customers. Instant Card Issuance to provide fast and easy access to accounts at the ATM and POS. Video Expert capability to connect our customers with specialized sales teams without the need to book an appointment. Employee facing technologies to encourage banker mobility and create a fluid customer choreography in the branch. 11

12 There were several factors driving the successful execution of the Smart Branches in Chicago Creating comfort with the format and technology and evolving to meet customer needs. Customer Engagement Creating the right capabilities to enable customers to choose where and how to bank. Capability Change Management Preparing customers and employees for the change. 12

13 So what does all of this mean for the ATM Industry? Customers expect.. Simplicity Using an ATM needs to be quick and easy: Intuitive user experience and interface Minimize the number of steps it takes to complete a transaction Convenience Create flexibility in how customers can interact: Innovative authentication options Provide better access through partnerships Integrating with other channels Their needs to be met We need to meet increasingly complex customer needs: Expanding ATM capabilities Creating a personalized experience Moving beyond service to sales 13

14 Assisted Service Can we move the needle and leverage the ATM to build better relationships with our customers? Established Emerging Aspirational Transaction Focused Can we innovate and increase ATM capability to build better relationships? Self-Service Relationship and Advice Focused 14

15 There are several levers that we can pull within the ATM industry to help build customer relationships Network and Operations Capability Innovation How am can I run my network more efficiently and most effectively manage customer information? What can t customers do at an ATM? How will we challenge ourselves to think differently about the function an ATM can serve? ATM enhancements that exist, but are not widely deployed ATM enhancements that are aspirational 15

16 Expanding capabilities and driving innovation will be key in the evolution of the ATM Industry ATM enhancements that exist, but are not widely deployed Personalization Dynamic Currency Conversion Foreign currency Customer selected bill mix Mobile ATMs Better integration of branch format and ATM access ATM enhancements that are aspirational Referrals and customer opportunities Biometrics Omnichannel interface and preferences 360 view of customer portfolio Viable commercial and small business solutions / coin option Sales capability Problem tracking & resolution 16

17 What are the opportunities for the industry? 1. How can we increase capability without making things more complex for our customers? 2. How can we rethink the value proposition for the ATM and make the shift to relationship building? 3. How can we break down barriers for those customers who don t traditionally think of the ATM for more complex servicing and sales needs? 17