Banking for Generations «Y», «Z» and beyond

1

Banking for

Generations «Y», «Z» and beyond

Mike Franz, Netcetera AG

Head of Sales and Business Development

Objectives / Motivation / Definitions

Generation Y‘s Expectations

4

Agenda or

«le fil rouge»

Objectives

§

analyze

the expectations of tomorrow’s banking

customers

, i.e. Generation «Y», «Z» and beyond

§

match the findings against the current state of IT affairs in

terms of

methodology, services, architecture & attitude

and derive specific recommendations

6

Motivation

Tomorrow, Generation «Y» and beyond will be

§

your customers

§

your employees

§

your business partners

§

… and just be aware …

… there are already HNWI among the Generation «Y»

Definition (1/2)

Generation «X»

also known as

Baby Boomers

were born

after WWII. Their birth years range from

1945 up to 1965.

Generation «Y»

also known as the

Millennial Generation

,

Generation Next

,

Net Generation

,

Echo

Boomers

, succeeds Generation «X». Its

members are typically born between 1965

and 1990

Generation «Z»

also known as

Digital Natives

. Oldest

members are 20 years of age by today.

Smartphones were their first toys.

8

Definition (2/2)

Generation Y‘s Expectations (1/3)

General Observations

§ Generation Y is well informed.

Information is actively searched on the internet before the actual transaction. Commodity transactions must be executed without delay (including banking).

§ Threshold to do business-relevant tasks online is

very low (maybe sometimes too low). The views on

privacy differ greatly.

§ Community assessment is valued higher than

anything else (commercials, etc.). Facebook has even outlasted e-mail.

§ Multitasking lies in the genes.

§ Service Providers (Banking Providers) are with me on the smartphone, I don't have to go to see him.

10

Generation Y‘s Expectations (2/3)

(Source: Cisco IBSG, Top 10 Reasons Young Consumers Will Transform Retail Banking – Executive Summary)

Top Concerns: Debt reduction, expense management, and financial

education are key priorities

In Need of Help managing its Finances: More than one-third

believe they need assistance managing their financial affairs, (with boomers/silvers it is less than a fifth)

Financial Advice from Friends and Family, not just Banks:

Advice from friends and family is valued three times more than boomers/silvers do.

Gen «Y» values advice from professional advisers: More than

one-third prefer using professional advisers as their source for financial advice, ahead of peers, tools, etc..

Banks are well positioned: 85 percent of Gen Y are satisfied or

very satisfied with their current banking provider.

Generation Y‘s Expectations (3/3)

(Source: Cisco IBSG, Top 10 Reasons Young Consumers Will Transform Retail Banking – Executive Summary)

Active users of new Technologies: They have exhibited

substantially higher adoption of new online tools and channels relevant to receiving financial advice.

Interested in receiving automated Advice: 40 percent of Gen «Y»

use Personal Finance Manager (PFM) tools (primarily those offered by their banks) to manage expenses, reduce debt, etc.

Video interaction is compelling: Nearly 40 percent of Gen «Y» are

interested in interacting with an adviser via video, as compared to 17 percent of boomers (Gen X) / silvers (Gen before X).

A virtual Financial Services Community is important: Gen «Y» is

four times more likely than boomers/silvers to have posted a question about financial matters to a blog or forum.

Willing to change banks: 26 percent of Gen «Y» are generally

Agenda or

«le fil rouge»

Expectations on Banking Provider Assessment of today’s Banking IT Challenges Mgmt Summary M eth od olo gies Ser vice s Att itude Te ch no lo gy A rc hitec tu re Recommendations

Methodology (i.e. Governance & Processes, etc.)

Challenges

Only two Major Releases per Year

Increasing system complexity, tedious test & integration cycles.

Waterfall Approach

Business analysis & Requirements Management need to be

completed in order to fulfill «business casing» on a feature basis. Agility suffers heavily.

Channel Silo Thinking

Channels are treated as silos. Features are not identified across channels.

Beta

Methodology (i.e. Processes, etc.)

Recommendations

Allow and react quickly to user feedback!

Launch early and iterate! Going live in «Beta» is a constant!

Services (i.e. Transactions & Reporting, Advisory, etc.)

Challenges

Self-Serving Limitations

Self-Servicing (transactions & reporting) has probably

reached its limits.

Missing Service Transitions

Services are not promoted across channels. Missing execution completion. Users are left with open items.

Interaction Design

Customer and advisor

experience are rigidly bound by existing frameworks and dusty CI/CD manuals. Device specific UIs have not arrived yet.

Service Complexity vs. Delivery

complex easy manual automatic Service Delivery

1995

Service Complexity vs. Delivery

complex easy manual automatic Service Delivery

2005

Service Complexity vs. Delivery

complex easy manual automatic Service Delivery

2015

16

Services (i.e. Transactions & Reporting, Advisory, etc.)

Recommendations (1/5)

Promote self-servicing towards full-servicing

As online services become more complex, self-servicing in itself, is not the answer. Supporting customers within more demanding tasks asks for co-browsing, chat & video to your online platforms

Tomorrow’s online bank is a bank with staff !!!

Full-service means that there is more than wizards and solvers on the other side of the customer. Tomorrow’s online bank employs advisors extending today’s service breath of a typical call center.

Adapt state-of-the-art user interaction across devices

Smartly deploy your services across multiple devices limiting the features only to the capabilities of the corresponding device.

Services (i.e. Transactions & Reporting, Advisory, etc.)

Recommendations (2/5) – Personal Financial Manager

18

Services (i.e. Transactions & Reporting, Advisory, etc.)

Recommendations (3/5) – Holistic Advisory Desktop

Services (i.e. Transactions & Reporting, Advisory, etc.)

Recommendations (4/5) – Mobile Banking

20

Services (i.e. Transactions & Reporting, Advisory, etc.)

Recommendations (5/5) – Mobile Banking

Architecture & Technology

Challenges (1/3)

22

Architecture & Technology

Challenges (2/3)

Legacy everywhere

A green field approach is not possible. Your existing landscape with all the components over the last 20-30 years must be taken into consideration.

Component & Data Redundancy

Components, features & functionality have been repeatedly copied across channels resulting in high complexity and

subsequently in:

Limited Availability

Frequent maintenance needs and end-of-day-processing prohibit around the clock availability.

No Service-oriented Architecture Strategy across the Enterprise

A stringent service strategy is missing or has not been executed properly.

Architecture & Technology

Challenges (3/3) … and in addition:

High Focus on Core Banking, i.e. Production-side

The last 5 years have seen high investments on the core banking side (Avaloq, Finnova). This desired standardization at the

backend obviously will not help differentiation.

Neglected Online-Channel

§ almost exclusively used for transactions & reporting (advisory very thin; even in private banking)

§ almost exclusively Web-based (no mobile channels, no

multiple device support, no co-browsing, no human interaction)

§ almost exclusively self-serviced

… but this is the channel where you can differentiate your

24

Architecture & Technology

Recommendation

«Online Banking» API

Push your core banking system providers to open up and provide

suitable «Online Banking» APIs giving you a single-point, multi-mandate, multi-device, multi-user capable interface to your core components.

Attitude

Challenges (1/2)

Information Asymmetry

Tomorrow’s customers (remember: they are information junkies) might know more than today’s advisor. How can the bank prepare for this?

Differing view on Privacy

Customers are used to share almost everything on Facebook, etc. How do we align this with today’s banking secrecy and customer privacy?

26

Attitude

Recommendations

Transparency

Because your customer might know more about specific services it will be mandatory to collaborate real-time among experts within the bank.

Transparency

Customers know what the financial service provider might know about them. So don’t hesitate to share your full profile with him or her.

28

Management Summary

Generation «Y» will

change the way

banks serve customers today

.

Either

you embrace change now

, or

you wait to be embraced.

Über Netcetera

Head of Business Development

Dr. Jens Piesbergen

Head of Systems Engineering and Services

Dr. Hansruedi Vonder Mühll

Head of Software Engineering

Produkte: • Target IDP • Target Desktop • Target Financial Planning • Target W eb Tools • Target Components Spezialgebiete: • Data Quality Assessment • Process Performance Management • Contact Center Performance • BI Assessment • Systemintegrationen • Business- und Prozessanalyse • Java & .NET

• Web-, Mobile und Rich-Clients

• Agile Methoden • ITIL v. 3.0

Hans Peter Gränicher

Managing Director D1 Solutions

Daniel Bareiss

Managing Director Brain-Group

Jacqueline Duvoisin

Managing Director Netcetera Middle East

Krume Dolnenec

Managing Director Netcetera Macedonia

Lebenszyklus eines IT-Systems ab

Mitarbeitende Management 250 0 50 100 150 200 250 300 1 9 96 2 0 00 2 0 05 2 0 10