Operational Transformation to Drive Digital Customer Experience and Efficiency

Transcription

1 October Las Vegas Operational Transformation to Drive Digital Customer Experience and Efficiency Wednesday, October 14 th, :30PM 2:30PM #retaildelivery

2 Speakers Joe Reilly Chief Information and Operations Officer, Zions Bancorporation Paul Hlivko SVP, Managing Director, IT & Digital at First Niagara Bank Craig Focardi Principal Executive Advisor, CEB TowerGroup Page 2

3 Accelerating The Digital Shift In Retail Banking Technology Innovation Accessible analytics to turn data into insight Advancing digital capabilities Customer Behavior Consumers changing how they get information and manage their lives Economic Trends Interest rate environment and legacy of financial crisis create tough climate for retail banks New ways to support operations and manage relationships New ways to interact with customers Pressure to become more efficient The Digital Bank Source: CEB analysis Page 3

4 Back Office Placing Even Higher Priority on Service Than Front Office Top Two Areas of Multichannel and Non-Branch Channel Capabilities For the Next 6 to 12 Months Percentage Retail Banking Executives Who Identified Topic as Top Area, 2015 Front Office (Senior Business Management) Improving service and customer experience drivers in digital channels 0% 20% 40% 31% Back Office (Senior IT/Ops Management) Improving service and customer experience drivers in digital channels 0% 20% 40% 60% 54% Acquiring customers through digital channels 21% Boosting digital marketing capabilities and impact 21% Boosting digital marketing capabilities and impact Providing personal support and guidance in non-branch channels Building contact center capabilities for more digital customers 6% 5% 9% Building contact center capabilities for more digital customers Acquiring customers through digital channels Providing personal support and guidance in non-branch channels 0% 13% 21% n = 150. Source: CEB 2015 Retail Banking Leadership Council Agenda Poll n = 24. Source: CEB 2015 TowerGroup Retail Banking Agenda Poll Page 4

5 Primary Values Driving Core Banking System Modernization Efforts PRIMARY VALUE EXPECTED FROM A MODERN CORE BANKING PLATFORM Percentage of Responses, % 20% 40% 60% Regulatory Compliance 40% Process Improvement Service/Experience Improvement Reduce Risk 30% 33% 35% Competition 18% Acquire New Customers Increase Existing Customer Sales 10% 13% n = 40. Source: 2015 CEB Financial Services Technology Investment and Adoption Survey Page 5

6 Mobile Applications Needed for Customer Service and Competition Technology Value Drivers for Company Improving service and customer experience drivers in digital channels Keep up with competitors 0% 20% 40% 60% 39% 39% Which Mobile Payment Apps Have You Used in the Past Year? Google Wallet Bank payment application Retailer's mobile app 0% 20% 13% 16% 18% Increase sales to existing customers 24% Apple Pay 4% Differentiate with new capabilities 21% Passbook Venmo 3% 2% Process improvement 18% Samsung Wallet 1% n = 38. Source: CEB TowerGroup FSI Technology Survey Source: Walker Sands 2015 Future of Retail Study Page 6

7 Digital Channels Now Dominate DELIVERY CHANNEL TRANSACTION VOLUMES Percentage of Total Transactions, P 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Online Mobile ATM Branch E 2016 P 2017 P CAGR (%) -3% 29% 3% -7% Source: CEB analysis. CAGR: Compound Annual Growth Rate, by number of channel transactions, P. Page 7

8 Key Takeways Line of business and IT executives have similar, but different views on channel technology investment priorities. Get aligned, and stay aligned. Customer service is even more important to line of business executives than customer acquisition; good service leads to more sales. Core modernization is also tied to process improvement and customer experience. Its not just channels driving satisfaction and revenue. Having a mobile app is only table stakes for being in business; having the best mobile apps is needed. Page 8

9 First Niagara Bank First Niagara Bank, N.A. is a multi-state bank serving New York, Pennsylvania, Connecticut and Massachusetts. With approximately 390 branches and 5,400 employees, First Niagara provides financial services to individuals, families and businesses. Driven by proven, local talent, First Niagara has approximately $39 billion in assets and $28 billion in deposits. The bank has maintained industry leading loan growth, without compromising credit quality. Thanks to its people and its unique corporate culture, First Niagara is well-positioned for long-term success. Page 9

10 Customer experience driven results Online Account Opening We wanted to be a part of our customer s daily digital interactions and present a completed experience, end-to-end, on mobile devices (or their choice of device) with an obsession to perfect the customer s experience. 2x of industry Mobile Engagement 2x of industry Completion Rates 2x of Time to Market Minutes to complete, leading industry disruptors Page 10

11 The technology stack must support CX Define your next generation digital architecture by looking outside the industry and fin-tech, crowdsourcing the best expertise/knowledge and leverage open source DevOps to accelerate. Enable your digital architecture through an enterprise scale SOA strategy with effective orchestration of internal and external APIs. Don t compromise on where data is persisted. Enabling omni-channel isn t about purchasing software from a vendor. It s architecture. A customer experience first approach can enable an organization to optimize the Core, prepare for Core investments. It can further accelerate next generation infrastructure. Page 11

12 Customer experience is half the story Customer behavior and expectations are changing across retail and commercial;. Front For each customer expectation, there are digital-savvy organizations transforming business from front to back Experience Engagements result with a positive cognitive recollection across touch-points and are easily accessible Supportive Provide aid and support on specific client subject matter to minimize mistakes. Promote features and educate customers Value Aggregate value through a combination of operational efficiencies, personalized customer experiences and products and services Secure & Risk Adverse Customer data and engagements are protected to minimize negative service repercussions Eliminated friction and reduce intermediation to deliver delightful experiences to customers Using data to understand customers and markets Streamlined infrastructure to make it more economical and information more accessible Engaging Touch-points are ubiquitous and aid in supporting specific customer interactions and goals Back Automated low-value, non-strategic, complex activities to reduce operating costs Page 12

13 Takeaway Know your priorities Simplistic understanding of banking customer Complex product set Complex understanding of banking customer Simple product set Page 13

14 Takeaway Know your opportunity Your strategy must reflect your unique positioning and opportunity, it s only when you understand that, from a business and technology perspective, that you can embark on the journey. Page 14

15 Prediction Emerging models will accelerate EXPONENTIAL CHANGE I & T Talent is Critical Cloud & Open Source Maturity Value of Algorithms Platforms-as-a-Service Changing Revenue Models Fin Tech Activity Accelerating Non-Traditional Players Financial Product Innovation Page 15

16 Zions Bancorporation Zions Bancorporation is one of the nation s premier financial services companies, consisting of a collection of great banks in select Western markets. Zions operates its banking businesses under local management teams and community identities in 11 Western and Southwestern states The Company is a national leader in Small Business Administration lending and public finance advisory services, and received 24 Excellence awards by Greenwich Associates in the 2014 survey. Zions is included in the S&P 500 and NASDAQ Financial 100 indices. Page 16

17 The Digital Shift & the Efficiency Imperative Self-fund technology investment through operational efficiencies Banks can remove 20 to 25 percent of their cost base by leveraging this digital shift to transform how they process and service Retail banks that pursue a full digital transformation, pulling all improvement levers, can realize improvements in earnings before interest, taxes, depreciation, and amortization of more than 40 percent over the next five years Almost two-thirds of this potential value comes from the impact of digital on the cost base and loss provisions rather than from revenue uplift, which is why a focus beyond front-end investments is critical There are two areas that are especially significant and represent the bulk of the value: automation of servicing and fulfillment processes and migration of front-end activity to digital channels McKinsey Page 17

18 How is Zions Responding to The Digital Shift? Simplify everything Business & operating models Charter consolidation Architecture Core banking systems Financial systems Business process management Product sets Page 18

19 How is Zions Responding to The Digital Shift? Enhance Key Digital Capabilities Customer data integration Customer analytics Cross-channel campaign/offer management CRM New account opening Product fulfillment Page 19

20 How is Zions Responding to The Digital Shift? Get Agile From Idea to Implementation Agile product development ofrom competitive analysis to causal analysis Agile new product review orisk, legal, compliance, vendor/contract management Agile delivery oorganizational structure omethodology Page 20

21 Prediction The impact of alternative lenders will grow as they continue to gain traction and move up market; a superior customer experience will drive much of this growth Page 21

22 October Las Vegas Operational Transformation to Drive Digital Customer Experience and Efficiency Wednesday, October 14 th, :30PM 2:30PM #retaildelivery