The Eight Dimensions of Customer Experience for Financial Services

WHITE PAPER: FINANCIAL SERVICES The Eight Dimensions of Customer Experience for Financial Services OCTOBER 2007

Table of Contents Executive Summary SECTION 1 2 Financial Institutions Shift Their Focus to Revenue Growth The Eight Dimensions of the Customer Experience SECTION 2 5 The Need for a New Enterprise IT Management SECTION 3 6 Benefits of IT Management for the Customer Experience SECTION 4 7 Conclusions ABOUT CA Back Cover Copyright 2007 CA. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. This document is for your informational purposes only. To the extent permitted by applicable law, CA provides this document As Is without warranty of any kind, including, without limitation, any implied warranties of merchantability or fitness for a particular purpose, or noninfringement. In no event will CA be liable for any loss or damage, direct or indirect, from the use of this document including, without limitation, lost profits, business interruption, goodwill or lost data, even if CA is expressly advised of such damages.

Executive Summary Challenge Financial firms seeking to grow in a commoditizing market are focusing on customer satisfaction and innovation. Providing a great customer experience is key to both and requires attention across eight dimensions a customer-centric architecture that provides a complete view of the customer, extended enterprise security, transaction efficiency, transaction performance, value for cost, anytime/anyplace service, compliance and a constant stream of new solutions. Opportunity Success on all Eight Dimensions requires a clear strategy and systems integrated with your business processes. As your firm migrates towards new IT architectures that improve business agility and address changing customer expectations, you must shift to an Enterprise IT Management (EITM) approach that provides the critical governance, management and security capabilities needed to enable dynamic business services. Proper design and deployment of these three key IT management functions can help you more easily and effectively strengthen relationships with customers and grow revenues. Benefits A well-crafted IT management approach provides comprehensive and integrated governance, management and security capabilities that allow you to implement your choice of strategies and tactics to improve customer experience. You can: Treat customers as individuals through a customer-centric architecture Enhance customer confidence that information is being properly protected Build your brand s reputation with consistent availability and high performance Offer value for cost Improve customer convenience with anytime/anyplace service Demonstrate that you are an ethical, compliant partner Deliver a constant stream of new solutions WHITE PAPER: FINANCIAL SERVICES 1

SECTION 1 Financial Institutions Shift Their Focus to Revenue Growth Financial institutions in all sectors (insurance, banking, and brokerage, institutional and retail) have shifted their focus from defensive risk management, compliance and security to making money through improved customer retention, cross-selling and customer acquisition. As financial institutions seek to boost revenues, however, industry consolidation and compe - tition from Web 2.0 companies offering financial services have left them to face the challenge of commoditized service offerings as well as decreasing transaction fees and profit margins. To differentiate their offerings, firms are focusing on improving customer experience. Indeed, a Forrester survey of 190 North American banking executives about their customer experience efforts found that 76 percent of respondents said that customer experience will play a critical role in their company s competitiveness. 1 The Eight Dimensions of the Customer Experience In the past, customer experience was the purview of customer service representatives in the field. Today, many factors affect customers satisfaction and willingness to recommend a financial institution. Multiple channels, including online, branch, telephone/call centers and ATMs, together with a rapidly growing number of products and services, represent customer touch points that contribute to the customer experience. Because technology underlies them all, IT has become essential to delivering on the customer experience. If your firm is embarking on the journey of improving customer experience, you will need to begin with an understanding of the ways in which technology impacts that experience. In working with 50 of the top 50 financial institutions worldwide, CA has developed a methodology for relating business strategies to IT imperatives. Figure A illustrates the strategy of a fictitious company, First Global Financial, that is representative of our customers and shows the eight dimensions of customer experience and the related technologies necessary to realize its strategy. These components include: Customer-centric architecture Extended Enterprise security Transaction efficiency Transaction performance Value for cost Anytime, anyplace service An ethical and compliant partner A constant stream of new solutions 1 Banks Prepare for Customer Experience Wars, Forrester Research, June 26, 2007 2 WHITE PAPER: FINANCIAL SERVICES

FIGURE A Ensuring a positive customer experience requires financial services firms like First Global Financial to relate their business strategy to IT imperatives along these eight dimensions. THE 8 DIMENSIONS OF CUSTOMER EXPERIENCE FIRST GLOBAL FINANCIAL A CUSTOMER-CENTRIC ARCHITECTURE A customer-centric architecture maps your business processes and financial services offerings to your IT systems, enabling your employees to view your customers as individuals rather than simply as accounts. Such a view of your customers can help your staff position new products and services ideally suited to each customer at the precise times when the customer is open to considering new offerings. However, if, like many financial services firms, your firm relies on inflexible legacy systems, you will need to consider an evolutionary IT transformation to a customer-centric architecture that will enable you to deliver superior, differentiated customer service. EXTENDED ENTERPRISE SECURITY Your firm needs a reputation for flawless data security before customers will even walk in the door or initiate a transaction online customers are unlikely to use your services if you ve experienced a high-profile loss or theft of personal data. Robust security is also a prerequisite for satisfying the myriad regulatory requirements your firm faces today. Additionally, as you develop new types of value-added services (such as funds transfer via cell phones) or access services through partner ecosystems (such as online credit checks), security must extend to systems beyond your firm s control, including user browsers, mobile networks or even partner mainframes. Although your firm cannot dictate the systems your customers use to initiate transactions in this extended enterprise, you will suffer economic and reputational loss should any security breach occur. WHITE PAPER: FINANCIAL SERVICES 3

TRANSACTION EFFICIENCY When dealing with financial institutions, customers need to be sure that their transactions complete and are processed properly with no surprises. For example, when customers move funds between accounts via an online transaction, they expect to see their money in the proper account when promised. TRANSACTION PERFORMANCE Customers count on high performance from the moment they log on until they receive a response or final confirmation of their transaction. For example, if a customer wishes to pay a credit card bill online right before the deadline and the site does not perform as expected or is unavailable, the customer stands to lose loyalty points or accrue late-payment fees. Needless to say, this outcome will cost your firm customer satisfaction and loyalty. Since organizations such as Gomez and Barrons publicly rank banks and brokerages on the performance and availability of their online transactions, firms with consistently poor rankings are likely to lose customers. VALUE FOR COST Your customers demand value for their money. While that usually translates into the lowest price for a commodity service, customers expect to pay for a relationship. Indeed, you have the opportunity to adopt a strategy of using competitively-priced commodity services to retain your customer base while upselling more profitable, value-added services. Such a strategy depends on your ability to price your services based on their value to the customer, rather than on the cost of providing the service. ANYTIME, ANYWHERE SERVICE Customers must be able to bank at any time of the day or night, using their choice of devices, with the same service and security they would expect when walking into a branch during regular business hours. Enabling service delivery through multiple channels means managing heterogeneous and highly distributed systems, including userselected devices that your firm does not control. The task includes tracking what s happening in real time, regardless of the channel and network used so that the services you deliver perform well, avoid outages and recover quickly from disasters. AN ETHICAL AND COMPLIANT PARTNER Customers need to believe that they are working with an ethical partner who complies with government regulations that mandate security for sensitive financial information as well as strong controls and financial transparency. It is crucial to implement data access controls, automate business controls and processes, monitor access control effectiveness, manage compliance activities as well as put in place change control and auditing mechanisms that track access and changes made within your systems. A CONSTANT STREAM OF NEW SOLUTIONS Customers want access to the latest service innovations whether these are revolutionary new products and services, such as the ability to make payments with a cellphone, or evolutionary changes, such as expanded hours for bank - ing or wealth management advisory services. Since no business or IT organization has a crystal ball, you need the agility to quickly address evolving customer needs and competitive threats. 4 WHITE PAPER: FINANCIAL SERVICES

SECTION 2 The Need for a New Enterprise IT Management All of these dimensions of customer experience rest on an IT foundation. And achieving a superior customer experience likely means you will need to revamp your enterprise IT architecture, moving from closed legacy systems to more open systems that enable business agility. You will also need a enterprise IT management (EITM) approach. In implementing this new technology, you will need support from partners who can take advantage of decades of experience solving complicated IT problems to move your IT organization from where it is today to where it needs to go to optimize your customer experience. Typically, this EITM approach involves rolling out three types of management capabilities: governance, management and security. GOVERNANCE IT is a business enabler that allows you to differentiate your organization by responding quickly to changing business demands with innovative business services. IT governance services enable you to make the right IT choices in the face of conflicting demands and limited resources as well as comply with regulations. For example, one leading investment banking company is using IT governance solutions to ensure that it spends as much of its IT budget as possible on strategic activities that help it grow by differentiating the quality of its services from those of its competitors. MANAGEMENT A comprehensive solution that integrates data from your entire infrastructure and applications can keep your business processes up and running properly while eliminating redundancy in management systems and the use of human resources. You can monitor your end-to-end system for performance, correct any issues, recover quickly from disasters and prevent system changes from impacting performance and availability. For example, a leading provider of insurance and financial services developed application management best practices that enabled it to effectively manage performance for its most critical production applications. As a result, the firm has seen dramatic improvements in 30 key applications, achieving its goal of moving beyond merely monitoring for performance and availability to reach a proactive, predictive state. The firm is now able to prevent more problems and improve its follow up in those instances where problems occur. SECURITY Security services enable you to protect vital IT assets and services against improper access to promote trust as well enable regulatory compliance. For example, one of the largest financial firms in the United States is implementing global identity and access management (IAM) for user provisioning and role-based access that will support more than 100,000 employees worldwide and map to millions of unique individual system-level and applicationlevel accounts. This IAM project will improve the firm s ability to protect corporate assets, make better business decisions, reduce operating expenses and sharpen its customer focus. WHITE PAPER: FINANCIAL SERVICES 5

SECTION 3 Benefits of IT Management for the Customer Experience End-to-end governance, management and security solutions enable you to provide comprehensive and innovative business services to customers and employees alike while satisfying stringent quality-of-service, performance, cost, security and compliance requirements. Thus, your firm will be able to: TREAT CUSTOMERS AS INDIVIDUALS THROUGH A CUSTOMER-CENTRIC ARCHITECTURE With an integrated, customer-centric architecture managed by appropriate governance, management and security capabilities that gives employees a 360-degree view of customers, your firm will gain the understanding necessary to offer customers appropriate products and increase revenue per customer. ENHANCE CUSTOMER CONFIDENCE WITH STRONG SECURITY By consistently securing sensitive data, you cement your firm s reputation as a trusted partner, which helps retain existing customers and attract new ones. A comprehensive security solution enables you to mitigate the full range of operational risks. BUILD YOUR BRAND S REPUTATION THROUGH TRANSACTION EFFICIENCY AND PERFORMANCE High performance and availability burnish your firm s reputation for reliability. Comprehensive IT management capabilities that allow you to proactively identify and prevent performance issues, as well as recover quickly from any issues that arise, help you ensure that your systems provide the service to meet your customers high expectations. OFFER VALUE FOR COST Integrated IT management solutions help keep costs down, enabling you to price commodity services competitively and other services based on value. With comprehensive governance capabilities, you can ensure that your IT solutions are deployed on the optimal platform and make the most efficient use of assets and resources. Management solutions that improve system availability and performance reduce the cost of downtime. IMPROVE CUSTOMER CONVENIENCE WITH ANYTIME, ANYWHERE SERVICE Flexible new IT architectures and solutions give customers convenient, consistent real-time access to all of their accounts and information from any channel. Centralized monitoring and management of systems that serve customers across channels ensures that business-critical processes are available, 24 hours a day, 7 days a week. DEMONSTRATE THAT YOU ARE AN ETHICAL, COMPLIANT PARTNER Your organization can meet data security and compliance requirements through integrated and comprehensive governance and security capabilities. Integrated access management ensures financial data privacy by providing a strong set of internal security controls. Integrated and comprehensive IT governance capabilities enable you to implement a continuous and sustainable compliance program. DELIVER A CONSTANT STREAM OF NEW SOLUTIONS A flexible IT architecture provides the foundation for business agility. Integrated and centralized solutions for automating IT manage - ment tasks free resources to enable your organization to become more agile and responsive. Comprehensive IT governance solutions allow you to choose the services with the greatest strategic impact. If you choose to create innovative solutions through partnerships, federated identity management provides the security necessary to share applications and information. 6 WHITE PAPER: FINANCIAL SERVICES

SECTION 4 Conclusions Today s financial services firms have turned their focus to increasing revenues. And in the current commoditized marketplace, the customer experience has become a primary factor determining success. Implementing an agile IT solution combined with comprehensive, inte - grated and modular governance, management and security capabilities will enable you to enhance the eight dimensions of customer experience for retail and wholesale customers alike by: Treating customers as individuals Enhancing customer confidence that information will be properly protected Building your brand s reputation with consistent availability and high performance Providing value for the cost of your offerings Improving customer convenience Demonstrating that you are an ethical, compliant partner Delivering a constant stream of innovative solutions As you move to these enabling IT and IT management solutions, you need to work with a trusted IT management provider that offers a proven methodology for rapid delivery, implementation and time-to-value for solutions aligned to the eight dimensions of customer experience. An IT management provider, like CA, that partners with the full range of global systems integrators, regional consulting firms and domain experts also ensures you will have access to superior subject matter expertise as well as functional and business advice. WHITE PAPER: FINANCIAL SERVICES 7

CA, one of the world s largest information technology (IT) management software companies, unifies and simplifies complex IT management across the enterprise for greater business results. With our Enterprise IT Management vision, solutions and expertise, we help customers effectively govern, manage and secure IT. WP05FS8DCE01E MP321261007 www.ca.com/finance