Branchless Banking

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Information about Branchless Banking
Finance

Published on March 13, 2014

Author: maxymiser

Source: slideshare.net

Description

The current banking landscape has transformed into what many analysts refer to as “branchless banking.” Fueled by the ease of use, instant accessibility and advanced functionalities of digital and mobile devices, this new era of digital banking is vastly improved, streamlined and convenient.

As a result, more consumers are accessing online and
mobile banking sites with greater ease, frequency
and confidence. ComScore estimates that 423.5
million people worldwide accessed online banking
sites during April 2012, reaching 28.7 percent of the
Internet audience. Additionally, over 45 percent of the
Internet audience in North America accessed bank
sites – that’s an increase of 1.2 percentage points,
making it the top region for these sites. Although in a
relatively nascent phase, mobile banking is also on a
steady rise with nearly 44 percent of bank customers
expected to use mobile services on at least a monthly
basis by 2015, according to a report from Capgemini
and Efma.

All of these factors reinforce just how critical and
timely it is for financial brands to not only test and
optimize their online customer experience across all
devices, but also to personalize the messaging, offers
and experiences to be most relevant, useful and
engaging to their customers.

Branchless Banking: A New Era of Online & Mobile Banking SEPT. 2013 maxymiser STUDY Reviews: Nearest Store: maxymiser.com

maxymiser.com Contents Introduction 2 Objectives & Methodology 2 Findings 3 Conclusion 11 Recommendations 11 About Us 12 Contact 12 Branchless Bankingmaxymiser STUDY Reviews: Nearest Store:

Branchless Bankingmaxymiser STUDY Reviews: Nearest Store: 2maxymiser.com Introduction In the 1990s, the act of banking involved consumers walking into their banking institution’s branch during business hours, filling out long, time-consuming forms and standing in line to meet with a teller behind a glass wall, who would then process their financial transaction. All in all, this form of consumer banking tended to be long, tedious and often frustrating. Now fast forward to the current banking landscape. It has transformed into what many analysts refer to as “branchless banking.” Fueled by the ease of use, instant accessibility and advanced functionalities of digital and mobile devices, this new era of digital banking is vastly improved, streamlined and convenient. As a result, more consumers are accessing online and mobile banking sites with greater ease, frequency and confidence. ComScore estimates that 423.5 million people worldwide accessed online banking sites during April 2012, reaching 28.7 percent of the Internet audience. Additionally, over 45 percent of the Internet audience in North America accessed bank sites – that’s an increase of 1.2 percentage points, making it the top region for these sites. Although in a relatively nascent phase, mobile banking is also on a steady rise with nearly 44 percent of bank customers expected to use mobile services on at least a monthly basis by 2015, according to a report from Capgemini and Efma. Meanwhile, a growing number of banking institutions are shutting down branches and reducing the working hours of bank tellers in order to keep costs down and meet the individual needs of their consumers across all devices. Financial Management Solutions Inc. (FMSI) reported that branch transaction volumes have declined more than 45 percent since 1992. All of these factors reinforce just how critical and timely it is for financial brands to not only test and optimize their online customer experience across all devices, but also to personalize the messaging, offers and experiences to be most relevant, useful and engaging to their customers. Objectives & Methodology In order to gain insight into the behavior of US adults who own desktop/laptop computers, smartphones and tablets, Maxymiser conducted a research study to understand how consumers access online and mobile banking sites, as well as the impact of a personalized and optimized customer experience on customer loyalty and engagement. The study was fielded from July 25 to July 30, 2013 and garnered a total of 1,000 completes. It targeted a random sample of consumers, 18 years or older, who own at least one desktop/laptop computer, smartphone and tablet.

maxymiser.com PURCHASE Branchless Bankingmaxymiser STUDY Reviews: Nearest Store: 3 Online Banking Dominates To further reinforce the benefits that both financial institutions and consumers can derive from digital, the Maxymiser study found that 61 percent of respondents reported the Internet as their primary banking method used for routine transactions. In addition, 13 percent of consumers use ATM machines as their primary banking method and 14 percent are still inclined to walk into a physical branch for routine banking transactions. It will prove to be valuable for banking institutions to understand and listen to what online banking consumers are doing, what types of financial products they are searching for and what types of financial messages and offers resonate and convert most. Once they have listened, tested, experimented, tested some more and then implemented the necessary changes on their websites, it will be beneficial to adopt a more holistic cross-channel, cross-device strategy inclusive of the web, smartphones, tablets, apps, social and email. FREQUENTLY (10+ TIMES/MONTH) OFTEN (5-9 TIMES/MONTH) OCCASIONALLY (3-4 TIMES/MONTH) INTERNET ATM MOBILEPHYSICAL 61% 13% 12%14% 44% FREQUENTLY (10+ TIMES/MONTH) OFTEN (5-9 TIMES/MONTH) OCCASIONALLY (3-4 TIMES/MONTH) 16% 29% 16% 30% 73%DESKTOP/ LAPTOP SMARTPHONE/ TABLET 27% 18% Mobile’s Untapped Potential When given the choice, 27 percent of respondents in the Maxymiser study would choose to access their bank via a smartphone/tablet, rather than use their desktop/laptop computers. While online banking is still the top choice for digitally savvy consumers, the mobile channel is primed for growth. For this reason, some financial institutions may look to responsive design as a viable option to improve the mobile customer experience. However, responsive design should not be a brand’s standalone mobile strategy or “quick fix” without putting serious thought, strategy and testing behind it. 61% of respondents reported the Internet as their primary banking method used for routine transactions. 27 percent of respondents would choose to access their bank from their smartphones/tablets, as opposed to their desktop/laptop computers. If given the choice, do you prefer to access your bank via desktop/laptop computer or smartphone/tablet? ( INTERNET ATM MOBILEPHYSICAL 61% 13% 12%14% 44% FREQUENTLY (10+ TIMES/MONTH) OFTEN (5-9 TIMES/MONTH) OCCASIONALLY (3-4 TIMES/MONTH) RARELY (1-2 TIMES/MONTH) NEVER 16% 8% 29% 37% 21% 17% 15% 8% 2% CHEC BALA DEPO FUND TRAN FUND PAY B OPEN ACCO RESE 3% What is your primary banking method used for routine transactions?

Branchless Bankingmaxymiser STUDY Reviews: Nearest Store: Frequency of Digital Banking Online and mobile are the predominant channels consumers use to access their banks. While 97 percent of consumers visit their bank’s website or mobile site (ranging in frequency), only 3 percent of respondents never do. For financial institutions with a test-and-learn culture already in place, it will be critical to be as smart, personal and targeted with brand and product- specific messaging, offers, upsells, promotions and informational videos shown on their websites and mobile sites. Consumers Ditch Branches More and more consumers are ditching branch banking in favor of the speed, ease of use and convenience of online and mobile banking. The Maxymiser study found that 32 percent of respondents visit their bank’s physical branch rarely (1-2 times per month) and 5 percent never make branch visits. maxymiser.com 4 FREQUENTLY (10+ TIMES/MONTH) OFTEN (5-9 TIMES/MONTH) OCCASIONALLY (3-4 TIMES/MONTH) RARELY (1-2 TIMES/MONTH) NEVER INTERNET ATM MOBILEPHYSICAL 61% 13% 12%14% 44% FREQUENTLY (10+ TIMES/MONTH) OFTEN (5-9 TIMES/MONTH) OCCASIONALLY (3-4 TIMES/MONTH) RARELY (1-2 TIMES/MONTH) NEVER 16% 8% 29% 16% 30% 32% 73%DESKTOP/ LAPTOP SMARTPHONE/ TABLET 27% 3% 5% 18% How often do you visit your bank’s physical branch locations? *Percentages may not add up to 100 due to rounding. 28% FREQUENTLY (10+ TIMES/MONTH) OFTEN (5-9 TIMES/MONTH) OCCASIONALLY (3-4 TIMES/MONTH) RARELY (1-2 TIMES/MONTH) NEVER 22% 46% 18% 14% 1 TO 3 4 TO 6 7 TO 9 10 OR MORE INTERNET ATM MOBILEPHYSICAL 61% 13% 12%14% CRITICAL HELPFUL DOESN’T MATTER IMPORTANT 32% 18% 46% 44% FREQUENTLY (10+ TIMES/MONTH) OFTEN (5-9 TIMES/MONTH) OCCASIONALLY (3-4 TIMES/MONTH) RARELY (1-2 TIMES/MONTH) NEVER 16% 8% 29% 16% 30% 32% VERY LIKELY LIKELY SOMEWHAT LIKELY RARELY NEVER 5% 30% 73%DESKTOP/ LAPTOP SMARTPHONE/ TABLET 27% 37% 21% 17% 15% 8% 2% CHECK BALANCE DEPOSIT FUNDS TRANSFER FUNDS PAY BILLS OPEN ACCOUNT RESEARCH 3% 5% 18% 4% 25% 13% How often do you visit either your bank’s website or mobile site?

maxymiser.com PURCHASE Branchless Bankingmaxymiser STUDY Reviews: Nearest Store: 5 Popular Digital Banking Activities As it’s been made apparent from the findings of the Maxymiser study, consumers are inclined to use digital devices often – be it their desktop/laptop computers, smartphones or tablets – in order to make the process of managing their finances easier, more efficient and productive. The three most important activities completed when respondents visit either their bank’s website or mobile site include: checking balance (37 percent), depositing funds (21 percent) and transferring funds (17 percent). FREQUENTLY (10+ TIMES/MONTH) OFTEN (5-9 TIMES/MONTH) OCCASIONALLY (3-4 TIMES/MONTH) RARELY (1-2 TIMES/MONTH) NEVER CRITICAL HELPFUL DOESN’T MATTER IMPORTANT 32% 18% 46% LARGE/ VISIBLE BUTTONS ADAPTABLE TO SMALL- SCREEN LESS CLICKS REQUIRED ONE- DIRECTION SCROLL RELEVANT OFFERS/ PROMOTIONS EASY-TO- FIND SEARCH 1% 7%5% 2% 8% 2% 44% FREQUENTLY (10+ TIMES/MONTH) OFTEN (5-9 TIMES/MONTH) OCCASIONALLY (3-4 TIMES/MONTH) RARELY (1-2 TIMES/MONTH) NEVER 16% 8% 29% 37% 21% 17% 15% 8% 2% CHECK BALANCE DEPOSIT FUNDS TRANSFER FUNDS PAY BILLS OPEN ACCOUNT RESEARCH 3% 4% When visiting either your bank’s website or mobile site, what is the single most important activity that you typically complete?

Branchless Bankingmaxymiser STUDY Reviews: Nearest Store: maxymiser.com 6 Personalized Content Increases Engagement As branch banking faces a steep decline around the country, the ability to deliver the most relevant and personalized experiences across all devices will be critical for banking institutions looking to get a leg up against the competition. According to the Maxymiser study, over three-quarters of the respondents (83 percent) have a propensity to click on a personalized online or mobile banking offer. On the other hand, the percentage of respondents who would rarely (13 percent) and never (5 percent) click on this type of online or mobile banking offer is drastically lower. While some financial marketers may view consumers’ dependence on digital devices as a daunting, those financial marketers who will persevere will be the ones who leverage personalization to better understand their customers, enrich the user experience, and ultimately, drive ROI and revenue growth. 28% FREQUENTLY (10+ TIMES/MONTH) OFTEN (5-9 TIMES/MONTH) OCCASIONALLY (3-4 TIMES/MONTH) RARELY (1-2 TIMES/MONTH) NEVER % 16% 30% 32% FREQUENTLY NEVER OCCASIONALLY OFTEN RARELY VERY LIKELY LIKELY SOMEWHAT LIKELY RARELY NEVER 5% 30% 73%DESKTOP/ LAPTOP SMARTPHONE/ TABLET 27% CHECK BALANCE DEPOSIT FUNDS TRANSFER FUNDS PAY BILLS OPEN ACCOUNT RESEARCH 5% 18% 25% 13% How likely are you to click on/respond to a financial promotion or offer from your bank’s website or mobile site when it is specifically targeted and relevant to your needs? PURCHASE*Percentages may not add up to 100 due to rounding.

Branchless Bankingmaxymiser STUDY Reviews: Nearest Store: maxymiser.com 9 Seamless Experience and Performance Are Critical 32 percent of the respondents in the Maxymiser study indicated that it is critical/must-have to easily and quickly find financial information or products on either their bank’s website or mobile site. Additionally, 64 percent of respondents found that it is important and helpful to easily and quickly find financial information or products on either their bank’s website or mobile site. In contrast, only 4 percent of respondents reported that ease of use and s peed don’t matter. Slow Speed Kills Online Business According to the Maxymiser study, 22 percent of respondents are willing to wait no more than 3 seconds for pages and images to load on either their bank’s website or mobile site. Meanwhile, 46 percent are patient enough to wait up to 6 seconds. What’s most interesting about these findings is that what consumers say they want doesn’t match their actions. It is a widely known fact from research by Akamai and Forrester that two seconds is the threshold of acceptability for ecommerce web page response times. When the experience falters, lags and causes frustration, today’s consumers are more likely to abandon their online and mobile activities. How important is it for you to easily and quickly find financial information or products on either your bank’s website or mobile site? CRITICAL HELPFUL DOESN’T MATTER IMPORTANT 32% 18% 46% CHANGE BANKS N C LEAVE/ GO TO COMPETITOR 15% 16% LARGE/ VISIBLE BUTTONS ADAPTABLE TO SMALL- SCREEN LESS CLICKS REQUIRED ONE- DIRECTION SCROLL RELEVA OFFER PROMOT 1% 7%5% 2% 2% 21% 17% 15% 8% 2% DEPOSIT FUNDS TRANSFER FUNDS PAY BILLS OPEN ACCOUNT RESEARCH 4% 28% FREQUENTLY (10+ TIMES/MONTH) OFTEN (5-9 TIMES/MONTH) OCCASIONALLY (3-4 TIMES/MONTH) RARELY (1-2 TIMES/MONTH) NEVER 22% 46% 18% 14% 1 TO 3 4 TO 6 7 TO 9 10 OR MORE CRITICAL HELPFUL DOESN’T MATTER IMPORTANT 32% 18% 46% LARGE/ VISIBLE BUTTONS ADAPTABLE TO SMALL- SCREEN LESS CLICKS REQUIRED ONE- DIRECTION SCROLL RELEVANT OFFERS/ PROMOTIONS FAST LOADS EASY-TO- USE EASY-TO- FIND SEARCH 1% 7%5% 2% 16% 58% 8% 2% 44% FREQUENTLY (10+ TIMES/MONTH) OFTEN (5-9 TIMES/MONTH) OCCASIONALLY (3-4 TIMES/MONTH) RARELY (1-2 TIMES/MONTH) NEVER 16% 8% 29% 16% 30% 32% FR OCC VERY LIKELY LIKELY SOMEWHAT LIKELY RARELY NEVER 5% 30% 37% 21% 17% 15% 8% 2% CHECK BALANCE DEPOSIT FUNDS TRANSFER FUNDS PAY BILLS OPEN ACCOUNT RESEARCH 3% 5% 18% 4% 25% 13% How many seconds are you willing to wait for pages and images to load on either your bank’s website or mobile site?

PURCHASE Branchless Bankingmaxymiser STUDY Reviews: Nearest Store: Qualities of the Ideal Online Experience For 58 percent of the respondents, the single most important element of the experience when visiting their bank’s website or mobile site is a simple, easy-to-use experience. The second most important element of the experience is fast loading of pages and images at 16 percent. This is why it is so important for financial institutions to continually test the quality of each experience throughout their online and mobile sites. Without data and testing, the online and mobile banking experience will be left to guesswork. The Unforgivable Sins of Bad Experiences If presented with a single “bad” experience or shown an irrelevant offer on their bank’s website or mobile site, 42 percent of respondents reported they would abandon their transaction and leave the site/page altogether. In addition, 16 percent of respondents would leave the site/page and go to a competitor’s site and 15 percent of respondents would consider changing their banking institutions. Whether the customer experience is spoiled by technical difficulties, slow page loads, or irrelevant messaging and offers, consumers expect their banks to get the customer experience across all channels and all devices right the first time. Any deviation from a favorable, personal and engaging customer experience is therefore, considered unforgiveable in the minds of consumers. What would you do if you had a single “bad” experience or were shown an irrelevant offer on either your bank’s website or mobile site? maxymiser.com 9 22% 46% 18% 14% 1 TO 3 4 TO 6 7 TO 9 10 OR MORE CRITICAL HELPFUL DOESN’T MATTER IMPORTANT 32% 18% 46% CHANGE BANKS LEAVE NEGATIVE COMMENT ABANDON TRANS- ACTION LEAVE/ GO TO COMPETITOR 15% 28% 42% 16% LARGE/ VISIBLE BUTTONS ADAPTABLE TO SMALL- SCREEN LESS CLICKS REQUIRED ONE- DIRECTION SCROLL RELEVANT OFFERS/ PROMOTIONS FAST LOADS EASY-TO- USE EASY-TO- FIND SEARCH BAR 1% 7%5% 2% 16% 58% 8% 2% 4% What is the single most important element of the experience that matters to you when visiting either your bank’s website or mobile site? CRITICAL HELPFUL DOESN’T MATTER IMPORTANT 32% 18% 46% CHANGE BANKS LEAVE NEGATIVE COMMENT ABANDON TRANS- ACTION LEAVE/ GO TO COMPETITOR 15% 28% 42% 16% LARGE/ VISIBLE BUTTONS ADAPTABLE TO SMALL- SCREEN LESS CLICKS REQUIRED ONE- DIRECTION SCROLL RELEVANT OFFERS/ PROMOTIONS FAST LOADS EASY-TO- USE EASY-TO- FIND SEARCH BAR 1% 7%5% 2% 16% 58% 8% 2% RARELY NEVER 5% 15% 8% 2% PAY BILLS OPEN ACCOUNT RESEARCH 4% 1 *Percentages may not add up to 100 due to rounding. *Percentages may not add up to 100 due to rounding.

maxymiser STUDY Reviews: Nearest Store: 11 Conclusion With the proliferation of digital devices, consumers are more connected than ever to their banking institutions. This, in turn, has led to consumers taking greater control of their banking relationships. They are demanding more improvements, adapting their behavior to the devices they are using, and even switching banks if the experience is unsatisfying. As a result, banks need to change the way they interact with their customers across all devices and all channels. They need to provide greater flexibility, better choices, more control and greater efficiency. All of the data from our study reinforces that customer experience optimization is vital to drive customer engagement, loyalty and cross-channel sales. The only way to deliver customer experiences that are seamless, intuitive, personalized and engaging is through online testing and personalization. maxymiser.com Branchless Banking Recommendations • Adopt a ‘test-and-learn’ culture based on testing and personalization. This will create online and mobile experiences that are highly relevant and immediately gratifying to prospective customers. It will also present a seamless, easy-to-use and reassuring experience to existing customers. • Use past and in-session browsing behavior in conjunction with comprehensive visitor profiles from social, mobile and demographic data. This will enable you to target the most relevant and enticing online and mobile banking offers to all prospects and unauthenticated customers for huge increases in response rates. Automated and dynamic targeting engines are essential for success, as online visitor behavior and available offers evolve over time. • Proactively target cross-sell and upsell offers to customers based on strategic customer life cycles and value segments, based on a genuine 360-degree view of each customer. This will drive massive increases in lifetime customer values.

maxymiser.com Branchless Bankingmaxymiser STUDY Reviews: Nearest Store: About Maxymiser Maxymiser empowers brands to transform every digital interaction into seamless, relevant and engaging customer experiences with its cloud- based testing, personalization and cross-channel optimization solutions. Known for serving billions of individual experiences across every device, Maxymiser leverages customer data to dramatically boost engagement and revenue, while also driving long-term business value. Combined with a team of vertically focused digital experts, Maxymiser’s Customer Experi- ence Optimization suite quickly delivers measureable results to every client through A/B and multivariate testing, segmentation, behavioral targeting and product recommendations for the web, mobile, social and email. Maxymiser works with some of the world’s most iconic brands, including Progressive, Office Depot, Alaska Airlines, Harry & David, LIDS, Sovereign Bank, Teleflora and Wyndham Hotel Group. Founded in 2006, Maxymiser is headquartered in New York with offices in Chicago, Edinburgh, Dnipro- petrovsk, Dusseldorf, London, Munich and San Francisco. To learn more about Maxymiser, please visit www.maxymiser.com and connect with us on Facebook, Twitter and LinkedIn. Contact Us For Media Relations, please contact SHIFT Communications: Nicole Bestard, Account Director TEL: 646.758.3705 Email: nbestard@shiftcomm.com / maxymiser@shiftcomm.com For Corporate Communications, please contact Maxymiser: Ragini Bhalla, Director of Content and Communications TEL: 646.664.4591 Email: ragini.bhalla@maxymiser.com

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