Forrester research m bank builds next gen online experience (2013-11-12)

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Information about Forrester research m bank builds next gen online experience (2013-11-12)
Business & Mgmt

Published on February 20, 2014

Author: fred.zimny


For: eBusiness & Channel Strategy Professionals Case Study: mBank Builds A NextGeneration Online Banking Experience by Stephen Walker, November 12, 2013 Key Takeaways mBank Wanted To Deliver A Next-Generation Digital Experience A direct subsidiary of BRE Bank, mBank launched as the first online-only bank in Poland -- and one of the first anywhere in the world -- in November 2000. But following a flood of foreign bank entrants and better digital experiences in other industries, the digital team at mBank feared it was falling behind customer expectations. mBank Took Inspiration From Best-In-Class Online Retailers mBank looked to best-in-class online retailers that do a better job of supporting sales online. Consumers buy with their eyes through pictures and videos; access real-time advice through chat-prompts, clickstream analysis, and Amazon-style algorithms; and enjoy optimized checkout through stored payment and instant digital delivery of goods. mBank Completely Overhauled Its Online Banking Experience Based on a gap analysis with best-in-class online retailers, mBank prioritized the following innovations: a new virtual store, video banking, integrated money management features, real-time CRM-driven offers, merchant-funded rewards, gamification, Facebook integration, a Google-like search tool, and a real-time creditscoring system. Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA Tel: +1 617.613.6000 | Fax: +1 617.613.5000 |

For eBusiness & Channel Strategy Professionals November 12, 2013 Case Study: mBank Builds A Next-Generation Online Banking Experience by Stephen Walker with Benjamin Ensor, Oliwia Berdak, and Alexander Causey Why Read This Report Poland’s mBank launched a revolutionary new online banking platform on June 4, 2013. The new platform delivers a new generation of digital banking, with a mix of customer-centric interfaces, advanced and integrated money management features, quick search, gamification, real-time customer relationship management (CRM), merchant-funded rewards, Facebook integration, and video banking. Read this report to understand how to better harness digital technologies to deepen customer relationships and increase revenue. Table Of Contents Notes & Resources 2 Situation: mBank Wanted To Deliver A Modern Digital Experience Forrester interviewed Michal Panowicz, senior director, mBank. We also reviewed mBank’s new site. 4 Best Practice: mBank Completely Overhauled Its Online Banking Site 13 Results: It’s Early Days, But The Indicators Are Encouraging 13 Next Steps: mBank Will Extend These New Experiences To Mobile recommendations Related Research Documents How Polish Banking Customers Use Different Channels, 2011 December 1, 2011 Next-Generation Digital Financial Services March 11, 2011 14 Digital Executives Should Learn From The Leaders In Any Industry © 2013, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email For additional information, go to

For eBusiness & Channel Strategy Professionals 2 Case Study: mBank Builds A Next-Generation Online Banking Experience Situation: mBank WANTED TO DELIVER A MODERN DIGITAL EXPERIENCE Poland’s mBank is a direct banking subsidiary of BRE Bank, which is in turn a subsidiary of Germany’s Commerzbank. When mBank first launched in November 2000, it was the first onlineonly bank in Poland and one of the first anywhere in the world. With no branches, the bank had to do a lot of legal and process innovation to enable full transactional banking online and through a call center. Today, the bank has more than 4.2 million customers; it has become the largest online bank in Poland and one of the largest anywhere in the world.1 Despite that success, the bank faces difficult challenges: ■ Competition has intensified. Competition in the Polish retail banking market is fierce as banks compete for young customers and a growing middle class with Internet-only current-account offers.2 The presence of so many foreign-owned banks — including Bank Millennium, Bank Pekao, BNP Paribas Fortis, Citibank Handlowy, ING Bank Śląski, and mBank itself — means that successful strategies and tactics from abroad are quickly imported and new strategies are devised in Poland. Other direct banks, like established rival Inteligo and new entrant Alior Sync, compete directly with mBank for consumer and media attention. ■ Customer expectations are rising. mBank customers now enjoy many digital experiences outside banking that are far more graphical, interactive, and contextual; these made mBank’s once-leading platform look dated (see Figure 1). Likewise, as the fastest-growing eCommerce market in Europe, Poland continues to attract many best-in-class retailers from abroad that do a much better job of supporting online sales and showing what the modern Internet can — and should — be.3 As a result of these two factors, mBank’s digital team was beginning to feel like an early innovator that had fallen behind customer expectations. Its ambition was to bring mBank’s online banking experience into the 21st century. For inspiration, it looked to a wide range of firms, including for showing the world that everything can be sold online using real-time offers; Spotify for its focus on customer delight through app and process design; for its virtual instore experience; for its graphical and interactive approach to financial insight; Google for its powerful search; Cardlytics for its transactional marketing and merchant-funded rewards; Foursquare for driving early engagement with game mechanics; and American Express’s Link, Like, Love campaign for plugging financial services into the heart of the social graph.4 © 2013, Forrester Research, Inc. Reproduction Prohibited November 12, 2013

For eBusiness & Channel Strategy Professionals 3 Case Study: mBank Builds A Next-Generation Online Banking Experience Figure 1 mBank’s Existing Online Platform Used A Dated, Text-Heavy Interface Transactional services Log out and messages Products Settings and customer service Source: mBank website 106321 © 2013, Forrester Research, Inc. Reproduction Prohibited Source: Forrester Research, Inc. November 12, 2013

For eBusiness & Channel Strategy Professionals 4 Case Study: mBank Builds A Next-Generation Online Banking Experience Best Practice: mBank Completely Overhauled Its Online Banking Site On June 4, 2013, mBank relaunched with a next-generation online banking platform that delivered a radically different experience from the old site. To find out more, we spoke with Michal Panowicz, senior director of mBank and project leader for the new mBank, about exactly what he and his team did and how they did it. Panowicz’s team arrived at its final set of 10 main innovations through a gap analysis. After identifying those firms worldwide that manage to drive engagement and sales through digital channels, the team asked itself: What do these firms do that most banks do not? Three areas for improvement stood out: navigation and presentation, research and advice, and checkout (see Figure 2). Figure 2 mBank Performed A Gap Analysis Around Best-In-Class Online Retailers’ Functionality Best-in-class online retailers Traditional online banking New mBank Navigation and presentation Customers buy products with their eyes, through pictures, videos, and interactive wizards with accurate product search Products are presented through text and tables; secure site search is rare. A virtual store environment using a modern Internet stack with a quick search tool Research and advice Customers get real-time advice and offers through algorithms, clickstream analytics, and chat prompts. Customers see generic banners and poorly tailored offers; typically, they must use a branch or call center for advice. Real-time CRM-driven offers, integrated money management, and video banking, with full product and transactional details available on drill down Checkout Stored customer and payment details enable rapid purchases and payment confirmation, with instant delivery of digital goods. Product approvals can take days; know-yourcustomer hoops are complex; payments require sort codes and account numbers. A simplified payments hub and a real-time credit approval system using simplified know-yourcustomer processes. Activity 106321 © 2013, Forrester Research, Inc. Reproduction Prohibited Source: Forrester Research, Inc. November 12, 2013

For eBusiness & Channel Strategy Professionals 5 Case Study: mBank Builds A Next-Generation Online Banking Experience mBank’s New Navigation/Presentation Make It Easier For Customers To Find And Buy Within the presentation and navigation categories, best-in-class online retailers let customers buy with their eyes, giving them lots of graphics, videos, and animation; they also make it easy to find information. Yet online banking is traditionally text-heavy and table-based, with little search functionality.5 mBank introduced two important changes as a result: 1. A virtual store using a modern user interface. mBank courageously stopped supporting older browsers that constrained both how the bank developed code and the type of experiences it could offer.6 Using HTML5 and CSS3 standards lets the bank craft more graphical and interactive scenarios, while single page application (SPA) schemas help limit superfluous clicks and page reloads.7 The result is a streamlined virtual store akin to, in which pictures convey the meaning behind products and customers drill down to reveal additional product details and benefits (see Figure 3).8 Figure 3 mBank Created A Virtual Store Environment For Financial Products Product gallery Savings account — 3-, 6-, and 12-month interest rates Increase credit card limit Personal loan Source: mBank website 106321 © 2013, Forrester Research, Inc. Reproduction Prohibited Source: Forrester Research, Inc. November 12, 2013

For eBusiness & Channel Strategy Professionals 6 Case Study: mBank Builds A Next-Generation Online Banking Experience 2. A Google-like quick search function. To make it easier for customers to find information, mBank introduced a powerful, Google-like search tool (see Figure 4). Based on just three letters, the search interface renders all possible keywords and results immediately within the main screen. The flicks and iterations are absolutely Google-like. Figure 4 mBank Built A Powerful, Google-Like Search Feature Payments Search in transaction history Source: mBank website 106321 © 2013, Forrester Research, Inc. Reproduction Prohibited Source: Forrester Research, Inc. November 12, 2013

For eBusiness & Channel Strategy Professionals 7 Case Study: mBank Builds A Next-Generation Online Banking Experience mBank Built Research And Relevant Advice Tools That Require Little Customer Effort Best-in-class online retailers typically offer better calibrated advice and guidance during the research and sales process, whether this is through Amazon- or iTunes-style algorithms, clickstream analytics, video support, or simple chat prompts. This guidance typically requires little customer effort; customers don’t have to set up savings goals or fill out forms — they just get the insight. Translating this into a banking context, Panowicz’s team: 3. Integrated money management features into day-to-day banking. When customers log in, they are automatically shown their current balance; their safe-to-spend limit; as well as a consolidated financial statement across all mBank accounts that automatically categorizes spending to an accuracy of more than 85%, with a one-click link to how they are performing against their budget (see Figure 5).9 In doing so, mBank exposes all customers to the most important money management features and delivers all their value upfront. Figure 5 mBank Automatically Categorizes Spending And Displays Performance Against Set Budgets Spending in the category — eating out Budgeted amount Remaining budget Amount spent Budget Source: mBank website 106321 © 2013, Forrester Research, Inc. Reproduction Prohibited Source: Forrester Research, Inc. November 12, 2013

For eBusiness & Channel Strategy Professionals 8 Case Study: mBank Builds A Next-Generation Online Banking Experience 4. Refined the CRM engine to offer real-time, event-driven advice. Rather than use generic banners, mBank associates predefined customer events with specific bank responses. For example, if a customer’s current account is running low and his money management forecast suggests that he will soon hit zero, mBank can display a preapproved cash loan with a prefilled application and deliver the cash straight to that customer’s account.10 As the offer is real time and relevant, it doesn’t render as a sales message but as advice — received just at the moment the customer needs it. 5. Developed video banking for more complex interactions. To give customers the confidence to complete more high-value banking activities through digital touchpoints, mBank enables customers to transact, buy products, access advice, and share documents through video banking (see Figure 6).11 Importantly, customers don’t need to install a software client, access a separate app, or use a separate phone.12 It offers the ease of Google chat or Facebook chat but with full authentication and the quality and efficiency management of call center integration, even on the modest bandwidth of a 3G mobile connection. Figure 6 mBank Offers Video Banking For More Complex Interactions Disconnect Source: mBank website 106321 © 2013, Forrester Research, Inc. Reproduction Prohibited Source: Forrester Research, Inc. November 12, 2013

For eBusiness & Channel Strategy Professionals 9 Case Study: mBank Builds A Next-Generation Online Banking Experience mBank Optimized Its Transaction Processes So That They Are Quick And Easy Panowicz’s team found the biggest experience gaps within checkout. Best-in-class online retailers do a better job of supporting the modern Internet user’s desire for instant gratification. Sites like Amazon and iTunes make payment quick and easy, with stored payment facilities instantly retrieved for express checkout and instant digital delivery of goods. Translating these principles into banking, Panowicz’s team focused on two imperatives: 6. A channel-agnostic payments hub. Rather than being forced to remember bank sort codes and account numbers, mBank customers simply need to enter the first three letters of a name and mBank searches for all context about that person — through Facebook, previous payments, and the customer’s account history — to prefill the payment. Regardless of the underlying rails — and they support transfers, payments, Facebook, email, and mobile — the login scenario and flow is identical, and customers can make multiple payments in one go.13 7. Expedited approval times for credit products. Instead of assessing credit risk through credit bureaus or paper financial statements — which can take days, if not weeks — mBank now makes all credit decisions for existing customers within minutes, using internal aggregation to analyze all of a customer’s transactional activity.14 Using external aggregation, the bank can even do this for prospective customers. mBank Offers New Services That Make Banking Easier, More Fun, And More Rewarding With this difficult groundwork done, Panowicz’s team realized that without much additional work, it could experiment with three further services, not traditionally associated with retail banks: 8. Merchant-funded offers. mBank uses its real-time CRM engine to identify patterns in customers’ transactions and to match those patterns to relevant product offers. Customers access offers by clicking on a given merchant within their bank statements or by clicking through to a dedicated tab. mBank also offers a Facebook application for this service — mDeals — in which customers can manage their offers, share great deals with friends, and receive rewards refined by “likes” within their profile (see Figure 7). 9. Gamification integrated into the transactional site. Inspired by Foursquare, mBank did some light software development of game mechanics to test the capacity of games to drive early engagement. mGame consists of two parts: a series of tutorials, which acts as a type of game-driven user manual, in which players earn badges for completing quests organized around new service features; and a selection of engagement games in which players get points for logging into online banking, making loan repayments or deposits, and using contactless payments, for example. Throughout, mBank uses cultural humor, historical references, and word play to make it fun (see Figure 8).15 © 2013, Forrester Research, Inc. Reproduction Prohibited November 12, 2013

For eBusiness & Channel Strategy Professionals 10 Case Study: mBank Builds A Next-Generation Online Banking Experience 10. Facebook integration. Lastly, mBank has taken advantage of social platform application programming interfaces (APIs) and the social graph. Panowicz’s team uses Facebook APIs to pull in customers’ pictures to personalize service, enhance the address book of transfer recipients, enable fast person-to-person payments to Facebook friends, populate leadership boards for mGame, and offer sharing and gifting scenarios for mDeals.16 With mDeals, Panowicz’s team made a conscious choice to seek social influence by encouraging customers to share information on the bank’s behalf, rather than attempting to share that information itself.17 Figure 7 mBank Offers Merchant-Funded Rewards On Facebook Through mDeals My mOffers Your gains Choose an mOffer Source: mBank’s Facebook page 106321 © 2013, Forrester Research, Inc. Reproduction Prohibited Source: Forrester Research, Inc. November 12, 2013

For eBusiness & Channel Strategy Professionals 11 Case Study: mBank Builds A Next-Generation Online Banking Experience Figure 8 mBank Uses Cultural Humor And Historical References To Make mGame Fun Discover the surprising capabilities of your account and collect badges. Mr. Tagger (tag spending) Transfer King Socialman Speedy Deal Personalizator Collect badges for performing your usual transactions. Source: mBank website 106321 © 2013, Forrester Research, Inc. Reproduction Prohibited Source: Forrester Research, Inc. November 12, 2013

For eBusiness & Channel Strategy Professionals 12 Case Study: mBank Builds A Next-Generation Online Banking Experience How mBank Did It: Colocation Drove Co-Operation Among Business, IT, And Design Perhaps more impressive than the number of new features that mBank implemented is the time it took the bank to deliver them. In just 14 months, the new mBank went from a blank sheet of paper to a full product range and full backward compatibility.18 Of course, this wouldn’t have been possible without funding — and Panowicz’s team secured approximately $35 million to cover the entire project — but the real story of how mBank did it stems from innovations in its approach.19 These included: ■ The colocation of business, IT, and design teams. mBank changed how employees co- operate, the frame of reference for how it made decisions, and how people do everyday tasks by colocating business, IT, and design teams in one room. Right from the beginning, design professionals, psychologists, and human-computer interaction specialists worked side by side with career bankers to design new customer experiences from the ground up. ■ Dedicated “build the bank” headcount. Rather than make building the new mBank part of someone’s existing job, Panowicz’s team had 200 dedicated full-time employees in the core new mBank team and more than 300 during the peak period of development. Many of these people were employees that mBank reassigned from other roles at the bank to help build the new mBank. ■ Several strategic partners. mBank worked with a number of strategic partners to build and launch the new mBank: Polish systems integrator Efigence for design and human-computer interaction; Icelandic white-label money management vendor Meniga for the back end, digital money management, and search; Accenture for engineering excellence and support in development process management; and Polish software and services vendor Software Mind for back-end video banking service support. ■ Rapid design iteration. In total, mBank’s development team delivered 400 final user interface (UI) and user experience (UX) designs with 1,700 interim blueprints. The bank ran 1,050 hours of wireframe and prototype testing with customers (excluding customer acceptance tests), held 250 beta tests, and had 1,100 pre-rollout testers; it had 1.6 million lines of final code and 45,000 test conditions for final user acceptance tests (UATs). © 2013, Forrester Research, Inc. Reproduction Prohibited November 12, 2013

For eBusiness & Channel Strategy Professionals 13 Case Study: mBank Builds A Next-Generation Online Banking Experience RESULTS: IT’S EARLY DAYS, BUT THE INDICATORS ARE ENCOURAGING The most important feedback for mBank is what its customers say and how they react. While it’s too soon to share the final verdict on that, the new mBank appears to be having a big impact across a range of crucial indicators, including: ■ Voluntary migration to the new platform. Rather than risk alienating customers with a “big bang” launch and forced migration to the new online banking platform, mBank has invited customers to try the new platform and has given all customers a 12-month period in which both platforms are running concurrently. Within the first four days of launch in June, mBank received 200,000 volunteer sign-ups; by mid-July, the new interface had reached 500,000 customers. These numbers far exceeded the bank’s expectations. While objective comparisons are difficult, the digital team at mBank is delighted that these numbers greatly exceed the scale of many other digital-only banks.20 Already, 35% of total logins for mBank are made through the new platform.21 ■ New account opening. Some 45% of mBank’s new account openings in the post-launch period were linked to interactions with marketing content for the new mBank, suggesting that the new platform is driving net new customer acquisition. ■ Installations of the mDeals Facebook app. mDeals, mBank’s Facebook app for merchant- funded rewards, received 50,000 installations in its first three weeks. In June 2013, Facebook reported that mDeals was its third-fastest-growing app in Poland and has been for the past three months (July, August, and September 2013). ■ mGame use. In the first few weeks after launch, mBank was getting 45 views of the mGame page for every 100 views of the new online banking home screen; this suggests that these games are enticing customers to find out more about the new platform. ■ Media coverage. Although it’s a softer metric, the new mBank has received 714 press mentions since launching. By mBank’s count, that’s 3.3 times the 217 mentions that its Polish rival Alior Sync received over that same period.22 NEXT STEPS: MBANK WILL EXTEND THESE NEW EXPERIENCES TO MOBILE Even with all the new features that mBank has launched, Panowicz believes that his team is only about halfway through the project. The next phase is expected to roll out in Q1 2014. Until the end of 2013, the team will focus on: ■ Planning second-generation mobile and tablet applications. mBank will translate its new online services to smartphones. The digital team is still at the ideation stage, but it plans to use the unique interaction mechanisms and form factor of touchscreen devices and phones to create distinctive digital experiences. © 2013, Forrester Research, Inc. Reproduction Prohibited November 12, 2013

For eBusiness & Channel Strategy Professionals 14 Case Study: mBank Builds A Next-Generation Online Banking Experience ■ Extending the new mBank platform to other entities. mBank will roll out the new platform to customers of MultiBank, which is BRE Bank’s brand for the affluent and small and midsize enterprise (SME) segments. The bank will also roll out the new platform to the 600,000 customers of mBank’s Czech and Slovak operations. ■ Developing scenarios for more complex products. mBank wants to extend account aggregation and the new user interface to investments, loans, and insurance products. From here, the bank will be able to blow out all of a customer’s transactional behaviors to provide even better insight, offers, and guidance to customers about managing their finances. R E C O M M E N D AT I O N S DIGITAL EXECUTIVES SHOULD LEARN FROM THE LEADERS IN ANY INDUSTRY mBank’s success with its new platform shows that traditional financial firms can be highly innovative and can beat startups at their own game. In Michal Panowicz’s words: “We banks have to innovate and catch up with our customers’ lives. We can no longer pretend that giving them a 20-year-old online interaction model (text and tables) and a centuries-old branch model is still OK.” mBank’s design and build therefore focused not on what other banks are doing or perceived industry best practices but on the best digital experiences offered in any industry, anywhere in the world. Digital teams at both banks and companies in other industries can draw the following lessons from mBank’s success: ■ A modern interface is foundational to delivering something new. Only by using a fully modern Internet stack was mBank able to craft graphical and interactive scenarios akin to those that best-in-class online retailers offer. ■ Underlying processes matter as much as front-end technology. Before mBank developed its credit-scoring systems, credit approval was an intractably offline process. Only by hacking into the process behind the technology could mBank take advantage of that technology.23 ■ Customers shouldn’t have to work for insight. By taking the most important money management features and embedding them into customers’ day-to-day scenarios, rather than burying them on a separate tab, mBank has delivered all the insight of money management upfront. ■ Video can fulfill the psychological purpose of the branch. Digital channels have steadily replicated all the things that the branch can do. Synchronous, one-to-one video is the final frontier in the digitization of distribution — giving customers the confidence to complete high-value tasks but with the convenience of not visiting the branch.24 © 2013, Forrester Research, Inc. Reproduction Prohibited November 12, 2013

For eBusiness & Channel Strategy Professionals 15 Case Study: mBank Builds A Next-Generation Online Banking Experience ■ If an offer is real-time and relevant, it is advice — not sales. Refining its real-time CRM engine catapulted mBank into a post-“sales” paradigm. The bank now offers only advice and at precisely the time that customers need it — when there is excess liquidity in an account, an anticipated shortfall, or some other financial need. ■ Merchant-funded rewards are an obvious new revenue stream. Retail banks with a strong transactional marketing capability are in a unique position to be the face of these rewards. The merchant funds them, but they give the bank a real halo effect, as evidenced by the number of customers sharing mDeals.25 ■ You can best influence social conversations by staying out of them. The early traction of mDeals suggests that if you want to exert influence through social media, you must give your customers something positive to talk about — such as great merchant-funded rewards — rather than attempt to infiltrate the conversation yourself. ■ The colocation of business, IT, and design drives collaboration. Business, IT, and design teams often exist in deep trenches with barbed wire between them: different professions, trained differently, evaluated differently, and motivated by different things.26 Colocating teams in one room helped mBank overcome the perennial challenge of effective collaboration. Endnotes While there are a few online-only direct banks that have more customers than mBank, notably ING Direct in several countries, the direct banks that have more customers than mBank almost all either operate in more countries than mBank does or operate in larger countries than Poland. 1 2 Strong growth and competition characterize the Polish retail banking market. Only 68% of the population owns a current account, and a large number of banks are competing for customer attention. Online banking has grown rapidly in the past few years and is overtaking the branch as the preferred banking channel. Changing customer behavior means that Polish channel strategy executives need to put digital channels at the heart of their strategy. See the December 1, 2011, “How Polish Banking Customers Use Different Channels, 2011” report. Because of the rapid growth of eCommerce in Poland, companies like French supermarket chain Carrefour and UK-owned Tesco have recently introduced services that allow Polish consumers to buy products online and pick them up at drive-in locations. And Polish online grocery stores such as have enjoyed popularity for some time. Amazon made waves in Poland in January 2013 with its purchase of Polish IT company Ivona Software, a maker of text-to-speech software. For years, there have been reports in the Polish media that Amazon is considering opening a Polish version of its service. Source: “Online Retailing: Britain and Europe 2012,” Centre for Retail Research ( 3 © 2013, Forrester Research, Inc. Reproduction Prohibited November 12, 2013

For eBusiness & Channel Strategy Professionals 16 Case Study: mBank Builds A Next-Generation Online Banking Experience Within financial services, mBank looked to GarantiBank and Akbank in Turkey for inspiration; both have shown the world that a modern retail banking transformation is possible, even from a large-scale institution. 4 Google has revolutionized and reset expectations around search. Our Technographics® data suggests that consumers rank secure site search as important, but 23 out of the top 30 banks in the US do not offer this functionality within their secure sites. 5 The site is not compatible with Internet Explorer 8 and doesn’t use Silverlight (except for video banking) or Flash technology. The digital team focuses only on modern HTML and CSS standards, with heavy use of JavaScript. Silverlight was accepted as a tradeoff to get video banking launched sooner, which is difficult to provide in a business-to-consumer scenario. The bank plans to replace it with an HTML5 solution once that standard solidifies. 6 Single page application (SPA) schemas are pages that dynamically render as a full page, rather than users having to scroll down to see all the content. For more insight into HTML5, see the August 3, 2012, “The Coming Of HTML5” report. 7 All in, Panowicz’s team believes that it has nearly 2,000 different pictures and nearly 60 different videos within its public and secure site. 8 “Complexity on demand” was an important design principle for Panowicz’s team throughout the overhaul of mBank’s online platform. It wanted the overall experience to be simple but able to support those customers who wanted to go deeper. 9 This CRM system also prompts reps in mBank’s call centers and the branches of BRE Bank’s subsidiary MultiBank. mBank refrained from offering sales messaging within its transactional system in the past, both because a lack of targeting made it look like spam and because the table view made it difficult to render that offer unobtrusively. With its new graphical interface, a small pop-up window discreetly presents the offer — and does so at precisely the time the customer needs that guidance. 10 Panowicz’s team was guided by the landmark research from Albert Mehrabian: This suggests that 55% of human communication is seeing another person, while only 38% is tone of voice and 7% actual spoken words — the so-called 55:38:7 rule. Without the visual cues — seeing another person — customers won’t have the comfort and confidence to undertake more high-value, high-risk financial transactions. Source: Albert Mehrabian, Nonverbal Communication, Aldine Transaction, 2007. 11 The bank uses Silverlight for video banking. The bank plans to replace it with an HTML5 solution once that standard solidifies. 12 Customers can concurrently execute five different payments to the same person, for example, all using different payment “rails” but a single TAN authentication code. 13 As checkout is paper- and “wet signature”-free for all products except mortgages (i.e., current accounts, loans, mutual funds, car and home insurance, and brokerage services), it takes only a few clicks. 14 © 2013, Forrester Research, Inc. Reproduction Prohibited November 12, 2013

For eBusiness & Channel Strategy Professionals 17 Case Study: mBank Builds A Next-Generation Online Banking Experience At the time of writing, mBank’s mGame does not allow players to exchange points for prizes. They can exchange badges for stars, which are then used to determine the players’ positions within the leader board. 15 To address adoption and privacy concerns, Facebook integration is explicitly opt in, with the user turning each service on/off separately. 16 Panowicz’s team based this strategy on research that suggests that 99% of interactions on social networks involve people speaking to people; only 1% are geared toward companies. As such, companies will have more impact if they give people something to share, rather than attempting to infiltrate the conversation themselves. Source: Mikolaj Jan Piskorski, A Social Strategy, Princeton University Press, 2014. Mikolaj Jan Piskorski is associate professor of business administration at Harvard University. 17 mBank is not a “de novo” bank, but the digital team has had to deliver a platform that will scale to more than 4.2 million customers across two banks in Poland as well as mBank’s subsidiaries in the Czech Republic and Slovakia. 18 In a recent article, $40 million was quoted as the “build” cost for the new mBank, which is slightly rounded up. Source: Mary Wisneiwski, “The Cutting Edge of Online Banking, as Practiced by a Polish Bank,” American Banker, September 27, 2013 ( However, mBank has publicly communicated 100M PLN, which was around $33 million, depending on the exact exchange rate at the time. Panowicz’s team obtained this funding by securing agreement around three points: 1) that the digital life of mBank’s customers had changed so dramatically since 2000 that it was no longer OK to offer table-based banking; 2) that its competitors had largely caught up with the online banking model it had pioneered in the early 2000s; and 3) that digital services would be the key battleground for tomorrow’s customers. 19 Winning new customers to a new brand is substantially harder than converting existing customers to a new platform. In Forrester’s view, therefore, direct comparisons with banks like Moven, Simple, and Alior Sync are unfair. Nonetheless, mBank’s success in converting 500,000 customers to its new platform shows that traditional financial institutions can beat startups at their own game. 20 Three-quarters of those logins are from customers with only six weeks’ experience of the new platform, which suggests that customers are quickly converting entirely to the new platform. 21 Alior Sync is the rival online-only bank in Poland that made a splash when it launched in 2012. 22 Some products are intrinsically complex, but other products are complex because of the processes that underpin them — whether it’s the credit checks required for a personal loan, a credit card, or a mortgage or the identity verification, background details, and proof of income required for the application process. Traditional banks may shy away from reducing this complexity for fear of increased compliance risk or because they depend on the branch to conclude sales, but in doing so, they leave themselves vulnerable to disruption. It is only a matter of time before firms like Capital Access Network, ezbob, FundingCircle, Kabbage, OnDeck Capital, Prosper, SocietyOne, and Zopa come along with a more efficient process. 23 © 2013, Forrester Research, Inc. Reproduction Prohibited November 12, 2013

For eBusiness & Channel Strategy Professionals Case Study: mBank Builds A Next-Generation Online Banking Experience 18 However, many banks use video for branding and “how to” guidance but don’t support product selection and sales. Forrester’s research suggests numerous potential benefits from online videos, including explaining products better than text can, improving education efficiency, generating new leads, encouraging users to linger on site, and helping find new audiences by syndicating content to social sites. See the August 11, 2011, “Use Video To Drive Online Financial Service Sales” report. 24 With a good CRM engine in place, banks are extremely well positioned to spot behavioral patterns in customer spending and match that to products in a relevant way — and they get the halo effect of being the face of that reward for their customers. The retailer, meanwhile, is interested in reaching certain customers and giving them a great offer. Given fully automatic redemption, they don’t have to train their people or notify their staff — it’s all done on the back end. They just get a beautiful report that shows the demographics of the group that bought, how much the basket changed, and what value they got out of it. One of the most impressive things for merchants is that they pay only for sales — i.e., the rebate for transactions that actually happened — not for traffic. Meanwhile, all that data is very nicely sandboxed from a privacy perspective. Retailers never see the name and addresses of those who bought with them; they just see a transaction ID so that they know the transaction actually happened. All that data and segmentation analysis stays with the bank, and the retailer gets the extra sales. For further background, see the May 25, 2011, “Boosting Revenue With Merchant-Funded Offers” report. 25 In Michal Panowicz’s words: “Too often, business leaders specify ambitious plans; IT then feels it’s being forced to do something that won’t work; and the business is left thinking it’s been cheated out of its idea. With design teams, which typically know little about technology and even less about financial products, IT and business teams seldom respect what they bring to the table. By putting them all together on one floor, mBank bred mutual trust and respect.” 26 © 2013, Forrester Research, Inc. Reproduction Prohibited November 12, 2013

About Forrester Global marketing and strategy leaders turn to Forrester to help them make the tough decisions necessary to capitalize on shifts in marketing, technology, and consumer behavior. We ensure your success by providing: Data-driven insight to understand the impact of changing consumer behavior. n Forward-looking research and analysis to guide your decisions. n Objective advice on tools and technologies to connect you with customers. n Best practices for marketing and cross-channel strategy. n for more information To find out how Forrester Research can help you be successful every day, please contact the office nearest you, or visit us at For a complete list of worldwide locations, visit Client support For information on hard-copy or electronic reprints, please contact Client Support at +1 866.367.7378, +1 617.613.5730, or We offer quantity discounts and special pricing for academic and nonprofit institutions. Forrester Focuses On eBusiness & Channel Strategy Professionals Responsible for building a multichannel sales and service strategy, you must optimize how people, processes, and technology adapt across a rapidly evolving set of customer touchpoints. Forrester helps you create forward-thinking strategies to justify decisions and optimize your individual, team, and corporate performance. « ERIC CHANG, client persona representing eBusiness & Channel Strategy Professionals Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. Forrester works with professionals in 13 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 29 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit 106321

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