IBM Bankenstamm - Mehrwert durch kanalübergreifenden Kundendialog im Banking

© 2011 IBM Corporation1
16.30 h Registration mit Erfrischung
17.00 h Begrüssung und Einführung
Rudolf E. Vontobel, Director Banking Industry
IBM Schweiz AG
17.10 h Mehrwert durch kanalübergreifenden Kundendialog
Christoph Wille
Strategy & Transformation Leader, IBM Global Business Services
18.15 h Abschluss und Fragen
18.30 h Apéro und Diskussion
19.30 h Ende der Veranstaltung
Programm
IBM Bankenstamm
Herausforderungen und Perspektiven für Banken in der Schweiz

AGENDA
Introduction 5 min
Our Vision of the Perfect Customer Dialogue 5 min
Examples of successful cross-channel client dialogue
implementations in Banking 40 min
Steps towards an enhanced customer dialogue 10 min
Conclusions, Questions & Answers 10 min
2

Revenue growth is
the #1 priority
Responsiveness is
key competence
Improving internal
capabilities as first
step to growth
Revenue growth is
the #1 priority
Responsiveness is
key competence
Improving internal
capabilities as first
step to growth
Business model
innovation matters
External
collaboration
Innovation must be
orchestrated from
the top
Business model
innovation matters
External
collaboration
Innovation must be
orchestrated from
the top
Hungry for change
Customers as
opportunity to
differentiate
Business model
innovation, global
business designs
Hungry for change
Customers as
opportunity to
differentiate
Business model
innovation, global
business designs
Embody creative
leadership
Reinvent customer
relationships
Build operating
dexterity
Embody creative
leadership
Reinvent customer
relationships
Build operating
dexterity
Empowering
employees through
values
Engaging customers
as individuals
Amplifying innovation
with partnerships
Empowering
employees through
values
Engaging customers
as individuals
Amplifying innovation
with partnerships
3
2004
Your turn
2006
Expanding the
Innovation Horizon
2008
The Enterprise
of the Future
2010
Capitalizing on
Complexity
2012
Leading through
Connections
The Global CEO Study 2012 is the fifth biennial CEO study, building
on our insights and findings over the last 8 years
765 interviews765 interviews 1130 interviews1130 interviews 1541 interviews1541 interviews456 interviews456 interviews 1709 interviews1709 interviews

Drawing insight from information – Areas of improvement
Source: Q23 “In which areas do you plan to improve your ability to draw meaningful and executable insights from available information?”
(Global n=1609 to 1658) (Banking & FM n=200 to 213)
“The role of risk management will
become more significant. Active
selling and understanding
consumer behavior will be
important.”
Financial Services CEO, Europe
CEOs identify customer insights and risk management as the most
critical areas for investment
72%72%Customers
Operations
Sales
Markets and competitors
Human resources
Supply chain
Risk management
Financials
73%73%
50%50%
49%49%
44%44%
43%43%
40%40%
38%38%
32%32%
Global
53%53%
50%50%
31%31%
37%37%
27%27%
64%64%
30%30%
Banking & Financial Markets

Change required to meet customer expectations (3 to 5 years)
Source: Q9 “To what extent will your organization change to meet customer expectations compared to your industry peers over the next 3 to 5
years?” (Global n=1652 to 1676) (Banking & FM n=212 to 216); Note: Financial Services (FS) includes Banking and
Financial Markets
FS1 CEOs want to improve their understanding of individual
customers and respond faster
CEOs in the financial services industry attribute
importance to Transparency and Corporate
accountability but value even more customer
needs, time to market and customer
experience
72%72%
68%68%
72%72%
72%72%
Improve understanding of individual customer needs
Improve response time to market needs
Harmonize customer experiences across channels
Include customers / citizens across product / service life cycle
Increase transparency and corporate accountability
Increase social and environmental responsibility
55%55%
48%48%
47%47%
44%44%
Global
67%67%
44%44%
55%55%
38%38%
Banking & Financial Markets

Source: Q22 “How good is your organization at driving value from data? [Today]” (Global n=631 to 636) (Banking & FM n=215 to 216)
Access to data
Global Outperformers
Global Underperformers
Draw insights from data
Translate insight into action
Banking & FM
Outperformers are twice as good at deriving value from data – key
to engaging customers as individuals
Outperformers strongly differentiate their organizations in three key areas
54%
26%
40%
54%
26%
42%
57%
31%
43%
108%
more
108%
more
84%
more

50%
Banking CMOs believe they are underprepared to manage the
impact of key changes in many areas of the marketing arena
Banking
Underpreparedness
Percent of CMOs reporting underpreparedness
Source: Q8 How prepared are you to manage the impact of the top 5 market factors that will have the most impact on your marketing organization over the next 3 to 5 years?
n=6 to 159 (n = number of respondents who selected the factor as important)
Global
Corporate transparency 46% 47%
Regulatory considerations 45% 50%
Global outsourcing 50% 54%
Customer collaboration and influence 50% 56%
Emerging market opportunities 44% 56%
Shifting consumer demographics 50% 63%
Privacy considerations 62% 55%
ROI accountability 56% 56%
Decreasing brand loyalty 51% 57%
Financial constraints 56% 59%
Growth of channel and device choices 62% 65%
Social media 72% 68%
Data explosion 74% 71%

To deal with the broad level of underpreparedness, CMOs signaled
three key domains of improvement
Deliver value to
empowered
customers
Foster lasting
connections
Capture value,
measure results
“Marketing must become more adept at managing the
magnitude of change now taking place. Otherwise, it
will be like going into battle with a Swiss Army knife.”
Financial services, Vice President of Marketing, United States

AGENDA
Introduction 5 min
9

“Growth at IBM's scale means creating new
markets…. Rometty is making IBM’s new market
pitch to marketing executives, promising that
technology will change the way they do their
jobs.”
Rometty noted that IBM will help change the
way corporations communicate with their
customers -- and ultimately the way they use
technology to build and sell their products. "This
is a mindset shift, not a market shift… It
changes everything.”
Paris, October 25th – 26th - CIO – CMO events
IBM’s “Big Shift” to focus on the Front Office & Customer Dialogue
1010

Our vision: From Marketing to a Personalized Customer Dialogue:
The four P’s of Marketing have changed
The Old Four P’s The New Four P’s
Company-centered view of the world
Mass produced products
Established distribution channels
One-Size Fits All mass advertising
One way communication
Customer-centered view of the world
Products tailored to customer
preferences
Flexible cross-channel distribution
Personalized, targeted promotions
Listening in a two-way conversation
Personalization
Presence
Persuasion
Permission
Product
Price
Place
Promotion

What does it take to achieve a successful interactive
value creating Multi-Channel Dialogue?
Executive Commitment to a Customer-Centered Business Strategy
1. Customer Awareness – 360º View of the Customer
2. Customer Engagement – An Ongoing Personalized Dialog
3. Cross-Channel Integration – Right Message, Right Channel, Right Time
4. Integrated Infrastructure and Operations – Plan, Execute, Track, Adjust

AGENDA
Introduction 5 min
13

Reaching the next level of Customer Dialogue and Centricity
14
Examples of Successful Implementations

Creating a Customer
Focused Enterprise
Case Studies… based on:
Driving differentiated treatment based on
individual customer needs
Examples of Successful Implementations
Continent North Bank

ING Bank in the Netherlands
CASE STUDY 1Examples of Successful Implementations

Smarter Customer Dialogue: Business Drivers for ING
17
Consumer is ‘in control’Consumer is ‘in control’ Action required!Action required!
Leverage inbound contacts for targeted sales
and service
Centrally coordinate sales and marketing
efforts on all channels
Stop the ‘information-overload’
Leverage all channels
Increase marketing accountability – show
impact of marketing spend
Clear distinction on roles: marketing
orchestrates, channels execute
Increase marketing effectiveness
Reduce costs
Traditional campaigns dont work
anymore
Traditional campaigns dont work
anymore

Customer browses ING
webpages for a
savings product …
Customer browses ING
webpages for a
savings product …
… but does not
continue the process
… but does not
continue the process

Customer leaves the
bank website and
browses the
newspaper pages.
An ING savings ad
shows up, targeted at
this individual
customer.
The customer clicks
on the advertisement
Customer leaves the
bank website and
browses the
newspaper pages.
An ING savings ad
shows up, targeted at
this individual
customer.
The customer clicks
on the advertisement

The customer starts
filling out the
application form
The customer starts
filling out the
application form
… but then abandons the
process
… but then abandons the
process
And returns to the ING
webpages
And returns to the ING
webpages

A call center service
representative calls the
customer the day after
and offers to print out
the application
document and send it
over (remarketing)
The customer agrees
and completes the
application
A call center service
representative calls the
customer the day after
and offers to print out
the application
document and send it
over (remarketing)
The customer agrees
and completes the
application

The customer receives
the monthly newsletter
The customer receives
the monthly newsletter
The newsletter is
personalized and starts
with a topic on savings
accounts …
The newsletter is
personalized and starts
with a topic on savings
accounts …
… and a call to action to
transfer funds
… and a call to action to
transfer funds
A few weeks later, the
customer still hasn’t
transferred funds
A few weeks later, the
customer still hasn’t
transferred funds

A personalized
message is shown in
the service box, urging
the customer to
transfer funds.
The customer decides
to transfers funds and
does this with a few
clicks
A personalized
message is shown in
the service box, urging
the customer to
transfer funds.
The customer decides
to transfers funds and
does this with a few
clicks
… the customer goes
to the secure part of
the website
… the customer goes
to the secure part of
the website
A few days later …A few days later …

A personalized offer pops –
special bonus points for when the
customer deposits more money.
A personalized offer pops –
special bonus points for when the
customer deposits more money.
A month later, there has been no
further transfers of funds.
The customer uses the mobile
app to make a payment
A month later, there has been no
further transfers of funds.
The customer uses the mobile
app to make a payment

ING posts a personalized offer for
this customer: the ‘bonus point’
offer
ING posts a personalized offer for
this customer: the ‘bonus point’
offer
The customer has liked the ING
page on facebook
The customer has liked the ING
page on facebook

On the next day, the customer
visits a branch.
A warning message shows up
on the branch screen – the agent
offers a increased savings rate
and secures the customer
On the next day, the customer
visits a branch.
A warning message shows up
on the branch screen – the agent
offers a increased savings rate
and secures the customer
A while later, the customer visits
the website and looks at INGs
interest % on the savings
accounts.
Short after, the customer starts to
withdraws funds from the
savings account.
A while later, the customer visits
the website and looks at INGs
interest % on the savings
accounts.
Short after, the customer starts to
withdraws funds from the
savings account.
Impact: banners that are
triggered based on behavior of a
customer have up to 10x higher
CTR
Impact: banners that are
triggered based on behavior of a
customer have up to 10x higher
CTR

Underlying principles: A single marketing engine, providing offers
and next best actions across all channels
27
Internet
Open
homepage
Open
productpages
Secure
homepage
Open
Logoff page
Secure
landingpages
Call outbound
Branches
E-mail
Call inbound
Sept 2012
Mail ATM
Inbound
Outbound
Banners at
non-ING domains
Fase 4 ?
New
in phase 4
Sales Force
Powered by Next
Best Actions

Results
Cannot be shared but discussed with IBM on request

© 2013 IBM Corporation
Continent North Bank
29
• Industry: Financial services company
• Specialization: Personal financing
• Type: Both Business to Consumer (B-C) and Business to Business (B-B)
company
• Total Managed Assets: $1 Trillion
• Number of Employees: 280,000+
• Market: Largest bank holding company in North America
• Growth: Driven by acquisition or expansion of services to existing
customers. Continent North Bank has increased its focus on managing and
optimizing customer relationships with a focus on organic growth.
Continent North Bank background
CASE STUDY 2CASE STUDY 2Examples of Successful Implementations

Continent North Bank needed to shift marketing from product to a
customer incentive approach
30
• Unable to drive organic growth within existing customer base due to lack of customer
experience and relevance of customer interaction
• Loss of customers of newly acquired banks after take over which impacts value of
acquired business
Client issue
• Consumer and small business bank
•Marketing segment team
•Marketing operations and information management
Scope• Use customer events as the means to deepen relationships and drive organic growth
• Improve the customer experience and the timeliness and relevance of customer interaction
Objectives
Scope

“I have an offer – let me find a customer to sell to.”
CustomerNeedsandSegmentStrategies
MassMarket|MassAffluent|SmallBusiness
Offer
Offer
Offer
Offer
Offer
Offer
Deposits
Offer
Offer
Offer
Offer
Offer
Offer
Card
Offer
Offer
Offer
Offer
Offer
Offer
Mortgage
Offer
Offer
Offer
Offer
Offer
Offer
Investments
Direct mail
BC
Agent, IVR
Online, email
ATM
Mobile, SMS
Chat
Relevance?
Awareness?
Value?
Understanding?
Clarity?
Retail
• You do not know me and ask me
multiple times about the same thing.
• I am not offered solutions based on my
multiple relationships.
Preferred
• They don’t really know me - Customers
are offered products that may feel
irrelevant and disconnected versus
solutions.
Small Business
• I use North Continent Bank for
convenience but primarily use another
bank.
• The Bank doesn’t understand me, my
industry or my business.
• The Bank’s associates can’t address all
of my business needs.
Staff are not
confident in acting on
offers – our
presentment rates
are too low.
Measure
Staff are not
confident in acting on
offers – our
presentment rates
are too low.
Engage
Every group, product
and channel for itself
– no customer
optimization
Present
Every group, product
and channel for itself
– no customer
optimization
Target
Our analytics are
geared to
propensities not
relationships and
behaviors.
Learn
Our data is siloed,
latent, and oriented to
products and
channels.
Inform
Current State was inconsistent with bank’s customer experience
aims & growth imperatives

“Who”
“Who”
Atomic level
data
Event detection
Product lifecycle
Life stage plans
and events
Behavioural profiles
External events
Offers and treatments based on customer behavior & preferences
Event engine trawls daily
transactions
Identifies aberrant behavior
Predictive analytics engine
determines Next Best Action
Optimization engine
maximizes use of channel
capacity
Contact channel based
on client preferences
and likely response
“What”
Analysis and modelling
Analytics and
Business rules
“When”
Fatigue and optimisation
Customer
initiated Info
Operational/
compliance Growth Retention
Customer
initiated
Information
Operational/
compliance
Growth
Retention
Customer
initiated
Information
Operational/
compliance
Growth
Retention
Current communication
Previous
communication
90900210
60600210
11000
1414000
3030050
90900210
60600210
11000
1414000
3030050
“How”
Delivery Channel

© 2013 IBM Corporation33 33
Traditional approaches to segmentation looked at a few variables
and provided very little in the way of action
Transactions
Sales
Geography
Income
Age
The also do not represent the uniqueness of individuals
and their behaviors
IBM Confidential33

The adoption of more effective methods of segmentation is key to
developing customer insights
Take a multi-dimensional view
of customers:
– Who they are
– What they look like
– What they need
– How they act
– What they buy
– Why they want it
– When they want it
– Where they want to buy it
Consider time factors:
– Customer lifecycle view
– Timing and frequency of
interaction
– Customer life-stage
– Channel choice
Know the profitability of
your customers:
– Lifetime value
– Share of wallet
– Cost to serve
Major dimensions of effective segmentation
Segment
characteristics
Source: IBM Institute for Business Value analysis
Profitability Time
IBM Confidential34

Effective segmentation starts with Feature Vectors
Feature Vectors or customer dimensions developed to explain or predict customer
behavior:
A Feature Vector is a model (not raw data) of the customer’s response
(historical or predicted) to one specific aspect of the value proposition
Each feature vector is like a gene strand, which describes a facet, or set of
customer behavior traits
Feature Vectors are building blocks that can be assembled into larger models of
customer behavior
IBM Confidential35
Age +
Income +
GeographyPreferred
Product
CategoriesPreferred
Channel
Participation
in Loyalty
Program
Use of In-
House Credit
Card
Use of
Service
Programs
Return /
Exchange
Behavior
Breadth of
Categories
Shopped
Length of
Time as
Customer
Recency +
Frequency +
Value
Response
to Media
Time until
Repurchase in
Key
Categories
Annual
Spend
Level
Annual
Transactions
Econometric:
Real-estate and
Unemployment
Most segmentation
approaches only
focus here
Examples of Successful Implementations CASE STUDY 2

Feature Vectors lead to Action Clusters
36
Action Clusters have 8-13 dimensions – Feature Vectors – based on
primarily on behavioral data attributes
Preferred
Product
Categories Preferred
Channel
Participation
in Loyalty
Program
Use of In-
House Credit
Card
Use of Service
Programs
Return /
Exchange
Behavior
Breadth of
Categories
Shopped
Length of Time
as Customer
Recency +
Frequency +
Value
Response to
Media
Time until
Repurchase in
Key Categories
Action Clusters must be:
•Highly homogeneous
•Highly differentiated
•Highly actionable
Rank Action Cluster % of Customers % of Spend
1 Brand fanatics 8% 30%
2 Core customers 11% 18%
3 Online socialites 6% 14%
Sample of Best Buy Action Clusters

Predictive Analytics implemented to optimize dialogue:
Inbound Call Center, Web, Agent Office, On-site, Outbound Campaigns
Context data
(channel, contact reason, planned
actions, IVR selections, etc.)
C
Customer data
(current portfolio, segmentation,
baseline behavior, preferences, etc.)
C
Qualify eligible/appropriate offers
Prioritize offers (e.g. by NPV and
likelihood of acceptance)
Determine “best” offer/action
and deliver to channel
C?
Make the offer!
32%
54%
Response
probability
54%
32%
90
200
NPV
A
B
C
Potential
offers
Business
rules
64
49
Expected
value
Capture more
feedback
Identify potential actions / offers

We understand the
value levers and
have instrumented
CIM to “know”.
Measure
Staff and leaders
understand our goals
– have the skill and
motivation to deliver.
Engage
We deliver the right
information to the
right channel – we
capture feedback.
Present
We optimize
communication to
maximize value to the
bank and customer.
Target
We have re-
calibrated to the
customer and have
new test and learn
abilities.
Learn
Data is highly
integrated and recent
– provides holistic,
detailed customer
view.
Inform
“I have a customer – what do they need most?”
Deposits
Card
Mortgage
Investments
Customer Experience
and Treatment
Strategies
Direct mail
BC
Agent, IVR
Online, email
ATM
Mobile, SMS
Chat
Brilliant!
Service
Offer
Inform
R
etain
Governance,
Prioritization &
Optimization
Integrated
Customer
Analytics
“The bank knows me
and values my
relationship.”
“They seem to know
what I need and when I
need it.”
“The bank isn’t always
selling something.”
“They always get me to
the right place and
never fail to follow up.”
“There is real value to
me in getting all my
needs met by one
bank.”
38
Target State put bank on the offensive in competing for the mind-
share & wallet-share

This has resulted in measurable increases in customer retention,
conversion rates & employee engagement
• Conversion rates on sales leads exceeded 30%
• Reduced cost of non-targeted communications
• Average asset value of sales increased by 25%
• Customer attrition reduced by 10%
• Employee engagement across relationship
metrics up
Cannot be shared but discussed with IBM on request

Another Example of what is possible....
40

AGENDA
Introduction 5 min
41

Typically we are working through a number of steps to develop a
valid target operating model, implementation roadmap & value case
42
CustomerExperience
TargetOperating
Model(IT&Business)
Roadmap
RefinedValueCase
CustomerValue
Strategy
Capabilities
Required
Very often parts of these elements are already available and must just be
validated or adjusted. This has impact on timelines and efforts.
✔✔✔✔
Steps towards an enhanced customer dialogue

Accelerated Visioning is IBM’s proven method to define your multi-
channel strategy – it focuses on do-ability and value testing
43
-
Business DesignBenefits Case
Guiding Principles
Technical Design
Innovative Propositions &
Customer Experience
Customer
Testing
Client
Requirements
Customer Profiles
and Personas
Accelerated Visioning
Roadmap

AV fuses creativity with do-ability through iterative testing
44
-3 to 0 1 2 3 4 5 6 7 8 9 10 11 12 13
Anchor ValidateMobiliseMobilise “Hot House” Define & Visualize
Stakeholder Feedback
Customer Testing
Process Workshops
Sample Interaction
Scripts and
Wireframes
UI Style Guide
Customer
Experience
Customer
Experience
Blueprint &
Prototype
Proposition Definition
Market Research
Conceptual Model
Customer Testing
Content Audit/Model
Information Architecture
Functional
Design
Process Maps
Use Case Inventory
Business Rules
Business Requirements
Functional Scope
Process/Event List
Refine Processes,
Use Cases, Business
Rules, Requirements
Use Case Examples
High Level
Functional Design
Organisational Design
Change Management Plan
Communication Plan
Benefits Action Plan
Business
Change
Organisational Structure
Change Impact & Capacity
Comms Assessment
Benefits Targets
Business
Change
Approach
Management Roles
Change Management Strategy
Communications Strategy
Benefits, Governance & Scorecard
Data Model
Service Catalogue.Technical
Solution Design
Technical
Solution
Outline
Refine Component, Data,
Service Model
Technology Appraisal
Refine Data, Service,
Component Model
Use Case Realisations
Technology appraisal
Project
Management
Programme
Plans
Integrated Scope
Document
Draft Wave Plan
Candidate Release
Governance
Release Definitions
Migration Strategy
Integrated Programme
Plans
Workshops
“BigIdeas”-Workshops
“Do-ability”Workshops
Workshops

It is key to understand the customer‘s future multichannel journey.
Customer Journey Murals are facilitating this.
45

Example of a Prototype: Nationwide Children‘s Passbook App Demo
46

AGENDA
Introduction 5 min
47

It is all about a change from Product Centric to Customer Centric
48
“I have an offer”
Outbound Marketing What is the best group of
people to target for this offer?”
“I have a person”
Interactive 1:1 Dialogue
Shift from outbound
to interactive marketing
“What is the best treatment
for this person”
ACTION
QUESTION?
Conclusions, Questions & Answers

Executive commitment is required to make it happen as there
are many challenges to be adressed
Executive Commitment to a Customer-Centered Business Strategy
1. Customer Awareness – 360º View of the Customer
2. Customer Engagement – An Ongoing Personalized Dialog
3. Cross-Channel Integration – Right Message, Right Channel, Right Time
4. Integrated Infrastructure and Operations – Plan, Execute, Track, Adjust

Successful Multichannel Dialogue Initiatives provide significant value
for the client and the bank!
50
“I have a customer – what do they need most?”
Deposits
Card
Mortgage
Investments
Customer Experience
and Treatment
Strategies
Direct mail
BC
Agent, IVR
Online, email
ATM
Mobile, SMS
Chat
Brilliant!
Service
Offer
Inform
R
etain
Governance,
Prioritization &
Optimization
Integrated
Customer
Analytics
SHARE OF WALLET AND MIND!

Wir freuen uns,
Sie wieder an einem
IBM Bankenstamm
als Gast zu begrüssen.

IBM Bankenstamm - Mehrwert durch kanalübergreifenden Kundendialog im Banking

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