Download - Monetizing the Mobile Channel
Katherine Jansen is the Senior Manager, Business Development at Digital Insight, an NCR subsidiary. She is responsible for identifying and executing strategic alliances that extend the company’s mission to its financial institution customers. Katherine previously served as Digital Insight’s leader of corporate strategy, Senior Vice President of Marketing and Senior Manager of Customer Experience.
Introduction
TodayToday’s session will be a success if you:
• Leave thinking that you’ve got to figure out mobile strategy and where you stand
• Rethink the mobile market
• Rethink channel profitability
• Do you have a defined mobile strategy?
– Yes, and it is well-socialized
– Yes, senior management knows it
– I think so
– No
• How frequently is the strategy updated?
– Every quarter
– Once a year
– When the board asks about it
Polling Questions – Mobile Strategy
P&L View• Revenue
• Income
• Expense reduction
Direct or indirect contribution Lifetime Value View• Customer profitability
• Customer retention
• Infrastructure
Applying the Filter of ROI:Mobile Investments Should Drive:
Showrooming
With mobile device in hand, consumers also consulted their balances in real time before making a purchase, and 50 percent decided against making purchase for lack of available funds.
• Similar benefits as retail
• Offers, promotions, pre-staging
• Transactional net promoter
• Appointments and advance check in
iBeacon in the Branch
Reduce Expense
Source: Javelin Strategy & Research, Leveraging an Omnichannel Approach to Drive 1.5B in Mobile Banking Cost Savings, July 2013
Customer Retention
Among younger consumers,
technology and innovation was of
greatest importance, with the reasons for switching primary banks including:
"My previous bank didn't offer the
level of technology/innovation that
I wanted”
"My previous bank didn't offer the
online services that I needed”
"My previous bank didn't offer the
mobile services that I needed"
Source: AlixPartners (March, 2014)
Mobile driving increased engagement and activity; banking no different
Logins / Month
Debit Purchases / Month
Retention Rate
15
85%
10.51
22
93%
17.35
30
93%
Offline Online without Mobile
Online with Mobile
Increase Marketing Traffic:
• Access their financial information
65% more frequently 1
Increase Revenue:
• Conduct 40% more monthly
debit card purchases 2
• 8 additional debit card purchases/month could equal
$32 additional revenue/year
per customer 2
¹ Internal study of 36 Digital Insight FI customers, July 2009 through March 2014; claim based on comparison to Digital Insight online non-mobile consumers. ²Internal study of 29 Digital Insight FI customers, July 2009 through March 2014; claim based on comparison to Digital Insight online non-mobile consumers with an estimated interchange fee of $0.35 current as of 2012.
• Define, regularly update and socialize a living, breathing mobile strategy for your financial institution.
• Identify your points of focus for ROI– P&L view
– Lifetime value view
– Defensive strategy
– Growth strategy
• Measure, analyze, iterate regularly
What is your mobile strategy?
WyWallet in Sweden• Started by 4 largest
mobile companies• 1.2 million consumers
using (only 9.6 million in all of Sweden)
• Accepted by 4,600 merchants there, including McDonald’s and Burger King.
• Oh – doesn’t run on card rails.
• There is an opportunity to out-innovate
• Identify disruptors & partner with them– Think about your “silos” and where
disruptors can elevate your game
• Drop a pebble and create a ripple
• Disruptors can be your lunch
• Look for innovative partners
• Embrace & cause disruption
If you can’t beat ‘em, join ‘em?
• Online credit delivery
platform with automated
loan application,
underwriting, origination,
packaging and account
management
• Specifically targeted to
smaller SBA loans.
• Small bank generates 50
loans for over $1M since
testing in October.
Small bank & this company jointly create
Expansion
• New areas of revenue/income
• New ways of doing business that attract more customers or reduce expenses
• Brand evolution
Protection
• Customer retention
• Brand importance
• Expense reduction
• Future revenue streams
Applying the Filter of Innovation/Experiments:
Mobile Investments Should Drive:
• Do you measure channel profitability?
– Yes
– No
• Do you have a way to measure “contribution”?
– Yes
– No
Channel Profitability – polling question
• Income– Value of increased balances
– Value of retention
– Interest income
– Fee income
• Expenses– FTEs for creating/maintaining
channel
– Marketing expenses
– Solutions provider’s expense
Channel Profitability: probably looks something like this
What Channel is this?
• Decides not to buy yet, but do more research online . . .
• GPS locator sends a push notification with a 20% discount
• Your customer visits an electronics store for washer and dryer
• He’s convinced, downloads coupon, returns to the store and makes purchase with your card
• Goes to OLB to check funds and finds 20% discount again
Apologies to the accountants…• Take a Return on Investment approach
– Define the expected benefits and time period
– Take a lean start up approach if possible to iterate into a solution
– Measure, analyze, iterate
• Take a “Test the Hypothesis” approach– Fund some experiments
– Lean start up, minimum viable product
– Define your learning plan and instrument the experiment so you can analyze.
• Re-evaluate traditional channel profitability and think more of contribution.
www.digitalinsight.com
Thank you!
June 2014: Security & Compliance in the Age of IoE
Alan Akahoshi, Product Manager, Digital Insight
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