innovative assets to meet change in the financial world
TRANSCRIPT
Innovative assets to meet change in the financial world.
How you can remain competitive and compliant and enhance the
consumer experience.
2
Market trends 3-4
Persona: Introducing the Millennial 3
Channels: Creating Connections 4
Branch technology 5-10
Five Reasons You Can’t Afford to Wait on Mobile 5
The Next “Big Thing” in Technology 7
Concierge Video Services: Consumer-Driven Services for the Branch 10
self-service convergence 11-12
Operation 4-1-1: Four Components. One Company. One Request. 11Windows® 7 Migration | EMV Adoption | PCI | ADA Compliance
virtual liBrary 14
Contents
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Mobile banking
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3
The Millennial generation is beginning
to saturate the retail banking customer
base, and it shows no signs of slowing.
As these potential customers mull their options for long-term financial partners, it will pay to get to
know them now.
MEET THE MiLLENNiAL
Also known as Generation Y, members of the Millennial generation were born between the late 1970s and
early 2000s. They grew up in an age of technology and economic boom in the United States. Naturally,
they’re very comfortable with communication technologies and virtual environments.
THE MiLLENNiAL SHiFT
Currently representing nearly one-third of American adults,1 Millennials are also called “Echo Boomers”—
a nod to the generation’s comparable size to Baby Boomers. By 2017, Millennials will have the most spending
power of any generation. Today, they account for 9 percent of total transactions; within five years,
it will be 40 percent. And by 2025, Millennials will make up 75 percent of the workforce and will surpass
all other generations in total earnings.2
THE ENTiTLEMENT iSSuE
Known for high expectations, demand flexibility, access and advanced technology in all aspects
of their lives. In a 2010 study, Gen Y respondents scored 25 percent higher for levels of narcissism and
entitlement than respondents aged 40–60 and 50 percent higher than those aged 61 and older.3
THE TECH GENERATiON
The most tech-savvy generation yet, members of Gen Y expect technological conveniences.
Compared to Boomers, Millennials are:
• 15 percent more likely to let financial institutions’ websites and online communities impact banking decisions
• 29 percent more likely to try new technology-enabled tools4
THE MOBiLE GENERATiON
Millennials are connected to their mobile devices. Of note, 31 percent of Gen Y reviews account balances
more than eight times a month.5 Compared to Boomers, Millennials are:
• 8 percent more likely to use remote check deposit capture
• 33 percent more likely to use mobile banking functionality4
THE ExpERiENCE COuNTS
Millennials are driven by experiences, desiring consistency and efficiency in their interactions with financial
institutions regardless of what channel they use. Despite their affinity for technology, Millennials aren’t
refraining from using traditional channels. They average 2.5 branch visits per month,6 and 59 percent say branch
locations are important. Surprisingly, a Gen Y consumer is more likely to visit a branch, drive up to an ATM or
use a call center than any other age segment.7 However, this could be because Millennials aren’t getting what
they need from their preferred digital self-service channels.
1. Derived from U.S. census data in 2009, applied to 2012.
2. “Insuring the Catalyst-Customer: Generation Y and the Insurance Industry,” Deloitte, 2009.
3. University of New Hampshire management study, P. Harvey, 2010.
4. “Omnibus Survey,” Forrester, Diebold, Fiserv, 2012.
5. “Gen Y: How to Engage and Service the New Mobile Generation,” Javelin, 2011.
6. “Winning Strategies for Omnichannel Banking,” Cisco® Internet Business Solutions
Group, 2012.
7. Fiserv Consumer Trends Survey, 2011.
pERSONA: iNTRODuCiNG THE MiLLENNiAL
CHANNELS: CREATiNG CONNECTiONSTAKiNG A MuLTiCHANNEL AppROACH TO BuiLDiNG RELATiONSHipS
In today’s market, offering multichannel solutions is a must.
But remember that each channel should focus on what it does
best. Your branch is the hub for acquiring and deepening
customer relationships. There, you can offer one-on-one
consultation, customer service and problem resolution for
richer customer experiences. Call centers bridge the gap
between face-to-face and self-service, satisfying information
needs and resolving problems. The anytime convenience of
mobile, online and ATM channels makes them best-suited for
routine self-service transactions. However, as important
extensions of your brand, they need to offer comprehensive
and convenient services that satisfy customer demands.
RELATiONSHip-BuiLDiNG AT THE BRANCH Consumers continue to value personal interaction at the branch—and not just for transactions.
• 83% are interested in branches that offer more financial and advisory services1
• 26% would leave their current institution if advisors were removed from branches1
• 80% prefer opening a deposit account at a branch2
• 75% prefer applying for a loan at a branch2
• 56% believe branch location is important when selecting an institution3
BE MOBiLE Mobile services are must-have offerings to appease
technology-hungry consumers—especially Millennials,
who will account for 40 percent of total transactions by
2017. Millennials are 33 percent more likely than Boomers
to use mobile banking functionalities like:4
1. Cisco® Internet Business Solutions Group, 2012.
2. “Forrester/Diebold Research,” Forrester, Diebold, 2011.
3. CEB TowerGroup, 2011.
4. “Omnibus Survey,” Forrester, Diebold, Fiserv, 2012.
DON’T GET LEFT BEHiND
To meet customer expectations, financial institutions need
to keep pace with technology. And that pace is rapidly
accelerating. The Apple® iPad® took a mere 18 months to
go mainstream, compared to 50 years for the telephone.
Mobile reMote deposit capture
person-to-person payMents
debit card-locking security features
cardless transactions
routine transactions simple information needs
detailed information needs simple problem resolution
financial planning, advice and sales customer service and problem resolution
physical brand presence
Mobile phone
tablet
laptop
atM
phone
branch
Ric
hnes
s o
f E
xper
ienc
e –
Any
tim
e C
onv
enie
nce
Richness of Experience – Deeper Relationships
technology
50 years |
25 years |
| 18 months
Mainstream acceptance
13 years |
| 3 years
telephone
television
Mobile phones and pcs
apple® ipod®
apple® ipad®
4
5
FivE REASONS YOu CAN’T AFFORD TO WAiT ON MOBiLEALREADY A GAME-CHANGER, MOBiLE TECHNOLOGY’S iMpACT ON FiNANCiAL SERviCES HAS ONLY juST BEGuN
Aite projects the number of U.S. consumers accessing bank accounts via mobile devices will increase from 33 million
to 96 million by 2016. More importantly, customers are increasingly relying on the mobile channel as their primary form
of communication. If that’s not enough, here are five reasons financial institutions should adopt mobile banking in 2013:
1. CONSuMERS ARE DEMANDiNG iT
Mobile banking offerings have become
deciding factors for new customers. With 6.4
billion mobile transactions conducted in 2011,
TowerGroup predicts this will grow to 17 billion
by 2015. But customers want more than the
basics. Mobile payments, merchant coupons,
remote deposit capture, person-to-person
payments and ATM transaction pre-staging are
just a few of the advanced options financial
institutions can offer customers.
2. iT’S COST-EFFECTivE
Like other self-service channel technologies,
the mobile channel reduces transaction costs.
According to TowerGroup, a typical mobile
transaction costs 86 percent less than at a
branch and 95 percent less than with a call
center agent. On average, mobile transactions
are even one-third the cost of ATM transactions.
3. MOBiLE iNTERCONNECTS CHANNELS
Providing a seamless experience
anytime/anywhere, mobile banking can
help financial institutions integrate channels
and offer consumers a consistent experience.
Creating a similar look and feel for online and
mobile platforms is a start, but financial
institutions can also tie branch and ATM services
into the increasingly popular mobile channel.
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4. ANYWHERE/ANYTiME ACCESS
DEEpENS CONNECTiONS
Allowing consumers to access their financial information
anytime/anywhere also gives financial institutions unique
opportunities to connect with customers. A mobile app can
be a marketing device, allowing financial institutions to
present new offers when consumers are actively thinking
about banking. Based on real-time transactional data and
mobile GPS technology, financial institutions can also analyze
critical data about where and when consumers access certain
types of information—essential information for marketers.
5. MOBiLE CONTiNuES TO EvOLvE
Mobile adoption continues to grow quickly toward the
proverbial tipping point. As technology evolves, financial
institutions will experience a rapid increase in usage and
opportunities to integrate. Those financial institutions
that wait on mobile offerings will fall behind, missing an
opportunity to engage customers before they look elsewhere
for mobile banking that meets their needs.
Adoption of mobile technologies and mobile banking is occurring faster than we’ve ever seen.
telephone dishwasher automobile Microwave Mobile phone color tV Mobile oven banking
30
25
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10
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0
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Time for innovations to reach 10% of available users
MOBiLE TRANSACTiON SCHEDuLiNG AT THE ATM puTS MORE CONTROL iN CONSuMERS’ HANDS
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“In my ideal, in-branchself-service experience,I want to feel in control.I don’t want to wait or torely on anyone else.”
I am informed. I am advised.I am protected. I am at ease.
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THE NExT “BiG THiNG” iN TECHNOLOGY: A SuCCESSFuL BRANCH TRANSFORMATiON iS GREATER THAN THE SuM OF iTS pARTSRAjA BOSE, SENiOR DiRECTOR, CONSuMER TRANSACTiON SOLuTiONS, DiEBOLD, iNCORpORATED
Financial institutions have been contemplating the “Branch of the Future” for more than a decade. However, dramatic
changes in consumer behavior, lingering impacts of the most recent economic downturn and the rapid adoption of mobile
technology over the past five years have significantly accelerated the need to take action and change their most expensive
distribution channel.
THE NEED FOR A CHANGE
Coming off the heels of a deep economic downturn and unparalleled regulatory constraints, financial institutions have been
under tremendous pressure to deliver improved and sustainable profitability. As traditional revenue streams have eroded,
many of them have turned to aggressive cost rationalization exercises to improve profitability. A key area of focus has been the
branch channel. However, this remains a challenging proposition as the majority of new accounts are still opened in branches.
Further, in most cases, the branch represents the primary and most effective way to communicate a financial institution’s brand
to their customers. Lastly, the reality is that many customers still prefer to visit the branch for specific transactions and consider
branch location when selecting a new banking relationship.
For years, financial institutions (FIs) referred to their digital channels (initially online and now mobile) as their “alternate”
channels. But, as current transaction volumes suggest, online and mobile are increasingly becoming customers’ primary channels
for routine transactions. And the branch, where we’ve seen a steady decrease in transaction volumes, is now actually the
alternate channel. And while the branch will continue to be the channel of choice for opening new accounts, seeking financial
advice and resolving complex problems, today’s branches don’t necessarily reflect this new reality. Specifically, the size of the
branch, the number of branches in an FI’s network and the role of the branch are not aligned with typical consumer behavior.
If the branch is central to complex, relationship-based transactions, it should be reconsidered from a staffing, design, operations
and technology perspective.
While digital channels have created greater convenience to customers and have reduced the cost to serve for some FIs, their
broad proliferation has, in some ways, diminished any differentiation that early adopters of these channels once enjoyed. In a
somewhat counterintuitive way, the branch has become the primary way for FIs to differentiate themselves from competitors.
To that end, FIs should look for opportunities to transform their branches in such a way that drives operational efficiency and
enables their staff to focus on what really matters—delivering the high-value service and advice customers want and need.
As many top retailers have realized, physical location still matters to most consumers. It’s why Apple® revolutionized the
retail experience, and now even Google™ and Microsoft® are contemplating retail stores. However, leading retailers have
also realized that a physical store not tightly integrated with its online and mobile presence quickly loses relevance with
today’s consumer. Examples of some retailers that have successfully bridged online/offline gap include BestBuy®, Banana
Republic® and Great Clips®. As a whole the retail financial services industry has not kept pace with top retailers in this
regard. Today, most branches are still digital “islands” — essentially disconnected from the FI’s online and mobile
channels. To make branches relevant for the next generation of customers, FIs must look for ways to better integrate
the experience across their digital and physical channels.
THE TRANSFORMATiON OppORTuNiTY
Many financial institutions are looking for the next “big thing” in technology to help them solve their branch challenges.
However, we believe the most successful branch transformations followed a balanced approach to upgrading branch staff
skills and goals, rethinking processes, making changes to the branch layout and design and lastly through the thoughtful
deployment of technology that enables many of these changes to occur. The reality is that most branch transformations
can be completed with today’s technology. They can be done using traditional ATM, teller cash dispensing/recycling
and two-way video conferencing. FIs can leverage the investments they’ve already made in facilities and technology
to create a more effective branch presence.
Branch staff will likely assume more “universal” roles within the branch and focus more on sales, complex problem
resolution and improving the customer experience rather than tending to routine transactions. While these roles will
require better qualified and more expensive staff, the incremental cost will be more than outweighed by lower attrition
rates, improved customer satisfaction and higher sales.
In conjunction with new staffing models, branch processes must be modified to enhance the customer experience that
FIs wish to deliver. Everything from how a customer is greeted upon entering the branch, to how they are directed to the
appropriate area to be served, to how cash is handled (or not handled) by staff needs to be rethought. These changes
should not only consider the end-customer experience but also how the branch can be operated more efficiently,
allowing branch staff to focus on what they do best—engaging customers.
While there have been attempts at revamping branches, generally, they amounted to adding a few sofas, serving coffee
DiEBOLD HELpS TRANSFORM uNivERSiTY FEDERAL CREDiT uNiON BRANCHES
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CONCiERGE viDEO SERviCES: CONSuMER- DRivEN SERviCES FOR THE BRANCHviDEO uSAGE BY FiNANCiAL iNSTiTuTiONS iS BEiNG RE-iMAGiNED THANKS TO CONSuMER ExpECTATiONS WiTH TECHNOLOGY
and putting aside some space for a children’s play area. Although these
elements are potentially attractive, we believe that changing the look and
feel of your branch should not only reinforce your brand (such as sofas and
coffee may do), but also facilitate ease of interaction with your customers
and make your staff’s job easier to perform. For example, one institution
wanted its staff to greet customers at the door as they walked in. They
installed floor-to-ceiling windows along two sides of its branch, enabling its
staff to see customers as they arrived in the parking lot and well before they
were at the front door. They were then able to be waiting for a customer
rather than rushing to the front as someone walked in.
Lastly, consider the technology your branch needs to enable these changes
to occur. Much of this will depend on your overall strategy. For example, one
FI may be highly focused on efficiency. In that case, the FI may opt for more self-service devices. It would modify its branch and staffing
model to encourage consumers to use self-service devices, resulting in reduced cost from potential staffing reductions. Another FI may
want to offer a high-touch consumer experience strategy, in which tellers continue to complete the transaction on behalf of consumers.
This FI may benefit from cash recycling technology that streamlines teller-based transactions. The reality is that most FIs fall somewhere
in the middle and would benefit from deploying a combination of these models.
MAKiNG TECHNOLOGY pERSONAL
On the surface, interfacing with ATMs and online and mobile banking platforms appears to be highly impersonal. There’s no familiar
face greeting the customer. There’s no conversation. No rapport. Yet the self-service banking experience can still be personal. It’s more
than an ATM or online interface simply knowing a customer’s name or remembering his or her transaction preferences. It’s about
enabling customers to complete efficient, reliable transactions that emulate a human interaction.
For example, ATM deposit automation technology allows a customer to complete cash and check deposits in much the same way a
teller does. And when it comes to resolving issues, such as temporarily increasing an ATM withdrawal limit, two-way video at the ATM
can connect customers directly with live representatives. Customized ATMs can even offer the ability to print checks at the terminal.
Essentially, the experience you offer your customers is the “face” of your institution. In each of the above cases, customers are
interacting with a machine, yet they are able to perform tasks that were once relegated to the branch. Similar experiences extend to
online and mobile channels, where customers can easily make remote deposits, check account balances and transfer funds.
Beyond the technical capabilities of new technology, banks should also consider how they deploy new solutions. We have seen
numerous instances of an FI’s simply installing new technology and expecting that customers will simply adopt a new way of transacting.
A more successful approach entails truly understanding your customers, including demographics, transaction profiles and propensity
to use new technology among others. Once you understand your customers (which will likely vary by markets), you can develop a
comprehensive plan that includes elements such as employee education, consumer marketing, changes to pricing and incentives and
live support.
The industry is rapidly moving to automate more functions that are performed within branches. However, given the relative low
adoption rate among customers of capabilities already available and deployed today, there is ample room for improvement. However,
if FIs look at branch transformation more holistically and begin to make changes in staffing models, processes and branch design, they
will be well-prepared as technology improves — as it inevitably will.
Two-way video allows for more complex transactions at an ATM or kiosk
Two-way video technology can increase operational efficiency, improve consumer experience and boost growth and retention
The right partner can optimize adoption of new video technology
CONCiERGE viDEO SERviCES FROM DiEBOLDWatcH Video
DiEBOLD MiLLENNiAL-iNSpiRED ATM CONCEpT WatcH Video
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Over the next few years a number of required changes are coming to the self-serve channel. A mix of payment card
industry (PCI) compliance requirements, technology shifts and supplier support changes will necessitate upgrades to your
self-service equipment and/or reevaluation of deployment strategies in 2013, 2014 and beyond. Diebold is here to help
with Operation 4-1-1. Receive four necessary upgrades, from one trusted source, with one request.
THE 4-1-1 ON WiNDOWS 7 HARDWARE MiGRATiON
Most ATMs currently run on a Microsoft® Windows® XP operating system, which has become an industry standard. On
April 8, 2014, Microsoft will no longer support Windows XP, according to its lifecycle policy, focusing on Windows 7
instead. As a result, operating system upgrades on all ATMs are necessary to ensure you can receive technical support
for your terminals and remain PCI-compliant.
THE 4-1-1 ON EMv ADOpTiON
The distinguishing feature of EMV (Europay, MasterCard® and Visa®) is that the consumer payment application is resident in
a secure chip that is embedded in a plastic payment card, often referred to as a chip card or smart card, or in a personal
device such as a mobile phone for future applications. The chip contains the information needed to use the card for
payment and is protected by various security features. It can also facilitate robust authentication, which can significantly
reduce fraud rates at the point of sale or ATM.
FOR ONGOiNG upDATESVisit the Regulations & Compliance site on: www.diebold.com
THE 4-1-1 ON pCi (pAYMENT CARD iNDuSTRY)
The PCI Security Standards Council’s mission is to enhance payment account data security by driving education
and awareness of the PCI Security Standards. Encrypting PIN Pads have been required on ATMs for some time as a
means of maintaining the security of a terminal user’s PIN, but have evolved over time to provide increasingly complex
security. In order to remain PCI-compliant, ATMs installed or moved after April 2014 will need to
have a new, more robust EPP, known as EPP7, which will be released for network certification in mid-2013.
THE 4-1-1 ON ADA COMpLiANCE
The Americans with Disabilities Act has already been affecting your operations, hardware layout and design parameters
for some time now, as you have sought to meet all federal guidelines for enabling consumers with special needs to carry
out financial transactions effectively. As it has done for the past several years, Diebold will continue monitoring for any
legislative or judicial adjustments to the ADA that might affect your business. Diebold remains committed to determining
exactly what is required of FIs and how they can remain compliant as efficiently as possible. If your hardware is not
currently in compliance with federal mandates, Diebold can make any adjustments necessary as part of
Operation 4-1-1 upgrades to your units.
DiEBOLD’S OpERATiON 4-1-1 | pROACTivE pREpARATiON FOR SELF-SERviCE CONvERGENCEWatcH Video
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CONTiNuE THE CONvERSATiONAccess valuaBle insight throughout 2013–2014
Diebold is committed to providing financial institutions with actionable insight that can help them create a distinctive
competitive advantage in the marketplace. Whether it’s consumer, regulatory or marketplace insight, if it’s important to your
business, it’s important to us. It’s why we’ll bring you access to the content within this interactive eBook—as well as a variety of
other insightful pieces—throughout 2013–2014.
As we work together leveraging technology to humanize service, let’s continue the conversation. Join us to talk about how
technology can enable you to expand offerings while enriching the customer experience.
GET THE LATEST NEWSVisit our newsroom for information about the latest technologies and trends: http://news.diebold.com
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