May 2016 Issue 725 www.retailbankerinternational.com WHAT ARE PEOPLE WATCHING? TV BANK ADVERTISING: WINNERS AND LOSERS ● DISTRIBUTION: North American Mobile Wallets ● DIGITAL: Moven ● EVENT: RBI Asia Trailblazer Summit 2016 ● TECHNOLOGY: Artificial Intelligence RBI 725.indd 1 22/04/2016 16:34:06 Multichannel digital solutions for fi nancial services providers To fi nd out more about us please visit: www.intelligentenvironments.com Intelligent Environments is an international provider of innovative mobile and online solutions for fi nancial services providers. Our mission is to enable our clients to always stay close to their own customers. We do this through Interact®, our single software platform, which enables secure customer acquisition, engagement, transactions and servicing across any mobile and online channel and device. Today these are predominantly focused on smartphones, PCs and tablets. However Interact® will support other devices, if and when they become mainstream. 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IE RBI final design.indd 1 17/09/2015 11:21:32 Retail Banker International EDITOR’S LETTER CONTENTS 2 TECHNOLOGY: ARTIFICIAL INTELLIGENCE Has account switching Edwin van Bomme,chief cognitive officer at IPsoft, considers the impact that artificial intelligence could have on switched on? the banking sector, both in the front- and back-ends 3 DISTRIBUTION: NORTH AMERICAN MOBILE WALLETS Robin Arnfield reports on the wide ake a bow Santander, Halifax and bills for £3 a month. variety of mobile wallets available in Nationwide, the big winners in the North America. Despite a wide selection latest account switching stats Efma and Capgemini report on customer on offer, customers still feel undersold on this solution T A monthly record 124,000 plus UK experience customers switched their current account in As RBI goes to press, the fifth annual World 6 MARKETING: TV ADVERTISING March, highlighting the success of a new ad Retail Banking Report from CapGemini and Patrick Brusnahan speaks to Nielsen and examines the effectiveness of campaign at the start of the year promoting EFMA comes to hand. banks’ adverts in the UK. While some the seven day switching initiative. As ever, the report is a good read. have made strides in this arena, there Only around 2.5% of current account Some positives: retail banks have acceler- are still a few with a lot to learn users switch per year; by contrast 3.4 mil- ated their drive towards optimising the cus- 8 DIGITAL: MOVEN lion UK customers switched their electricity tomer experience and that has resulted in an Robin Arnfield talks to Vincent Bahk, Moven’s Chief Customer Officer, about provider in 2015 and 2.7 million switched increase of 2.9% in the CapGemini Custom- the New York-based neo-bank’s offering gas provider. er Experience Index (CEI). and how it hopes to change the face of the sector However, for the first quarter of 2016, As for some negative findings-take your 10 AL DIGIT : BRACKET 309,678 switches took place, up 20% com- pick. Key takeaways include one killer. Alexander Atkins investigates how the pared to the fourth quarter of 2015 and 10% Despite the rise in the CEI, profitable cus- uses of the public cloud have developed more than the same period last year. tomer behaviour has improved only margin- and how financial institutions are The ad campaign was badly needed with ally. beginning to see its true potential account switching rates remaining stubborn- The report also discusses the highly topical 11 DEBATE: DIGITAL BANKING CLUB ly low. Overall, only 1.06 million switches issue of fintechs and their relationship with In the first Digital Banking Club debate were completed in the 12 months to end financial institutions, the topic for debate by of 2016, banking experts assembled to discuss what the financial sector in March 2016 compared with 1.13m in the the by at the upcoming Digital Banking Club the UK could learn from its European prior 12 months. Live Debate in June. brethren. This ranged from the value And the winners: well, the most up to date According to CapGemini, fintechs are of a high quality branch network to the problems regarding regulation. Patrick data on a bank by bank basis covers the three making increasingly significant inroads with Brusnahan writes month period to end September last year and customers, yet the vast majority of banks 14 EVENT: RBI ASIA TRAILBLAZER SUMMIT Santander is the big winner by a distance. admit they are not adequately prepared to 2016 Between July and September, Santander manage this emerging threat. The RBI Asia Trailblazer Summit 2016 attracted an additional net 51,000 customers The report states that nearly two-thirds of – hosted in Singapore – featured panel- lists from start-ups and banks operating ahead of Nationwide (+15,000) and Halifax the 16,000 retail banking customers polled across the region, who discussed the (+11,000). are now using fintech products or services, banking model of the future in Asia. Xiou Ann Lim reports on the event The only other brands to show a net gain and are much more likely to refer friends and 16 OPINION: TEMENOS were TSB (+3,300) and Tesco Bank (+600). family to their fintech provider (55%) than Ben Robinson, Temenos’ chief Biggest losers: well RBS NatWest lost over to their bank (38%). marketing and strategy officer, 2,000 per week (down more than 27,000 for Nearly two in three of the banks execs examines how PSD2 might have a more the quarter) just ahead of Barclays (-25,000) surveyed by CapGemini say that they need positive effect than most people assume and Lloyds (-10,000). to view fintechs as partners while only 18% 20 GUEST COMMENT: ALLIED WALLET Switching figures released in the third and say that they plan to acquire fintechs or their EUROPE fourth quarters this year will be of signifi- technology. Steve Wilson, managing director of Allied Wallet Europe, argues that the cant interest given recent product changes at It will be interesting to see how the stats in only way to receive huge rewards is to Santander and RBS. this report compares to the attendees at the take huge risks. Otherwise, what’s the In January, the monthly cost of Santand- DBC debate when they are polled. point? er’s 123 current account more than doubled from £2 to £5 a month while last October, RBS launched a 123 type product, the RBS Reward account. The latter product gives Douglas Blakey customers 3% cashback on seven household [email protected] www.retailbankerinternational.com May 2016 y 1 RBI 725.indd 1 22/04/2016 16:34:11 TECHNOLOGY: ARTIFICIAL INTELLIGENCE Retail Banker International Can AI breathe new life into banking relationships? Edwin van Bomme,chief cognitive officer at IPsoft, examines artificial intelligence and cognitive technology and whether it can make a difference in the ever-changing banking sector. With a more demanding consumer emerging in the industry, could this satisfy their growing list of needs? etail banking is facing the deepest level With new capabilities that can optimise tunity in decades to establish new operational of disruption in decades. Shifting cus- value rapidly, banks have a fighting chance to models. Many of the reactive service elements tomer needs and a generation of mil- both compete and team with fintech entrants can be automated at a fraction of the cost. In R lennials resistant to traditional banking and disruptors that have quickly gained mass the back office, robotic process automation methods are challenging established models. appeal amongst customers of all groups. (RPA) is already being used to populate data After years of change, banks need to plan for a entry and increasing processing speeds for all fundamental rethink in order to thrive in a rap- Winning customer loyalty in the age of agile elements containing structured data. With idly digitised, globalised and data-driven world . start-ups other technologies and policies, this will lead Although consumer relationships in the AI will only be impactful if customers are willing to a radical slimming down of back-offices retail banking space have never been particu- to engage with it and that means understanding organisations. larly strong, a recent survey revealed that all how to leverage AI to meet changing customer With customer patience becoming ever four of today’s leading banks are amongst the preferences. Banks can learn from fintech com- shorter, always available service will become a ten least loved brands by millennial consum- panies who are growing fast in popularity by necessity in order to maintain customer loyalty. ers. Today’s generation is dealing with a dearth addressing these squarely. Analysing successful In the US, research shows that more than half of jobs and personal debt. As a result, today’s fintech initiatives shows that above all custom- of consumers will hang up after waiting on hold hyper-connected consumer associates personal ers want cross-platform, 24/7 responses, ease for 6-15 minutes while 25% will cut out of the finance with crowdfunding, virtual currencies of use, and low cost.