ABA Webcast: Next Generation Financial Sites

1. ABA Webcast:Next Generation Financial Sites Cathy Graeber Senior Analyst Online Financial Services Forrester Research

2. Agenda • What do consumers think of today’s financial sites? • Why do financial sites fall short? • Why is this a problem? • What will next generation financial sites look like? • What are the specialized roles for financial firms? • How will successful banks partner to fill in the gaps?

3. The voice of the customer • Survey of 5,500 consumers with online access to their banking or brokerage accounts • Ranked 20 banks and 15 brokerages • Measures degree to which sites meet consumer expectations on 12 -14 attributes in 3 categories: 1) Tools and advice 2) Transactions 3) Customer support

4. Transactions ……... Transaction accuracy 3.46 Support……….. Helpfulness of phone reps 3.40 Transaction …. Timeliness of account info 3.33 3.25 Transactions …………….. Ease of applying Support ... Responsiveness of phone reps 3.19 Tools ………. Range of products available 3.18 3.15 Transactions …... Synchronization of info Support ………. Responsiveness to email 3.15 Support ... Helpfulness of email responses 3.08 Tools …………..….. Depth of product info 3.05 Tools ………. Usefulness of financial tools 3.03 Tools …... Relevance of recommendations 3.03 Support and tools barely meet expectations Average score of top 20 banks 1Much worsethan expected 2 3 5Much betterthan expected 4 Meetsexpectations Based on responses from 5,500 consumers surveyed

5. 1. Sites don't help users choose tools and content 2. Tools don’t integrate customer data XYZBank.com Mortgage Home-buying calculator center Whoa! 50 articles Enter estimated Hmm…howmuch do Ihave in mysavings? down payment about buying a first home, and 3 different mortgage calculators! 3. Account access interfaces are isolated from the rest of the site 4. Online service is weak, driving users to more expensive channels XYZBank.com Balance Mortgage information Pre-approval $43,000 What's the difference between a fixed and variable rate? I need to call customer service OK, I found howmuch I have -- howdo I get back to the calculator Why sites fall short: The user experience is broken

6. How did sites get in this predicament? • Misguided priorities • Mismatched goals and metrics • Misaligned organizations

7. How well does your site meet customer expectations? ……..…… 3.5 Customer service 37% ………….…... 3.8 Usability 33% ……………….….... 2.5 27% Personalization 17% Channel integration Site redesign 17% …………………….…………... 3.5 13% Content 10% Measurement Account aggregation 7% ……...………………...……………... 3.1 Interactive tools 7% ………………………….………………... 2.4 Online advice 3% 1 = Much worse than expected, 5 = Much better Priorities are misguided What are your top priorities for your site? Percentage of 30 financial firms responding

8. Enrich existing customers 53% Acquire new customers 40% Offer wide variety of products 30% Retain customers 30% Improve customer satisfaction 23% Offer an easy to use site 23% Integrate multiple channels 20% Cut costs 13% Generate traffic 10% Goals and metrics are mismatched What are the business goals for your site? Percentage of 30 financial firms responding

9. Site traffic 67% Usability testing 60% Focus groups 60% Third party feedback 57% Customer surveys 50% Customer feedback 33% Acquisition rate 33% Revenue generated 20% Retention rate 10% Goals and metrics are mismatched How do you measure the success of your site? Percentage of 30 financial firms responding

10. Channel integration 33% Lack of resources 27% 23% Understanding customer needs 20% Setting the right priorities Making the site easy to use 17% 13% Keeping up with business change 13% Acquiring customers Keeping up with new technology 10% Balancing growth with profitability 10% Being innovative 10% Organizations are misaligned What are the greatest challenges for your site? Percentage of 30 financial firms responding

11. A formula for customer dissatisfaction • Misguided priorities + • Mismatched goals & metrics + • Misaligned organizations = A broken user experience Why is this a problem?

12. The pain of serving new online consumers • The early adopters were much more forgiving • The mainstream need easy to use sites and synchronized channels • The affluent require objective advice online • Young consumers want a seamless process What will next generation sites have to accomplish?

13. Next generation financial sites Guide users through decisions with clear language and actionable recommendations Contextualizedguidance Preemptivesupport Intelligenttransactions Anticipate problems and service needs before they arise Incorporate customer profiles, data, and preferences when transactions are initiated

14. Examples The next generation user experience 1. Contextual guidance Wells FargoResource Centers put content and tools together in groups that apply to specific customer segments. PNCLearning Link groups articles and calculators by financial topic and consumer life stage, then lets user choose the view that works best for him. Quicken.comOne-Click Scorecard lets users see how a stock measures up against four investment strategies. TD WaterhousePortfolio Planner recommends specific funds based on the amount a consumer investor has on hand, as well as her goals and investing style. XYZBankHome BuyingCenter Welcome back! Last time you filled out a financial goal planner you indicated you were looking for a house. Would you like to try our novice or advanced calculator?

15. Examples The next generation user experience 2. Intelligent transactions WingspanBank.comPre-populated online account applications with the name, address, and phone number of existing customers who wanted to add new products. BankOneAlerts customers to new bills as soon as they log on, then lets user pay up to three bills at a time. Key BankLets customers pay multiple bills with one click from one screen and shows account balances on transfer and bill payment pages. AmeritradePuts a Quote look-up box at the bottom of every screen, letting users trade any stock in two clicks. CalculatorResults You’re in good shape to buy a house -- would you like to start the pre-approval process?

16. Examples The next generation user experience 3. Preemptive support CitibankUses a “Learn More About …” window on MyCiti pages to alert users to new features and offers tips and tricks that can eliminate problems. Datek Online“Ask Datek” lets customers search for answers using natural language and displays questions asked by other users. Juniper BankAlerts customers via email, pager, cell phone, or PDA when a balance runs low or a bill is due. MortgagePre-Approval Many customers ask about the difference between a fixed and variable rate …..

17. What they do Who will do it Banks, Schwab, AmEx Advisors Orchestrate the customer experience Attracter Aggregate suppliers and objectively match buyers Lending Tree, Financial Engines, Fidelity Funds AmEx Blue, Chase Mortgage, Turbo Tax Design and deliver financial products Digital Insight, Checkfree,Metavante Design and deliver technology products Specialized Roles For Financial Firms Matchmaker Transformer Enabler

18. Travelers Salomon Smith Barney Citi Visa Quicken Insurance Smart Money Credit Quotes GEICO Datek NextCard Specialists will partner freely Citi

19. Overspend Few transact finance online Access to new customers Operate at arm’s length Acquisition costs higher Lower acquisition costs Don’t differentiate themselves Reduced processing costs No ROI in sight Today’s Online Partnerships Don’t Work Financial Service Providers Promise Reality

20. Plans For Partnering In Financial Services Will you partner more in the future, and why? Access to new offerings 38% Shared costs and risks 32% Don’t know 14% 22% Partner has more expertise More Speed-to-market 20% Less 80% Technology makes it easier 16% 6% Access to new markets 14% Percent of 50 FIs interviewed (multiple responses accepted)

21. What Data Do You Share With Your Partner? 34% Don’t share data 32% Aggregated product usage data Data to complete the transaction 24% 14% Customer demographic data Product feedback and quality data 8% Percent of 50 FIs interviewed (multiple responses accepted)

22. Visibility Transparency Accountability Partners see a single view Customers see a single All parties work toward a of the customer view of the partnership single set of objectives • Shared segmentation • Common workflow • Shared risk and reward and promotions spanning partners • Combined modeling of • Innovative product • Partner-friendly internal customer data combinations incentives • Integrated sales • Single point of • Partnerships run as processes customer contact profit centers Improved close rates on Improved customer Improved internal promotions and cross-sells satisfaction and loyalty commitment to the deal Three Keys For Successful Partnerships What is it? What does it require? How does it pay?

23. Are there specific customer segments you excel at attracting? Attracter Matchmaker Do you refer customers to competitors? Which products have an operational competitive advantage? Transformer Could back-office or technology functions be profitable as stand-alone business units? Enabler Evaluate your customers and capabilities

24. Create Successful Partnerships • Take a hands-on approach to partnerships • Collaborate to uncover the needs of distinct segments • Combine predictive models to improve results • Make partnerships transparent to the customer • Mutual accountability builds internal commitment

25. Thank you Cathy Graeber 415-848-1308 cgraeber@forrester.com www.forrester.com