BBVA Innovation Edge. Customer Experience (English) by Centro de Innovación BBVA

NOVEMBER 2013

Customer Experience

Designing customer experiences for value

also in this issue

Trending issues Technology trends

Customers at the Front & Center of Business Customer Experience & Banking Hello Omnichannel! Omnichannels for FSs

Corporate social responsibility at the sales coalface â&#x20AC;&#x201C; no more only 'what's in it for me'

Customer experience management (CX) will replace CRMs

Customers control the buying process

Salespeople become financial managers

The rise of smartphones in sales

Marketing (as we know it) is dead

Breaking the chain of ignorance, upping the pace of transformation

Empathy, the new sales edge

The university of selling

Instant access to solutions

Sales leadership in uncertain times; stop managing and start leading

Delivering real value beyond product and price

Customers at the Front & Center of Business Changes in technology are forcing change onto business models. We are moving away from product-centric models and moving towards customercentric models. Leading companies are discovering ways to harness this shift by placing customers at the front and center of business.

Ready for customer-centricity Customers are living increasingly digital lives, with access to technology and information that enable them to make better and more-efficient decisions across their day-to-day interactions with companies and other individuals. Understanding the underpinnings of this digital life, the ecosystem that is driving customer adoption and how this integrates into existing face-to-face interactions will be key to banks and financial services companies flourishing through the next five years. Nexus of Forces: the convergence of major technology trends; setting the table for the post-product era: Welcome to customer-centricity. Source: Gartner | The Nexus of Forces: Social, Mobile, Cloud, and Information, June 2012 Gartner | Agenda Overview for Banking and Investment Services, January 2013 image: i95dev | Applying Gartnerâ&#x20AC;&#x2122;s Nexus of Forces to Retail, March 2013

Behaviour

Information Social

Delivery

Access

Cloud Context

Mobile

Customers are now in control Customers now hold the power in their relationships with banks. They are more connected, vocal, and on the lookout for stronger relationships than ever before.

They want a partner in their daily lives, not just a product or service

Source: EFMA/Peppers&Rogers Group Customer Experience in Retail Banking, 2010

People are the new channel In a digital and social age, pipes are less important. People are the channel. You don’t own or rent them. You can’t control them. You can only serve and support them. This new world is disorienting because pipes and people work very differently as channels. Pipes flow out; people flow in. Content is pushed out through pipes, but pulled in through people. This reversal is shifting the balance of power.

You can only serve and support them!

Flow in! You can’t control them!

Flow out!

Content is pulled in through Content is pushed out through!

Source: Harvard Business Review | People Are the New Channel, April 2013

CX (Customer Experience) is increasingly a top of mind issue Competitive differentiators of the past—manufacturing strength, distribution power, and information mastery—have each been commoditized and are now easily accessible to every company (and, let’s face it, any enterprising individual with a smartphone). This has led to mass digital disruption and dissolution of traditional industry boundaries. The field of customer experience has risen to prominence over the past several years because we’ve entered a new era: the age of the customer. As we approach the end of 2012, the business discipline of customer experience, or CX, has gone mainstream. It’s acknowledged as a key competitive differentiator, even by those who prefer spreadsheets to sticky notes. Source: Forrester | Outside In: The Power of Putting Customers at the Center of Your Business, 2013

Other industries are focusing on customer experience Over the past seven years, Forrester has observed an increase in the number of companies that have a single executive leading customer experiences efforts for a business unit or entire company. Whether firms call them a chief customer officer (CCO) or give them some other label, Forrester sees an increasing number of executives accountable for customer experience efforts across a business unit or an enterprise. 17 % 16 %

Software

15 % 24 %

Professional services Financial services

9% 10 %

Utilities

Healthcare

Telecommunications services

Business services

Retail

4% 5%

Automotive

Consumer products manufacturing

Food manufacturer

5% 2% 3%

Transportation services

2% 1% 2% 2%

Art. entertainment and recreation Beverage manufacturer Industrial manufacturing

2% 1%

Commercial printing

Education

1% 1% 1% 1%

Media Restaurant, bars, and food services

1% 2%

Wholesale

1% 2%

2013 2012

15 %

The rise of the Chief Customer Officer CCOs will play an increasingly critical role for firms—not just in helping them differentiate based on great experiences, but also in adopting new business architectures and operating models made possible by new capabilities like digitally connected products and services, mobile computing,social networks, and dynamic partner networks. Source: Forrester Research | The Rise of the Chief Customer Officer, January 2011

Successful CCOs will move their company…

from a reactive find-and-fix mentality to one that aligns… …employees, partners, processes, and technologies… …around customer goals and uses emerging capabilities to deliver new value.

Customer Experience & Banking In a crowded banking market, just having good branch locations with high-level service and competitive rates are not going to cut it. Banks must find ways to remain relevant in the future Financial Services industry by embracing CX as a key element of a sustainable, competitive business model.

If I need banking services nearby, how many providers are there? Thereâ&#x20AC;&#x2122;s a lot!!! For example, in the US, there are more than 15,000 Financial Institutions; about 7,800 banks and 7600 credit unions. In a typical metropolitan setting, a depositor will have more than 50 banking providers competing to capture the deposit. Needless to say, just keeping the money safe isnâ&#x20AC;&#x2122;t going to be enough to win the business. At the end of the day, whoever consistently offers the best experience for the customer will win.

Just 5% deposits are held by banks competing in regions with less than 15 Fls. 89

Competition is intense, with 28 Banks competing in a typical geographic area NÂş MSA ( Metropolitan Statistical Area ) % Deposits

28 Banks competing in a typical MSA

66% of all deposits are held by banks competing in regions with more than 15 Fls.

41% 82

18% 40

38 Source: Optirate | Retail

Banking is more competitive than most believe, 2011

13%

7% 24 6

1% 4% Financial Institutions

< 10 11-15

16-20 21-30 31-50

51-75 76-100 > 101

And if we add direct banks into the mix ... Not only do consumers have lots of nearby banks offering financial services, they also have access to “direct banks” (aka “branchless”) ... and they are capturing the customers’ attention and their business. Source: TNS | Direct Banks and the Future of Retail Banking, 2012

Share of New and Lost Primary Bank Relationships BOFA, CHASE, WELLS

24 REGIONAL BANKS

Share of New Relationships

37%

34% 30%

41%

Share of New Relationships

35% 29%

30%

28%

Share of Lost Relationships

COMM. BKS & CUS

4 DIRECT BANKS

Share of Lost Relationships

Share of New Relationships

32%

8.0%

31%

Net share loss

28% 3.5%

Share of New Relationships

07% 2000

2006

2008

2005

2007

2009

2010

2011

Net share gain

Share of Lost Relationships

2012

2000

2006

2008

Proj

2005

2007

2009

2010

2011

1.0% 2012 Proj

Customer Experience & ROI Despite an increased focus on customer experience initiatives by banks of all sizes, new research has found that not all of these efforts may be resulting in revenue growthÂ ... Part of the problem is a lack of association by banks between customer experience initiatives and a tangible ROI. The important question is which activities lead to revenue growth.

Establishing a goal for customer experience improvement

Taking action on individual customer feedback

By evaluating activities being implemented at growth and non-growth banks, the research found that there were four fundamental customer experience practices that could be directly tied to revenue growth at financial institutions. The practices that were found to be most correlated with financial performance:

Utilizing a decisionmaking process that emphasizes the customer

Sharing a common definition of what a positive customer experience is

The two most important differentiators are CX PRACTICES OF GROWTH that growth banks have invested in technol- VS. NON-GROWTH BANKS ogy that helps to close the loop between cus- There are four foundational customer experitomers who report a problem, indicate a need ence practices that differentiate Growth Banks or recognize an employee who performs well. from their Non-Growth competitors. Growth banks and credit unions also have a set of criteria they follow when prioritizing, funding Source: Bank Marketing Strategy | All Bank Customer Experience Initiatives are Not Created Equal, June 2013 and resourcing customer-aligned initiatives.

Non-Growth Banks

Growth Banks

71% 60%

points

29%

21%

TAKE INDIVIDUAL ACTION CUSTOMER FEEDBACK

DISCIPLINED DECISION MAKING AROUND THE CUSTOMER

69% 63%

points

42%

29%

COMMON UNDERSTANDING OF CX

ESTABLISHED GOALS FOR IMPROVEMENT

The fastest growing financial services institutions are retailers, grocery store chains and automotive companies. They have adopted the omnichannel (approach) more aggressively than the banking industry Ralph Silva

Competition in the financial services is heating up Itâ&#x20AC;&#x2122;s getting rather crowded in the FS space. â&#x20AC;&#x153;Banks are no longer just competing with each other, they are also at war with a growing number of retailers and innovative start-ups that employ social media tactics to offer soughtafter services. In the retail world, a customer can order an item online and pick it up in the store. They can go into a store and ask for a particular item to be delivered to their home (or in the store). This type of service is no longer just multichannel or cross-channel; it is omnichannel â&#x20AC;&#x201C; a seamless and integrated experience for consumers without restrictions. It is exactly this type of offering that is lacking among banks. Indeed, there is little choice for banks but to change their strategy. Source: The Banker | Social Banking in the Omnichannel Era

The threat of disintermediation is real From a financial services institution’s perspective, disintermediation is a major risk in the current wave of transformation. Disintermediation happens when the current industry offering (and revenue model) becomes obsolete by failing to adapt to new technology enabled value propositions.

FinTech start-ups Telcos Tech Companies Retails

Source: Cisco | Winning Strategies for Financial Services Players in the Age of Mobile and Social Payments, February 2013

For banks, CX is a top priority Improving the customer experience was the foundation of almost all of the responses I received around 2014 strategic priorities. Whether we are talking about branch reconfiguration, mobile banking applications, back office operations, etc. banking industry leaders believe an improved customer experience is the key to growth. Jim Marous

This threat is coming from four major players

Source: Bank Marketing Strategy | Banking Leaders Discuss 2013 Strategic Planning Activities, July 2013 See also: Gartner | Gartner Says Customer Experience Enters Top 10 CIO Priorities for 2012, April 2012

Hello Omnichannel ! Which way should I go? In an omnichannel world, it doesnâ&#x20AC;&#x2122;t really matter; the customer will have a consistent, frictionless journey regardless of the road she chooses to take, accompanied by his preferred device and, increasingly, devices.

A little about today’s consumers Today, consumers take a multi-device/multichannel path “journey” to purchase and navigate seamlessly between various touchpoints, driven by the given context.

CONTEXT DRIVES DEVICE CHOICE Today consumers own multiple devices and move seamlessly between them throughout the day.

The device we choose to use at a particular time is often driven by our CONTEXT

Our

The amount of TIME we have or need

The GOAL we want to accomolish

LOCATION

Our ATTITUDE and state of mind

SEQUENTIAL USAGE Moving from one device to another at different times to accomplish a task

TOP ACTIVITIES PERFORMED WHEN SEQUENTIALLY SCREENING BETWEEN DEVICES

81% 72% 67%

63% 46%

Browsing the internet

Social Networking

Shopping Online

Searching for Info

Managing Finances

43%

Planning a Trip

Watching an Online Video

SMARTPHONES

TABLETS

PC / LAPTOP

Smartphones are the most common starting place for online activities

Inicio on a Started en un smartphone PC

Continued Continúa onen a PC un smartphone

Continúa Continued en una on atableta tablet

63% 30

66 30%

65 25%

65 29%

59 34%

47% 38

56 34%

Browsing Navegar por internet the internet

Social en Interacción redes sociales Networking

Shopping Compras online Online

Searching Buscar información for Info

Managing Gestionar las finanzas Finances

Planning Planificar un viaje a Trip

Watching an Ver un vídeo online Online Video

58 24%

58 27%

61% 19

60 23%%

56% 29

45 31%%

48 24%

5% 6

8 4%

4 5%

4% 6

3% 6

3 7%

8%% 10

Source: Google | The New Multi-screen World, August 2012

SMARTPHONES

TABLETS

PC / LAPTOP

Tablets are most often a starting point for shopping and trip planning

Started on a tablet

Continued on a smartphone

Continued on a PC

11%

15%

11%

Browsing the internet

Social Networking

Shopping Online

Searching for Info

Managing Finances

Planning a Trip

Watching an Online Video

10%

14%

Source: Google | The New Multi-screen World, August 2012

SMARTPHONES

TABLETS

PC / LAPTOP

PCs are most often a starting point for more complex activities

Started on a PC

Continued on a smartphone

Continued on a tablet

30%

25%

29%

34%

38%

34%

Browsing the internet

Social Networking

Shopping Online

Searching for Info

Managing Finances

Planning a Trip

Watching an Online Video

24%

27%

19%

23%

29%

31%

24%

10%

Source: Google | The New Multi-screen World, August 2012

A new path to purchase The new path to purchase is called customer decision journey. Marketing has always sought those moments, or touch points, when consumers are open to influence. For years, touch points have been understood through the metaphor of a â&#x20AC;&#x2DC;funnel.â&#x20AC;&#x2122; But today, the funnel concept fails to capture all the touch points and key buying factors resulting from the explosion of product choices and digital channels, coupled with the emergence of an increasingly discerning, well-informed consumer.Â

A more sophisticated approach is required to help marketers navigate this environment, which is less linear and more complicated than the funnel suggests. We call this approach the consumer decision journey. When marketers understand this journey and direct their spending and messaging to the moments of maximum influence, they stand a much greater chance of reaching consumers in the right place at the right time with the right message.

NOW THEN

Source: McKinsey & Co | Winning the customer decision journey, December 2011

NOW: The consumer decision journey

THEN

Evaluate Commit Consider Interest trigger

Decision trigger

Buy

Advocate

Experience

THEN: The purchase funnel Awareness Familiarity Consideration Purchase Loyalty

Customer journey as a differentiator Consumers connect with brands throughout the customer life cycle: they discover, explore, buy, and engage using a multitude of touchpoints. But some sources are more effective than others at driving consumers to the buy phase and have a stronger influence on the price they ultimately pay for their purchase.â&#x20AC;? â&#x20AC;&#x153;Marketers need to understand the iterative and circular consumer decision journey so they reach consumers in the place at the right time with the right message. Getting the basics right starts with the customer decision journey and it can mean millions of euros in growth or savings. Marketers can find millions of euros by being much more systematic and disciplined about extracting value from every stage of the customer decision journey. Sources: Forrester Research | Assess the Impact of Touchpoints Along the Consumer Path-to-Purchase, April 2013 McKinsey & Company |Â Major Bank, Major Digital Transformation, December 2012

Moving from point of sale to point of decision: the omnichannel A differentiating strategy in the omnichannel era is moving from the “point of sale” to “point of decision”

Omnichannel, an attempt at a definition In its most simple sense, omni-channel can be defined as ‘doing multi-channel properly.’ Omni-channel starts with understanding the needs and behaviors of your customers, then designing experiences that fit your brand into their natural habits and day to day lives. Finally, the right technologies are chosen and optimized to deliver the experiences in an efficient, enjoyable and consistent manner to the consumer.

Source: webcredible | Omni-channel Customer Experience, November 2012

Omnichannels for FSs For established financial services companies, the challenge of omnichannel lies in finding the â&#x20AC;&#x153;rightâ&#x20AC;? mix of branch banking, mobile, social, and video technologies to offer seamless banking experiences to customers in contextually meaningful way.

The era of omnichannel banking is here Omnichannel banking is different from the current “multichannel” approach in which banks encourage customers to use the least expensive channel, while delivering minimal crosschannel consistency and an inconsistent user experience. Omnichannel banking provides a consistent experience across channels to provide customers with seamless access to financial products and services—where and when they are needed. In the world of omnichannel banking, customers are in control of the channels they wish to use.

Branch

Omnichannel banking is not a hypothetical concept; instead, it is essential to addressing customers’ desire to control the time, place, channel, and information required to perform their banking activities. In developed countries, a rich mix of physical (branch) and virtual (web, mobile, and social) banking channels has prepared customers for the advent of a seamless omnichannel experience. Source: Cisco IBSG | Winning Strategies for Omnichannel Banking, June 2012

Social

Mastering digital channels Digital tools are a wonderful opportunity for banks to address customersâ&#x20AC;&#x2122; needs throughout the lifecycle. source: Bain & Company | Customer Loyalty in Retail Banking, 2012

Mastering digital channels: from a single moment of truth approach to a global client lifecycle approach Optimised channels all over the customer lifecycle Increasing client knowledge

Cross-selling Increase stickiness

Loyalty Develop client intimacy

Retention Be the main bank

ATM

Branch

Mobile

Social media

Tablet

Website (internet banking)

Source: Kurt Salmon study

High

Low

Elements of the omnichannel for banks

Hub and spoke

Large branch in high-traffic crossroad surrounded by small, largely automated branches

Kiosk

In grocery store or metro station, with staff member for quick service

Pay bills; buy airline tickets, stamps, transit system passes; or other third-party transactions

For remote deposit capture, alerts related to accounts, alerts on homes for sale, etc

With expert specialist for advice and consultation

Source: Bain & Company

Video connection to extended-hours tellers for transactions or problem solving

Smart ATM

Mobile applications

Video conferencing

Video teller machine

Touch-screen wall

To browse and get turorials on products

Credit center

Unstaffed center connected via video to remote office for credit applications

4 Pillars for transforming to Omnichannel banking

The new branch

Mobile

Social

Video

Source: Cisco IBSG | Winning Strategies for Omnichannel Banking, June 2012

4 pillars for transforming to omnichannel banking: the new branch The Old Branch Is Dead; Long Live the Omnichannel Branch The death of the branch has been greatly exaggerated. The most avid adopters of virtual channels—tech-savvy consumers—are also among the most frequent branch visitor. The branch continues to be the preferred channel for personal attention and advice, including new services. Customers are also open to having advice delivered to them virtually in the branch as long as quality and personalization do not suffer. Video will be at the center of branch transformation. Source: Cisco IBSG | Winning Strategies for Omnichannel Banking, June 2012

The percentage of US Studies indicate that 47% customers who prefer to bank of US banking customers believe online jumped to 62% in 2011, that a bank is not even legitimate up from 36% in 2010 unless it has branches, up from 41% only a year ago

Digital technologies will accelerate branch transformation The Branch Remains a Preferred Channel for Complex Products and Advisory 18% 2%

73%

13% 4%

1% 5% 1% Research/compare available products/services 5% 8% Pay for something

70%

28%

14% 5%

59%

2% 5%

70%

48%

20%

3% 8% 28% 1% 3%

Branch ATM/Kiosk Telephone

10% 9%

69%

1% 11%

10% 4%

76%

3% 7%

10% 5%

Social media (e.g. Facebook) Source: Cisco study, “Winning Strategies for Omni Channel Banking”, 2012

Transfer funds between accounts Obtain support from banking representative Receive/review account alert Manage my account

Bank´s mobile app/site Bank´s Website

Trade a security (e.g., buy/sell a stock)

75% 53%

9% 7%

5% 70%

3% 7% 39%

3% 4% 10%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Pay a bill Apply for a loan Check account balance

4 pillars for transforming to omnichannel banking: mobile The Promise of Embedded Banking in Consumers’ Lives As Internet access continues to improve over mobile devices, mobile is rapidly emerging as a banking channel. Preferred features for mobile banking include real-time expense tracking, mobile payments, and location-based commerce. Source: Cisco IBSG | Winning Strategies for Omnichannel Banking, June 2012

What Consumers want from financial institutions I would feel more confident in buying goods and services through a mobile phone if i coul do so through an app offered by my bank. Among smartphones owners Agree

Agree strongly

100% 80% 60% 40%

Spain

Germany

20% 0%

Source: Monitise/Future Foundation/nVision Base: 500 online respondents per country who are aged 16+ and own a smartphone, 2013

Mobile Capabilities Considered Most Valuable (North America) Respondents clearly have a preference for mobile banking, (however) it’s important to note that they do not want it to replace other channels. ... and are very supportive of using multiple services in an omnichannel environment. Source: Cisco IBSG | Winning Strategies for Omnichannel Banking, June 2012

Real-time expense tracking and money management

21%

Remote check deposit by talking a picture

Mobile phone acts as a payment mechanism, replacing cards / cash

14%

Shopping offers based on location

14%

Peer-to-peer payments Being recognized upon entry into a bank branch or retail store for more personalized services

Customer support from my bank using “natural language query”

38% None of the above Do not know

10% 0%

10%

20%

30%

40%

N= 1,671

4 pillars for transforming to omnichannel banking: social The Potential Is Here — When Will Banks Be Ready? Social banking is still lagging, as an overwhelming number of customers are reluctant to mix banking with social activities. A key reason for their reluctance is concern about privacy and lack of control over personal information. When it comes to going social, one segment stands out—younger, tech-savvy customers, especially those in emerging countries who tend to be dissatisfied with their bank. Source: Cisco IBSG | Winning Strategies for Omnichannel Banking, June 2012

Social is not another channel, it’s a whole new way of doing business and it’s key to customer experience. Customer experiences are about touchpoints and touchpoints are by definition social. Guess what is a key focus in 2013? Indeed, social. Not as ‘just another channel’ but as a whole new way of doing business. Gartner predicts that by 2014, refusing to communicate with customers via social channels will be as harmful to the relationship as ignoring their emails or phone calls is today. Our discussions with service providers and end users indicate that CRM services are shifting from a focus on point solution deployment centered on application suites, to a ‘customer experience’ that brings together customer information, analytics, workflows, mobility and social CRM disciplines into a richer, multichannel access to capture the entire customer journey. Source: Gartner | Analyst, Ed Thompson

4 pillars for transforming to omnichannel banking: video Seeing is Believing In banking, video is a key enabler of building trust in situations where humans are not physically available. Video is a key feature and experience enhancer for unmanned banking kiosks, afterhours multipurpose ATMs, and next-generation virtual banking delivered to homes and offices.

Video adoption in consumers’ personal lives or at work isn’t limited to younger, tech-savvy consumers. Cisco IBSG’s study indicates that Gen X and early-majority technology adopters are now solid believers in the role of video. Source: Cisco IBSG | Winning Strategies for Omnichannel Banking, June 2012

26 percent said that video conferencing with a remote expert would enhance their experience when the expertise was not available in the branch. This makes video a key feature and experience enhancer for unmanned banking kiosks, after-hours multipurpose ATMs, and next-generation virtual banking delivered to homes and Offices. Interestingly, those most interested in video as a banking channel tend to be GenX customers who are also in the early-majority group when it comes to technology adoption. This shows that video is ready for mass adoption above and beyond younger, tech-savvy consumers.

Global Snapshots A quick look at some examples of omnichannels in the financial services industry and other leading retail businesses and some notable providers of omnichannel technology solutions.

Experience Design

BANKS / FS l RETAILERS l PROVIDERS COMMONWEALTH BANK Pi is an open platform developed by Commonwealth Bank designed to optimise business payment processes and enrich customer experience. Sources: www.commbank.com.au/business/pi.html www.banktech.com/payments-cards/commonwealth-bank-aims-to-revolutionize/240003842 See the video: http://www.youtube.com/watch?v=oaWHgl4984E

BANKS / FS l RETAILERS l PROVIDERS FIDOR BANK Is built around web 2.0 and social media, allowing customers to experience their finances as a retail social experience. See the video: http://www.youtube.com/watch?v=Br39kKaCKxA#at=42

BANKS / FS l RETAILERS l PROVIDERS ALIOR BANK Unveiled Alior Sync, PolandÂ´s first digital bank, pitching it as a new type of financial services firm, available anytime, anywhere, for a young, digitally savvy customer base. Source: Finextra I Virtual branches and Facebook payments: Poland gets new digital bank, June 2012

BANKS / FS l RETAILERS l PROVIDERS MBANK Is a banking spin-off of BRE Bank, redesigned from scratch based upon four key tenets: real-time marketing, personal Financial management, Mobile banking and Social media. Winner of Finovate Europe Best in Show 2013 award with Efigence for their facebook and social platform. Source: Techcrunch I mbank and the future of responsive banking, July 2013

BANKS / FS l RETAILERS l PROVIDERS MASTERCARD AND VISA Just like AmEx members, Mastercard and Visa cardholders can sync their accounts with Foursquare to earn discounts at nearby restaurants and retail stores. Source: Fastcompany I Foursquare syncs mastercard visa merchant specials, February 2013

BANKS / FS l RETAILERS l PROVIDERS CRED At the heart of Moven is CRED, a credibility score that incorporates the social sphere to financial scoring: it´s not about your credit, it´s about your credibility. Vimeo I Cred Score from Movenbank, 2012

BANKS / FS l RETAILERS l PROVIDERS KIWIBANK Kiwibankâ&#x20AC;&#x2122;s Adaptive Experience Prioritizes DeviceSpecific Tasks. On a PC, the site focuses on products and Internet banking. On a mobile handset, it prioritizes mobilerelevant tasks and content. Source: Forrester I Digital Customer Experience Trends To Watch, January 2013

BANKS / FS l RETAILERS l PROVIDERS CITIBANK Implemented PolyVistaâ&#x20AC;&#x2122;s Cloud Solution to discover what drives and what impacts negatively customer experience during a loan application process. Source: Businesswire I Citibank Harnesses PolyVista Discovery Capabilities to Improve the Customer Experience, February 2013.

BANKS / FS l RETAILERS l PROVIDERS BNP PARIBAS Bnp Paribas mimicks the retail experience one might see in an online supermarket adding icons that denote various financial product categories, providing familiarity to the sales process. Source: Mapa Research www.maparesearch.com/brochures/MapaResearchDigitalSalesReport-Brochure-Apr13.pdf

BANKS / FS l RETAILERS l PROVIDERS NATWEST Natwest approaches the ideal proposition in providing direct access to customer support as users look to be leaving the sales journey. As a potential customer attempts to click out of an application, possibly in frustration, the web site provides a clickable link for direct contact with an advisor to help complete the journey. Source: Mapa Research www.maparesearch.com/brochures/MapaResearch-DigitalSalesReport-Brochure-Apr13.pdf

BANKS / FS l RETAILERS l PROVIDERS TESCO Tesco leads the way in addressing mobile grocery buyers with a range of apps and services that allow customers to shop on the go and have the items delivered at the door later or a GPS-enabled app that tells customers where in a store a certain product is. See the video: http://www.youtube.com/watch?v=JcgfgO3Vzmw

BANKS / FS l RETAILERS l PROVIDERS AMAZON AND WALMART Companies such as Amazon and Walmart provide users with temporary lockers to receive delivery of packages. Basically, you can go online, order all of the things that you want, and your items will show up in this locker rather than your doorstep. Itâ&#x20AC;&#x2122;s a convenience thing for sure, and the reason why Google bought Y Combinator company Bufferbox and the reason why a company like Swapbox can emerge. Source: Techcrunch I Walmart follows amazons lead starts testing locker delivery in retail stores, March 2013

BANKS / FS l RETAILERS l PROVIDERS HOINTER Is a fully automated store run on software algorithms and machinery that closes the gap between online and brick and mortar marrying digitalâ&#x20AC;&#x2122;s instant gratification with in-store benefits. Source: Psfk I How to close the gap between online and brick and mortar, May 2013 See the videos: http://www.youtube.com/watch?v=2ZjWwlzRYBM http://www.youtube.com/watch?v=r-9tYnXntrQ

BANKS / FS l RETAILERS l PROVIDERS MACY´S Is expanding their capacity to fulfill online orders from stores as part of its “omnichannel” push, essentially turning their hundreds of retail locations into local distributions centers. Source: Forbes I Macys, others turn stores into online fulfillment centers, January 2011

BANKS / FS l RETAILERS l PROVIDERS BRAUN Braun´s website is designed to disrupt the shopper experience dropping context as shoppers move between touchpoints: the “where to buy” function directs shoppers to retailer websites; however all context about the products that the shopper was researching is lost in the transition. Source: Forrester I Managing The Cross-Touchpoint Customer Journey, December 2012

BANKS / FS l RETAILERS l PROVIDERS BURBERRY Is a very good illustration of online-offline coordination: 60% of its customers shopped online and then picked up their products from the store. Burberrys new flagship store on Regent Street is currently the best example of truly omni-channel instore approach. Source: Webcredible, Omnichannel Report, 2012

BANKS / FS l RETAILERS l PROVIDERS BANKTRON Multichannel online banking product BANKTRON helps finance institutions to maximize cost savings and bring a unified user experience across different channels and devices, while retaining core legacy systems. See the video: http://www.youtube.com/watch?v=_bT3vMVeIV4

BANKS / FS l RETAILERS l PROVIDERS LODO SOFTWARE Provides a full range of integrated financial services using a powerful, predictive analytics engine to deliver a personalized customer experience anytime, anywhere, on any device. Source: Finovate I Lodo software launches d3 banking to help banks deliver a personalised customer experience, May 2013

BANKS / FS l RETAILERS l PROVIDERS SAP Completes Acquisition of hybris to Help Businesses Deliver Seamless Commerce Experience to Customers hybrisâ&#x20AC;&#x2122; Commerce Suite is an open, extensible omni-channel platform, with state-of-the-art product content management and unified commerce processes designed to give a business a single view of its customers, products and orders, and its customers a single view of the business. Sources: Forbes I Smoothing the kinks in your omnichannel strategy, August 2013 www.news-sap.com/sap-completes-acquisition-of-hybris-to-help-businesses-deliver-seamless-commerce-experience-to-customers/

BANKS / FS l RETAILERS l PROVIDERS IDINTERACT IDInteract Demand Exchange platform leverages Big Data analytics to pluck demand signals from a sea of social, mobile and customer relationship management (CRM) data sources and deliver realtime, context-aware insights for targeted customer engagement. Source: www.enterpriseappstoday.com/crm/dinteract-launches-demandexchange-cloud.html Cmswire I Customer Experience idinteract creates personas based on multichannel big data for targeted digital marketing, December 2012 See the video: http://www.youtube.com/watch?v=nVzJq-W-XGQ

BANKS / FS l RETAILERS l PROVIDERS SUNDAYSKY Enables organizations to dynamically embed customer-specific personal data and details into a video related to a product or service, and then deliver the custom how-to video for that specific client. Sources: Brandchannel I SundaySkyâ&#x20AC;&#x2122;s SmartVideo Transforms Consumer Data into Digestible Videos, June 2013 www.gartner.com/document/2428616 www.forbes.com/sites/petercohan/2012/10/15/sundayskysmart-videos-boost-customer-service-productivity/

BANKS / FS l RETAILERS l PROVIDERS WALKME Is an interactive online guidance system, enabling organizations to overlay on-screen â&#x20AC;&#x2DC;Walk-Thrus,â&#x20AC;&#x2122; onto their sites and apps. WalkMe encourages enduser self-service helping user complete complex tasks and making any online process intuitive. Sources: www.gartner.com/document/2428616 betanews.com/newswire/2012/10/26/walkme-worlds-first-interactivewebsite-guidance-system-announces-5-5-million-funding-round-from-gemini-israel-ventures-mangrove-capital-partners-and-giza-venture-capital/

GLOBAL SNAPSHOTS

the BBVA experience

BBVA & the Omnichannel We are living in the consumer’s era. With internet and the new possibilities technology provides, customers have more power than ever (empowered consumer). The only source of sustainable competitive advantage comes from having a strategy based on the “obsession” for understanding, delighting, connecting and serving customers.

ithin this reality, customers choose to interact with companies through any channel, at any time and from wherever they may be, in a simple, convenient and pleasant way - in short, they are demanding an omnichannel experience. To provide an omnichannel experience means to go a step beyond the multichannel, overgoing the concept of channels as “silos”, the connectivity gaps between channels and the limited supply in digital channels.

The omnichannel vision is already being applied in certain consumer-related areas, such as in the ROPO effect (research online, purchase offline), which describes the customer who researches on the internet and buys in the physical channel, or in some models developed in the distribution industry, such as the online purchase and in store pick up, or the purchase of geolocated deals.

How can we get an omnichannel experience?: Providing a seamless experience (“seamless journeys”) in those processes in which the client uses and combines several channels.

Developing a complete offering across all channels (“full channel choice”), with a strong focus on digital distribution channels (internet and mobile).

Generating a consistent experience regardless of the channel the client is using.

n banking there is no doubt that omnichannel is the way to go. The key is to be able to articulate this process and to generate a strategy that results in a differentiated omnichannel experience for customers, increasing their satisfaction, recommendation and engagement.

Based on a customer-centric vision, this strategy will be implemented with a clear message: “BBVA Banking Anywhere” (BBVA donde estés), which is the main message of the first global campaign for a bank in the omnichannel field.

BBVA wants to offer its customers the best way BBVA is a pioneer in having an omnichannel to access its products and financial services, vision and strategy. A strategy based on the in a fast and easy way, wherever they are and following pillars: with their channel of preference. BBVA wants to make sure its clients know that these services are available and that they understand their benefits – they can choose how they want to connect with us. This is the transformation path designed by BBVA to make the omnichannel vision happen.

Become real omnichannel, increasing sales and transactions in non-branch channels

Become the bank best valued in Customer Experience in all geographies, segments and channels (IReNe) Raise digital channels penetration in our client base and become leaders vs. competitors

Innovation Forecast

The journey towards customer centricity is really just beginning. Though we are continuously learning as we try to figure this out; here is our sharing, so far, on the customer experience framework, the design, and keys for survival in this new world.

The old framework

A new framework

One environment while performing a task. Segregated approach. Linear thinking:

Multidimensional context, Multi-device usage no constant environment. Holistic approach. Systems thinking

Personas (user profile)

Personas + “day in the life” + user journey

Contextual inquiry – ONE context

Multi-dimensional Usage scenarios

Single channel evaluation

Cross-channel experience analyses

Sitemaps, wireframes

Experience maps, systems models

Navigation design

Navigation design + cross channels connections

Design consistency

Design consistency + cross channel continuity

Efficient task design

Cross channel task breakdown

Platform & resolution optimized designs

Platform & resolution optimized + channel and device designs Source: Infosys | Finsights, January 2013

Key Takeaways: for thriving in the new paradigm

for designing CX

A few tips to help you thrive in this new paradigm:

A few tips to remember when designing CX:

w e n a s i e r e Th i s u b r o f k framewor ple o e p e r e h w ness el. n n a h c w e n are the t. s r fi m e h t t Pu

2. Consider Cus-

tomer experience as top priority.

s u c a e Think lik erms t n i t o n : s m tomer r e t n i t u b , s o l e c of si i v e d d n a l e n n a h . s n of c o i t c a r e t n i c i t agnos

4. New ways of think-

ing still need analytics and metrics. Identify CX initiatives that lead to tangible ROI and reward by customer-driven metrics.

1. Move from a line-

ar thinking framework to a holistic approach where there is no constant environment: multidimensional context, multi-device usage.

t u o b a t s Think fir n e h t , s d e e rn e m o t s u c y g o l o n h ec t e h t t u abo . r e l b a n e as

3. Organize around

the customer lifecycle.

4. Optimize

the journey, not the touchpoint.

Books &

publications

In depth A list of links to other useful tools and resources that you may find useful as a supplement to the information offered on the â&#x20AC;&#x2DC;Experience Designâ&#x20AC;&#x2122; report.

On the

web

Books & publications Accenture | Banking on Digital. Building Trust and Innovation in Financial Services, 2013. Accenture | The RE-banking Revolution. Innovative Practices from Non-banking Companies that Banks Can Use to Improve Customer Engagement, 2013. Bain & Company | Customer Loyalty in Retail Banking, 2012. CapGemini | The Future of Bank Branches. Coordinating Physical with Digital, 2013. Celent | Top Trends in Retail Banking 2013, 2012. Cisco IBSG | Winning Strategies for Financial Services Players in the Age of Mobile and Social Payments, February 2013. Cisco IBSG | Winning Strategies for Omnichannel Banking, 2012. EFMA/Kurt Salmon | Phygital and Other Digital Challenges for Retail Banks, 2013. EFMA/Peppers&Rogers Group | Customer Experience in Retail Banking, 2010. Forrester Research | Assess the Impact of Touchpoints Along the Consumer Path-to-Purchase, April 2013. Forrester Research | How Chief Customer Officers Orchestrate Experiences, 2013. Forrester Research | How to Engage Your Omnichannel Consumer. Brand Engagement the Consumer Way, 2013. Forrester Research | The Rise of the Chief Customer Officer, January 2011. Gartner | Agenda Overview for Banking and Investment Services, January 2013. Gartner | Ed Thompson, analyst. Gartner | Gartner Says Customer Experience Enters Top 10 CIO Priorities for 2012, April 2012. Gartner | Online Banking as a Discrete Channel Is Obsolete, 2013. Gartner | The Nexus of Forces: Social, Mobile, Cloud, and Information, June 2012. Google | The Customer Journey to Online Purchase, 2013. Google | The New Multi-screen World: Understanding Cross-platform Consumer Behavior, August 2012. Google | The Role of Search in Credit Card Shoping, 2010. Google | The Zero Moment of Truth for Credit Cards, 2011. Google | Understanding Credit Card Researchers, 2010. Harley Manning, Kerry Bodine and Josh Bernoff | Outside In: The Power of Putting Customers at the Center of Your Business, 2012. Harvard Business Review | People Are the New Channel, April 2013. Harvard Business Review | The Truth About Customer Experience, 2013. Infosys | The Multi-channel UX Model, 2013. Infosys | Technology insights for the Financial Services Industry, 2013. iProspect | Omni-channel: The Marketing Evolution That Changes Everything, 2013. Mapa Research | Digital Sales: Enhancing Existing Customer Relationships. Insight Report on Digital Sale Techniques across Different Channels (Internet, Mobile and Tablet Banking), 2013. McKinsey & Company | A Symphony of Separate Instruments: Cross-channel and Online Sales - CMO & Sales Office Forum: Multichannel Delivery, 2013. McKinsey & Company | Customer Journey Analytics and Big Data, 2013. McKinsey & Company | Major Bank, Major Digital Transformation, December 2012. McKinsey & Company | Winning the customer decision journey, December 2011. Monitise/Future Foundation/InVision | M-commerce: What Consumers Want from Financial Institutions, July 2013. Online Banking Report | FINovate Quarterly Q2 2013, 2013. PricewaterhouseCoopers | Rebooting the Branch. Reinventing Branch Banking in a Multi-channel, Global Environment, 2013. TNS | Direct Banks and the Future of Retail Banking, 2012.

Web AdExchanger | Google Is Pushing An Omni-channel Mindset. Are You Ready?, 2013. Bank Innovation | Increasing Customer Acquisition and Retention with Predictive Analytics, 2013. Bank Marketing Strategy | All Bank Customer Experience Initiatives are Not Created Equal, June 2013. Bank Marketing Strategy | Banking Leaders Discuss 2014 Strategic Planning Activities, July 2013. The Banker | Social Banking in the Omnichannel Era. Ben Evans | Twitter, canvases and cards, 2013. Financial Times | Big Data in the Spotlight as Never Before, 2013. FinExtra | ASB Bank Pilots Customer Video Conferencing Facility for PC and Mobile, 2013. Finovate Blog | Lodo Software Launches D3 Banking to Help Banks Deliver a Personalized Customer Experience, 2013. The Financial Brand | Experiments With Pinterest In Retail Banking Fail Miserably, 2013. Forrester | Outside In: The Power of Putting Customers at the Center of Your Business (video). Gallup | How Customers Interact With Their Banks, 2013. Martin Gill | Agile Commerce - That’s Forrester’s Word for “Omnichannel”, Right?, 2013. i95dev | Applying Gartner’s Nexus of Forces to Retail, March 2013. Inside Intercom | Why Cards Are the Future of the Web, 2013. Geoff Livingstone | What Comes First, Multichannel Integration or Social Business?, 2013. MIT Sloan Review | Competing in the Age of Onmichannel Retailing, 2013. Optirate | Retail Banking is more competitive than most believe, 2011. Chris Skinner | Project New mBank. Perhaps the World’s Most Innovative Online Banking, 2013. SmartCompany | The 12 sales trends that will drive 2013: Report sneak peek, December 2012. Brian Solis | The Conversation Prism, 2013. Wall Street Journal | Banks Using Big Data to Discover ‘New Silk Road,’ 2013. webcredible | Omni-channel Customer Experience, November 2012.

1 Trending issues

Summaries of the most relevant news of selected topics that have been published over the course of the period based on its relevance to the Banking industry. The summaries were prepared by the editorial board. Further information is made available for each given topic.

also in this issues

2 Technology trends

In the following section, we outline the upcoming technologies that will change everything, with predictions on what may come of them in financial industry.

Innovación

Highlighted in this section some of the actions in which BBVA Innovation Center takes part, on innovation and entrepreneurship. Through this section we also provide direct access to the BBVA Innovation Center events.

Trending issues

In this section, readers will find summaries of the most relevant news of selected topics that have been published over the course of the month based on its relevance to the Banking industry. The summaries were prepared by the editorial board. Further information is made available for each given topic.

Core Banking Platform

Mobile Banking

The Core Banking market is poised to grow through 2017; a modest 4% growth rate, steadily growing to a market size of $10.7B

Social Business

Though decision-making related to core banking technology is Â dependent on local circumstances, three global trends are observed:

New Formats

Mobile Payments CustomerCentricity Brands & Branding Crowd Finance App Ecosystem Gadgetology New Banking Concepts Big Data Future of Work DIY

1. Banks are increasingly willing to consider core replacements, whether big bang or phased (which is dependent on size). 2. Cost and customer demands for agility are key drivers motivating banks to finally make the switch. 3. Vendor products have matured enough that the trepidation banks have typically felt may no longer be warranted.

Global Market Share, in percentages, of leading core banking technology providers Celent analysis N= 1,276

Sopra ERI Accenture 3% 3% 2% CSC 4% Other 5% Infosys 6%

FIS 24%

SAP 6% TCS 6%

Temenos 21%

Oracle 6% Misys 14%

Trending issues

Core Banking Platform New Formats Mobile Banking

Learn about Banking at Allied Irish Bank’s The Lab, a digital banking showroom The space at the Lab is divided into five zones:

Social Business

1. The Quick Banking Zone: ATMs, card kiosks, phone booth, and social media wall.

Mobile Payments

2. The Product Zone: a showcase of AIB’s products, services, and innovations.

CustomerCentricity

3. The Mobile Banking Zone: dedicated to mobile banking, featuring an interactive table and a display of AIB’s mobile banking devices/services.

Brands & Branding

4. The Lounge & Learning Zone: an area to interact with experts, with a digital learning wall and play area for children.

Crowd Finance

5. The Business Banking Zone: for business customers to network and conduct meetings, with remote access to specialists

App Ecosystem Gadgetology New Banking Concepts Big Data Future of Work DIY

Customers now choose how they wish to interact with AIB in the way that suits them best, said a spokesperson.

Trending issues

Core Banking Platform New Formats Mobile Banking

The 10 Best Mobile Banking Apps for iOS & Android Based on a recent analysis of mobile banking apps of the top 53 US banks, here are the 10 best apps for each platform:

Social Business Mobile Payments CustomerCentricity Brands & Branding Crowd Finance

Top 10 Highest Rated Android Banking Apps iOSMobile Banking Apps 01 - USAA – 4.6 stars, 95% favorable reviews 1. RBS Citizens – 4.5 stars, 93% favorable reviews 02 - RBS Citizens – 4.5 stars, 97% favorable reviews 2. 4.0 stars, 91% favorable reviews 03Charter - AmEx –One – 4.4 stars, 91% favorable reviews 04 - Wells Fargo – 4.3 stars, 90% favorable reviews 3. KeyBank for iPad – 4.0 stars, 83% favorable reviews 05 - BofA – 4.2 stars, 88% favorable reviews 4. City National – 4.0 stars, 76% favorable reviews 06 - TD Bank – 4.2 stars, 88% favorable reviews 07 - Chase – 4.23.5 stars, 87% favorable reviews 5. Santander – stars, 83% favorable reviews 08 - BB&T – 4.2 stars, 87% favorable reviews 6. Associated Bank – 3.5 stars – 76% favorable reviews 09 - Regions – 3.9 stars, 80% favorable reviews 7. Huntington Bank for iPad – 3.5 stars, 75% favorable reviews 10 - Union Bank – 3.9%, 79% favorable reviews

App Ecosystem Gadgetology New Banking Concepts Big Data Future of Work DIY

Top Banking Apps Top 10 10 Highest Highest Rated Rated iOSMobile Android Banking Apps 01 - RBS Citizens – 4.5 stars, 93% favorable reviews 1. USAA – 4.6 stars, 95% favorable reviews 02 - Charter One – 4.0 stars, 91% favorable reviews 2. Citizens – iPad 4.5 stars, reviewsreviews 03RBS - KeyBank for – 4.097% stars,favorable 83% favorable 04 - City National – 4.0 stars, 76% favorable reviews 3. AmEx – 4.4 stars, 91% favorable reviews 05 - Santander – 3.5 stars, 83% favorable reviews 4. Fargo – Bank – 4.3 stars, reviewsreviews 06Wells - Associated 3.590% starsfavorable – 76% favorable 07 - Huntington Bank for iPad – 3.5reviews stars, 75% favorable reviews 5. BofA – 4.2 stars, 88% favorable 08 - US Bank – 3.5 stars, 71% favorable reviews 6. TD Bank – 4.2 stars, 88% favorable reviews 09 - Utrecht Bank – 3.5 stars, 69% favorable reviews 7. 10 - Bank of the West – 3.5 stars, 68% favorable reviews

Trending issues

Core Banking Platform New Formats Mobile Banking Social Business Mobile Payments CustomerCentricity Brands & Branding Crowd Finance App Ecosystem Gadgetology New Banking Concepts Big Data Future of Work DIY

8 Social Media KPIs to track & monitor By tracking the right KPIâ&#x20AC;&#x2122;s, your company will be able to make adjustments to your social media strategy and budget. Â Below, an industry expert shares her Top 8 KPIs for Social Media: 1. Number of Fans and Followers 2. Demographics and Location 3. Number of Active Followers 4. Likes and Shares 5. Comments 6. Mentions 7. Retweets 8. Traffic Data

Trending issues

Core Banking Platform

Consumers are very loyal to their favorite payment instruments

New Formats Mobile Banking Social Business

A recent study conducted by the Federal Reserve Bank of Boston reveals that consumers ‘almost never’ deviate from their favorite payment types, but that they also aren’t likely to use their top payment method all the time.

Mobile Payments CustomerCentricity Brands & Branding Crowd Finance App Ecosystem

Pay type by household income. 80% 70% 60% 50% 40% 30% 20% 10% 0% 5

9.8 15.5 20.7 28.3 34.7 39.5 43.7 47.7

55 57.7

71.1 82.3 85 91.7 103.5 110

Gadgetology New Banking Concepts Big Data Future of Work DIY

In regards to mobile payments and wallets, though consumers are hardwired to pay like they already pay, … they’re kind of willing to switch around a little bit within [payment types], that at least gives you the kind of beachfront for mobile to get in there, and for people [to] try it out.

Trending issues

Core Banking Platform New Formats Mobile Banking Social Business Mobile Payments CustomerCentricity

These 5 Customer-Centric habits enabled Sprint’s dramatic turnaround, helping the company to go from “zero” to “hero” in 5 years Listen Understand what customers value, act on their feedback Think Make smart, fact-based decisions

Brands & Branding

Empower Give employees resources and authority to serve customers

Crowd Finance

Create Produce new value for customers and company

App Ecosystem Gadgetology New Banking Concepts Big Data Future of Work DIY

Delight Exceed expectations, be remarkable.

Trending issues

Eleven “wow” stats that researchers and marketers should know about mobile. The stats tell us that mobile is just starting; people are loving it, offers richer data, and is a global phenomenon 1. Mobile broadband subscription growth averages 40% annually, climbing from 268 million in 2007 to 2.1 billion in 2013. 2. In 2013, there are almost as many mobilecellular subscriptions as people in the world, with more than half in the Asia-Pacific region (3.5 billion out of 6.8 billion total subscriptions). 3. More people have access to mobile phones than to toilets or latrines. 4. Similarly, more people are users of mobile devices than owners of toothbrushes. 5. Mobile usage makes up about 15 percent of all Internet traffic—and it’s not showing any signs of slowing down. Mobile is already huge, but it’s just getting started. 6. At the end of 2013, mobile search queries in South Korea are expected to exceed the number of PC queries. Mobile isn’t just a West thing. 7. Over one third (37%) of time spent consuming digital media is now spent on mobile devices rather than PCs. 8. In 2012, 72 percent of all newly-acquired mobile devices are smartphones. This is great news for researchers who would like to take advantage of the rich features of smartphones. 9. The average response time for emails is 90 minutes; for text messages, it’s 90 seconds. 10. Compared to traditional coupons, mobile coupons have 10x the redemption rate. 11. More than three quarters of the world’s mobile phones are located in the developiing world—and growth is set to rocket.

Trending issues

Can the big boys play the crowd financing game? Say hi to 2.0 Call it crowdfunding 2.0. Established companies are using Kickstarter and the like to launch new products, paid for by a built-in customer base before they hit the production line. … The appeal is not limited to raising funds. ‘Just as important, we’re looking to get feedback,’ he says. ‘This campaign is about market messaging and product viability. It’s forcing us to think about how this product should be sold.’

Trending issues

The EU is a player in the App Economy, producing 22% of world’s apps The App Economy in the EU28 countries generated revenues of €10.2 billion in 2012 and is projected to grow to €14.9 billion in 2016, according to VisionMobile. The European Commissioner, Neelie Kroes, pointed out the app economy is a great example of what happens if you create the right environment; give people the framework to create. Borderless, open, and as innovative as your imagination.

Trending issues

iPhone fans, fear not, as Apple’s response to Galaxy Gear is near With the introduction of iPhone 5s, Apple also launches the M7 chip, which runs alongside the new iPhone’s main A7 processor, (and) opens up opportunities for developers of health-monitoring gadgets and apps, as well as other connected devices. … (it) enhances the iPhone’s core capabilities, and also makes it a better hub for wearable accessories, whether they are made by Apple or anyone else. The M7 is an example of a clever way to start learning about wearables and what consumers want, without getting them to pay for [a dedicated device] right now,’ says Carolina Milanesi, mobile analyst at Gartner.

Trending issues

Seeing is Banking: video banking to enhance customer engagement According to a recent industry report, there are four reasons to adopt video banking: 1. The imperative for branch redesign. In response to business conditions, declining branch foot traffic, and growth in digital channel usage, banks must increase both the efficiency and effectiveness of the branch channel. Video can play a role. 2. Consumer acceptance. Once primarily a business application, mass market usage of video is burgeoning. Its appeal extends well beyond Gen-Y. 3. Customer engagement. As more customer interaction occurs in digital media, banks must devise ways of engaging customers digitally. Banks can no longer afford to view digital channels simply as a mechanism for low-cost transactions. Video and chat can play a role. 4. Solution viability. Modern video alternatives are light years ahead of earlier solutions, improving efficacy at a much lower cost than before.

Trending issues

EMC’s Big Data expert shares his point of view on best practices for projects and success The Key Takeaways: 1. Start a Big Data project by concentrating on business processes already supported by BI (Business Intelligence) and data warehouse enviornment. Leverage Big Data to take that business process to the next level. 2. Apply insights from diverse sources: customers, products, operations, etc. By applying these insights, for example, organization can re-wire their interactions with customers to build a more engaging, more sticky, more profitable relationship. 3. Find a positive spiral. Big Data has a liberating organizational effect whereby once users start to experiment with data and see positive results, more people in the organization will get involved to share ideas and collaborate around Big Data. No longer do you have a single department head making decisions around data, but rather people working together to come up with new ideas as to how to solve key business problems.

Trending issues

Core Banking Platform New Formats Mobile Banking Social Business

Future of Work: Evolve or go Extinct At the recent SWSX V2V event, experts were discussing the future of work. Here is what some believe awaits around the corner regarding the future of work: ■■

Companies are less committed to commitment – Gene Zaino, MBO Partners

■■

Our children’s generation will have ten jobs by the time they’re 40 – Gary Swart, oDesk

■■

The winners are those who can learn fast, have a strong network and the best online reputation – R “Ray” Wang, Constellation Research

■■

The best talent will have even more options in this new economy –Maynard Webb: entrepreneur, author, investor & company director

Mobile Payments CustomerCentricity Brands & Branding Crowd Finance App Ecosystem Gadgetology New Banking Concepts Big Data Future of Work DIY

Trending issues

With 3D Printing, the complexity is free In large organizations, in the old days, a designer would have to design the product, then … build the machine tools to make a prototype of that part, which could take up to a year, and then it would manufacture the part and test it, with each test iteration taking a few months. The whole process ... often took ‘two years from when you first had the idea for some of our complex components.’ Today … computer-aided design software now design the part on a computer screen. Then they transmit it to a 3-D printer, which is filled with a fine metal powder and a laser device that literally builds or ‘prints,’ the piece out of the metal powder before your eyes, to the exact specifications. Then, you immediately test it — four, five, six times in a day — and when it is just right you have your new part. To be sure, some complex parts require more time, but this is the future;” the complexity is free. Though the example alludes to how a large multinational corporation is approaching 3D Printing, the “complexity is free” concept can be applied to everyone, including makers or DIYers. It’ll be interesting to see how they take advantage of this concept moving forward.

EACH SECTION EXPLAINED

Core Banking Platforms Here you will find articles related to basic IT infrastructure which supports main banking processes, including technologies such as SOA, WOA, digital platforms, etc.

New Formats Based on design principles focused on customer insights, New formats offers retail banking customers more channels which are more granular and highly functional; a consistent, simple, and collaborative universal user interface; real-time intelligent processes; highly personalized solutions; and is open to social networks and the web. Examples of these new formats are provided here.

Mobile Banking Relevant news about mobile banking platforms (which enable customers to access financial services, such as transfers, bill payments, balance information and investment options) can be found here.

Social Business Social Business is the integration and use of social technologies by an organization, which includes social media/work media, crowd listening, crowd intelligence, crowd working, etc. Stay tuned to see how this space will evolve.

Mobile Payments The process of using a hand-held device to pay for a product or service, either remotely or at a point-of-sale. Up to date information is provided.

Customer-Centricity Customer-centricity is the organization’s understanding of customers at a granular level and the capability to create, deliver, and capture different kinds of value propositions to different groups of customers, based on customer understanding.

Brands & Branding Marketing in the modern world have many channels to reach consumers at their disposal: (smart)phones, tablets, PCs and (smart)TVs and different ways to communicate their brands, such as traditional ads, banner ads, SMS/MMS, etc.

Crowd Finance A process where small amounts are money raised for a definite purpose, Crowd finance sources funds collectively from individuals. In other words, the money comes from a wide range of individuals and not from a single entity. Read more about it here.

App Ecosystem There are 5 main components in the current Apps Ecosystem: connectivity, devices, OS platforms, app platforms, and apps; along with related products and services providers (MEAPs, Mobility as a Service providers etc.).

Gadgetology Gadgets are everywhere and it seems that there are more and more each passing day. We are moving towards a contextual computing environment and, as a result, the number and functions of gadgets are poised to grow (thanks in part to the internet of things). In this section, we share a word or two about gadgets.

New Banking Concepts Banks around the world continuously explore new approaches to strengthen customer relationships, both in the virtual and the physical worlds; including Virtual assistants, natural language search tools, new marketing tools, different segmentation (children, gen Y,…) etc. This section will cover news along these lines.

Big Data It been said, “what gets measured, gets managed.” The Big Data trend offers organizations an opportunity to manage just about everything. Here we’ll share stories about Big Data capture, curation, storage, sharing, analysis, and visualization.

Future of Work Work, increasingly, is not about where you do, but what you do. The future of work is more flexible and collaborative; and values are going to play an important role, especially corporate values. The way we work is changing fast … stay tuned.

DIY Do It Yourself (DIY) refers to a trend of people doing “projects” to either be creative/recreational and/or costsaving activity. This trend becomes really interesting as new technologies enable new functionalities such as 3D printing, health/wellness, etc, which help empowers individuals; this may even change the we think about businesses in the future.

Technology trends The following section outlines the upcoming technologies that will change everything, with predictions on what may come of them in financial industry.

Techcrunch Disrupt NY 2013 Recap After some dark months in terms of news in well-defined tech trends, in which the good ideas seemed to be sleeping after the SoLoMo’s big hangover, we can see some light. In the last edition of TechCrunch Disrupt 2013 (NY), there was a big chat about the death of Innovation (good, it seems that I was not the only one who was bored and worried). The conclusion was that Innovation is not dead, even more, there are some green sprouts emerging. Tired of the social networking fever, the apps without a real value, or with a confusing business plan, are sent to the back of the closet (except for SnapChat and Vine, which are still considered potential apps, despite being from the previous batch due to the “real time” concept), and those which offer great solutions to problems are arising. Investors are now very concerned about where they put their money, not only looking for great products but also great founders.

What do I mean?

or example, now there’s no need to meet new interesting people around you in real time, but organize the contacts you already met (Glider); there’s no need to checkin places anymore, but choose where you go to have dinner (new focus of Foursquare, still alive and growing!!). More examples below:

change the landscape and the way in which digital products are created, however some speakers (like Hill Ferguson from Paypal) stay a little skeptical saying that the problem that Bitcoin is trying to solve is not clear at all (if any), and wondering if their idea is the best way to achieve it. Let’s wait and see.

Productivity a big business: These apps definitely make our life and work easier. Now you can send the attachments of your mails directly to a file in the cloud with Kloudless, organize you mail with Mailbox or Handle, or you meetings with Retrace.

■■Hardware was the co-star of the event. Some

■■

Online for offline: This is still a big trend, for apps as well as devices. The success of AirBnb lead the launch of apps like EatWith, for eating homecooked meal in someone’s home and allowing locals to turn their homes into temporary dining destinations for curious visitors looking to experience something new. Also, Taskrabbit is the seed of Bidzy, a professionalized platform for last minute tasks and services.

■■

■■ Bitcoin:

still too early. Acording to Square, Stripe or Paypal, is still too early to know what it really means for economy. Bitcoin may

Source: BBVA Digital Technologies & Omnichannel

interesting solutions where shown, like KISI, a Keyless home access management platform, or KeenHome, remote vents for your central air conditioning and heating systems that can be controlled from your smartphone to optimally direct air where you actually need it, or away from places you don’t. See video

Two special mentions: RAMBLER, the winner of the Hackathon contest: a web app that lets users view their credit and debit card transactions on a map. (it may sound familiar to all those who fought for including this feature at the new bbva.es) ENIGMA, the winner of Startup Battlefield: a web service that allows its users to dig into a vast amount of publicly available (but hardto-obtain) data. The service pulls its data from more than 100,000 data sources, but the process of sifting through all this information is deceptively simple. Just a quick search for a person’s name and company brings up multiple previewable tables of information, and jumping in and playing with data is thoughtfully executed.

The emergence of “Cards” Seeing that we are now in the post-PC era, there is a trend that is picking up some steam: cards, cards, and more cards. In short, Cards “are fast becoming the best design pattern for mobile devices. We are currently witnessing a re-architecture of the web,... towards completely personalized experiences built on an aggregation of many individual pieces of content:” Individual’s interests, preferences, and behavior ■■ Context of location and environmental ■■ Interests, preferences, and behavior of friends ■■ The ecosystem of targeting advertising ■■

ANY EXISTING OR PROSPECTIVE CUSTOMER

NEWS

3rd PARTY SERVICES + DATA

Friends

LOCAL NEWS

Interests

NEWS BASED ON YOUR INTEREST

Twitter

NEWS YOUR FRIENDS HAVE READ

Google

Friends’ Interests Location Demography

Facebook

NEWS PEOPLE LIKE YOU HAVE READ

Loyalty Cards

WORLD NEWS

Aggregators

Sources: insideintercom.io/why-cardsare-the-future-of-the-web/ ben-evans.com/benedictevans/2013/6/18/canvases

...

any leading companies are moving toward Cards: Google Now. Twitter. Pinterest... Also, many other leading technology companies are moving towards Cards: Facebook, Spotify, Apple, etc. As Inside Intercom puts it, “If the predominant medium of our time is set to be the portable screen (think phones and tablets), then the predominant design pattern is set to be cards. The signs are already here …”

CONTENT FORMAT THAT IS SO FAMILIAR AND FLEXIBLE Cards, as a content format, go back to 9th century in Imperial China and we’ve been using cards ever since. Today, we are surrounded by them: debit/credit cards, business cards, government issued cards, coupons, card games,

personal cards, and the list seems to go on and on. Also, Cards can present content in a more flexible way. “They can be turned over to reveal more, folded for a summary and expanded for more details, stacked to save space, sorted, grouped, and spread out to survey more than one. … Cards are perfect for mobile devices and varying screen sizes. … They can be stacked horizontally, adding a column as a tablet is turned 90 degrees. They can be a fixed or variable height.” Moving forward, it’s going to be interesting to see how this new content format will bring in the future. “Cards are the next big thing in design and the creative arts.” Let wait and see how this trend will affect the way we manage and consume content with post-PC devices.

DESKTOP TABLET LANDSCAPE TABLET PORTRAIT MOBILE

SUMMARY CARD

REGULAR CARD

EXPANDED CARD

Open Talent 2013

Discover the winning projects of the BBVA Open Talent 2013 competition The projects participating in this start-up com-

Open Talent is an international BBVA initiative

petition are born from the illusion of people

aiming to boost innovative entrepreneurship

who believe they can contribute to society with

and establish a real network with start-ups

the implementation of their very own project.

showing potential to lead the changes in the

These are innovative and technology-based

technology and banking sectors, and with all

initiatives launched by start-ups less than two

the other stakeholders of the entrepreneurship

years old and for whom the 100,000 Euros

ecosystem as well.

of the award and the opportunities associated with a competition such as BBVA Open Talent

The 2013 edition of the start-up competition

can make much a difference.

has been so far the most international one, registering a record of participation. A total of 916

All the initiatives have in common their drive to

projects of 24 countries around the globe have

do things differently through innovation and

been submitted, mainly from Colombia, Spain,

their enthusiasm for creating something new

Argentina, Mexico and Peru. Furthermore, the

from scratch.

participating projects have received more than 70,881 online votes through the Innovation Centreâ&#x20AC;&#x2122;s website and social networks.

IM35

Innovador del Año and Innovadora Social, at EmTech Spain Bernat Ollé and Karen Márquez were elected from the 10 Spanish winners of Premios Innovadores Menores de 35 años organized by MIT and the BBVA collaboration. The youngers presented there projects at EmTech España 2013 (Valencia).

IM35

The third edition of the conference EmTech

ment of diseases and the way he bring it to

Spain held on 5 and 6 November, analyzed the

market.

economic impact of innovation and technological entrepreneurship. EmTech was also the

“Their innovative ideas and the way to imple-

escenario where the winners of Innovadores

ment them and bring them to market success-

Menores de 35 presented there projects. With

full have been key to his victory “, according

those awards, MIT, supported by BBVA, recog-

to Pedro Moneo, director of the Spanish edi-

nizes young people who are giving a solution

tion of MIT Technology Review.

to real problems through technology. Alongside Ollé, the other main entrepreneur Bernat Olle was the youngest elected as In-

was Karen Marquez, chosen as Innovadora

novador del año, among the 10 selected Spanis,

social, by proposing a new approach to early

for his disruptive breakthrough in the treat-

childhood education.

IM35 The Innovators under 35 awards, organized

“We should be proud of our young people,

by the Massachusetts Institute of Technology

who have the courage and ingenuity of the

(MIT ), through MIT Technology Reviewy pu-

major problems facing global concern and

blication since its first edition in 2010 has the

provide real solutions that have a real impact

support of BBVA, has great international pres-

on society,” said Moneo.

tige and is a strong impetus for young people in developing their innovation projects. “These 10 young Spanish are an example of the ability of innovation and entrepreneur-

Innovators Under 35 in Latin America

ship that is in the country,” said Hugo Najera,

Argentina and Uruguay – 20 November

Chief Innovation Officer of BBVA. “Investing

Peru – 30 November

in research and innovation is essential to pro-

Chile – December

mote competitiveness, at a time when full

The 10 winners will present their projects

technological change, economic, social and

during the Innovators Under 35 awards

environmental “stressed Nájera.

ceremony.

INNOVA CHALLENGE Big Data

BBVA invites developers to create apps with transaction data of its cards in the Innova Challenge Apps for public institutions, for consumers and data visualization. These are the three categories of the first edition of Innova Challenge Big Data, a competition for which BBVA is giving access for the first time to a set of real transaction data of its cards. The best apps in the different categories will be awarded with 15,000 Euros.

INNOVA CHALLENGE Big Data

Open and collaborative innovation. Based on

a total value of 90,000 Euros (15,000 for the

these pillars, BBVA wants to build a community

winner, 10,000 for the runner-up and 5,000

of developers around its data platform, and for

for the third prize in each of the three catego-

this purpose the bank is now allowing third par-

ries).

ties to create new content and services using real transaction data of its cards.

Developers may access the API to obtain a set

of anonymous and aggregated transaction

With the launch of the Innova Challenge Big

data generated by banking cards in the cities

Data, BBVA has become the first Spanish bank

of Madrid and Barcelona. In order to maximize

to open an API for developers to create apps for

this platform, BBVA has organized a series of

public institutions, individual consumers or even

free workshops to show how to work with

for the creation of new content visualizations.

open data.

Registration to participate was opened on 24

You may find detailed information about the

September and will end on 3 December, 2013.

Terms and Conditions and how to participate

This international challenge will award prizes to

in the Innova Challenge Big Data website.

BBVA Innovation Edge is the result of a collaborative work done by all the people who are involved in innovation at BBVA Group. CONTRIBUTORS TO THIS ISSUE

Alfonso Bey Reyes Bolumar Vanesa Casadas Luz Fernandez Antonio Garcia Israel Hernanz Marta Javaloys Luz Martin Manolo Moure Multichannel Strategy Team Carlos Perez Javier Sebastian Elena Solera Ignacio Villoch Gustavo Vinacua “Phil” Sang G. Yim

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