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Customers and Corporations’Digital
Journeys are just Beginning…
Designing a Results Driven
Digital Strategy
By Fabio Mittelstaedt
June 2017
DefineDigitalVision
Change
Mobile
App’s
Wireframe
Build Cross-
-Functional
Team Improve
Digital
Customer
Experience
Do Proof
of Concept
with
Customers
Designing a Results Driven
Digital Strategy
Point of View - 2
Designing a Results Driven Digital Strategy
T
he common question
in the market regard-
ing digital strategy is if
leading corporations
and multinationals re-
ally need or “must have it”. However,
disruptive emerging business models
using digital first approach are a very
clear message for the C-Level that it
is not hype, it is rapidly becoming the
new normal.
Remember all the innovative tech-
nologies of the last two decades
that seemed fragmented and more
appealing for punctual process
improvements and gains in isolated
areas like sales, marketing, supply
chain etc? CRM, BI, Big Data, Analyt-
ics, Mobility, Cloud, AI, Robotics,
Telematics, VR, AR are only a few
examples.
It happens that the new generation
driving open innovation, collabora-
tive models and a fascinating new
wave of startups, FinTech, InsurTech
and other niches in different indus-
tries, could finally connect the dots
using all these available technologies
in a simple, integrated and seamless
way.
And how they did it? Simply
reimagining or reinventing
Customer’s Experiences with a
holistic view of what is called to-
day “Customer Journey”, mean-
ing all the phases of a customer
interaction with a brand, product
or service in order to fulfill his
needs, from the moment zero of
motivation passing through re-
search and comparative analysis
of options in multiple channels
or touchpoints (digital and physi-
cal), purchasing and relationship
and customer service post-sales.
Initially, disruptors attacked one
strong pain point or customer
need and tried to build the ideal
customer experience, the customer’s
dream realized without the con-
straints that large corporations and
regulators tend to ignore or label
as not feasible. Do an international
money transfer with a few clicks
paying a small fee, starting a mobile
video call with a specialist doctor as
a on-the-shelf service without having
a health plan or previous appoint-
ment, buying an auto insurance via
mobile in less than two minutes that
charge you for miles driven and give
you back up to 50% of premium if
you don’t have any incident are a
proof that new game changing digital
models are highly desired and ap-
preciated by customers, and came to
stay.
Disintermediation, unbundling
products with digital challengers and
simplifying customer experience are
topics that most financial institutions
learned to respect, developing simi-
lar solutions, partnerships, accelerat-
ing startups (with or without venture
capital) and even acquiring players.
Others are building their own Digital
Innovation Labs.
Bank of America recently announced
the coming launch of “erica”, a new
Digital Assistant combining Artificial
Intelligence, predictive analytics and
cognitive messaging capabilities via
voice command or text to make pay-
ments, check balances and savings,
pay bills, transfer money etc. Their
bet is that this mobile platform,
one of the first aiming to attend the
retail banking focusing on mass and
affluent segments, instead of wealth
customers and investment capital
markets, can establish a risk-taking
innovation built by a huge market
leader, not a FinTech competitor.
This shows that Digital Strategy is
already a Top Priority in the strategic
planning agenda in some industries
and that executive committees
already understood that it is much
more than pure technology and
systems, even if a company is not a
tech native and deliver services or
any type of goods or B2B, digital can
be the catalyst to transform and join
business strategy, operations and
technology in one single shared vi-
sion across the company.
Digital Customer Experience
Maturity
Once that Digital Strategy became
extremely relevant in everyday busi-
ness, Banks and Retailers overall
are struggling to achieve Customer
“Digital can be the catalyst to transform
and join business strategy, operations and
technology in one single shared vision
across the company.”
“Unlike a mathematical
formula that gives you
certainty about the final
result, Digital CX is totally
about uncertainty and
constant change, because it
is anchored on customer’s
mind, how it interacts with
new technologies, products
and services.”
“Unlike a mathematical
formula that gives you
certainty about the final
result, Digital CX is totally
about uncertainty and
constant change, because it
is anchored on customer’s
mind, how it interacts with
new technologies, products
and services.”
Point of View - 3
Experience Maturity, recognizing
that the real treasury behind it is in
understanding customer’s dreams,
ambitions, aspirations and daily
habits and attitudes. And that all off
it is transparent in the path to digital
journeys, in the traces that they
leave in the web, mobile apps, social
networks and in the sometimes
under explored in-house consumer
data warehouse.
You just need a structured analytics
engine and a cross-functional team
of motivated strategists, UX design
thinkers and Departmental Experts
to reveal and envision what should
be the enhanced digital customer ex-
perience for all segments, from baby
boomers to millennials and genera-
tion Z. And for sure, do not forget
the most important thing here, talk
directly to your customers, despite of
all your survey investments with the
best research institutes.
But creating, measuring and compar-
ing Digital CX Maturity is not like any
regular business challenge. Corpora-
tions, Consulting Firms and Research
Institutes are trying to rationalize
it through different methodolo-
gies. The only issue is that unlike
a mathematical formula that gives
you certainty about the final result,
Digital CX is totally about uncertainty
and constant change, because it is
anchored on customer’s mind, how
it interacts with new technologies,
products and services.
The relevance about analyzing Digital
CX Maturity from different perspec-
tives: Customer’s Eyes, Competi-
tion Benchmarking and New Digital
Comers is that it can be an effective
method to quickly test and learn and
bring practical insights for improve-
ment in specific processes and cus-
tomer journeys that your team didn’t
notice before.
Some time ago, Fjord developed
the “Love Index”, which aims to
understand and identify how much
people’s experience define the affin-
ity with a product, service, company
or brand and provide actionable
insights for improving the design
of digital CX by mapping how much
an experience is Fun, Relevant,
Engaging, Social and Helpful.
Forrester delivered the “Cus-
tomer Experience Index” (CX
Index™), willing to help Digital
Chief Officers and CX profes-
sionals understand the ups and
downs of CX quality over time
in 18 industries. Consumers are
asked how each brand or prod-
uct is selected based on three
dimensions: enjoyable, easy and
meets needs.
Despite methodologies, the real
question is: “what digital really
means for your business strategy
and for every single customer
that your company is trying to
capture or retain?”
Generic strategies or broad
customer segments do not work
anymore, we are living the new era
of real time personalization.
Personalization is the new
name of the game
Digital experts are using new expres-
sions to try to distinct the natural
“Digital Customer” from the more
resistant segments that slowly ex-
periment the benefits of life digitali-
zation, from how I use my cash, how
I manage macro decisions in my life
and how I make the small everyday
choices, what has been called micro-
moments and how they can create
natural personalization and customer
intelligence to the daily experiences
that really matters. It means that if
I am searching for a new car in the
web and if I just checked my avail-
able credit in my mobile banking
app, I can receive an instant pre-ap-
proved auto loan offer for that BMW
that I was dreaming off in a dealer
near to my location, all in real time.
And that your food requests through
voice command for AI ChatBots like
Siri, Alexa, Jarvis or Google Assistant
can be crossed with data from wear-
ables like Jawbone body media and
fitness trackers and next time you
try to order a meal online, you will
receive a personalized diet advice
about the type of food, proteins and
calories that you should eat in order
to have a balance in your nutrition
and health.
But what this kind of thing has to
do with digital banking and finan-
cial services? Everything. Your daily
habits in life and how you manage
your money are fully connected.
And digital is the link that is building
the bridges for a more integrated
experience. Ideally in a near future
I shouldn’t need thousand different
apps for shopping, payment, learn-
ing, travelling etc. The one-stop-shop
is not a new concept, but only now
we have available all the digital,
analytics, mobility, omnichannel and
artificial intelligence capabilities that
will make it possible.
Your mobile Banking platform
becomes an intelligent and per-
sonalized retail marketplace for all
customer needs, integrating several
providers with secure APIs in the
Banking as a Service platform. This
complete Mobile Banking Mall would
be frictionless, meaning that there
is no data duplication, it is pre-
populated in the background every
time you want to buy a new service
from another financial services
partner sharing this open platform,
generating revenues for incumbent
Banks and FinTech Startups. A Digital
Win-Win.
Point of View - 4
Designing a Results Driven Digital Strategy
Big data collects data from your
financial history, social networks,
last purchased products, preferred
channels, demographic data, fam-
ily household profile, geolocation
and can use predictive analytics to
model your personal context in the
customer life cycle. Thus, Artificial In-
telligence just built your persona and
now can instantly send you personal-
ized offers.
That could go from an investment
advice coming from a robot advisor
to an insurance product to a cheaper
air flight ticket for a frequent travel
that you do monthly to visit your
parents in another state.
Moven’s Mobile banking app, is a
very well know digital case, but not
everybody knows that besides all
basic personal financial management
features (very similar to Simple and
GuiaBolso) depending on the analy-
sis of your spending behavior, Moven
can automatically increase your
savings volume sending you simple
personalized recommendations via
a specialized debit card linked with
your app.
Case: BBVA, Personalized Mobile
Videos
Personalization in Digital banking
does not mean the apps features
only, but using digital and customer
data analytics to generate higher
adoption and contribution margin
on products online. BBVA and Allianz
are using Uses Personalized Mobile
Video to Drive Pensions and Digital
Banking with Idomoo. They created
a Future Self video from the perspec-
tive of their future retired customer.
The videos are further customized
to each individual viewer, showing
them the specific amount that they
currently contribute, how much they
can save if they increase the average
contribution, their rates and end of
term savings they could see based
on their current financial status and
activity what would be the monthly
pension income after retirement. In
the same digital platform, just swap-
ping a bar in the mobile bank app,
customers could adjust their pension
plans for best future cost vs benefit.
In the case of BBVA, 40% of target
customers (selected automatically
via analytics campaign engine) saw
the personalized video, resulting in a
78% increase in retirement savings.
Regarding mobile banking personal-
ization, there are many aspects that
do not add too much value for cus-
tomer engagement like design
and photo personalization or
basic things like using geoloca-
tion to find the nearest ATM.
What is really interesting about
personalization is when a bank
use three things in a smart way:
intelligent data analytics person-
alization, real time automated
personalized advice and artificial
intelligence managing it all and
interacting with the customer in
a less robot style and more hu-
man appeal.
Case: Tangerine Bank, Personal
Finance Summary
For the first aspect Tangerine
Bank (previously ING Direct, a Retail
Bank from Toronto, Canada and
part of the Scotia Bank group) has
a very nice way to show customer’s
financial data summary in one small
screen, showing what you have,
what you owe, interest earned and
fees saved since you became a client
and the rest is the typical informa-
tion that most mobile banks have.
Point of View - 5
Case: Finie, AI Digital Powered
Banking with Natural Language
And there is a mobile innovation
that intends to join the three points
mentioned before: Finie (meaning
Financial Genie), which is an AI App
for Digital Bank Account. Created
by professors at the University of
Michigan who assembled a small
start-up named Clinc, Finie is a voice-
powered AI platform based on deep
neural networks, an innovative way
to interact with a banking account
using natural language queries (as
opposed to a very limited set of
rule-based commands as most rob
advisors in the market do). This is a
game changing AI technology, more
advanced than Siri and Alexa for
instance.
And what else is different about Finie
comparing to other AI platforms?
Finie is a Banking expert! Its remark-
able natural language processing
engine has specifically trained its ap-
plications with a deeper knowledge
of the financial and banking industry.
Finie is like a fast machine learning,
expanding knowledge and improving
results with every interaction.
Instead of being limited to robotic
boring commands such as, “Show
me my credit card balance”, you
can freely talk to Finie in your own
words asking for instance: “Do I have
enough money to travel to Caribe
next holiday with my family for one
week, spending around US$ 8,000?”
or “Did I spend more on groceries
this month than last?”
Finie is integrated within a banks’
mobile banking application, acting as
“a voice-activated intelligent person-
al assistant” that is able to answer
financial questions unique to each
individual user, offering personalized
spending advice.
This new level of digital banking per-
sonalization may take digital custom-
er experience to a totally different
quality and satisfaction high stan-
dard. A few Banks in Canada like ATB
Financial and Royal Bank of Canada
are trying it, but with the more basic
AI platforms. ATB launched the digi-
tal assistant “Pepper” which pretty
much a customer service robot, since
it does not make transactions. Royal
Bank of Canada Canada’s is offer-
ing e-transfers for its customers via
voice-command
with Siri, Apple’s
virtual assistant.
Case: L’Oréal,
Digital Beauty
Personalization
integrated with
m-Commerce
Going outside
financial services
world, there is a
digital personaliza-
tion innovation
in beauty prod-
ucts retail that I
particularly like because the idea
is simple, the customer need was
latent but nobody could implement
a so user friendly and intelligent
digital platform before: the Make
Up Genius from L’Oréal, launched by
2015. It is an augmented reality app
which allows customers to virtually
try on 4,500 of the cosmetic brand’s
catalogue of products using their
smartphone or tablet.
The Makeup Genius applies bronzer,
eyeshadow, lip gloss, and eyeliner
in real time using facial recognition
technology, enabling the virtual
make up to stay in place as you move
your face. The technology captures
64 facial data points and 100 differ-
ent facial expressions to accurately
place the make up. The app scans
your face, and then allows you to try
out different products or entire make
up looks.
Depending on the context and event:
going to a marriage during the day or
a night dinner or party, the app can
recommend and apply instantly dif-
ferent looks in your virtual face. You
can then save your selfie, share it on
social media, and the app automati-
cally select the products needed for
your make up, add to your mobile
basket, you pay directly through the
app and receive it at home. It means
“really” a seamless and integrated
digital customer experience.
And one lesson learned for seasoned
executives should be: pay attention
to digital best cases from different
industries that do not belong to
your comfort zone. You need to be
creative and open mind when talking
about digital innovation and try to
adapt the best of each idea and join
the pieces in a new original innova-
tion that will work for you market
context and type of customer.
The new digital salesforce models
launched by products industry are a
good example that could be adapted
to rationalize costs with huge struc-
tures of sales representatives in the
financial services industry.
Digital Experience is
omnichannel, but Mobile
will Prevail
When defining a digital strategy,
omnichannel is much more than an
operational decision. Ideally a Bank
should put available 100% of all func-
tionalities, products and services in
digital channels, while keeping them
connected with traditional channels,
allowing customers to go forward
and back through channels without
struggling and have to restart the
Point of View - 6
Designing a Results Driven Digital Strategy
process when switching touchpoints.
Citi Card’s Digital Lead, Alice Milligan,
recently declared that made around
85% of services available on mobile
app so far, and will hopefully move
quickly to 100%.
But the main point here is that we
can’t choose what channels cus-
tomers will use in their non-linear
journey. Depending on the indus-
try, digital channels can handle the
full experience from research and
purchase to aftersales service or play
the typical role of decision support
and the purchase will be done on
physical channels, like the car buying
experience. A research from Google
and Luth says that even before going
to a car dealer, customers explore
from 6 to 14 brands online, do on
average 139 google searches, see
14 youtube videos with technical
details about the desired car in sites
like cars.com and more. 71% of these
online activities are performed on
mobile. In addition to that more than
60% of customers use the digital car
configurator tool and more than 40%
simulate auto finance online. Only
after all this digital research, or in
between, customer visit car dealers
in order to do the test drive, negoti-
ate and close the deal.
This seems complex, right? As a mat-
ter of fact, native digital customers
already do it intuitively. That is why
mapping and improving a customer
journey is something that you can’t
do only with common sense inside
your company.
Coming back to Banks, it is easy to
notice that they offer multiple chan-
nels, from branch to social network,
call center, chat, video call, e-mail,
apps, ATM and others. Definitely it is
a very rare situation when you really
start experiencing true omnichannel
integration.
Take as an example what every bank
is trying to do now: implement a
fully digital new checking account
opening experience. After FinTech
players like mBank, IGaranti and
others showed the treasure map,
most leading banks put this available
with steps and technologies that are
becoming a standard like digital sign-
in, face recognition, photo capture
and OCR documents, fingerprint
login etc. And most of these apps are
really great.
The reality is, if you have any issue
post-digital account opening and
contact another channel, typically
there is no context transfer and
customer’s interactions detail his-
tory with data transposed from one
platform to another. That is why
“Your daily habits in life and how you
manage your money are fully connected.
Digital is the link that is building the bridges
for a more integrated experience.
Your mobile Banking becomes an intelligent
and personalized retail marketplace for all
customer needs, integrating several providers
with secure APIs in the Banking as a Service
platform. A complete Mobile Banking Mall.”
Point of View - 7
backoffice and customer service are
the most complicated Achilles’ heel
when integrating omnichannel and
delivering new end-to-end digital
banking journeys.
The good news is that there is a lot
of digital technology available to
improve this experience and more
flexible business models disrupt-
ing the market, taking advantage of
business inefficiencies of established
market leaders.
This is the case of Lemonade, a New
York-based insurer for homeowners
and renters. It looks like a peer-to-
peer insurer, this is because they
disintermediated the market by
eliminating brokers from the process,
what made the InsurTech community
call them the “Uber of Insurance”.
They use a artificial intelligence bot
named Maya, that interacts with cus-
tomers through chat, with the value
proposition to get insured through
mobile in 90 seconds and in case of
claims, pay customer on average in
3 minutes. No stress, when you start
a claim in the app, you just answer
a few questions and record a video
telling the details about the incident
and a few minutes later the money is
in your account.
An article published by March 2017
at The Economist web site, described
a real customer claim and told the
science behind it: “Late last year a
customer called Brandon claimed
for a stolen coat. He answered a few
questions on the app and recorded
a report on his iPhone. Three sec-
onds later his claim was paid—a
world record, says Lemonade. In
those three seconds “A.I. Jim”, the
firm’s claims bot, reviewed the claim,
cross-checked it with the policy, ran
18 anti-fraud algorithms, approved
it, sent payment instructions to the
bank and informed Brandon.”
Another good case of linking mobile
app and other channels seamless
in the customer journey is cardless
ATM withdrawal, not thinking only
about the convenience when you
forget your debit card at home, but
also aiming a less risk and quick
operation without identity theft
situation. The discussion here is not
if ATMs will die or survive, it is about
giving real functional technological
examples of omnichannel, consider-
ing that this topic sometimes is too
much theoretical.
In the last months, many Banks and
Credit Card Companies announced
cardless ATM withdrawal, but one of
the first to develop it was Akbank,
from Turkey, using beacons (tiny
Bluetooth 4.0-based devices).
Wells Fargo is going one step ahead
of competition in this area. Their in-
novation team is close to launch the
mobile capability to use Apple Pay to
withdraw cash from ATMs without a
card (5,000 NFC enabled ATMs out of
its 13,000 total network). After you
click on Apple Pay app you will just
need to enter your card PIN to finish
the transaction. Simple like that.
In all these examples, there is
something in common, even in a
omnichannel scenario, digital mobile
is always taking the lead as main
platform. It is absolutely clear and
natural for any Digital Strategist that
omnichannel integration is a key
element of customer success’ path.
“Mobile-First Approach and Apps are the first
thought when teams start a project to digitize
customer journeys. By 2016 more than 90% of
time spent on mobile was in apps and only 10%
on browser, and daily web consumption per user
is getting almost equal in the mobile and laptop.”
“Mobile-First Approach and Apps are the first
thought when teams start a project to digitize
customer journeys. By 2016 more than 90% of
time spent on mobile was in apps and only 10%
on browser, and daily web consumption per user
is getting almost equal in the mobile and laptop.”
Point of View - 8
Designing a Results Driven Digital Strategy
There are significant signals that digital channels are gaining preference and that the internet access through Desktop
and Laptop is losing share for the Mobile platform. That is why Mobile-First Approach and Apps are the first thought
when teams start a project to digitize customer journeys. By 2016 more than 90% of time spent on mobile was in
apps and only 10% on browser, according to Flurry and comScore.
Daily web consumption per user is getting almost equal in the mobile and laptop in emerging markets like China
(3h03m mobile, 3h29m laptop) and Brazil (4h48m mobile, 5h36m laptop), while in mature markets web access via
laptop continues much higher. France shows only 1h32 minutes of daily web access on mobile and the triple in laptop
(3h57m). Surprisingly, mobile web access in USA is close to half of the volume in Brazil, with 2h37 minutes.
By 2017, mobile banking may reach incredible 60% of usage in Asia Pacific and 54% in Latin America. Europe and
North America, despite the fact that they are regions with strong mobile banking technology R&D investments, will
show an average range from 42% to 45% of mobile usage. One possible explanation is that both continents have
older aging inhabitants, more resistant to innovative technologies. Millenials share of population are much larger in
emerging markets for instance, and all surveys shows that they are the early adopters and promoters of new digital
banking technologies, along with generation X.
44
45
42
54
60
32
38
43
43
52
Africa/Middle	East
North	America
Europe
Latin	America
Asia	Pacific
Mobile	Banking	Basic	Services	Usage	and	Intention	By	Region
2016	Actual 2017	Forecast
Source:	The	Nielsen	Mobile	Shopping,	Banking	&	Payments	Survey	2016,	analysis	Fabio	Mittelstaedt.
Mobile	
Banking	
Adoption	
Growth	will	be	
higher	in	Asia	
Pacific	and	
Latin	America	
as a	trend	for	
next	years,	
strongly	
pushed	by	
emerging	
markets	like	
India,	
Singapore,	
China,	Brazil,	
Argentina	and	
Colombia.
2.37
1.32
3.03
4.484.48
3.57
3.29
5.36
USA France China Brazil
Web	consumption	 per	user	via	Mobile	and	Laptop		(Hours	per	Day)
Mobile Laptop
Source: Statista Digital Market Outlook, April 2017, analysis Fabio Mittelstaedt.
Point of View - 9
52% of millennials will be doing payments through mobile banking by 2017, with 47% from generation X. These
are really aggressive numbers, considering that many innovative payment apps from FinTech Startups and even
incumbents, still have security issues to be solved in the mobile architecture, which is relatively new comparing to
other systems like web and branch front office solutions. Here some of the key motivations is the offer of more user
friendly and simple apps and lower fees. Above all, younger digital users like to experiment and have no attachments
or loyalty with financial services providers. They just use it because they like the experience and there is no bureau-
cracy in new Digital “FinTech like” models.
The current usage and future intention to use mobile apps for financial services and personal finance management is
a trend that is not going to decline anytime like in a product lifetime curve that people learn in marketing and admin-
istration courses, because it is changing people lifestyle and making it easier and more dynamic. This trend is becom-
ing a solid reality that is being materialized (or saying better digitized) in the last 8 or 10 years. Proof of that is the
incredible number of finance mobile apps available at Apple Store by March 2017: 49,060 apps, and with the poten-
tial power to consolidate apps from other industries and segments as cash and daily life needs converge naturally, as
you need to buy and pay for goods and services. We will show in this point of view one of the best examples of this
digital converge with “Ant Financial / Alipay’s Digital Strategy Case”.
Building a Strategic Digital
Customer Experience Road-
map
The first step to build your Digital CX
Roadmap is to forget about technol-
ogy. The temptation to use the most
advanced and appealing digital and
mobile technologies shouldn’t be
part of your Experience Strategy
upfront. Super Sex Digital Features
like Location Based Services, Aug-
mented Reality, Artificial Intelligence
Avatar, Smart Robo Advisors for In-
vestments, Gamification… All of this
can used, if they make sense for the
storyline of your customer and for
the value proposition that your busi-
ness strategy is aiming to achieve
and design.
Start from the basics, talk to your
customer, apply user experience
research techniques, do the typi-
cal design thinking workshops with
a multidisciplinary team, and test
hypothesis again with your customer,
even before prototype and minimum
viable product phase.
Try to understand the non-linear
path of CX in the omnichannel
environment and do exercises to
simplify the experience and create
shortcuts in the value chain, using
digital innovations, existing and new
ones to be developed. That is when
big data analytics show its power,
because the customer won’t tell you
everything, but you can consolidate
behaviors of common segments and
prioritize some personas that make
sense for your business and your ap-
plication design.
And don’t underestimate backoffice
processes. Sometimes digitizing a
process may be more important to a
lean experience than a sophisticated
personal finance management dash-
board, and can make the difference
in critical moments as purchase and
customer service, when trying to fix
a pain point in the customer journey.
Put a limit in the complexity of your
Point of View - 10
Designing a Results Driven Digital Strategy
UX strategy, a few products, a few
clicks and a killer design that facili-
tate customer’s interaction making
intuitive screens and buttons, just
like Steve Jobs envisioned when
inspired the programmers to create
the Mac interface, yes old school of
design still works a lot…
But the real test of success is when
the empathy with the customer
is achieved and in your next focus
group you listen testimonials like:
“it seems that they guessed what I
wanted, easy and fast, without push-
ing products that I don’t want”.
At this point of the CX Strategic
Blueprint, the CMO, CDO and CIO are
probably satisfied with the prelimi-
nary results of the initial sprints of
your agile development. And then
the CFO asks about the projected
ROI, Revenues Generation, Estimated
Customer Acquisition Curve in the
first year of operation, Costs Amor-
tization, Potential Churn and other
important quantitative and financial
elements to sustain the business
case, that is the value creation part,
for the customer and for the busi-
ness, it must be a Digital Win-Win in
the Customer Experience and Bal-
ance Sheet.
The “Digital Strategy Roadmap”
explain in a simple way the basic
steps to build and implement your
strategy in a high-level vision. This
model is complemented next in this
point of view with the “Digital Strat-
egy Framework”, that brings further
detail organized by structural points
that should be evaluated when de-
signing your digital strategy.
The Roadmap steps are based on the
most advanced techniques of open
innovation, design thinking, agile,
scrum and traditional strategy and
management consulting methodolo-
gies.
The steps are intuitive and not nec-
essarily sequential: understanding
the digital market context, the com-
petitive scenario (including disrup-
tive startups and FinTech), technol-
ogy trends etc makes total sense
when starting any digital project.
But your digital team may choose to
start from the step 2, which is map-
ping digital customer needs and pain
points and trying to transform them
in strong hypothesis for value cre-
ation opportunities and innovative
business models, that is step 3.
Or you could jump from customer
assessment directly to the design
thinking customer journey vision-
ing (step 4) and only after that think
about revenue models and how your
digital idea has the potential to be-
come the next US$ 1 billion unicorn.
The Digital Transformation Strategy
(step 5) is a broad step, because here
you need to have more than the stra-
tegic vision at this point: a structured
business case, sales projections and
all the operational, technological,
human and cultural changes needed
to make the transformation happen,
and before that, engage the board
and the all company with the digital
vision.
The agile implementation (step 6),
based on quick sprints and test &
learn is self-explanatory. Using open
innovation working model, APIs,
intense collaboration of cross-func-
tional teams to create a continuous
digital innovation cycle.
And finally, the Agile Project Man-
Point of View - 11
agement is a gradual evolutionary
concept, totally based on lessons
learned in large digital transforma-
tion projects. For instance, in a lead-
ing Bank, I have spent a significant
time first preparing the field, what I
call Digital Building Blocks, in order
to make the organization ready to
develop the most advanced digital
innovation ideas. In some customer
journeys it means basic things like
digitizing processes, going paper-
less, integrating digital channels
with branches’ front end and other
actions.
Some organizations like Deutsche
Bank are many steps ahead of that,
and already established their own in-
novation lab and made several waves
of internal transformation to make
their digital strategy a real success.
A Digital Roadmap requires flexibility
and agility. You need to constantly
learn and adapt your digital strategy,
and be bold in your digital thinking,
allowing mistakes and understand-
ing that quickly test, try and improve
can lead you to a huge success very
soon, if you go fast. So it is not about
finishing a great Digital Strategy
Roadmap and in the next day starting
developing a revolutionary mobile
app that will change your business.
Even small startups commonly don’t
do it this way. Imagine big corpora-
tions that have their cash cow and
star products that generate great
profits for decades. It is always a
phased approach, going forward and
back again, and educating employees
with a different digital mentality, like
if everyday you challenged yourself
to create a new business or replace
your own product portfolio.
Digital Transformation
is about Reinventing the
Business
Typically, most large incumbent
Banks launch fancy new mobile apps,
but ignore completely the toughest
customer pain points, that would re-
quire a strong change management
effort in the governance model, com-
pany culture, core banking and CRM
systems, internal processes, paper
elimination, digitalization and auto-
mation, backoffice workflow rules,
new training for branches, salesforce
reorganization and even revision of
contact center outsourcing contracts.
It means that digital transformation
can’t be a cosmetic change in the
design of your digital channels and
investing heavily in digital marketing
and mass advertising to convince
your customer that you are the best
digital bank.
Must be a new attitude, culture and
rethink strategically the business
model, value proposition, revenues
model, core costs, segmentation,
product portfolio and the new profile
of your needed digital talent work-
force. Smart Bots don’t implement
digital roadmaps.
FinTech and InsurTech Startups do
not have a millionaire cash flow
and a broad customer base and the
terabytes of big data about customer
behavior as leading financial institu-
tions possess, but they bring two
lost assets in large corporations:
simplicity and true customer
centricity.
“A Digital Roadmap
requires flexibility and
agility. You need to
constantly learn and
adapt your digital
strategy, and be bold in
your digital thinking,
allowing mistakes and
understanding that
quickly test, try and
improve can lead you
to a huge success very
soon, if you go fast.”
Designing a Results Driven Digital Strategy
Point of View - 12
Results & Insights: Continu-
ously Improving Experience
If in your digital strategy you had to
choose one first priority KPI, certain-
ly it should be something new and
broad like “digital customer journey
success”, meaning that along all the
journey and steps interacting with a
brand, how the typical most stress-
ful pain points simply disappear in
the design of your enhanced digital
experience, and as a result of that
you do not need to call the contact
center, do not need to go to a branch
and do not need to email your bank-
ing account manager to handle the
top list of issues affecting customer
satisfaction in the sales and after-
sales stages of the relationship with
a financial service provider.
Example of Best Digital Mobile Ex-
perience: Blocking a Credit or Debit
Card
One of the most common examples
is the urgent need to block a credit
or debit card, when minutes can
make a difference when you lost
your card or when it has been stolen.
Imagine you are travelling for vaca-
tions with the family and your card
was theft. Great probability that you
do not have a laptop close to your
hands, but almost 100% chance
that your smartphone is with you.
This way, the mobile app experience
should be the focus of any Bank for
this critical task. Santander Mobile
App, for instance, offer one of the
most simple and intuitive experienc-
es to block a card: you just login with
fingerprint, click on cards and then
on block card. Three clicks with no
screen scroll, no unnecessary infor-
mation, data fields are all pre-popu-
lated in the background and the call
to action buttons and icons are clear
and easy to find in the screen. The
same is not true for other Competi-
tor Banks offering the same function-
ality in their mobile app. The main
issues noticed in these other banks
are multiple screens, buttons and
process is not clear in the application
and when you finally find the right
place after trial and error, a lot of
information is requested like details
explaining why you are blocking your
card, security questions, if you wish
or not to receive another card etc.
“Mobile Banking Sell? Or it is
just about a better experience?”
At this point, validating your Digital
Dashboard with the Steering Com-
mittee, probably the CSO and CFO
may have done the same question:
“Mobile Banking Sells? Or it is just
about a better experience?” The les-
sons learned so far in Digital Trans-
formation Projects implementation
is that digital shoppers conversion
rates that typically vary from1% to
5%, can jump from 7% to 10% if you
develop an intelligent offering en-
gine, including cross-sale and up-sale
capabilities lever-
aged by analytics
and next best
offer, what I call
“smart digital
revenues model”,
where the goal
is to generate
cash in cycles from microments in
the daily life like personalized digital
offers of food, consumer goods,
apparel, electronics, services, travel
and entertainment up to changes in
your life cycle that drives you to buy
a car, an insurance or think about a
pension plan for the future.
Conversion rates in digital platforms
must be high in order to sustain the
business case for ongoing invest-
ments. This is result of at least
three elements: creating innovative
models, delivering them in a power-
Point of View - 13
ful digital & omnichannel experi-
ence and bringing to the customer’s
awareness an attractive value propo-
sition, that goes beyond pure pricing
discounts, establishing a positive
relationship with the brand.
Understanding the new all day con-
nected on multiple devices reality is
something that is not responsibility
of design thinkers and marketers
only, but of all executives, because
they allow you to enter in customer’s
digital life through the front door.
Thinner light Ultrabooks, the latest
iPhone or Samsung Galaxy or a re-
versible tablet/notebook. The device
doesn’t matter so much. Screens of
all these devices are getting bigger,
since user research
experience shows
that customers
need to see high
quality product
images, videos, in-
tuitive screens and
easy simulations
and secure environ-
ment to enter pay-
ment information.
If your mobile app
delivers all these
features, conversion
rates can increase by 20% or higher.
If you add analytics intelligence, per-
sonal and context based interactions,
it can move up to 60% or more, tak-
ing your conversion rate from 3%-5%
range to 7%-10%.
This is valid for large corporations
going digital. Sure, for startups and
FinTech the metrics are different:
number of app downloads, people
using the app and making transac-
tions on the digital platform. Other
KPI’s like average value spent online
continue the same. This is the output
of innovation, not the input or mo-
tivators that can explain why some
digital players become unicorns and
others not. The level of disruption
in the digital business model, easi-
ness of digital customer experience,
lower prices and fees due to disin-
termediation and lower overhead,
are some common factors, but can’t
summarize all the key digital success
elements.
Case: Ant Financial / Alipay’s Digital
Strategy
The largest FinTech Unicorn by 2017
is Ant Financial (controlled by Ali-
baba Executive Chairman Jack Ma),
valued at US$ 60 Billion, owner of
Alipay, which manages almost 60% of
all China’s payments through digital
channels and that have many other
integrated digital ventures like the
mobile bank called “MyBank”.
And coming back to original ques-
tion: Why Ant Financial / Alipay is
the most succesfull unicorn in the
world?
The answer is not just because they
are based in China, where is located
the largest population in the world:
1.4 Billion (but sure it helped them
to get 450 million users, being in-
clusive both for the average citizen,
unbanked, and for the small and
medium enterprises). It is because
Ant Financial / Alipay is extremely
customer centric in the heart of their
digital strategy and financial services
strategy.
Their vision and ambition was to
build an entire digital ecosystem to
cover all Chinese Customer’s Finan-
cial Needs, and also all other every-
day habits where you need cash or a
robust digital wallet, as some define
in the market. Or a “Lifestyle app”, as
Alipay define itself. And the position-
ing slogan makes sense, because
they are much more than a Digital
Wallet.
If you look at Apple iTunes’Alipay
page at https://itunes.apple.com/
us/app/alipay-makes-life-easy/
id333206289?mt=8, it is impressive
to see the list features that the Digi-
tal Platform deliver to users:
1. Send/Receive money from your
peers;
2. Transfer money to friends or split
the bill at your favorite restaurant;
3. Card free payment at millions of
merchants;
4. Top up your mobile phone and pay
your utility bills;
5. Place and track orders in Taobao
and TMall;
6. Order food from local restaurants
or book a taxi;
7. Manage your money with wealth
management products;
8. Free off-site cross-bank transfer /
credit card repayment and loans;
9. Scan & Pay – Scan & use the QR
code to pay at your local stores;
10. Book Air/Rail/Movie Tickets, at
ease;
11. Enjoy hundreds of discounts and
promotions from various merchants;
12. Group account facility to manage
expenses within family and friends
circle;
13. Donate/Participate in walkathons
along with your friends.
Designing a Results Driven Digital Strategy
Point of View - 14
For instance, an incumbent Bank
wants to deliver a new Mobile Wal-
let for Millenials or Digital Checking
Account for Mass Segment. In order
to deliver a full digital experience
in the Customer’s standpoint on
the opening account / onboarding
journey, many changes must hap-
pen, from eliminating paper con-
tracts and physical signatures, to
automating backoffice routines and
doing customer data analytics in real
time. In the meantime, the bank will
probably need to review the role,
profile (and eventually the sizing) of
salesforce and front office advisors at
branch and call center.
In the end of the day, to obtain the
best cost reduction while reengi-
neering processes and creating new
digital experience models outside
for customers and workflows inside
for employees, it is unavoidable to
combine advanced digital technology
and analytics with structural changes
Despite all these exciting features,
Alipay’s Design and Digital Customer
Experience is highly friendly, easy to
use and effective for all types of cus-
tomers. Probably they have the most
impressive social payments network
globally. And also, the most practical
digital payments solution for un-
banked and low-income users.
Another integration that Alipay did
and is amazing is between their giant
e-Commerce platform composed
of Alibaba and Marketplace Mobile
App Taobao, facilitating the shopping
experience. Taobao’s social media
features in some aspects are bringing
innovation lessons for the estab-
lished leader Facebook. Keep people
connected and buying is the dream
of every retailer in the world. But
despite their aggressive online sales
strategy, Alipay didn’t forget the
physical shopping experience: you
can use the QR Code Reader feature
in Alipay’s app and instantly read a
code and pay a product, enabling a
frictionless customer journey.
The range of Alipay allows Ant
Financial to capture an incredible
amount of customer data. This data
is not static as a trophy in a data
center. They really have a Big Data
Strategy and can generate actionable
insights with a very specific goal,
engage customers online, creating a
phenomenon that digital experts are
labeling as “social media commerce”.
And how it works?
They analyze customer’s online buy-
ing patterns, which means millions of
data points and automatically invite
users, during their navigation online
in the web and mobile platforms, to
join custom interest groups, which
from special algorithms, suggest
higher affinity topics according to
each individual’s profile, much more
than a segmentation.
While exchanging views and opin-
ions about products and brands, this
social experience makes shopping
more frequent and engaging. The re-
sult is fantastic leading to an average
7 visits/day/user to Taobao’s mobile
commerce app. The average ticket
per unique user/year is greater than
US$ 1,200.
And in order to enable the health
and credibility of its financial ser-
vices and eCommerce apps growth,
Ant Financial developed too the
first credit agency in China, named
“Sesame Credit”, which an intel-
ligent automated credit-scoring
that leverages big data (online and
offline), purchasing history, social
media presence and digital customer
behavior to build a strong analytics
machine that provides the group the
capability to make credit available
to Chinese Consumers and Small
Entrepreneurs.
Higher Revenues and Customer Satis-
faction are undoubtedly the most de-
sired targets of digital strategy proj-
ects. On the other hand, we should
not forget cost reduction, with an
important parameter: reduce costs
while increasing satisfaction and
revenues, what implies in profound
changes in corporations’ businesses
and processes.
“Digital Strategy is
not only about
digitizing processes
and customer
journeys, it is about
creating a more lean
and efficient
operating model,
that reflects a
new culture
of doing business.”
Point of View - 15
in the organization and high levels of
automation. The combined ben-
efits, considering direct and indirect
levers, can be extremely attractive,
going from 5% to 35% reduction,
depending on your strategic plan and
execution.
So, Digital Strategy is not only about
digitizing processes and customer
journeys, it is about creating a more
lean and efficient operating model,
that reflects a new culture of doing
business.
Digital Strategy Framework,
Imperatives for Success
Frameworks are not always easy
to understand and are more com-
mon for complicated technology
architecture schemes. The point is
that Digital Strategy is something
that stays in between business and
technology, and should be always
customer driven, otherwise nobody
will use your digital platform, only
NASA scientists.
There are many methodologies and
recipes to develop a digital strategy,
what sometimes generate different
visions. If you are a Product Manager
or a UX Design Lead or a Scrum Mas-
ter or simply the Client that bought
the Digital Project, there is a great
probability that despite the fact that
you organized a multi-disciplinary
team and they are working together
in the same war room, thousands of
different paths and views are pos-
sible.
That is why in this Digital Strategy
Framework the simple thing was to
put together key pillars and impera-
tives for success that are common
to most successful corporate digital
strategy projects. You may not need
to use it all, and depending on the in-
dustry and strategic market context,
customer needs, competition and
level of disruption from challengers,
you will have to combine distinct
building blocks in phased roadmaps.
It is summarized in 6 value levers:
1.	 Vision;
2.	 Prototype;
3.	 Capabilities;
4.	 Leadership (and Digital Tal-
ents overall);
5.	 Channels;
6.	 Support.
This framework complements the
“Digital Strategy Roadmap” model,
previously explained, which brought
a phased step by step approach.
Designing a Results Driven Digital Strategy
Point of View - 16
Some final thoughts with imperatives
for success about Designing a Results
Driven Digital Strategy:
1.	 Start your Digital Strategy
always with the Customer
perspective, be open to hear
and change from a product
feature and pain point up to
the entire business model;
2.	 Use Big Data and predictive
analytics to anticipate and
envision future customer
needs and create real inno-
vation that is a combination
of rich insights;
3.	 Don’t rush to go after the
most complex digital innova-
tion like embedding AI on
your mobile app, first make
sure that you are delivering
a consistent Digital Customer
Journey;
4.	 Agile methodologies aside,
do not forget to make the
time investment to gener-
ate your Digital Strategy
Roadmap and engage all the
organization with the same
vision, otherwise your plan
may be too tactical and with
a narrow vision;
5.	 More important than tech-
nology, think first how you
will attract the best digital
talent and transform all your
workforce and C-Level on
Digital First Thinkers and
Executers;
6.	 In the beginning of your
Digital Strategy implementa-
tion, make sure that you will
simultaneously do the quick
wins to gain the organiza-
tion’s confidence and at
same time deliver digital
cost reduction to internally
fund your big Digital Innova-
tion Bets. It means that your
organization will be more
efficient, with a lean oper-
ating model, high levels of
automation and new digital
revenues streams sustaining
business growth;
7.	 Put a big target around
digital personalization of-
fering through mobile and
omnichannel. The Digital
winners will be who use ana-
lytics and real time context
to make personalized offers
and specialized advisory
to Customers and also B2B
Clients;
8.	 Do not underestimate the
level of effort and energy
that you will have to put in
change management for
the backoffice and customer
service support areas, most
new digital business models
do not rise or do not get cus-
tomer’s adoption because
the digital experience in only
good in the appearance, but
many service and logistics
dissatisfaction points con-
tinue to exist;
9.	 Integration is the hardest
technological challenge
that you will face to execute
with mastery your digital
strategy. If you are a leading
incumbent, this is 100% true.
Integrate new digital chan-
nels with traditional chan-
nels, integrate core banking
Digital
Imperatives
for Success
Point of View - 17
systems, integrate different
data marts to enable digital
analytics and many other
aspects. Before investing a
lot of time and money on
this odyssey of integration,
consider the possibility to
rethink from scratch your
old IT Architecture (that
works pretty well but is not
a competitive advantage for
the future) into a completely
new “Digital Architecture”.
Define graduals cycles of
change tied to benefits for
the business through digital
innovation. And meanwhile,
while the architecture
transformation is happening
maybe you will need assem-
ble temporary digital units
for new businesses, other-
wise you could stop innova-
tion process. An example of
that are incumbents launch-
ing digital neobanks with
independent structure and
cost centers. Sure, without
a minimum integration with
core systems nothing works,
but some technological flex-
ibility is crucial to make not
just your IT department, but
the entire company an agile
machine;
10.	Find the right equilibrium
between risk management,
cybersecurity and simple and
seamless customer experi-
ence of your digital platform.
If you increase too much the
security measures on mobile
apps, you may reduce fraud
risk, but make the experi-
ence hard for users. Fast
sign-in through biometrics,
voice or face recognition are
a good example. Even today
the mobile app of some
incumbent banks requires
several steps, tokens and
passwords to access your
mobile banking app. For
every transaction, the same
concept may apply, with two
or three clicks maximum and
no screen scroll, a customer
should finish an action on
mobile. That is why it is so
important that experts in
cybersecurity, compliance,
regulations and legal par-
ticipate in digital cross-func-
tional teams in all key digital
innovation projects and agile
teams;
11.	Pricing and Fees are a very
important issue of your
Digital Business Model.
Many incumbents launched
Digital Mobile Banking apps
with exactly the same pric-
ing structure from standard
business model and physical
channels. The point is not
about doing a price war with
startups and FinTech, that
have lower structural costs,
but using all the key ele-
ments of digital like analytics
and artificial intelligence to
increase your share of wal-
let through more effective
digital cross-sale, up-sale
and new models like digital
subscription, on demand
services and others, enabling
you to have a digital pricing
intelligence and flexibility;
12.	Measure the success of Digi-
tal Customer Journeys and
how they will bring higher
profits to the stakeholders
is highly difficulty, turn your
digital ROI measure into a
top priority, automate KPI’s
analysis in real time building
a robust Digital Dashboard;
13.	Define a hybrid digital orga-
nization, with a dream team
of cross-functional experts
and executives fully dedi-
cated to digital transforma-
tion and a matrix structure
with focal points for digital in
all areas of the organization,
unifying common goals and
objectives. For those more
aggressive on digital invest-
ment, you may think about
establishing your own inno-
vation lab or design center;
14.	Make innovation and bench-
marking an obsession in your
company, you need to be
aggressively agile mapping
innovation in the market,
adapting and creating your
own digital innovation, with
a dynamic go to market lead
time, keeping you one step
ahead of competition. And
don’t forget to look at Digital
Innovation lessons cross-
industry. There are always
some aspects that you can
incorporate in your own in-
novation model;
15.	Foster open innovation and
increase your value network
constantly. It is not just
opening APIs or sharing cus-
tomer data like some bank-
ing regulations in Europe are
defining, but letting business
partners participate actively
in the digital innovation
cycles and sprints. Remem-
ber, this includes your cus-
tomers providing you direct
feedback, not just through
research institutes;
16.	Develop new analytics risk
score models for your digital
innovation models in bank-
ing, retail and any other rev-
enues based business online.
In some markets, selective
FinTech players are testing
more broad risk models
that include not just stan-
dard quantitative data from
credit institutions, includ-
ing secondary demographic
data, online behavior, social
media habits and network,
purchase history etc. The
Chinese FinTech Unicorn Ant
Financial is one Company
doing this more complete
and flexible scoring analysis
with the ultimate goal to
be more inclusive for target
segments like the unbanked
and millennials starting their
careers. On demand services
that do not require signing
annual contracts with loy-
alty restriction are another
solution that Startups are
bringing to change the risk
Designing a Results Driven Digital Strategy
Point of View - 18
score paradigm. A good
example is the Oscar Digital
Health Platform, which allow
customers that do not have a
health plan to buy separated
services like a mobile video
call with a specialized doctor
without previous appoint-
ment, you just pay online
with your credit or pre-paid
card or other tools like pay-
pal, and you get the immedi-
ate service. You can later pay
for a complementary face to
face appointment with the
doctor if needed and do the
required health exams, using
the online appointment tool;
17.	CRM and analytics are not
optional items in your Digital
Strategy. For instance, a Mo-
bile Banking app without any
analytics intelligence is just
one more channel. Analytics
gives you the capability to
recognize individual cus-
tomer’s profile and needs,
do personalized offers in the
right moment for the right
model and pricing, provide
services in a more intimate
way, knowing the history and
personality of your cus-
tomer. Analytics together
with CRM will make your
digital platform a live organ-
ism that learn everyday like
a machine learning system,
not something static, and
will bring effectiveness for
your customer’s acquisition,
cross-sell & up-sell, reten-
tion and loyalty strategies.
And finally, big data real time
streaming analytics (not just
predictive analytics) is a key
component to make this
CRM + Analytics equation
work with perfection, giving
you the ability to anticipate
customer needs and act right
when opportunities happen,
instead of analysis based on
past behaviors, which are
good to minimize customer
churn, but not so adequate
for the speed of the digital
customer;
18.	Complementing the point
above you need to have a
super expert digital market-
ing team in order to make
your digital strategy effec-
tive. This team will not do
the marketing advertising in
the old way, putting all your
eggs in TV Media. FinTech
players were naturally forced
to become masters in digital
marketing, because they did
not have budget for mass ad-
vertising. And they got mil-
lions of downloads and new
digital customers this way.
So, your new digital mar-
keting team need to build
and use proficiently capa-
bilities like SEO, online Lead
Management, Social Media
Marketing, Personalized
Push Mobile Offers, Location
Based Services, Campaign
analytics and others, with a
focus on marketing ROI. Do
not delegate all this change
and responsibilities for
your Advertising or Digital
Agency, you need to have an
in-house digital marketing
governance body;
19.	Your Company should have
a Venture Capital and M&A
mindset. Digital innovation is
spread in the market, in the
Small & Medium Enterprises,
early stage Startups, that
competitor that you never
paid too much attention,
smart ideas from emerging
markets and more. Keep an
strategic eye on all Digital
players and rapidly make
decisions about investing,
acquiring, accelerating, in-
cubating or just establishing
strategic alliances strength-
ening your ecosystem. This
can speed up your rhythm of
digital innovation and future
growth of your business.
Point of View - 19
Author: Fabio Mittelstaedt
Innovation and Digital Strategist
June 2017

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Designing a Results Driven Digital Strategy: Customers and Corporations’ Digital Journeys are just Beginning…

  • 1. Customers and Corporations’Digital Journeys are just Beginning… Designing a Results Driven Digital Strategy By Fabio Mittelstaedt June 2017 DefineDigitalVision Change Mobile App’s Wireframe Build Cross- -Functional Team Improve Digital Customer Experience Do Proof of Concept with Customers Designing a Results Driven Digital Strategy
  • 2. Point of View - 2 Designing a Results Driven Digital Strategy T he common question in the market regard- ing digital strategy is if leading corporations and multinationals re- ally need or “must have it”. However, disruptive emerging business models using digital first approach are a very clear message for the C-Level that it is not hype, it is rapidly becoming the new normal. Remember all the innovative tech- nologies of the last two decades that seemed fragmented and more appealing for punctual process improvements and gains in isolated areas like sales, marketing, supply chain etc? CRM, BI, Big Data, Analyt- ics, Mobility, Cloud, AI, Robotics, Telematics, VR, AR are only a few examples. It happens that the new generation driving open innovation, collabora- tive models and a fascinating new wave of startups, FinTech, InsurTech and other niches in different indus- tries, could finally connect the dots using all these available technologies in a simple, integrated and seamless way. And how they did it? Simply reimagining or reinventing Customer’s Experiences with a holistic view of what is called to- day “Customer Journey”, mean- ing all the phases of a customer interaction with a brand, product or service in order to fulfill his needs, from the moment zero of motivation passing through re- search and comparative analysis of options in multiple channels or touchpoints (digital and physi- cal), purchasing and relationship and customer service post-sales. Initially, disruptors attacked one strong pain point or customer need and tried to build the ideal customer experience, the customer’s dream realized without the con- straints that large corporations and regulators tend to ignore or label as not feasible. Do an international money transfer with a few clicks paying a small fee, starting a mobile video call with a specialist doctor as a on-the-shelf service without having a health plan or previous appoint- ment, buying an auto insurance via mobile in less than two minutes that charge you for miles driven and give you back up to 50% of premium if you don’t have any incident are a proof that new game changing digital models are highly desired and ap- preciated by customers, and came to stay. Disintermediation, unbundling products with digital challengers and simplifying customer experience are topics that most financial institutions learned to respect, developing simi- lar solutions, partnerships, accelerat- ing startups (with or without venture capital) and even acquiring players. Others are building their own Digital Innovation Labs. Bank of America recently announced the coming launch of “erica”, a new Digital Assistant combining Artificial Intelligence, predictive analytics and cognitive messaging capabilities via voice command or text to make pay- ments, check balances and savings, pay bills, transfer money etc. Their bet is that this mobile platform, one of the first aiming to attend the retail banking focusing on mass and affluent segments, instead of wealth customers and investment capital markets, can establish a risk-taking innovation built by a huge market leader, not a FinTech competitor. This shows that Digital Strategy is already a Top Priority in the strategic planning agenda in some industries and that executive committees already understood that it is much more than pure technology and systems, even if a company is not a tech native and deliver services or any type of goods or B2B, digital can be the catalyst to transform and join business strategy, operations and technology in one single shared vi- sion across the company. Digital Customer Experience Maturity Once that Digital Strategy became extremely relevant in everyday busi- ness, Banks and Retailers overall are struggling to achieve Customer “Digital can be the catalyst to transform and join business strategy, operations and technology in one single shared vision across the company.” “Unlike a mathematical formula that gives you certainty about the final result, Digital CX is totally about uncertainty and constant change, because it is anchored on customer’s mind, how it interacts with new technologies, products and services.” “Unlike a mathematical formula that gives you certainty about the final result, Digital CX is totally about uncertainty and constant change, because it is anchored on customer’s mind, how it interacts with new technologies, products and services.”
  • 3. Point of View - 3 Experience Maturity, recognizing that the real treasury behind it is in understanding customer’s dreams, ambitions, aspirations and daily habits and attitudes. And that all off it is transparent in the path to digital journeys, in the traces that they leave in the web, mobile apps, social networks and in the sometimes under explored in-house consumer data warehouse. You just need a structured analytics engine and a cross-functional team of motivated strategists, UX design thinkers and Departmental Experts to reveal and envision what should be the enhanced digital customer ex- perience for all segments, from baby boomers to millennials and genera- tion Z. And for sure, do not forget the most important thing here, talk directly to your customers, despite of all your survey investments with the best research institutes. But creating, measuring and compar- ing Digital CX Maturity is not like any regular business challenge. Corpora- tions, Consulting Firms and Research Institutes are trying to rationalize it through different methodolo- gies. The only issue is that unlike a mathematical formula that gives you certainty about the final result, Digital CX is totally about uncertainty and constant change, because it is anchored on customer’s mind, how it interacts with new technologies, products and services. The relevance about analyzing Digital CX Maturity from different perspec- tives: Customer’s Eyes, Competi- tion Benchmarking and New Digital Comers is that it can be an effective method to quickly test and learn and bring practical insights for improve- ment in specific processes and cus- tomer journeys that your team didn’t notice before. Some time ago, Fjord developed the “Love Index”, which aims to understand and identify how much people’s experience define the affin- ity with a product, service, company or brand and provide actionable insights for improving the design of digital CX by mapping how much an experience is Fun, Relevant, Engaging, Social and Helpful. Forrester delivered the “Cus- tomer Experience Index” (CX Index™), willing to help Digital Chief Officers and CX profes- sionals understand the ups and downs of CX quality over time in 18 industries. Consumers are asked how each brand or prod- uct is selected based on three dimensions: enjoyable, easy and meets needs. Despite methodologies, the real question is: “what digital really means for your business strategy and for every single customer that your company is trying to capture or retain?” Generic strategies or broad customer segments do not work anymore, we are living the new era of real time personalization. Personalization is the new name of the game Digital experts are using new expres- sions to try to distinct the natural “Digital Customer” from the more resistant segments that slowly ex- periment the benefits of life digitali- zation, from how I use my cash, how I manage macro decisions in my life and how I make the small everyday choices, what has been called micro- moments and how they can create natural personalization and customer intelligence to the daily experiences that really matters. It means that if I am searching for a new car in the web and if I just checked my avail- able credit in my mobile banking app, I can receive an instant pre-ap- proved auto loan offer for that BMW that I was dreaming off in a dealer near to my location, all in real time. And that your food requests through voice command for AI ChatBots like Siri, Alexa, Jarvis or Google Assistant can be crossed with data from wear- ables like Jawbone body media and fitness trackers and next time you try to order a meal online, you will receive a personalized diet advice about the type of food, proteins and calories that you should eat in order to have a balance in your nutrition and health. But what this kind of thing has to do with digital banking and finan- cial services? Everything. Your daily habits in life and how you manage your money are fully connected. And digital is the link that is building the bridges for a more integrated experience. Ideally in a near future I shouldn’t need thousand different apps for shopping, payment, learn- ing, travelling etc. The one-stop-shop is not a new concept, but only now we have available all the digital, analytics, mobility, omnichannel and artificial intelligence capabilities that will make it possible. Your mobile Banking platform becomes an intelligent and per- sonalized retail marketplace for all customer needs, integrating several providers with secure APIs in the Banking as a Service platform. This complete Mobile Banking Mall would be frictionless, meaning that there is no data duplication, it is pre- populated in the background every time you want to buy a new service from another financial services partner sharing this open platform, generating revenues for incumbent Banks and FinTech Startups. A Digital Win-Win.
  • 4. Point of View - 4 Designing a Results Driven Digital Strategy Big data collects data from your financial history, social networks, last purchased products, preferred channels, demographic data, fam- ily household profile, geolocation and can use predictive analytics to model your personal context in the customer life cycle. Thus, Artificial In- telligence just built your persona and now can instantly send you personal- ized offers. That could go from an investment advice coming from a robot advisor to an insurance product to a cheaper air flight ticket for a frequent travel that you do monthly to visit your parents in another state. Moven’s Mobile banking app, is a very well know digital case, but not everybody knows that besides all basic personal financial management features (very similar to Simple and GuiaBolso) depending on the analy- sis of your spending behavior, Moven can automatically increase your savings volume sending you simple personalized recommendations via a specialized debit card linked with your app. Case: BBVA, Personalized Mobile Videos Personalization in Digital banking does not mean the apps features only, but using digital and customer data analytics to generate higher adoption and contribution margin on products online. BBVA and Allianz are using Uses Personalized Mobile Video to Drive Pensions and Digital Banking with Idomoo. They created a Future Self video from the perspec- tive of their future retired customer. The videos are further customized to each individual viewer, showing them the specific amount that they currently contribute, how much they can save if they increase the average contribution, their rates and end of term savings they could see based on their current financial status and activity what would be the monthly pension income after retirement. In the same digital platform, just swap- ping a bar in the mobile bank app, customers could adjust their pension plans for best future cost vs benefit. In the case of BBVA, 40% of target customers (selected automatically via analytics campaign engine) saw the personalized video, resulting in a 78% increase in retirement savings. Regarding mobile banking personal- ization, there are many aspects that do not add too much value for cus- tomer engagement like design and photo personalization or basic things like using geoloca- tion to find the nearest ATM. What is really interesting about personalization is when a bank use three things in a smart way: intelligent data analytics person- alization, real time automated personalized advice and artificial intelligence managing it all and interacting with the customer in a less robot style and more hu- man appeal. Case: Tangerine Bank, Personal Finance Summary For the first aspect Tangerine Bank (previously ING Direct, a Retail Bank from Toronto, Canada and part of the Scotia Bank group) has a very nice way to show customer’s financial data summary in one small screen, showing what you have, what you owe, interest earned and fees saved since you became a client and the rest is the typical informa- tion that most mobile banks have.
  • 5. Point of View - 5 Case: Finie, AI Digital Powered Banking with Natural Language And there is a mobile innovation that intends to join the three points mentioned before: Finie (meaning Financial Genie), which is an AI App for Digital Bank Account. Created by professors at the University of Michigan who assembled a small start-up named Clinc, Finie is a voice- powered AI platform based on deep neural networks, an innovative way to interact with a banking account using natural language queries (as opposed to a very limited set of rule-based commands as most rob advisors in the market do). This is a game changing AI technology, more advanced than Siri and Alexa for instance. And what else is different about Finie comparing to other AI platforms? Finie is a Banking expert! Its remark- able natural language processing engine has specifically trained its ap- plications with a deeper knowledge of the financial and banking industry. Finie is like a fast machine learning, expanding knowledge and improving results with every interaction. Instead of being limited to robotic boring commands such as, “Show me my credit card balance”, you can freely talk to Finie in your own words asking for instance: “Do I have enough money to travel to Caribe next holiday with my family for one week, spending around US$ 8,000?” or “Did I spend more on groceries this month than last?” Finie is integrated within a banks’ mobile banking application, acting as “a voice-activated intelligent person- al assistant” that is able to answer financial questions unique to each individual user, offering personalized spending advice. This new level of digital banking per- sonalization may take digital custom- er experience to a totally different quality and satisfaction high stan- dard. A few Banks in Canada like ATB Financial and Royal Bank of Canada are trying it, but with the more basic AI platforms. ATB launched the digi- tal assistant “Pepper” which pretty much a customer service robot, since it does not make transactions. Royal Bank of Canada Canada’s is offer- ing e-transfers for its customers via voice-command with Siri, Apple’s virtual assistant. Case: L’Oréal, Digital Beauty Personalization integrated with m-Commerce Going outside financial services world, there is a digital personaliza- tion innovation in beauty prod- ucts retail that I particularly like because the idea is simple, the customer need was latent but nobody could implement a so user friendly and intelligent digital platform before: the Make Up Genius from L’Oréal, launched by 2015. It is an augmented reality app which allows customers to virtually try on 4,500 of the cosmetic brand’s catalogue of products using their smartphone or tablet. The Makeup Genius applies bronzer, eyeshadow, lip gloss, and eyeliner in real time using facial recognition technology, enabling the virtual make up to stay in place as you move your face. The technology captures 64 facial data points and 100 differ- ent facial expressions to accurately place the make up. The app scans your face, and then allows you to try out different products or entire make up looks. Depending on the context and event: going to a marriage during the day or a night dinner or party, the app can recommend and apply instantly dif- ferent looks in your virtual face. You can then save your selfie, share it on social media, and the app automati- cally select the products needed for your make up, add to your mobile basket, you pay directly through the app and receive it at home. It means “really” a seamless and integrated digital customer experience. And one lesson learned for seasoned executives should be: pay attention to digital best cases from different industries that do not belong to your comfort zone. You need to be creative and open mind when talking about digital innovation and try to adapt the best of each idea and join the pieces in a new original innova- tion that will work for you market context and type of customer. The new digital salesforce models launched by products industry are a good example that could be adapted to rationalize costs with huge struc- tures of sales representatives in the financial services industry. Digital Experience is omnichannel, but Mobile will Prevail When defining a digital strategy, omnichannel is much more than an operational decision. Ideally a Bank should put available 100% of all func- tionalities, products and services in digital channels, while keeping them connected with traditional channels, allowing customers to go forward and back through channels without struggling and have to restart the
  • 6. Point of View - 6 Designing a Results Driven Digital Strategy process when switching touchpoints. Citi Card’s Digital Lead, Alice Milligan, recently declared that made around 85% of services available on mobile app so far, and will hopefully move quickly to 100%. But the main point here is that we can’t choose what channels cus- tomers will use in their non-linear journey. Depending on the indus- try, digital channels can handle the full experience from research and purchase to aftersales service or play the typical role of decision support and the purchase will be done on physical channels, like the car buying experience. A research from Google and Luth says that even before going to a car dealer, customers explore from 6 to 14 brands online, do on average 139 google searches, see 14 youtube videos with technical details about the desired car in sites like cars.com and more. 71% of these online activities are performed on mobile. In addition to that more than 60% of customers use the digital car configurator tool and more than 40% simulate auto finance online. Only after all this digital research, or in between, customer visit car dealers in order to do the test drive, negoti- ate and close the deal. This seems complex, right? As a mat- ter of fact, native digital customers already do it intuitively. That is why mapping and improving a customer journey is something that you can’t do only with common sense inside your company. Coming back to Banks, it is easy to notice that they offer multiple chan- nels, from branch to social network, call center, chat, video call, e-mail, apps, ATM and others. Definitely it is a very rare situation when you really start experiencing true omnichannel integration. Take as an example what every bank is trying to do now: implement a fully digital new checking account opening experience. After FinTech players like mBank, IGaranti and others showed the treasure map, most leading banks put this available with steps and technologies that are becoming a standard like digital sign- in, face recognition, photo capture and OCR documents, fingerprint login etc. And most of these apps are really great. The reality is, if you have any issue post-digital account opening and contact another channel, typically there is no context transfer and customer’s interactions detail his- tory with data transposed from one platform to another. That is why “Your daily habits in life and how you manage your money are fully connected. Digital is the link that is building the bridges for a more integrated experience. Your mobile Banking becomes an intelligent and personalized retail marketplace for all customer needs, integrating several providers with secure APIs in the Banking as a Service platform. A complete Mobile Banking Mall.”
  • 7. Point of View - 7 backoffice and customer service are the most complicated Achilles’ heel when integrating omnichannel and delivering new end-to-end digital banking journeys. The good news is that there is a lot of digital technology available to improve this experience and more flexible business models disrupt- ing the market, taking advantage of business inefficiencies of established market leaders. This is the case of Lemonade, a New York-based insurer for homeowners and renters. It looks like a peer-to- peer insurer, this is because they disintermediated the market by eliminating brokers from the process, what made the InsurTech community call them the “Uber of Insurance”. They use a artificial intelligence bot named Maya, that interacts with cus- tomers through chat, with the value proposition to get insured through mobile in 90 seconds and in case of claims, pay customer on average in 3 minutes. No stress, when you start a claim in the app, you just answer a few questions and record a video telling the details about the incident and a few minutes later the money is in your account. An article published by March 2017 at The Economist web site, described a real customer claim and told the science behind it: “Late last year a customer called Brandon claimed for a stolen coat. He answered a few questions on the app and recorded a report on his iPhone. Three sec- onds later his claim was paid—a world record, says Lemonade. In those three seconds “A.I. Jim”, the firm’s claims bot, reviewed the claim, cross-checked it with the policy, ran 18 anti-fraud algorithms, approved it, sent payment instructions to the bank and informed Brandon.” Another good case of linking mobile app and other channels seamless in the customer journey is cardless ATM withdrawal, not thinking only about the convenience when you forget your debit card at home, but also aiming a less risk and quick operation without identity theft situation. The discussion here is not if ATMs will die or survive, it is about giving real functional technological examples of omnichannel, consider- ing that this topic sometimes is too much theoretical. In the last months, many Banks and Credit Card Companies announced cardless ATM withdrawal, but one of the first to develop it was Akbank, from Turkey, using beacons (tiny Bluetooth 4.0-based devices). Wells Fargo is going one step ahead of competition in this area. Their in- novation team is close to launch the mobile capability to use Apple Pay to withdraw cash from ATMs without a card (5,000 NFC enabled ATMs out of its 13,000 total network). After you click on Apple Pay app you will just need to enter your card PIN to finish the transaction. Simple like that. In all these examples, there is something in common, even in a omnichannel scenario, digital mobile is always taking the lead as main platform. It is absolutely clear and natural for any Digital Strategist that omnichannel integration is a key element of customer success’ path. “Mobile-First Approach and Apps are the first thought when teams start a project to digitize customer journeys. By 2016 more than 90% of time spent on mobile was in apps and only 10% on browser, and daily web consumption per user is getting almost equal in the mobile and laptop.” “Mobile-First Approach and Apps are the first thought when teams start a project to digitize customer journeys. By 2016 more than 90% of time spent on mobile was in apps and only 10% on browser, and daily web consumption per user is getting almost equal in the mobile and laptop.”
  • 8. Point of View - 8 Designing a Results Driven Digital Strategy There are significant signals that digital channels are gaining preference and that the internet access through Desktop and Laptop is losing share for the Mobile platform. That is why Mobile-First Approach and Apps are the first thought when teams start a project to digitize customer journeys. By 2016 more than 90% of time spent on mobile was in apps and only 10% on browser, according to Flurry and comScore. Daily web consumption per user is getting almost equal in the mobile and laptop in emerging markets like China (3h03m mobile, 3h29m laptop) and Brazil (4h48m mobile, 5h36m laptop), while in mature markets web access via laptop continues much higher. France shows only 1h32 minutes of daily web access on mobile and the triple in laptop (3h57m). Surprisingly, mobile web access in USA is close to half of the volume in Brazil, with 2h37 minutes. By 2017, mobile banking may reach incredible 60% of usage in Asia Pacific and 54% in Latin America. Europe and North America, despite the fact that they are regions with strong mobile banking technology R&D investments, will show an average range from 42% to 45% of mobile usage. One possible explanation is that both continents have older aging inhabitants, more resistant to innovative technologies. Millenials share of population are much larger in emerging markets for instance, and all surveys shows that they are the early adopters and promoters of new digital banking technologies, along with generation X. 44 45 42 54 60 32 38 43 43 52 Africa/Middle East North America Europe Latin America Asia Pacific Mobile Banking Basic Services Usage and Intention By Region 2016 Actual 2017 Forecast Source: The Nielsen Mobile Shopping, Banking & Payments Survey 2016, analysis Fabio Mittelstaedt. Mobile Banking Adoption Growth will be higher in Asia Pacific and Latin America as a trend for next years, strongly pushed by emerging markets like India, Singapore, China, Brazil, Argentina and Colombia. 2.37 1.32 3.03 4.484.48 3.57 3.29 5.36 USA France China Brazil Web consumption per user via Mobile and Laptop (Hours per Day) Mobile Laptop Source: Statista Digital Market Outlook, April 2017, analysis Fabio Mittelstaedt.
  • 9. Point of View - 9 52% of millennials will be doing payments through mobile banking by 2017, with 47% from generation X. These are really aggressive numbers, considering that many innovative payment apps from FinTech Startups and even incumbents, still have security issues to be solved in the mobile architecture, which is relatively new comparing to other systems like web and branch front office solutions. Here some of the key motivations is the offer of more user friendly and simple apps and lower fees. Above all, younger digital users like to experiment and have no attachments or loyalty with financial services providers. They just use it because they like the experience and there is no bureau- cracy in new Digital “FinTech like” models. The current usage and future intention to use mobile apps for financial services and personal finance management is a trend that is not going to decline anytime like in a product lifetime curve that people learn in marketing and admin- istration courses, because it is changing people lifestyle and making it easier and more dynamic. This trend is becom- ing a solid reality that is being materialized (or saying better digitized) in the last 8 or 10 years. Proof of that is the incredible number of finance mobile apps available at Apple Store by March 2017: 49,060 apps, and with the poten- tial power to consolidate apps from other industries and segments as cash and daily life needs converge naturally, as you need to buy and pay for goods and services. We will show in this point of view one of the best examples of this digital converge with “Ant Financial / Alipay’s Digital Strategy Case”. Building a Strategic Digital Customer Experience Road- map The first step to build your Digital CX Roadmap is to forget about technol- ogy. The temptation to use the most advanced and appealing digital and mobile technologies shouldn’t be part of your Experience Strategy upfront. Super Sex Digital Features like Location Based Services, Aug- mented Reality, Artificial Intelligence Avatar, Smart Robo Advisors for In- vestments, Gamification… All of this can used, if they make sense for the storyline of your customer and for the value proposition that your busi- ness strategy is aiming to achieve and design. Start from the basics, talk to your customer, apply user experience research techniques, do the typi- cal design thinking workshops with a multidisciplinary team, and test hypothesis again with your customer, even before prototype and minimum viable product phase. Try to understand the non-linear path of CX in the omnichannel environment and do exercises to simplify the experience and create shortcuts in the value chain, using digital innovations, existing and new ones to be developed. That is when big data analytics show its power, because the customer won’t tell you everything, but you can consolidate behaviors of common segments and prioritize some personas that make sense for your business and your ap- plication design. And don’t underestimate backoffice processes. Sometimes digitizing a process may be more important to a lean experience than a sophisticated personal finance management dash- board, and can make the difference in critical moments as purchase and customer service, when trying to fix a pain point in the customer journey. Put a limit in the complexity of your
  • 10. Point of View - 10 Designing a Results Driven Digital Strategy UX strategy, a few products, a few clicks and a killer design that facili- tate customer’s interaction making intuitive screens and buttons, just like Steve Jobs envisioned when inspired the programmers to create the Mac interface, yes old school of design still works a lot… But the real test of success is when the empathy with the customer is achieved and in your next focus group you listen testimonials like: “it seems that they guessed what I wanted, easy and fast, without push- ing products that I don’t want”. At this point of the CX Strategic Blueprint, the CMO, CDO and CIO are probably satisfied with the prelimi- nary results of the initial sprints of your agile development. And then the CFO asks about the projected ROI, Revenues Generation, Estimated Customer Acquisition Curve in the first year of operation, Costs Amor- tization, Potential Churn and other important quantitative and financial elements to sustain the business case, that is the value creation part, for the customer and for the busi- ness, it must be a Digital Win-Win in the Customer Experience and Bal- ance Sheet. The “Digital Strategy Roadmap” explain in a simple way the basic steps to build and implement your strategy in a high-level vision. This model is complemented next in this point of view with the “Digital Strat- egy Framework”, that brings further detail organized by structural points that should be evaluated when de- signing your digital strategy. The Roadmap steps are based on the most advanced techniques of open innovation, design thinking, agile, scrum and traditional strategy and management consulting methodolo- gies. The steps are intuitive and not nec- essarily sequential: understanding the digital market context, the com- petitive scenario (including disrup- tive startups and FinTech), technol- ogy trends etc makes total sense when starting any digital project. But your digital team may choose to start from the step 2, which is map- ping digital customer needs and pain points and trying to transform them in strong hypothesis for value cre- ation opportunities and innovative business models, that is step 3. Or you could jump from customer assessment directly to the design thinking customer journey vision- ing (step 4) and only after that think about revenue models and how your digital idea has the potential to be- come the next US$ 1 billion unicorn. The Digital Transformation Strategy (step 5) is a broad step, because here you need to have more than the stra- tegic vision at this point: a structured business case, sales projections and all the operational, technological, human and cultural changes needed to make the transformation happen, and before that, engage the board and the all company with the digital vision. The agile implementation (step 6), based on quick sprints and test & learn is self-explanatory. Using open innovation working model, APIs, intense collaboration of cross-func- tional teams to create a continuous digital innovation cycle. And finally, the Agile Project Man-
  • 11. Point of View - 11 agement is a gradual evolutionary concept, totally based on lessons learned in large digital transforma- tion projects. For instance, in a lead- ing Bank, I have spent a significant time first preparing the field, what I call Digital Building Blocks, in order to make the organization ready to develop the most advanced digital innovation ideas. In some customer journeys it means basic things like digitizing processes, going paper- less, integrating digital channels with branches’ front end and other actions. Some organizations like Deutsche Bank are many steps ahead of that, and already established their own in- novation lab and made several waves of internal transformation to make their digital strategy a real success. A Digital Roadmap requires flexibility and agility. You need to constantly learn and adapt your digital strategy, and be bold in your digital thinking, allowing mistakes and understand- ing that quickly test, try and improve can lead you to a huge success very soon, if you go fast. So it is not about finishing a great Digital Strategy Roadmap and in the next day starting developing a revolutionary mobile app that will change your business. Even small startups commonly don’t do it this way. Imagine big corpora- tions that have their cash cow and star products that generate great profits for decades. It is always a phased approach, going forward and back again, and educating employees with a different digital mentality, like if everyday you challenged yourself to create a new business or replace your own product portfolio. Digital Transformation is about Reinventing the Business Typically, most large incumbent Banks launch fancy new mobile apps, but ignore completely the toughest customer pain points, that would re- quire a strong change management effort in the governance model, com- pany culture, core banking and CRM systems, internal processes, paper elimination, digitalization and auto- mation, backoffice workflow rules, new training for branches, salesforce reorganization and even revision of contact center outsourcing contracts. It means that digital transformation can’t be a cosmetic change in the design of your digital channels and investing heavily in digital marketing and mass advertising to convince your customer that you are the best digital bank. Must be a new attitude, culture and rethink strategically the business model, value proposition, revenues model, core costs, segmentation, product portfolio and the new profile of your needed digital talent work- force. Smart Bots don’t implement digital roadmaps. FinTech and InsurTech Startups do not have a millionaire cash flow and a broad customer base and the terabytes of big data about customer behavior as leading financial institu- tions possess, but they bring two lost assets in large corporations: simplicity and true customer centricity. “A Digital Roadmap requires flexibility and agility. You need to constantly learn and adapt your digital strategy, and be bold in your digital thinking, allowing mistakes and understanding that quickly test, try and improve can lead you to a huge success very soon, if you go fast.”
  • 12. Designing a Results Driven Digital Strategy Point of View - 12 Results & Insights: Continu- ously Improving Experience If in your digital strategy you had to choose one first priority KPI, certain- ly it should be something new and broad like “digital customer journey success”, meaning that along all the journey and steps interacting with a brand, how the typical most stress- ful pain points simply disappear in the design of your enhanced digital experience, and as a result of that you do not need to call the contact center, do not need to go to a branch and do not need to email your bank- ing account manager to handle the top list of issues affecting customer satisfaction in the sales and after- sales stages of the relationship with a financial service provider. Example of Best Digital Mobile Ex- perience: Blocking a Credit or Debit Card One of the most common examples is the urgent need to block a credit or debit card, when minutes can make a difference when you lost your card or when it has been stolen. Imagine you are travelling for vaca- tions with the family and your card was theft. Great probability that you do not have a laptop close to your hands, but almost 100% chance that your smartphone is with you. This way, the mobile app experience should be the focus of any Bank for this critical task. Santander Mobile App, for instance, offer one of the most simple and intuitive experienc- es to block a card: you just login with fingerprint, click on cards and then on block card. Three clicks with no screen scroll, no unnecessary infor- mation, data fields are all pre-popu- lated in the background and the call to action buttons and icons are clear and easy to find in the screen. The same is not true for other Competi- tor Banks offering the same function- ality in their mobile app. The main issues noticed in these other banks are multiple screens, buttons and process is not clear in the application and when you finally find the right place after trial and error, a lot of information is requested like details explaining why you are blocking your card, security questions, if you wish or not to receive another card etc. “Mobile Banking Sell? Or it is just about a better experience?” At this point, validating your Digital Dashboard with the Steering Com- mittee, probably the CSO and CFO may have done the same question: “Mobile Banking Sells? Or it is just about a better experience?” The les- sons learned so far in Digital Trans- formation Projects implementation is that digital shoppers conversion rates that typically vary from1% to 5%, can jump from 7% to 10% if you develop an intelligent offering en- gine, including cross-sale and up-sale capabilities lever- aged by analytics and next best offer, what I call “smart digital revenues model”, where the goal is to generate cash in cycles from microments in the daily life like personalized digital offers of food, consumer goods, apparel, electronics, services, travel and entertainment up to changes in your life cycle that drives you to buy a car, an insurance or think about a pension plan for the future. Conversion rates in digital platforms must be high in order to sustain the business case for ongoing invest- ments. This is result of at least three elements: creating innovative models, delivering them in a power-
  • 13. Point of View - 13 ful digital & omnichannel experi- ence and bringing to the customer’s awareness an attractive value propo- sition, that goes beyond pure pricing discounts, establishing a positive relationship with the brand. Understanding the new all day con- nected on multiple devices reality is something that is not responsibility of design thinkers and marketers only, but of all executives, because they allow you to enter in customer’s digital life through the front door. Thinner light Ultrabooks, the latest iPhone or Samsung Galaxy or a re- versible tablet/notebook. The device doesn’t matter so much. Screens of all these devices are getting bigger, since user research experience shows that customers need to see high quality product images, videos, in- tuitive screens and easy simulations and secure environ- ment to enter pay- ment information. If your mobile app delivers all these features, conversion rates can increase by 20% or higher. If you add analytics intelligence, per- sonal and context based interactions, it can move up to 60% or more, tak- ing your conversion rate from 3%-5% range to 7%-10%. This is valid for large corporations going digital. Sure, for startups and FinTech the metrics are different: number of app downloads, people using the app and making transac- tions on the digital platform. Other KPI’s like average value spent online continue the same. This is the output of innovation, not the input or mo- tivators that can explain why some digital players become unicorns and others not. The level of disruption in the digital business model, easi- ness of digital customer experience, lower prices and fees due to disin- termediation and lower overhead, are some common factors, but can’t summarize all the key digital success elements. Case: Ant Financial / Alipay’s Digital Strategy The largest FinTech Unicorn by 2017 is Ant Financial (controlled by Ali- baba Executive Chairman Jack Ma), valued at US$ 60 Billion, owner of Alipay, which manages almost 60% of all China’s payments through digital channels and that have many other integrated digital ventures like the mobile bank called “MyBank”. And coming back to original ques- tion: Why Ant Financial / Alipay is the most succesfull unicorn in the world? The answer is not just because they are based in China, where is located the largest population in the world: 1.4 Billion (but sure it helped them to get 450 million users, being in- clusive both for the average citizen, unbanked, and for the small and medium enterprises). It is because Ant Financial / Alipay is extremely customer centric in the heart of their digital strategy and financial services strategy. Their vision and ambition was to build an entire digital ecosystem to cover all Chinese Customer’s Finan- cial Needs, and also all other every- day habits where you need cash or a robust digital wallet, as some define in the market. Or a “Lifestyle app”, as Alipay define itself. And the position- ing slogan makes sense, because they are much more than a Digital Wallet. If you look at Apple iTunes’Alipay page at https://itunes.apple.com/ us/app/alipay-makes-life-easy/ id333206289?mt=8, it is impressive to see the list features that the Digi- tal Platform deliver to users: 1. Send/Receive money from your peers; 2. Transfer money to friends or split the bill at your favorite restaurant; 3. Card free payment at millions of merchants; 4. Top up your mobile phone and pay your utility bills; 5. Place and track orders in Taobao and TMall; 6. Order food from local restaurants or book a taxi; 7. Manage your money with wealth management products; 8. Free off-site cross-bank transfer / credit card repayment and loans; 9. Scan & Pay – Scan & use the QR code to pay at your local stores; 10. Book Air/Rail/Movie Tickets, at ease; 11. Enjoy hundreds of discounts and promotions from various merchants; 12. Group account facility to manage expenses within family and friends circle; 13. Donate/Participate in walkathons along with your friends.
  • 14. Designing a Results Driven Digital Strategy Point of View - 14 For instance, an incumbent Bank wants to deliver a new Mobile Wal- let for Millenials or Digital Checking Account for Mass Segment. In order to deliver a full digital experience in the Customer’s standpoint on the opening account / onboarding journey, many changes must hap- pen, from eliminating paper con- tracts and physical signatures, to automating backoffice routines and doing customer data analytics in real time. In the meantime, the bank will probably need to review the role, profile (and eventually the sizing) of salesforce and front office advisors at branch and call center. In the end of the day, to obtain the best cost reduction while reengi- neering processes and creating new digital experience models outside for customers and workflows inside for employees, it is unavoidable to combine advanced digital technology and analytics with structural changes Despite all these exciting features, Alipay’s Design and Digital Customer Experience is highly friendly, easy to use and effective for all types of cus- tomers. Probably they have the most impressive social payments network globally. And also, the most practical digital payments solution for un- banked and low-income users. Another integration that Alipay did and is amazing is between their giant e-Commerce platform composed of Alibaba and Marketplace Mobile App Taobao, facilitating the shopping experience. Taobao’s social media features in some aspects are bringing innovation lessons for the estab- lished leader Facebook. Keep people connected and buying is the dream of every retailer in the world. But despite their aggressive online sales strategy, Alipay didn’t forget the physical shopping experience: you can use the QR Code Reader feature in Alipay’s app and instantly read a code and pay a product, enabling a frictionless customer journey. The range of Alipay allows Ant Financial to capture an incredible amount of customer data. This data is not static as a trophy in a data center. They really have a Big Data Strategy and can generate actionable insights with a very specific goal, engage customers online, creating a phenomenon that digital experts are labeling as “social media commerce”. And how it works? They analyze customer’s online buy- ing patterns, which means millions of data points and automatically invite users, during their navigation online in the web and mobile platforms, to join custom interest groups, which from special algorithms, suggest higher affinity topics according to each individual’s profile, much more than a segmentation. While exchanging views and opin- ions about products and brands, this social experience makes shopping more frequent and engaging. The re- sult is fantastic leading to an average 7 visits/day/user to Taobao’s mobile commerce app. The average ticket per unique user/year is greater than US$ 1,200. And in order to enable the health and credibility of its financial ser- vices and eCommerce apps growth, Ant Financial developed too the first credit agency in China, named “Sesame Credit”, which an intel- ligent automated credit-scoring that leverages big data (online and offline), purchasing history, social media presence and digital customer behavior to build a strong analytics machine that provides the group the capability to make credit available to Chinese Consumers and Small Entrepreneurs. Higher Revenues and Customer Satis- faction are undoubtedly the most de- sired targets of digital strategy proj- ects. On the other hand, we should not forget cost reduction, with an important parameter: reduce costs while increasing satisfaction and revenues, what implies in profound changes in corporations’ businesses and processes. “Digital Strategy is not only about digitizing processes and customer journeys, it is about creating a more lean and efficient operating model, that reflects a new culture of doing business.”
  • 15. Point of View - 15 in the organization and high levels of automation. The combined ben- efits, considering direct and indirect levers, can be extremely attractive, going from 5% to 35% reduction, depending on your strategic plan and execution. So, Digital Strategy is not only about digitizing processes and customer journeys, it is about creating a more lean and efficient operating model, that reflects a new culture of doing business. Digital Strategy Framework, Imperatives for Success Frameworks are not always easy to understand and are more com- mon for complicated technology architecture schemes. The point is that Digital Strategy is something that stays in between business and technology, and should be always customer driven, otherwise nobody will use your digital platform, only NASA scientists. There are many methodologies and recipes to develop a digital strategy, what sometimes generate different visions. If you are a Product Manager or a UX Design Lead or a Scrum Mas- ter or simply the Client that bought the Digital Project, there is a great probability that despite the fact that you organized a multi-disciplinary team and they are working together in the same war room, thousands of different paths and views are pos- sible. That is why in this Digital Strategy Framework the simple thing was to put together key pillars and impera- tives for success that are common to most successful corporate digital strategy projects. You may not need to use it all, and depending on the in- dustry and strategic market context, customer needs, competition and level of disruption from challengers, you will have to combine distinct building blocks in phased roadmaps. It is summarized in 6 value levers: 1. Vision; 2. Prototype; 3. Capabilities; 4. Leadership (and Digital Tal- ents overall); 5. Channels; 6. Support. This framework complements the “Digital Strategy Roadmap” model, previously explained, which brought a phased step by step approach.
  • 16. Designing a Results Driven Digital Strategy Point of View - 16 Some final thoughts with imperatives for success about Designing a Results Driven Digital Strategy: 1. Start your Digital Strategy always with the Customer perspective, be open to hear and change from a product feature and pain point up to the entire business model; 2. Use Big Data and predictive analytics to anticipate and envision future customer needs and create real inno- vation that is a combination of rich insights; 3. Don’t rush to go after the most complex digital innova- tion like embedding AI on your mobile app, first make sure that you are delivering a consistent Digital Customer Journey; 4. Agile methodologies aside, do not forget to make the time investment to gener- ate your Digital Strategy Roadmap and engage all the organization with the same vision, otherwise your plan may be too tactical and with a narrow vision; 5. More important than tech- nology, think first how you will attract the best digital talent and transform all your workforce and C-Level on Digital First Thinkers and Executers; 6. In the beginning of your Digital Strategy implementa- tion, make sure that you will simultaneously do the quick wins to gain the organiza- tion’s confidence and at same time deliver digital cost reduction to internally fund your big Digital Innova- tion Bets. It means that your organization will be more efficient, with a lean oper- ating model, high levels of automation and new digital revenues streams sustaining business growth; 7. Put a big target around digital personalization of- fering through mobile and omnichannel. The Digital winners will be who use ana- lytics and real time context to make personalized offers and specialized advisory to Customers and also B2B Clients; 8. Do not underestimate the level of effort and energy that you will have to put in change management for the backoffice and customer service support areas, most new digital business models do not rise or do not get cus- tomer’s adoption because the digital experience in only good in the appearance, but many service and logistics dissatisfaction points con- tinue to exist; 9. Integration is the hardest technological challenge that you will face to execute with mastery your digital strategy. If you are a leading incumbent, this is 100% true. Integrate new digital chan- nels with traditional chan- nels, integrate core banking Digital Imperatives for Success
  • 17. Point of View - 17 systems, integrate different data marts to enable digital analytics and many other aspects. Before investing a lot of time and money on this odyssey of integration, consider the possibility to rethink from scratch your old IT Architecture (that works pretty well but is not a competitive advantage for the future) into a completely new “Digital Architecture”. Define graduals cycles of change tied to benefits for the business through digital innovation. And meanwhile, while the architecture transformation is happening maybe you will need assem- ble temporary digital units for new businesses, other- wise you could stop innova- tion process. An example of that are incumbents launch- ing digital neobanks with independent structure and cost centers. Sure, without a minimum integration with core systems nothing works, but some technological flex- ibility is crucial to make not just your IT department, but the entire company an agile machine; 10. Find the right equilibrium between risk management, cybersecurity and simple and seamless customer experi- ence of your digital platform. If you increase too much the security measures on mobile apps, you may reduce fraud risk, but make the experi- ence hard for users. Fast sign-in through biometrics, voice or face recognition are a good example. Even today the mobile app of some incumbent banks requires several steps, tokens and passwords to access your mobile banking app. For every transaction, the same concept may apply, with two or three clicks maximum and no screen scroll, a customer should finish an action on mobile. That is why it is so important that experts in cybersecurity, compliance, regulations and legal par- ticipate in digital cross-func- tional teams in all key digital innovation projects and agile teams; 11. Pricing and Fees are a very important issue of your Digital Business Model. Many incumbents launched Digital Mobile Banking apps with exactly the same pric- ing structure from standard business model and physical channels. The point is not about doing a price war with startups and FinTech, that have lower structural costs, but using all the key ele- ments of digital like analytics and artificial intelligence to increase your share of wal- let through more effective digital cross-sale, up-sale and new models like digital subscription, on demand services and others, enabling you to have a digital pricing intelligence and flexibility; 12. Measure the success of Digi- tal Customer Journeys and how they will bring higher profits to the stakeholders is highly difficulty, turn your digital ROI measure into a top priority, automate KPI’s analysis in real time building a robust Digital Dashboard; 13. Define a hybrid digital orga- nization, with a dream team of cross-functional experts and executives fully dedi- cated to digital transforma- tion and a matrix structure with focal points for digital in all areas of the organization, unifying common goals and objectives. For those more aggressive on digital invest- ment, you may think about establishing your own inno- vation lab or design center; 14. Make innovation and bench- marking an obsession in your company, you need to be aggressively agile mapping innovation in the market, adapting and creating your own digital innovation, with a dynamic go to market lead time, keeping you one step ahead of competition. And don’t forget to look at Digital Innovation lessons cross- industry. There are always some aspects that you can incorporate in your own in- novation model; 15. Foster open innovation and increase your value network constantly. It is not just opening APIs or sharing cus- tomer data like some bank- ing regulations in Europe are defining, but letting business partners participate actively in the digital innovation cycles and sprints. Remem- ber, this includes your cus- tomers providing you direct feedback, not just through research institutes; 16. Develop new analytics risk score models for your digital innovation models in bank- ing, retail and any other rev- enues based business online. In some markets, selective FinTech players are testing more broad risk models that include not just stan- dard quantitative data from credit institutions, includ- ing secondary demographic data, online behavior, social media habits and network, purchase history etc. The Chinese FinTech Unicorn Ant Financial is one Company doing this more complete and flexible scoring analysis with the ultimate goal to be more inclusive for target segments like the unbanked and millennials starting their careers. On demand services that do not require signing annual contracts with loy- alty restriction are another solution that Startups are bringing to change the risk
  • 18. Designing a Results Driven Digital Strategy Point of View - 18 score paradigm. A good example is the Oscar Digital Health Platform, which allow customers that do not have a health plan to buy separated services like a mobile video call with a specialized doctor without previous appoint- ment, you just pay online with your credit or pre-paid card or other tools like pay- pal, and you get the immedi- ate service. You can later pay for a complementary face to face appointment with the doctor if needed and do the required health exams, using the online appointment tool; 17. CRM and analytics are not optional items in your Digital Strategy. For instance, a Mo- bile Banking app without any analytics intelligence is just one more channel. Analytics gives you the capability to recognize individual cus- tomer’s profile and needs, do personalized offers in the right moment for the right model and pricing, provide services in a more intimate way, knowing the history and personality of your cus- tomer. Analytics together with CRM will make your digital platform a live organ- ism that learn everyday like a machine learning system, not something static, and will bring effectiveness for your customer’s acquisition, cross-sell & up-sell, reten- tion and loyalty strategies. And finally, big data real time streaming analytics (not just predictive analytics) is a key component to make this CRM + Analytics equation work with perfection, giving you the ability to anticipate customer needs and act right when opportunities happen, instead of analysis based on past behaviors, which are good to minimize customer churn, but not so adequate for the speed of the digital customer; 18. Complementing the point above you need to have a super expert digital market- ing team in order to make your digital strategy effec- tive. This team will not do the marketing advertising in the old way, putting all your eggs in TV Media. FinTech players were naturally forced to become masters in digital marketing, because they did not have budget for mass ad- vertising. And they got mil- lions of downloads and new digital customers this way. So, your new digital mar- keting team need to build and use proficiently capa- bilities like SEO, online Lead Management, Social Media Marketing, Personalized Push Mobile Offers, Location Based Services, Campaign analytics and others, with a focus on marketing ROI. Do not delegate all this change and responsibilities for your Advertising or Digital Agency, you need to have an in-house digital marketing governance body; 19. Your Company should have a Venture Capital and M&A mindset. Digital innovation is spread in the market, in the Small & Medium Enterprises, early stage Startups, that competitor that you never paid too much attention, smart ideas from emerging markets and more. Keep an strategic eye on all Digital players and rapidly make decisions about investing, acquiring, accelerating, in- cubating or just establishing strategic alliances strength- ening your ecosystem. This can speed up your rhythm of digital innovation and future growth of your business.
  • 19. Point of View - 19 Author: Fabio Mittelstaedt Innovation and Digital Strategist June 2017