Transcription
Digital BankingMaturity 2020Belgian report
KEY TAKEAWAYS01 0204 0503Digital Banking Maturityidentifies champions and leadingpractices worldwideCovid-19 has changed bankingand fast-tracked development ofdigital channelsDigital champions outperformpeers on the basis of cost/incomeand ROECovering 318 banks from 39 countries, DBManalyses digital retail banking in 3 channels,based on an outside-in ‘mystery shopper’assessment of digital functionalities,customer needs research and UXevaluation.60% of banks have closed or shortenedopening hours of branches but many havealso implemented new digital features, suchas fully digital processes, e.g. accountopening (34%), remote identification &verification (23%) and contactless payments(18%).Digital champions don’t only lead theirpeers in number of digital functionalitiesalong the customer journey, those that areincumbents outperform other incumbentsin their country on average on both C/I (-4.0p.p.) and ROE ( 1.9 p.p.).Banks still need to close gaps inE2E digital sales processes tobetter serve online customersChallengers tend to be faster thanincumbents to adopt new trendsand innovationsDigital champions know UX is akey differentiator drivingcustomer satisfactionDigital champions are investing in E2E digitalsales processes and have widened their leadon latecomers for key products, e.g. 51% vs23% for current accounts, 85% vs 34% forcredit cards, and 84% vs 30% for cash loans.New functionalities typically gain tractionfaster with challenger banks thanincumbents, e.g. bill split 27% vs 2%, virtualdebit card 26% vs 2%, chatbots withadvanced use cases 15% vs 4%, chatbotsallowing transactionality 12% vs 2%.65% of digital champions ranked in the top10% for analysed UX scenarios. The largestgaps between champions and latecomersare in opening an account 71% vs 23%,buying an insurance product 44% vs 7% andbeyond banking service 48% vs 11%. 2020. Deloitte062
AGENDA1. L I V I N G I N T H E N E W N O R M A LHow are banks responding to challenges caused by the Covid-19pandemic?2. A B O U T T H E S T U D YHow to identify Digital champions worldwide to learn from them?3. I N S I G H T S F R O M D I G I T A L L E A D E R SDBM 2020Digital Banking Maturity 2020 is the4th edition of the largest globalWhere are Digital champions ahead and where are they investingnow for the future? Which innovations are gaining traction globally?4. I N S I G H T S O N T H E B E L G I A N M A R K E TWhat is the digital status of Belgian bank?benchmarking of digital retailbanking channels, answering whatleaders are doing to win in thedigitalization race. 2020. Deloitte5. S T R A T E G Y F O R T H E F U T U R EHow are digital investment priorities influenced by the localcompetitive landscape?3
LIVING IN THE NEW NORMAL2020 brought a number of challenges for banks, fast-tracking digital(r)evolutionIllustrativeSocial lockdowns“Coronavirus: Digitalbanking is no longeroptional”April 14th, EuromoneyLoan defaultsInterest rates reduction“World’s BanksBrace for Rise inLoan Defaults”April 17th, US News”Negative Interest RateMay Not Help InEconomic RecoveryFrom COVID-19”May 19th, Forbes2020AprilMay”41% of employeeslikely to continueremote workingafter pandemic”Source: Press 2020. Deloitte”Coronavirus: willcall centre workerslose their 'voice' toAI?”April 15th, GartnerApril 22th, Financial TimesRemote workingProcess automationCustomer preferences changesProfitability hurdlesGlobal recession forecasts”Banks may not beprofitable until 2025even as majoreconomies recover””World Bank forecastsworst recession ineight decades onCOVID-19”May 22nd, Business insiderJune 8th, BNN BloombergJune”'Phygital': a bankingstrategy for the newisolation economy”Revenue compression”COVID speeds up digitalbanking revolution in 10weeks not five years”June 5th, World EconomicForumJune 8th, The Sydney MorningHeraldBranches remodellingDigitalization fast trackOperating model transformation4
LIVING IN THE NEW NORMALCovid-19 related restrictions triggered immediate actions from banksL I M I TAT I O N S D U E T O C O V I D - 1 960%of banks closed or shortened openinghours of branches11%NEW FUNCTIONS IMPLEMENTED DUE TO COVID -1941%34%25%of banks increased limitof contactlesspaymentsof banks implementedfully digital processes(product opening etc.)of banks introducedappointment bookingsin branches24%23%18%of banks enableddonations to NGOs,social actions etc.of banks introduceddigital ID&V methodsof banks launchedcontactless paymentmethodsof banks turned-off selected methodsof account opening6%of banks suspended account openings orlimited access to products for new clients1.Survey conducted in June-August 2020 in ’mystery shopper’ assessment on a sample of 256 banks participating in 2020 edition. 2020. Deloitte5
CustomerjourneystepsABOUT THE STUDYDigital Banking Maturity is aglobal accelerator helpingbanks respond to changeFunctionalitiesbenchmarked6Banksassessed1.1k 318Digital Banking Maturity is the biggestglobal digital banking study, providing tionsMystery shopperresearchers394.9k17180 comprehensive outside-in ’mysteryshopper’ assessment of retail banks’digital channels and furtheringdiscussion about future developments.Digitalchannels3 6 2020. Deloitte6
ABOUT THE STUDYWith the 4th edition, we are able to identify key digital trends shapingthe banking industry1 country15 banks16 countries115 banks38 countries248 banks39 countries318 banks2020 – Global2016 – PolandThought leadershipmaterial forEuropean FinancialCongress 2020. Deloitte2017 – Central EuropeCovering 15 additionalCE countries and100 banks2018 – EMEAFrom one country to 38 in just2 years to become pioneers inassessing banks’ digitalappetiteBiggest global digital bankingstudy with 4th edition, allowing foranalysis of key trends amongbanks worldwide7
ABOUT THE STUDYIn order to compare digital maturity between banks we assessed threecomponentsFUNCTIONALITIES BENCHMARKINGAnalysis of 1108 digital functionalities through ‘mystery shopper’ approach on real retailcurrent accounts in each bank.Assessment of 6 customerjourney stepsAnalysis of digitalization of13 core banking productsFunctionalities library withworld’s leading practicesCUSTOMER NEEDS RESEARCHSurvey-based research focused on identifying 26 most important banking activities andpreferred channels (branch, Internet, mobile).Customer preferences between channels in termsof most common banking activitiesBENCHMARKAn exhaustive overview ofdigital maturity betweenbanksUXASSESSMENTAssessment of digitalUSER EXPERIENCE STUDYbanking channels fromSupplementing analysis of customers perception of user experience.19 UX scenarios reflecting 10 areas ofcustomer activity from all of the stagesof relationship with a bankDBMUEQ survey covering a comprehensiveimpression of UX of mobile appscustomer experienceperspectiveNote: Complementary assessment comprise KPIs and Covid-19 response surveys. 2020. Deloitte8
ABOUT THE STUDYWeights are applied so that scores reflect the significance, as well as the number, ofimplemented functionalitiesThe significance of functionalities varies greatly within the questionnaire so each question was assigned a unique weight.Weights componentsIFunctionalityassessmentVerification ofavailability of 1108functionalities inevery covered bankIIIIICustomer usageCustomer channelpreferencesRelevance offunctionalitiesPrioritization ofproduct openingmethodsAssessment ofAssessment ofFor majority ofFor product openingfunctionalities infunctionalities infunctionalities -methods –terms of frequencyterms of channelrelevance for bankingprioritization ofof use by customerspreferenceschannels based ondigital openinglevel of globalmethodsFunctionalityscoreadoption by banks 2020. DeloitteConsumer surveys(internal & external)9
ABOUT THE STUDYUsage and channel preferences were evaluated based on customer survey with4900 respondents4900 respondents answers on CAWI survey questions provided insights on customer preferences on 26 activities mapped with customer journeysteps in 3 banking channels.1How often are youperforming the followingbanking lationshipEndrelationship2Which of the channelsis/would be yourpreferred choice foreach of the followingbanking services? 2020. Deloitte3channelsBranchBanking viaPC/laptopBanking viasmartphone10
ABOUT THE STUDYWe analysed 1100 functionalities to track the customer journey focusing on day-today banking and expanding relationshipCustomer Journey sub-categoryCustomer Journey stepXX25InformationgatheringAvailability ofinformation5664Account openingOpening drelationshipAccount & productmanagementProduct x-sell(basic)1Guidance for newusersAuthorizationProduct x-sell(complementary)2Customer supportPersonal financemanagementTransfers andpayments 2020. Deloitte454ChannelsaccessibilityCard management1.2.# of benchmarked functionalities11End relationshipAccount closingBancassuranceInvestment servicesBeyond BankingEcosystem andaccount aggregationProduct x-sell (basic) includes: debit card, credit card, overdraft, cash loan, cheque, bank draft.Product x-sell (complementary) includes: car loan, mortgage, currency account, saving account, term deposit, private banking account.11
ABOUT THE STUDYPresence of UX-related functionalities was measured along persona user scenariosrepresenting all the stages of relationship with a bank19scenariosthat cover109 desktop10 mobileprocessesrepresented by4personasWe have assigned one of 4personas to each scenario. Thepersonas differ in age, career stageand level of technologicaladvancement which influencestheir consumer behaviourIIScenariosScoresWe created 19 scenarios to examine step bystep actions that customers are taking duringrepresentative processes from all of thestages of relationship with a bank. Thesescenarios should be treated as examples anddo not reflect local specifics and regulationse.g. multi-factor authenticationThe steps in scenarios are related to thequestions from the DBM questionnaire.Results comparing digital Champion andlatecomers can be found further 2020. Deloitte12
ABOUT THE STUDYIWe used internationallyrecognized framework tobenchmark UX of mobile bankingappsOverall impression of theproduct. Do users like or dislikethe product?IITranslated into 20 languages anddescribed in more than 20 scientificpapers UEQ is widely-used since 2005.It enables to benchmark in efficientway a lot of banking applications andeasily quantify and compare results.AttractivenessEfficiencyVCan users solve their taskswithout hassle?IIIPerspicuityIs it exciting and motivating touse the product?VIIs it easy to get familiar with theproduct? Is it easy to learn howto use the product?IVStimulationNoveltyIs the product innovative andcreative? Does the product catchthe interest of users?DependabilityDoes the user feel in control ofthe interaction? 2020. DeloitteSource: Deloitte analysis on the basis of M. Schrepp, A. Hinderks, J. Thomaschewski, www.ueq-online.org, used upon a permission of the authors.13
INSIGHTS FROM DIGITAL LEADERSIncumbent champions achieve better C/I (-4.0 p.p.) and ROE ( 1.9p.p.) on average than incumbent peersSelected KPIs of incumbents: average difference to incumbent peers2, p.p.81%of Digital champions are Incumbents11.9 p.p.ROEROACost/income 2020. Deloitte1.2.0.2 p.p.-4.0 p.p.Incumbents – banks with long-established position on the market. Challengers – relatively small bank competing with large long-established banks.Average difference to peers – peers are incumbent banks in the same country that were covered in the DBM survey.14
INSIGHTS FROM DIGITAL LEADERSAlong the customer journey, champions lead the way especially in expandrelationship % of functionalities offered by banks1Overview in this rt followersDigitalchampionsAvailability of informationTop categoriesAdvantage of championsover latecomers21.6xOpening process2.8xChannels accessibility1.4xGuidance for new users1.8xAccount and product mgmt.2.7xAuthorization1.8xCard management4.8xCustomer support1.7xPersonal finance management (PFM)2.9xTransfers and payments1.9xBancassurance3.5xBeyond banking6.2xEcosystem and account aggregation5.7xInvestment services4.2xProduct x-sell (basic)2.5xProduct x-sell (complementary)2.4xAccount closing1.2.7.1xData for 313 out of 318 banks which participated in 2020 edition.Ratio of functionalities % between Digital champions and Digital latecomers score. 2020. LATIONSHIP15
INSIGHTS FROM DIGITAL LEADERS.which, together with products & personal finance management, wasthe key investment priority in the last 2 years of championsDigital champions increase in advantage over peersdifference between % of functionalities in 2018-2020 between Digital champions and others, NBOARDINGX-sell (basic)Ecosystem and account agg.Beyond bankingBancassuranceTransfers and paymentsPFMCard managementAuthorizationAccount and product mgmt.11%10%Account closing10%X-sell (complementary)13%13%5%5%Customer support6%Guidance for new usersChannels accessibilityOpening processAvailability of information4% 2020. Deloitte14%10%8%4%15%14%Investment services15%Where have Digital championsgained the biggest advantageover peers in the last 2 years?Expand relationship functionalities(avg. 13 p.p. advantage) has been a toppriority for Digital champions, especiallypartnership ecosystem and accountaggregation (16 p.p. advantage).Champions have also widened theirlead over other banks in account andproduct management (15 p.p.) andPFM (15 p.p.).1.DAY-TO-DAYBANKINGEXPANDRELATIONSHIPBased on the data for 152 banks whichparticipated in 2018 and 2020 edition.ENDRELATIONSHIP16
INSIGHTS FROM DIGITAL LEADERSChampions deliver the best UX in account opening, transfers, and buyinga credit productUser experiencealong the customerjourney% of UX-related functionalities offered by banks1Digital latecomers79%71%67%61%A global assessment of 19user scenarios reflecting 10areas of customer activityprovides insight into thedevelopment of UX along thecustomer journey65% 48p.p.75% 25p.p.54%44% 30p.p.48%38%45%44%38%Digital champions22%30%23%7%1. Gatheraccountinformation1.2. Open anaccount3.Onboarding4. Reportlost card5. Make atransfer6. Buy aninsurance11%7. Usebeyondbankingservices5%2%8. Addaccountsfrom otherbanks9. Buy acreditproduct10. Closean accountData for 31 banks classified as Digital champions and 93 banks classified as Digital latecomers which participated in 2020 edition. UX score based on 209 unique functionalities. 65% of Digital champions have beenclassified in top10% of banks by UX score. 2020. LATIONSHIP17
INSIGHTS ON THE BELGIAN MARKETDigital Banking Maturity score by customer journey stepDBM score by CJ step, %Based on 1108functionalities andUX features (6customer journeysteps) scoredaccording to globalweights73%68%66%66%59%58%52%45%51%50%40%42% 45%46%37%34%24%15%Best countryGlobal pNote: To improve comparability, the results presented on this slide are calculated based on global average weights. Results for banks in the country on the following slides are preparedwith local weights, based on responses from the country's consumer survey 2020. DeloitteEndrelationship18
INSIGHTS ON THE BELGIAN MARKETOur approach splits global banks into four groups and 4 of the 7 Belgian banks assessedperformed as smart followers or Digital ChampionsDBM index1DigitallatecomersDigitaladoptersDigitalsmart followersDigitalchampionsBelgium isranked 3rdBanksBelgium has2 digitalchampionsout of 311.2.DBM index measures maturity for channels and products offered by a bank. Data for 313 out of 318 banks which participated in 2020 edition.Selection of 31 banks defined as Digital champions. 2020. DeloitteDefined asTop10% of banks219
INSIGHTS ON THE BELGIAN MARKETDigital Banking Maturity score by channelsDBM score by CJ step, %Based on 1108functionalities andUX features (6customer journeysteps) scoredaccording to 2%36%62%58%36%34%25%25%18%All researched channelsInternet & Public websiteBank 1Bank 2Bank 3Bank 4Bank 5Bank 6Bank 7MobileNote: To improve comparability, the results presented on this slide are calculated based on global average weights. Results for banks in the country on the following slides are preparedwith local weights, based on responses from the country's consumer survey 2020. Deloitte20
INSIGHTS ON THE BELGIAN MARKETDBM score by customer journey stepBank 1Bank 2Bank 3Bank 4Bank 5Bank 6Bank 7AverageInformation gathering45%38%40%67%38%63%73%52%Account opening45%37%51%78%50%76%50%17%Customer onboarding48%46%63%62%48%66%75%58%Day-to-day banking31%32%45%63%30%50%64%45%Expand relationship20%19%32%End relationship 2020. Deloitte45%42%8%23%32%11%73%15%55%73%0%61%36%21
INSIGHTS ON THE BELGIAN MARKETUX-related functionalities was measured along persona user scenarios representingall the stages of relationship with a bank using UEQ methodologyPlease note that UX scoring is only a complementary element of theDigital Banking Maturity functionality benchmarking and does not aimto replace comprehensive UX expertise. Quality of the results highlydepend on the number of responses in your country.ImportantUEQ analysis was done on the sample of Deloitte consultants fromBelgium, which provided a useful high-level overview, but it is not arepresentative sample.Overall UX score for 6 banks (on the scale from -3 to 3)1,581,361,321,170,710,11Attractiveness 2020. timulation22
STRATEGY FOR THE FUTUREDBM can help bothchampions and latecomersto future-proof their digitalstrategyWhat’s in it for the bank?We know the digital maturity of retail banking channelsGain insights into the positioning of an individual bank in comparisonto local and global leaders and key gaps.Outcome: Identification of opportunities and strategic implications basedon individual bank’s positioning versus peers.We’ve identified leading market practices worldwideWhat is a digital ambitionworkshop?A dedicated workshop that discusses an individualbank’s digital maturity in retail bankingchannels, competitive positioning and whichcan help to identify potential digital initiatives,based on gaps to local and global leaders.For more details, reach out to your local representativeon the following slides 2020. DeloitteLearn more about the latest trends and developments in digital retailbanking channels.Outcome: Introduction to trends, innovations and example use cases withassessment of relevance for the individual bank.We understand the importance of UX for customersExamine how UX features and functionalities are helping improvecustomer satisfaction.Outcome: Overview of leading UX market practices and identification ofkey improvement areas from a customer perspective.23
Will you drive thechange or bedriven by it?Feel free to reach us for ite 2020. DeloitteKasper PetersCédric DeleuzeBarbara VanhauterPartnerPartnerDirectorStrategy and M&ADigital StrategyCustomer & mbvanhauter@deloitte.com24
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Digital Banking Maturity is the biggest global digital banking study, providing a comprehensive outside-in ’mystery shopper’ assessment of retail banks’ digital channels and furthering discussion about future developments. Digital Banking Maturity is a global accelerator helping banks respond to change
