2017 FORRESTER REPRODUCTION PROHIBITED WEBINAR Digital Transformation Lessons

WEBINAR Digital Transformation: Lessons From Financial Services Leaders Oliwia Berdak, Senior Analyst Aurélie L’Hostis, Analyst January 18, 2018. Call in at 10: 55 a. m. Eastern time © 2017 FORRESTER. REPRODUCTION PROHIBITED.

We work with business and technology leaders to develop customer-obsessed strategies that drive growth.

The four rules of digital business Digital experience Deliver experiences that are easy, effective, and emotional. Digital operations Reconceive products and capabilities to deliver better outcomes. Digital innovation Continuously improve and break through at the digital frontier. Digital ecosystems Build platforms and partnerships to accelerate and scale. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 4

Learning from financial services leaders © 2017 FORRESTER. REPRODUCTION PROHIBITED. 5

Case study: Intesa Sanpaolo © 2017 FORRESTER. REPRODUCTION PROHIBITED. 6

Case study: Intesa Sanpaolo drives a customer-obsessed digital transformation › With 11 million customers, over 3, 900 branches, and total assets of € 725 billion, the Intesa Sanpaolo Group is the second largest bank in Italy by assets. Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 7

Situation: Intesa Sanpaolo wanted to drive an outside-in transformation › Embrace digital business transformation to unleash a number of opportunities: • Meet the needs of increasingly digitally savvy customers. • Engage mass-market customers with personalized digital services. • Compete with direct banks for younger customers. Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 8

Vision: Intesa set clear goals for digital transformation Increase adoption and use of digital banking. Generate revenue. Win more customers. Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 9

Digital transformation has gone through three phases Improving its multichannel sales processes Developing an integrated multichannel strategy Addressing technology processes in its digital factory Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 10

Intesa Sanpaolo established an aligned leadership team to accelerate its transformation Source: Intesa Sanpaolo and upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 11

“The evolution in the organizational set-up is coherent with the goal of better serving

The bank launched new digital banking services to deepen customer engagement Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 13

Best practice: Intesa Sanpaolo adopted a user-centered design process Source: Fjord and upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 14

Best practice: The bank adopted a user-centered development process Source: Fjord and upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 15

Intesa Sanpaolo is digitizing its business strategy to boost its transformation › Used customer journeys to guide its digital banking execution › Improved its data infrastructure and developed new analytical capabilities › Established a digital factory to accelerate technology change Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 16

Results: It’s early days, but there are some positive outcomes › Higher usage of digital touchpoints › Increased digital sales › Increased contact center sales › Higher customer satisfaction › Higher engagement Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 17

Case study: Lloyds Banking Group © 2017 FORRESTER. REPRODUCTION PROHIBITED. 18

Case study: How Lloyds Banking Group transformed through 10 customer journeys › Lloyds Banking Group (LBG), which includes Lloyds Bank, Bank of Scotland, Halifax, and Scottish Widows, is a UKfocused retail and commercial bank with over 30 million customers. Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 19

Situation: Lloyds wanted to go beyond optimizing digital channels › Digital to support a new business strategy focused on creating the best customer experience, becoming simpler and more efficient, and delivering sustainable growth Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 20

“This is a strategy adapting to the new world. We want to create a highperforming organisation . to be quicker than others to have a competitive advantage. ” António Horta-Osório © 2017 FORRESTER. REPRODUCTION PROHIBITED. 21

Vision for the transformation Transform 10 customer journeys end-toend. Establish a new operating model to deliver quality at speed. Deliver savings and revenue growth. Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 22

Lloyds set out to overhaul 10 customer journeys Source: Case Study: Lloyds Banking Group’s

Cross-functional teams are tackling 10 customer journeys Scaling team Lab team Product owner Business architect Ops CX design lead Digital technologist Compliance Legal Branch Call center Feature team + Business rollin team Model office team Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 24

Product owner and design and delivery partners head the labs Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 25

Results: Lloyds Banking Group improved customer experience Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 26

Results: Lloyds Banking Group became much faster › It now takes the LGB four to five months to bring something from just an idea to a live product or service — down from 12 to 18 months in the past. › Faster software development and delivery cycles mean that an idea can become a prototype (presentation layer) in just five days — from 90 days previously. Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 27

Results: Transformation didn’t cost a penny. . . › Simplified processes and digital tools have delivered savings and revenue increases to the tune of £ 500 million. › For example, better tools and processes for online personal loan applications have seen the overall credit acceptance and path to purchase increase by 40%, with the average loan amounts up by £ 700 at Halifax and Lloyds Bank. Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 28

Lessons learned © 2017 FORRESTER. REPRODUCTION PROHIBITED. 29

1. It doesn’t matter where you start Allied Irish Banks embraced digital as a “return to economic viability. ” Source: Case Study: AIB Puts Its Customers At The Heart Of Digital Transformation Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 30

2. It’s a journey, not a destination New developments in existing journeys New sets of journeys New enablers Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 31

3. Break down the transformation into manageable chunks BZWBK uses customer journeys to prioritize initiatives and prove the ongoing value of transformation. Source: Use Customer Journeys To Guide Your Digital Banking Strategy Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 32

4. Adopt a customer-centric lens Source: Forrester Research © 2017 FORRESTER. REPRODUCTION PROHIBITED. 33

5. Combine the ‘what’ with the ‘how’ Global digital factory • End-to-end digital journey transformation of existing business Global digital partnerships • Partnerships in relevant ecosystems Digital pure play • Digital offerings and digital distribution models Advanced business analytics • Analytics to enhance and transform the Allianz value chain Allianz X • Startup ecosystem Source: Allianz/Forrester Research © 2017 FORRESTER. REPRODUCTION PROHIBITED. 34

6. Unite business, design, and delivery Neighbours Friends Family Source: Scotiabank/Forrester Research © 2017

7. Adapt organizational structure as needed Source: ING Netherlands and Organize For Digital Banking

8. Calculate and measure the results Increased customer engagement through digital touchpoints Achieved significant growth in digital sales Reduced cost to serve Improved CX Unleashed a new source of revenue Source: Case Study: How Emirates NBD Bank Connected Execution To Strategy Forrester report © 2017 FORRESTER. REPRODUCTION PROHIBITED. 37

How Forrester can help How well do I currently serve my customers? How good are my digital capabilities? How ready am I for the digital transformation? • Functionality and usability benchmarks • Digital business (banking/insurance) assessment • Digital maturity model © 2017 FORRESTER. REPRODUCTION PROHIBITED. 38

Oliwia Berdak oberdak@forrester. com Aurélie L’Hostis alhostis@forrester. com Thank you FORRESTER. COM © 2017

Lessons from the leaders 1. It doesn’t matter where you start. 2. Digital transformation is a journey, not a destination. 3. Break down the transformation into manageable chunks. 4. Adopt a customer-centric lens. 5. Combine the ‘what’ with the ‘how. ’ 6. Unite business, design, and delivery. 7. Adapt organizational structure as needed. 8. Calculate and measure the results. © 2017 FORRESTER. REPRODUCTION PROHIBITED. 40