FINANCIAL SERVICES PRACTICE CEB TOWERGROUP RETAIL BANKING 7

FINANCIAL SERVICES PRACTICE CEB TOWERGROUP RETAIL BANKING 7 May 2014 Rethinking Channel Strategy and the Mobile Customer Breaking Barriers in the Digital Customer Experience Nicole Sturgill Research Director

ROADMAP FOR THE DISCUSSION The Digital Service Gap CEB Tower. Group Retail Banking ©

ENGAGEMENT DECLINES FOR TECHNOLOGY ORIENTED CUSTOMERS Engagement Indicators by Channel Preference Percentage of Customers in Top Two Categories on a Five-Point Scale for Each Indicator by Channel Preference, 2010 60% Clear Understanding of Who and How to Contact Bank Willing to Accept Feedback High-Quality Product Guidance When Purchasing 30% Bank Cares About Customers 0% Personal Only Personal Leaning Balance Multichannel Technological Leaning Technological Only N = 3, 044 FINANCIAL SERVICES PRACTICE, CEB TOWERGROUP RETAIL BANKING © 2013 The Corporate Executive Board Company. All Rights Reserved. Source: CEB Tower. Group research 3

CUSTOMER SUPPORT IS HOLDING DIGITAL BACK Customer Preference for Personal vs. Digital Channels Banking Customers by Banking Task, 2013 80% 75% Personal Channels 66% 56% 42% 40% 42% Digital Channels 54% 38% 18% 0% Receive Customer Support Learn About Financial Products and Services Use or Access Financial Products and Services Purchase New Financial Products or Services n = 2, 013. Source: 2013 CEB Customer Experience Survey. CEB Tower. Group Retail Banking ©© 2013 Corporate Board Company. All Rights Reserved. 2014 The CEB. All Rights. Executive Reserved. CMBO 8231314 SYN #CEBSUMMIT 4 2

POOR SERVICE FOR DIGITAL CUSTOMERS Problem Resolution Metrics Spike for Digital Channels Percentage of North American Banking Customers, 2013 80% 40% 78% 71% 69% 68% 41% 42% Personal Digital 39% 30% 0% Faced Incident More Than Once Interacted with Institution More Than Three Times Good or Great Amount of Customer Effort Ineffective Resolution n = 341. Source: CEB 2013 Customer Experience Survey. CEB Tower. Group Retail Banking ©© 2013 Corporate Board Company. All Rights Reserved. 2014 The CEB. All Rights. Executive Reserved. CMBO 8231314 SYN #CEBSUMMIT 5 3

DIGITAL ISSUE RESOLUTION FALLS SHORT Even When the Issue is Resolved, Digital Channels Fall Behind Percentage of North American Banking Customers Who Believe the Institution…. 80% Personal 68% 62% 44% 49% Digital 49% 37% 40% 23% 28% 0% …Formally Acknowledged the Issue …Kept Me Informed of Steps It Was Taking to Resolve the Issue …Exceeded My …Resolved My Issue Expectation in in a Satisfactory Manner Resolving the Issue n = 174. Source: CEB 2013 Customer Experience Survey. CEB Tower. Group Retail Banking ©© 2013 Corporate Board Company. All Rights Reserved. 2014 The CEB. All Rights. Executive Reserved. CMBO 8231314 SYN #CEBSUMMIT 6 4

BUT IMPROVING THE DIGITAL EXPERIENCE PROVIDES PAYOFF Impact of Engagement on Loyalty Among Tech-Oriented Customers Percentage of Technology-Leaning or Technology-Only Customers Who Took Indicated Actions Within the Past Year by Level of Engagement, 2010 65% 31% 27% 30% 27% 21% 15% 7% Recommended Firm Added or Purchased Product 5% Considered Switching Banks Disengaged 12% Closed an Account Engaged Moved Savings and Investments to Another Bank N = 1, 348 FINANCIAL SERVICES PRACTICE, CEB TOWERGROUP RETAIL BANKING © 2013 The Corporate Executive Board Company. All Rights Reserved. Source: CEB Tower. Group Retail Banking, Customer Experience Survey, 2010. 7

FUNCTIONAL CONSISTENCY CREATES COMPLEXITY WITHOUT CUSTOMER BENEFIT Main Challenges in Providing More Customer Choice Verbatim Current Channel Access Goal Illustrative Banking Function Service Channels A 1 B 2 C 3 Complexity It wasn’t too long ago that you had to pick up the phone or a pen to contact us. Today there are so many customer service touchpoints—I can’t keep track. ” Cost D 4 E 5 “Investing in new channels or building out a new functionality isn’t cheap, and it’s not like I have budget to spare. ” Financial Institution Goal Enable customers to resolve any service request in any channel at any time. FINANCIAL SERVICES PRACTICE, CEB TOWERGROUP RETAIL BANKING © 2013 The Corporate Executive Board Company. All Rights Reserved. Source: Customer Contact Leadership Council, CEB Tower. Group Retail Banking 9

CROSS-CHANNEL CONSISTENCY IS NECESSARY Breakdown Between Two Customer Types 100% Effort “The Ends” 50% Choice “The Means” 0% Means Focused: “My Way or the Highway” (16%) “I want to resolve this issue in the channel of my choice— no matter what. ” ■ Want issue resolved in their preferred channel ■ Willing to trade off ease and time to be able to choose their preferred channel Ends Focused: “Just Get It Done” (84%) “I want this issue resolved as quickly and easily as possible. ” ■ Want fast issue resolution, typically on first contact ■ Don’t want to have to switch service channels ■ Want the experience to feel like it was low effort ■ Don’t necessarily care where issues are resolved N = 996 FINANCIAL SERVICES PRACTICE, CEB TOWERGROUP RETAIL BANKING © 2013 The Corporate Executive Board Company. All Rights Reserved. Source: Customer Expectations Survey, CEB Tower. Group Retail Banking 10

MAP FUNCTIONALITY TO THE LOGICAL CHANNEL Feature/Function Branch Contact Center ATM Online Banking Mobile Check Balance Make Deposit Withdraw Cash Check Account Alerts Bill Payment Transfer Funds Open Account Address Change Card Dispute FINANCIAL SERVICES PRACTICE, CEB TOWERGROUP RETAIL BANKING © 2013 The Corporate Executive Board Company. All Rights Reserved. Source: Customer Expectations Survey, CEB Tower. Group Retail Banking 11

PERSPECTIVE CHANGES THE PRIORITY The Realistic View of the Digital Customer Experience External Customer View, 2014 Positive Customer Experience Helpful Channel Interactions Simple Processes Agile Technology Source: CEB analysis. CEB Tower. Group Retail Banking ©© 2013 Corporate Board Company. All Rights Reserved. 2014 The CEB. All Rights. Executive Reserved. CMBO 8231314 SYN #CEBSUMMIT 12 7

IMPROVING DIGITAL CUSTOMER SERVICE Indicators of Effective Service Opportunities for Effective Service Keep customers informed Send regular updates via channel of choice. Formally acknowledge the issue Send notice of acceptance. Resolve the issue to the customer’s satisfaction Measure resolution effectiveness over time. Exceed the customer’s expectations Review the business processes for ease of use. Source: CEB analysis. CEB Tower. Group Retail Banking ©© 2013 Corporate Board Company. All Rights Reserved. 2014 The CEB. All Rights. Executive Reserved. CMBO 8231314 SYN #CEBSUMMIT 13 8