Financial Services Approach to External Data Monetization – The mobile commerce and payments battle Dirk Rohweder DIGITAL DISRUPTION- FINANCIAL INDUSTRY Disruptors Pillars of disruption Mobile Traditional Business Models ? Social Digital disruption has demolished 52% of the Fortune 500 since 2000 (SOURCE: CONSTELLATION RESEARCH, 2014) Cloud Big Data Analytics “Banking industry is finally ripe for digital disruption. The financial services industry has yet to experience digital disruption that radically changed other sectors, such as retail and media.” Source Bryn Glick, 2015 THE MOBILE COMMERCE AND PAYMENTS ECOSYSTEM BATTLE FinTech Sweet spot Big Data Analytics Real Time Marketing COMMERCE - THE BANKING OPPORTUNITY ! ….of users are willing to buy goods and services by mobile. … but most of mobile shoppers are just browsing through m-shops, not completing their purchases on mobile devices. Main barriers for m-commerce adoption are security concerns and worries about spending more than a consumer can afford.* *According to: SAP -The Mobile Consumer Insights on Global Trends Impacting Mobile Momentum and Customer Engagement FINANCIAL SERVICES MONETIZATION Bank Ecosystem • Banks directly target consumers with relevant messages Bank Led Ecosystem Smart Hub Ecosystem • Banks lead an own ecosystems based on their card customers • Bring together data from different sources and broker it • Banks hyperprofile their customer base • Banks provide 3rd party targeted Offers & Ads to their customer base as an additional revenue stream • Additional revenues from aggregating data by selling insights • Banks differentiate their core product offering by providing relevant information • Banks strengthen the relationship with their customers by providing additional value • Banks offer highly relevant rewards to their customers from a partner ecosystem Bank opportunity Bank opportunity • Additional revenues by facilitating advertisement and commerce Industry / Cross Industry opportunity THERE IS A COMMERCE & INSIGHT SERVICES OPPORTUNITY FOR FINANCIAL INSTITUTIONS Extended Smart Wallet Extended Smart Network Extended Smart Store Extended Smart Life Commerce Advertising Extended Smart Media (TV &Video) Content Services Consumer Base Aggregated, Anonymized Data Insight Services •Data matching •Rich Customer Segmentation •Rich propensity to act models •Transport & Infrastructure Planning •Site planning (Retail, ..) •POI audiences (Venues, outdoors, ..) •Smart Digital Signage •Benchmark& Insight Reporting •Industry Coding SMARTNESS IS CREATED FROM CONSUMER CHARACTERISTICS & CONSUMER CONTEXT Consumer Characteristics Demographics • Gender Buying Behavior Interest Attitudes • Age • Shopping basket • App usage • Brand attitudes • Income • Financial transactions • Web browsing • Customer Satisfaction • Education Aspirations Consumer Base Geofences • Navigation • Environment • Weather • Pollen • Roadworks Lifestyle • Health & Fitness • Environment Lifestage events Location • • Sentiment Time • Day of the week • Time of the day Role Intent • Business • Search • Private • Navigate to Context and trigger events • Emotion • Mood • Relocation • Marriage, Divorce ADDITIONAL INFORMATION SERVICES 1. Download open 2. Create geographical clusters of high crime data crime with SAS 3. Create actionable 4. geofences from clusters with SAS Send notification if geofence is broken £ Other MyBank cardholders have reported fraud in the Shoreditch area. Please take care of your card! For card safety tips go to www.mybank.com/safe. 12 Jun 13:35 via SMS SUPERWALLET OR EXTENDED SMART WALLET „We think mobile wallets will succeed if they reinvent themselves as all-in-one apps that will integrate all of a consumer's shopping and finance needs into one place (…)” Business Insider, BI Intelligence white-label, in-app commerce platform for banks which combines m-banking, m-commerce and m-payments makes bank’s customers able to buy daily groceries, bus, train, parking or cinema tickets, order take-away food, taxis or book flights. All this within one bank app and one UI. SUPERWALLET OR EXTENDED SMART WALLET 1. Activation 2. Set Preferences 5. View Offer on Map 3. See Featured Offers Customer benefits • Daily activities made fast and simple • All-in-one app from trusted brand • One unified UI for all services financial, payment and commerce • One click to order-pay-send • One login/PIN (vs. many logins and pwds) for many services of ecosystem • Safety ensured by bank 9. Redeem in store 8. Buy in app with Instant Mobile Checkout 7. Get Offer 6. View Offer Details 4 STAGES OF CARD LINKED OFFERS SKU Based Offers Reward Exchange Value based Loyalty Program Value based Cash back Offers 1. Value Based Cash back offers to consumers 2. Value Based Loyalty Program (convert cash back into loyalty points) 3. Offer Rewards from Partner Ecosystem 4. Targeted offers for specific products (Brands / Product Categories) USER STORY 1 Opportunity – Increase sales and loyalty through ‘top up’ shop Step 2 – Targeted Offers Emilia browses through the offers in the home banking app and selects an offer for Retail A. This is close to where she lives and was selected as a target offer by the analytics within the CLO platform based on her past spending. Analysis– People that live near a Retail A Store Propensity– Spend in both Retail A stores and competitor stores (NACE) 0 2 0 4 Step 4 – Second Shop Emilia was delighted with both the price and the quality of the produce that she bought at Retail A so the following day she returns to buy more wine as well as bread, milk and salad. Urban Shopper Offer– Offers for smaller Retail A group stores 0 1 Step 1 – Home Banking Application Emilia is logged on to her home banking application and opts in to the new Card Linked Offer Scheme 0 3 Step 5 – Reward Receipt Step 3 – Shopping Experience Coming home from work Emilia goes in to her local store and buys a few essential items for her evening meal. She also buys a bottle of wine which is on offer in the store 0 5 At the end of the week Emilia is on her way home when she receives an SMS from her bank telling her that her account has been credited by €5,65 as a result of her purchases. FINANCIAL INSIGHT SERVICES Transaction data Transaction type (ATM, Home Banking, POS) Card (cardtype, issuer) Time of transaction Place of transaction Amount Enrich transaction data Customer profile (country of origin) Customer profile (enhance with bank data (anonymized) Time information (public holiday, school vacation) Place (geocode) add Points of Interest and shop outlet locations Merchant codes (classify POSs) Retail Hierarchy ( Aggregate POS) Time/place (events like festivals that influence shopping behavior) Market Share Insight: Spend and number of trips relative to competition analyzed by different regions or times of the day including trending and forecasting Customer Loyalty Insight: What is my share of wallet with customers in my category. What other categories do these customers spend their money with Customer churn: Where do new customers come from and to whom do I loose customers (loose but also reduced share of wallet) Customer Segmentation New forms of customer segmentation based on total wallet spend Store location analytics EXTERNAL MONETIZATION STREAM Market assessment Data and capabilities Assessment Pilot and Trial • Evaluate top use cases • Estimate market potential (3-5 years) • Conduct competition analysis • Evaluate current assets and capabilities • Identify gaps • Quantify investments necessary to close gaps • Identify partners (retailers) and customers • Pilot with friendly customers • Validate use case Thank you
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