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26 minutes | 11 days ago
Get Closer to your Banking Customers not Further Away
Summary: We're living at the speed of digital banking these days, and the pandemic seems to be pushing the gas pedal to the floor. While the banking industry needs to continue to embrace digital banking, they also need to be mindful of how far to swing the pendulum to ensure they've got that equilibrium between what's best for the consumer and best for the bottom line. Related Content: Banking Predictions Blog Associated Links: Scott Anderson LinkedIn Profile Jeff Bender LinkedIn Profile Alyson Clarke LinkedIn Profile Transcription: Scott Anderson: 00:15 Hello everyone. Thank you for joining us today on this episode of Commerce Now. I would like to welcome today's guests, Alyson Clarke, principal analyst with Forrester Research and Jeff Bender, who leads our digital solutions team here at Diebold Nixdorf. Alyson, great to speak with you again, and Jeff, so glad you have participated in this session of Commerce Now. Alyson Clarke: 00:34 Thanks for having me, Scott, much appreciated. Jeff Bender: 00:36 Thanks, Scott. Happy to be here. Scott Anderson: 00:38 Perfect. So today I want to explore a hot topic. We're living at the speed of digital banking these days, and the pandemic seems to be pushing the gas pedal to the floor on this. The banking industry has been on a digital evolution path for a while now, and the payments mix continues to evolve with sentiment and behavior changes around cash. Consumers have adapted to this new normal and the FIs have pivoted to accommodate. So, I think what we want to unpack is, is this simply an acceleration of further digital evolution or is it really a revolution? Let's look at what this might mean for 2021 and beyond. We can't ignore COVID and the impact it's having on the banking landscape. So, what transformational accelerators have resulted from the pandemic? Alyson, why don't you kick us off? Why do you think the environment was ripe and ready for this? Alyson Clarke: 01:26 Well, I'm actually going to say the opposite. Banks weren't ready for this, and that's part of the challenge, right. I and myself and many in the industry now, we've been talking digital transformation for years and years till we're blue in the face and talked about the urgency of it.,And I think we've gotten to the point of digital transformation fatigue before COVID. We saw a lot of firms that had been delaying projects that they needed to do, like digitizing loans and other kind of operational improvements to digitize the back office and the way they serve customers. What COVID did was really, really expose their flaws and where firms had been falling behind. And as a result, of course forced them to do things really quickly and hurry and do things like digitize loans in weeks and even sometimes months, but usually weeks, as opposed to how long it would typically take them, which could be many, many months or years even. So I think we've got this kind of environment where it exposed the flaws. At the same time, I think it's forced banks to react and it's great because it's pushed through some of the hurdles that were blocking firms before. Some of the governance and hurdles that have slowed implementation down. So I think certainly in that front I would probably challenge it and say that I don't know that the industry was ready. Scott Anderson: 02:51 Fair point. Fair point. Jeff, any perspective from your side of the equation? Jeff Bender: 02:56 Yeah. I mean, it's certainly accelerating things. I think that's right. The fall before was, there was a fatigue around digital transformation. You did see digital solutions, things like that becoming an optional. It was something that a bank would like to have, but it wasn't as critical or necessary as other initiatives. And I think certainly in the pandemic we've seen that change. As much as we like to talk about consumer behavior changing over time, we saw it radically change through the pandemic. But I do think there was a lot of technology foundation that was already in place there. And now what we've seen is consumer behavior is starting to drive an accelerated adoption rate of that technology. So I mean, even in our personal lives the way we order groceries, the way we order food. When we go to restaurant, we scan a QR code now to get a menu. Those have all changed the way that we operate. And it's forced us to start to do things differently. I like to tell the story about my father. He's an elderly man. Technology is his enemy. He's literally a guy if, when he doesn't use his cell phone he turns the thing off, so no one can even call him. But during the pandemic, I called him, and sure enough, the guy eating nachos and drinking margaritas and I'm like, "Where'd you get that?" Well, he ordered it on Uber eats. I mean, he never would've done anything like that. But now he's trying these new experiences and realizing that, "Hey, not only are they not bad, it's actually pretty good." It's pretty nice and that's changing consumer behavior from that. And we see that in the banking industry, starting now as well, where organizations, we're starting to see a lot more mobile deposits now than we ever saw before. People are forced to use that. People are forced to go to self-service. They're forced to go through the ATM channel to get cash because they're not going into branches as much as they used to. And so I think that consumer behavior change has been monumental as an outcome of the pandemic activities. Alyson Clarke: 04:51 I was just going to add something. It's interesting though, because what we've seen in terms of business priorities, accelerating the shift to digital business is now one of the top three priorities post COVID. It was number 11 pre COVID. So it's shot up to the near top of the list. And on the opposite side, when we talk about consumer behavior and consumers don't think digitally and consumer experience we're actually seeing the focus from firms in terms of their top business priorities for the next 12 months, improving the experience of customers has dropped dramatically and it's not in the top five anymore. So it's interesting how, what we're seeing playing out and then what we're seeing firms saying their priorities are. I think there's a problem there. Scott Anderson: 05:39 So, tell me a little bit about how you perceive and maybe, Alyson, you can kick off. How are you perceiving any differences or deltas either on a regional basis or even at the size of the financial institution or firm? Is there a difference here? Is there a delta, or is everybody facing this? Alyson Clarke: 05:59 Look, I think everyone's facing it, but in different ways, depending on where they were pre COVID. That's what I mean about COVID really kind of putting a microscope on the areas that were behind and the holes, digital transformation strategy. So we're seeing digital acceleration happen globally, but clearly the banks in some regions were better prepared than others. Some larger banks were better prepared than smaller banks. In terms of regions, Europe, for example, was already way ahead of North America for video chat and video banking. Now we've got North American firms scrambling to catch up and figure out how to use video. In Europe, they have been miles ahead on contact less payment take up and usage for years because it's been around a lot longer, whereas it's relatively new in North America. And so, whilst we're seeing that massive take up or we're seeing an increase in take up here in North America of contact less payments. It is COVID that's driven it. So again, I think the difference in regions and the difference in size of firms is reflective of where they were in their journey and the technologies they were already adopting pre COVID. COVID has kind of highlighted those gaps. And as I said, it's kind of forcing everyone to play catch up on stuff they thought they had many more years to build. Scott Anderson: 07:23 Jeff, you've mentioned a great example with family member, Uber Eats and certainly a great example of how we're embracing digital. Any specifics you're seeing in banking that you can point out? Jeff Bender: 07:35 Well, certainly you think when we looked at consumer behavior and adoption and usage of those types of technologies. It's been dramatic shifts. Citibank saw an 84% increase in mobile deposits throughout the course of the pandemic. They saw a 10 fold increase in the use of Apple Pay. So it was starting to see digital payments, touch less payments, kind of starting to come into the mix. We've started to see that massive shift. Our data now coming out of kind of a prediction of a post-consumer world is saying that 55% of consumers are less likely to visit branches as they go forward, and 26% of them don't want to have a face-to-face interaction at all. So challenge now becomes if that's the new norm for consumer behavior then what can you do as an FI to start to embrace technology and not let that technology dis-intermediate your relationship with the customer. So as Alyson said, things like how do you adopt video technologies through some self-service channels? Those things become very, very important to organizations, A, to respond to today, but also B, to prepare themselves for tomorrow. Scott Anderson: 08:42 It's interesting and Alyson touched on this at the beginning where I think some of the FIs were caught a little off guard, even though digital and in transformation was finding its stride. When we look at some of the output from the 2021 Forrester prediction report, there appears to be an industry focus or response to potentially mistakenly pivoting to digital only. And as we're seeing more and more FIs adopt this, I kind of look back and look at moves that Google has with their Google Plex and wonder, "Do we really think consumers are ready for this bank of virtual experience?" Alyson, again, I'm going to pick on you first, what's your opinion on this? Alyson Clarke: 09:22 Yeah. So look, I think it's not a one size fits all answer. I think some consumers are definitely ready for that digital experience. And we know this because we've seen around the globe, the take up of consumers for digital challenges like Monzo and Revolut and Chime. The problem is that, well, it's not a problem necessarily, but those digital experiences tend to be really simple with maybe just a checking or savings accounts. Some may have a credit card. And so those kinds of simple digital only solutions are more appealing to younger consumers who have simpler banking needs or those that are perhaps looking to try something new. And in that case, it's probably a secondary account, not their primary accounts. So, you think of this challenge. Your customers get older and, or they get wealthier, both potentially. And what happens then is, when things get more complex, human interaction becomes critical. I always say that if you have something that's either high value and, or emotional and or complex, any combination of those, that's when people want human help and guidance no matter what their age. And if I look at something like Google Plex, which is this banking marketplace that Google's due to launch next year. I think there's definitely going to be an appeal to consumers with simpler banking needs, so maybe younger consumers or those wanting to try new things. And there's certainly those that will want to try it for the convenience factor because the way it's going to be integrated with Google Pay and some of the tools that Google say they're developing. The challenge is going to be that as these consumers grow. And I think some of the banks are, the way they're going into this relationship with Google Plex is they're setting up separate accounts, a brand new digital checking or savings account that will go on to that marketplace. And what I'm not clear and perhaps they're probably unclear off too, is how do those separated new products for Google Plex integrate back into the bank's own digital services and human support? Will they even integrate back in at all? And so that kind of becomes a challenge then, if you're using Google Plex, if you're a bank using Google Plex to say, "Hey, I'm going to attract a new customer base and get some deposits. And then I'm going to use that to deepen my relationship with their customer base." How are you going to do that? And certainly the human element will be critical in that, in some way, shape or form. It might not be branch. It could be video. It could be... There's many different things. And so, when I think about this in the branch scenario, we've got potentially firms pivoting to shut down branches completely, or some of them are pulling back. I think some of them might get short-term benefits, but I think many will regret it later on. Because what we do know is when we look at consumer behavior, the location and availability of ATMs and branches is one of the key considerations when choosing who their primary bank is. So, those that pull back on that human element and branches too far, it could be a very costly mistake. Scott Anderson: 12:23 Jeff, any points of view? Jeff Bender: 12:25 Yeah. I agree with that. I think it's about striking the right balance. I think if you're a financial institution, you built your brand based on establishing robust relationships with your customer, to turn around and kind of pivot and say, "Okay, tomorrow we're going to be a digital bank and compete with the likes of Chime." I don't think that's smart. So I think it's about striking the right balance. I'm a huge supporter of the digital only channels. I literally have been kind of a digital banking customer for the past 15 years. Probably stepped foot into a branch, I can count the number of times on one hand. But I still have the need for some of that physical interaction. There are times when I need cash. I need to go to an ATM and get some cash. There are times when you have complex customer service issues or you need advice, and those things are still very personal types of interactions and they still require that personal connection. And so, I think in today's world that still takes place through that in-branch experience, but that's definitely evolving. And in with regards to technologies like Google Plex, I think on the one hand that can be seen as a threat, but on the other hand it's also, I think a significant opportunity for organizations to partner with some of these technology organizations and see how they can deliver services more effectively, more efficiently. One thing we've got going on right now in the kind of this post pandemic world is we have historically low, unprecedentedly low interest rates and that's impacting the financial institutions bottom line. And so they're looking to reduce costs, but also open up new revenue streams. And so, are there opportunities to do that? And I look at someone like Google with a healthy dose of a mindset around some of the analytics side as well. If you think about the potential there, you can start simple, and you can start to gain access to consumers and their spending habits and their behaviors and so forth. But as you go forward, you can see how that can become very personalized and a very personalized experience through technology from a company like Google. Maybe Scott, and I know everything about you, every transaction you've made, because you're doing that through a Google platform. I grow and I extend or I offer products through that platform maybe from other more traditional financial institutions, which adds value to both sides of the equation. And you can even get into things like conversational AI. If I know all this data about you and when you pick up the phone, I can go, "Great. How are you enjoying that new car you just bought last month?" Now, we're at a different level where I have this personal connection and as a consumer, how do you leave that? How do you leave that and start over someplace else? So I think they're laying the groundwork and the foundation for something that is very significant in the industry. Alyson Clarke: 15:05 I'll just add that I agree with that, and I agree with certainly the personalization that has to happen for those digital touchpoints to create that emotion and that loyalty that comes with that connection. And you're right, it does make it harder to move. That little thing going off in the back of my mind, that just goes over and over and over is, you can't forget the human. And I actually, you know what? I'm going to go out on a limb and actually say that I think what's going to happen post COVID, this is my personal view, is there's going to be a craving for human connection. I mean, how many of us are really kind of sick to death for social distancing and not being able to interact with people? I think potentially when this is over and we're vaccinated or whatever and that could be a year from now, whatever. There will be potentially swing back to craving this human connection in many things. And I don't think banking is not included in that. I think banking is included in that, and it is about getting that guidance and advice to help me improve my financial situation. I think it's about re-purposing the branch to be this engagement center for customers and employees. And yeah, if you want to get the cost savings, there might be less of them. But it's also that better using technology in those branches, being smarter about the footprint, being smarter with the technology and shifting to paperless and cashless branches. So I think you can squeeze some of those benefits out of it without losing the upside from that human connection. Scott Anderson: 16:33 So Alyson, and I know we've talked about this in the past and your point of view through the consumer's lens is give them choice, don't force them. I think the pandemic has done a little bit of forcing for obvious reasons. But you're feeling fairly confident that consumers are going to want to have that full range of engagement capability again too, once we're through this pandemic and once people are comfortable again engaging directly. Alyson Clarke: 16:59 Absolutely. And just to clarify, in terms of full range, I don't mean they want to do everything in person. Not that sort of full range, just to kind of clarify. When you say full range, I interpret that as, they want to have a choice. Don't force me down a path. In fact, we see this time and time again in our customer experience index, which measures how good experiences are, and then how that translates to loyalty and revenue. And firms that do really well are certainly growing faster than their peers, in terms of revenue and so forth. And what we find is that through that data is that when customers are forced to self serve, they're not having a great experience. It doesn't mean they're not happy to, if they want to have a choice. And I think in the spirit of driving down costs, a lot of firms have taken that choice away in certain parts of the customer journey and I think that's where the pendulum can go too far as well. Scott Anderson: 17:56 And that really builds then on what Jeff's point is, let's use technology to really personalize the experience and use that personalization and that data to ensure that every interaction, whether it's in-person or through a digital means, is empowered with that content in that context. And I think that's where there's probably going to be some huge benefit. Alyson Clarke: 18:17 Yes, absolutely. Scott Anderson: 18:19 So, now all of this conversation around embracing the transformation and going digital and all of this investment, I'm a CFO, and I'm a CIO at a bank and I'm staring my board in the eye or I'm staring my shareholders in the eye and looking at the huge investments that I've made or I'm being committed to make this year and next for digital transformation. How can we capitalize even further and increase the value of that spend? Maybe, Jeff, we'll start with you in your view, how can or should financial institutions monetize this investment in 2021 and beyond? Jeff Bender: 18:54 Yeah, well, like I said previously, I think they've got to strike this balance of trying to cut cost, streamline operational expenses, where they can by also better positioning themselves to open up new revenue streams and better engage with the customers. And I think right now, tactically short-term, I think the way for people to maximize their dollars is to invest in those technologies that do allow a more engaging experience through the digital channels. So if you've invested heavily in that ATM channel, bring marketing capabilities into that. Start targeting people who are using your ATMs that maybe are not a member today and offer them incentives to switch banks. Add video capabilities to those same ATM, so you can interact with customers in a way that is more meaningful and more personal and emulates that human interaction that they're missing today. And I agree with Alyson that they're craving it today. I think we will crave it for some time. But I also think we have to beef up some of our other capabilities, too. We look at the behavior changes that have taken place and you think about even things like, "Oh, we're doing more deposits now", and whether that's through a mobile channel or through an ATM. I need to make sure that those self-service experiences are robust. And I need to invest in those areas so that when a customer or consumer comes in and wants to use that self-service channel, because they don't want to go into the branch for whatever reason, they have a way to do that, and it's a good experience. And I think what we've found through the pandemics, when we have those good experiences, we continue to use them. We continue to adopt them and that's beneficial both for me as a consumer, as well as the business I'm engaging with. So I think, it's as Allison said a little bit earlier, it's kind of about choice. It's about making sure you're allowing those consumers to bank with you and interact with you, when and where they want. And I think it's about making sure you've got a really very, very strong customer focus. So as an FI, you can respond to those consumers because I do think there's different dynamics, different banks, different regions, small banks, big banks, credit unions, etc, and I think all of those dynamics are different. You have to take all that into account. Scott Anderson: 20:58 Alyson, any other opinion on a secret sauce here to make this work? Alyson Clarke: 21:02 So I would definitely say, absolutely focus on leveraging the technology you have. I mean, in any economic downturn or tough economic conditions, it's always hard to get funding to do the stuff you need to do, let alone the stuff you want to do. But time and time again, I see a lot of firms that have technology that's completely under utilized. They get CRM technology, personalization tools, some of the marketing stuff that you spoke about. It's like in some cases, people have gone out and bought the Tesla and they're only using it as a cup holder. Some of you may laugh if you heard me use that analogy before, it's one of my favorite because I just, I see it so often. There's so many more ways to leverage and use the technology we already own. So I think that's the first thing to look at because at this economic time it's smart to be cost conscious. But the other thing is when you're thinking about prioritizing what you do, try not to get completely stuck in prioritizing things that reduce costs. Not to say that you don't want to focus on that. But the real priority at this time, and this is always the advice during an economic downturn is, focus on getting closer to your customer, not further away. So things that you're talking about there around forcing them to self serve, or I would say making it hard to contact a person, that won't get you closer. We do know in economic downturns that firms that invest in deepening relationships and adding value above and beyond the product and showing those customers that they're valued instead of spending their energies focusing on trying to sell them a product. Remember it's an economic downturn. They might not be buying as much. Those brands that focus on getting closer and deepening engagement create the loyalty and the [RO One 00:00:22:48] that loyalty and the benefits will be rewarded for years to come when those economic conditions improve. And in fact, when the up to it happens, they will grow at a much faster rate than those firms that didn't focus on getting close to their customer and still we're trying to cling onto survival and how do we sell more product. So I guess that would be my kind of bit of advice there. The second thing I kind of linked to that is around keeping an eye to the future. If you are investing in things and building things out, think about a longer term, think about the world post COVID and position the firm for the future. And I talked about video before, that's a great example. North America is very much behind Europe and other regions. That video chat, video banking are a right way to engage customers. And I know many are accelerating that with COVID. Sometimes not always in a good and secure way. There's probably more work they can do. But it's a great technology that will solve some challenges now, but help you get closer to customers and positioning you for the future. Similarly, with a lot of firms that are building digital loan origination, or even any kind of digital account opening and digital sales and purchasing experience. The wrong way is just to build it for the customer self serve. The right ways to think about how do I leverage this? How do I get more out of it? And that is embed human support along the way for the customer. Allow for handoffs to agents and frontline staff, because we know customers move across touchpoints. And also, allow agents to use the same great technology. So if the customer does choose to call, they're still getting that same great experience. So, leverage in that case as well, across touch points and interactions. Scott Anderson: 24:31 Fantastic insights, Jeff, Alyson, really, really appreciate you spending time and giving us some opinions on some of these topics that are probably a top of mind for a lot of financial institutions, as we hope to come out of this global pandemic. If anything is certain, we're living in this phase of where digital transformation has been accelerated so significantly. And while the banking industry needs to continue to embrace digital banking, we also need to be mindful as you both pointed out, of how far to swing the pendulum to ensure we've got that equilibrium between what's best for the consumer and best for the bottom line. We've clearly outlined here today they may not always be aligned. So thank you to our listeners for tuning into this episode of Commerce Now. To download a free copy of the 2021 banking predictions report mentioned during our discussion, please visit DieboldNixdorf.com/bankingpredictions to download your complimentary copy now.
39 minutes | 2 months ago
What Can Financial Institutions Learn from Retailers
Summary: On this episode, DN's Simon Powley interviews guest Peter Wannemacher a Principal Analyst at Forrester Research. They discuss what they think the banking industry can learn from the retail industry to help support branch banking. Resources: Other Podcasts you may enjoy: How to prepare your FI for a Post-Pandemic Marketplace Websites: COMMERCE NOW Podcast Diebold Nixdorf Advisory Services Guests/Host LinkedIn Profiles: Simon Powley Guest: Peter Wannemacher Transcription: Simon Powley (00:15): Well, hello, everyone. Thanks so much for joining us today for another edition of COMMERCE NOW. I'm excited to be sitting on the opposite side of the mic today, hosting this, along with our returning guest, Peter Wannemacher from Forrester Research. Welcome, Peter, and thanks so much for joining me today. Peter Wannemacher (00:33): Thank you very much. Good to be here and thank you for having me. Simon Powley (00:36): Well, listen, yeah, we're glad to have you on today. You and I were talking I guess a couple weeks ago now, post-COVID and the impact of the industries, and really enjoyed the conversation. It was kind of a warm-up, I think, to today. But what I really found intriguing was really the talk about the parallels between banking and retail. Simon Powley (00:58): I kind of told you a little bit about my perspective of working for large FIs in the past that we had called our branches. Now they're called financial centers, but in the past, they really were even moved around and called them stores. There were times that we really focused on hiring retail folks, and then didn't. So it seems like it's kind of ebb and flowed. Simon Powley (01:20): But lately, I haven't really heard much about people learning as much from retail or the parallels of retail banking with a traditional retail network. And I think you and I both think there's something there. So talk to me a little bit about what you think the banking industry, how they underestimate retail, and maybe what can be learned from the retail industry to help support branch banking. Peter Wannemacher (01:45): Yeah, so I definitely agree with you that there's a lot there and there's a lot to learn from retailers, in some cases directly from, right? I mean, there are some big banks that have hired from... I won't name names, but there are some big banks that have hired from retailers or from related, right? So media companies like Disney, travel companies that have been successful like JetBlue. We've seen some hires at executive and strategy roles that have been successful. But they, as you sort of... I think you said it pretty explicitly, but you at the very least implied it's still more limited than I think it ought to be. Or maybe to put that another way, banks could do even more to yes, maybe hire from retail, but more importantly, to learn from retail. Peter Wannemacher (02:30): One way to think about this is... We, Forrester, wrote a report called What Banks Can Learn From Retailers, and it was almost exactly five years ago. For the purposes of our conversation, we can call it five years. When I went through, there were nine pieces of advice we had in there. And there were a couple that banks have improved, like cross-channel design. I think there's still a lot of work that could be done there, but there's a fair amount. Peter Wannemacher (02:56): When you think about how many banks now offer... I mean, in the time of COVID, the demand has decreased significantly, but there are still times when someone wants to go into a branch or have a conversation or have a video call or have a phone call, and navigating the move from a mobile device or a PC-based website to that other channel, that human channel or touch point within that channel is one that I've seen some progress on, some real progress. Peter Wannemacher (03:25): There are lots of others though, things that will... I'm sure we'll get into in this conversation, but things like search, notifications, even just how they think about the positioning of products. The nature of products is different in retail than is in banking, and that's going to remain true for the foreseeable future and probably forever. But the thinking about how you position products and how you design for product shopping, there's still a ton to learn from retailers for bank executives and managers. Simon Powley (03:53): Yeah, I love that. Yeah, you're bringing back fond memories from my past Disney efforts around onstage versus offstage behavior in the branch. Or the Ritz-Carlton approach of the morning huddle, and how to properly execute that to ensure that you're prepared for that sort of things. Simon Powley (04:12): But I'm fascinated. Let's do talk about positioning of products, because I've thought about this through the years. It's very different to walk into something, call it a Walgreens or an Apple store, and have a product display, pick it up, play with it, touch it, have someone describe it to you in such a way that it's useful. And then having to talk about how to position a bank product differently, if I'm understanding you. So tell me a little bit more about that positioning of products, because I think that's something that will continue to be a challenge as the landscape continues to evolve for branches. And I think it is something they can take away from retail. Peter Wannemacher (04:48): Yeah, so just to be clear, I'm thinking about the conceptual positioning, not so much the physical positioning in a branch, for example, or if a bank calls it a store. There is something... I mean, I want to spend most of our time today talking about the things banks can learn from retailers, but we should sort of have in the back of our heads the whole time that there are some genuine differences. Some ones that should adjust how you, if you're listening to this and you're a bank executive or someone working with a bank executive, and one of them is... Peter Wannemacher (05:17): I mean, the reason why there are stores, physical stores in retail is very different and always has been than the reason that there are branches for banks. That's noteworthy. I mean, there has never been... Even the few physical elements of banking, like a debit card or a physical credit card, no one ever goes into a branch and sort of flips through their credit card to choose which one they want. That's just not how it works. So that distinction is important as we think of that. Peter Wannemacher (05:45): But to go right back to your question. So our advice five years ago to banks... And as I said, when you look at our advice, some of the banks really have taken it to heart. I don't want to make this all about the negative. But I think you and I and our listeners care a lot more about what the work is now than kudos, well done by some leaders in the past five years. I'm going to focus on that. Peter Wannemacher (06:05): So one of our pieces of advice was base merchandising on user needs, not product silos. Which in some sense is yeah, I mean, we've heard that before. But if you look at banks' websites and mobile apps and mobile sites, right? Or responsive. Whatever they use, and most of them use multiple channels and touch points. Well, so in retail, they've done a good job of helping customers explore based on what they want, right? Peter Wannemacher (06:33): There's some really specific examples of this. If you look at J.Crew, what they do... And they've done and they've continued to do this, and Sephora does this really well is, "What are you looking for?" You probably don't care how we think about our product selections or categories. We care about how you're looking for it. And that includes some specific... So microsites around winter storms are coming for J.Crew, and so let's take you to our best jackets and stuff like that, right? Which ultimately, it's just outerwear, but they're thinking about it from the mental model of the customer, right? Peter Wannemacher (07:06): Or Walmart does this really well, both in store and online. They're actually better than most online. About average for in store from what I've seen in our research. At back to school, right? Back to school meant something different in 2020, sadly. But there is still such a thing as school, and hopefully there will be again something that looks like what it used to be. Simon Powley (07:23): Agreed. Peter Wannemacher (07:24): So they did a much better job. If you look at banks... And back to school, banks occasionally have something around that. But the big thing in banking is life events, big milestones that happen in people's lives and are the number one catalyst for people looking for a financial product. And yet, if you look at the average banks... Not just the average. If you look at the overwhelming share of banks' websites, and apps, and mobile sites, and I think branches, but I'm not as knowledgeable about that, they are not... The organizing principle of that positioning is almost never what's happening in that person's life that they might need X product. Peter Wannemacher (08:05): You see a little bit of it. I'll give a quick example here. TD does this. So I want to give a little bit of kudos to TD. They do this. But it's buried, right? It is not the primary organizing principle. It's not the main way you find what you need as a customer or prospect. It is secondary. Peter Wannemacher (08:19): And this doesn't need to be totally reorg... Especially in digital spaces. You don't need to totally rearrange everything, right? I understand why you want to let people, if they know they want to get a credit card, do a scroll over and look at all the credit cards, right? I don't think you have to abandon that traditional positioning in merchandising to allow people to weigh in to other options, right? Things where... Peter Wannemacher (08:42): And this is what, again, you could look at based on life events. I'm moving. What are all the things I might need? Or what we've seen, and I think you and I have talked about before, guided product recommendations, where a customer answers a couple of questions and then is provided proactively and in a personalized way with some suggestions, right? So I'm answering a few questions about who I am and what's going on in my life, or just what I need financially, and you, the bank, provide me with. And there's a large share of people, somewhere between 30% and 45% of most banks' customers that prefer this kind of method for finding what they need. So banks really fall short there. Does that make sense? Simon Powley (09:19): It does entirely. Yeah, no, that's very interesting. I'd agree with you. I think those life events are key. I think from a sales process, there's no question. I think the financial institutions are focused on it, but their execution or ability to dive in that the way some other retailers is more challenged, if I'm understanding you correctly. I think you're spot on there. Simon Powley (09:37): I think about the marketing that can be done through social media or those kind of things for retailers. My understanding, and you may have a better understanding of this probably do than I do, is they can really take data and analyze how much time you're looking at a particular product or service to help determine and target things for you in the future. Are those some of the lessons is how to leverage big data and analysis and those kind of things a part of how banks can also do that? Or what advice would you have around the digital capabilities a little bit more? Peter Wannemacher (10:11): Yes, and you nailed it. It's the leverage or the making use of data. So banks have two big advantages here over retailers, which is they tend to have lots of data. I mean, more or less. It's hard to quantify. But they have lots of actionable data, especially for their existing customer. So I'm going to start by answering that. Prospects is a little bit different, and there is a creepiness risk that I'll talk about in just a second. Simon Powley (10:31): For sure, yeah. Peter Wannemacher (10:32): But people that you have a current relationship with, you have lots of data about them, and they're actually very comfortable. There are some exceptions. So you want to allow them to opt out. Some people's favorite personalization is no personalization. Remember that. But in general, if you have an existing relationship with them, they're quite happy for you to utilize that. Peter Wannemacher (10:51): We did this, I won't name names, but there was a big bank that we did some work with where they greeted everyone on their mobile app with, "Happy birthday" when it was their birthday, but nothing else. Not like, "Let's think about do you want to get your financial house in order because of your birthday?" Or even just maybe a perk, right? Maybe an offer, whatever it may be. Peter Wannemacher (11:10): Now, most people still aren't going to go for that, but they'd done nothing. And when we talked to them, it was because they were really worried that people would feel weird about that. And the answer is for the vast majority of people, if they have an existing relationship with you, right? If they've authenticated into your website or your app, no, that's good. Honestly, the reaction, when we did some research on this, was, "You should know it's my birthday. I have all my money with you. Of course you know that. That doesn't make me feel weird at all." There's a very small percentage that are going to opt out of something like that, and that's okay. And you want to be giving them, right? Firms like Chase and Capital One are doing a better job of giving people control over their data and opting out of things. Peter Wannemacher (11:46): But for the most part, so yes, you hit the nail on the head when you said it's about leveraging that data. So what retailers... Over a third of Amazon's sales, according to Amazon themself, come from product recommendations based on data about the customer's behavior. And that includes sometimes within search, by the way, which is something that banks should do better as well. So yeah, this is something that banks need to be leveraging better. Peter Wannemacher (12:08): Every bank I work with and every bank who I'm sure you and I both talk to has mountains of data. It's making use of that data. And there are some limitations, right? We understand there's some legal and compliance issues. But the vast majority of the issues is putting in place the backend data infrastructure to enable that, and then making good use of it on the front end to enable better... Yes, it might be marketing. It might be product recommendations, which are a form of marketing, but can be... If you take that mental model of what the customer needs, what might be happening in their life, it can feel like advice and valuable advice. So yes. Short answer is yes. Simon Powley (12:44): Yeah, no, interesting. And the personalization, we've talked a lot about that, that customers are looking for. And I think you're spot on. I mean, the information can be gathered from Amazon about... Because I'm on that site regularly, obviously, and love their frictionless journeys, and we should talk about that. But they don't have as much information that I have provided to them as my financial institution with KYC requirements. Simon Powley (13:09): So certainly, I've had to tell my bank, through obligation, personal stuff about me that Amazon may not know. They're having to pick it up. And banks- Peter Wannemacher (13:18): That's right. Yeah. Simon Powley (13:18): ... do have that kind of big data where they can do the balance there to really personalize those needs and personalize my experience, which I know is very important to them. Peter Wannemacher (13:26): Yeah, and generally speaking, I mean, there is this sort of... There's a creepiness danger, and that banks should not [inaudible 00:13:31]. Simon Powley (13:32): Yeah, talk about that before we go onto the next topic. Tell me about that, because I agree. Peter Wannemacher (13:36): Yeah. Well, for starters, when you're talking about... People talk a lot about banks being too siloed, and they're almost always right, right? I think they're always right, essentially. There is however... So if you think about the role you play in people's lives, I'm talking about not you personally, but the bank plays in people's lives. There is a clear distinction, more so than in almost any other industry, between someone who has an existing relationship with you and someone who doesn't. And unlike retail and lots of other industries, there's a pretty clear line there, right? Peter Wannemacher (14:06): In other words, am I a Target customer right now sitting at my house talking to you? I don't know. I go to Target sometimes, right? If I want to stop being a Target customer, I just don't go to Target ever again. Peter Wannemacher (14:17): If I want to stop being a Bank of America customer, let's assume I'm a Bank of America customer, I have to extricate myself from that relationship. There's an inherent stickiness to that, which has a lot of implications. But one it has is that it means that there is a clear distinction between a bank that I have a relationship with, and I may not love them, but I have a relationship with them, and one I don't. Peter Wannemacher (14:38): So executives and strategists of banks should absolutely... I want you to remove many of your silos. And I even want you to maybe get rid of the silo between dot com site and secure site. That's often the language that bank executives use. But I don't want you to lose sight of the mental model customers have of the role you play in their lives, which is very distinct between those two. Peter Wannemacher (14:59): So the risk of creepiness is pretty darn low when it comes to those existing customers. I mean, you could say something inappropriate, right? We could talk about... But it is not going to be... It was almost never just because you seem to know about them, that they're very comfortable. In contrast with the prospects. I think if you're a bank executive, you should essentially treat prospects as though they don't want to know that you know much about them, right? Maybe you let them opt in, right? You can say, "Hey, we can use your location to find the best rate for you for X product," which is sometimes necessary. But you want to be transparent and upfront, set expectations why we need this. Which involves some UX design choices that are really important. Peter Wannemacher (15:41): I mean, and there are other folks at Forrester that are much smarter than me about the privacy and creepiness questions. Folks like Fatemeh Khatibloo, who does brilliant research here. But in terms of for bank executives specifically, that's the sort of most important headline is- Simon Powley (15:55): Got it. Peter Wannemacher (15:57): It's not a silo, but it is a great wall between those two groups, and you should keep thinking about that as being a clear distinction. Simon Powley (16:04): Great. Yeah, I'd love to, at another time, talk a little bit about those relationships and more of the subscription model and how that affects the differences between an online provider and a bank. Because I think there's something there in terms of pricing and the way they do that. But we'll have to table that for another conversation. Peter Wannemacher (16:22): Yeah. Well, we can table it, but I will say yeah, I mean, we've done some research and people do think... I've had bank executives, understandably, say to me like, "Well, isn't the monthly fee basically a subscription?" In the eyes of customers, the answer is- Simon Powley (16:35): No. Peter Wannemacher (16:36): ... no. Simon Powley (16:36): Absolutely. Peter Wannemacher (16:37): So yeah. And they pay for financial. Digit is a FinTech, a direct to consumer FinTech brand that is not a bank. It seemingly doesn't plan to be one. What it does is it has a proprietary algorithm. It moves your money to savings at another bank for you, right? That is its value prop. It has a subscription price. And the way people think about what they're paying for is very different than the way they think about how they pay for traditional financial providers. Some of that's good news, some of it's bad news. But your instinct there is, I think, absolutely right. Simon Powley (17:10): Yeah. Well, good, good. Well, let me ask this a little bit. All of these, whether it's retailers or in branches, however you want to call it, their experience is really changing. So the goal is to create the sustainable. Simon Powley (17:24): The way you described it earlier, I think, is right on with the frictionless kind of customer journey. That's really critical to the customer experience and therefore, customer retention moving forward. Retailers like Amazon, that's really frictionless from my perspective. Apple. They're doing a lot. And I think there's some things there that branch banking or retail banking, in the traditional sense, could learn from that. So what's the one or two things that you think that FIs could learn from those kinds of industries that would make the biggest impact quickly for them? Peter Wannemacher (17:57): I'm going to cheat a little bit and I'm going to give you five. I know you asked for two or three. Simon Powley (18:01): Yeah, great. No, more the better. I'll take it. Peter Wannemacher (18:01): I'll try to go fast. Simon Powley (18:02): All right. Peter Wannemacher (18:04): A couple of these, the first couple were true five years ago when we did this research in depth. And we continue to do it, but I think that was a pretty dedicated research stream we did. And then there's a couple that are not new concepts, but are areas where retailers really have moved well ahead of most banks. Really, the vast majority of banks. I'll name them quickly, and then we'll circle back. And there's some overlap in here. I did not have time to make this perfect or mutually exclusive in every way, but I hope they're still... My goal is to make them useful. Peter Wannemacher (18:37): Video, the use of video. And really, video and multimedia. Peter Wannemacher (18:41): Search, the use of search. Making search not just a check the box element of digital experiences, but a really effective and ultimately beneficial to both parties, the customer and to the bank. Peter Wannemacher (18:55): Notifications. Alerts and notifications are one of the most powerful drivers of engagement in banking. Our data has shown that time and again, and yet retailers are better at notifications in many ways, not in all ways, but in many ways than banks. Peter Wannemacher (19:09): The fourth one's a little funky, but I'm going to use it because I think it's actually... And I have an example from McDonald's that I really love. Which is just the value of time or the incredible value of time to customers. I'll talk about that one in just a second. I don't think banks ignore this, but I think they could look at how some retailers think about it. If McDonald's a retailer. But there's some other firms that look at this... I mean, Walmart actually does this really well as well. Peter Wannemacher (19:35): And then the fifth one is personalized recommendations. Something I touched on earlier, but I'll talk about... This is where some direct to consumer retail brands are better at this than traditional retailers or than banks. So those are the five, video, search, notifications, the value of time, and personalized recommendations. Simon Powley (19:52): Well, good. Well, give us a 30,000 foot view of those. Peter Wannemacher (19:55): All right. Video, ultimately I want banks to do great work with video. In the meantime, I kind of just want them to... And I don't mean I want them. I don't really care. I don't have a dog in this fight. What I mean is they will be more effective and more successful in their goals, in their business outcomes, in their customers' experiences if they do these five things, just to clarify. I'm going to say things like as though Peter Wannemacher cares. I only care because I want my bank clients to be successful. Peter Wannemacher (20:21): So video, eventually I want them to make the best videos in the whole world. In the meantime, I just want them to make more use of video. Video somewhere between, and it varies by segment, by brand, and actually by use case, but somewhere between 20% and 40% of a given customer base, most of the time, would prefer to consume information through video. Like I said, that varies a lot, right? So there are certainly... I won't get into all the use cases. Simon Powley (20:51): When you're talking, Peter, about video, you mean really like a vignette or YouTube, those kinds of... You're talking about that kind of video. Is that right? Peter Wannemacher (21:00): The research I just mentioned, the 20% to 40% preferring to consume that, I'm referring to on demand video. I mean, I guess it could be personalized on demand, but it's one way, right? It's not two way live real-time. It is one way yeah, content. Simon Powley (21:15): Got it. Yeah, and- Peter Wannemacher (21:15): Exactly. Yeah, yeah. Simon Powley (21:15): ... that's the differentiation I wanted to make. Okay, got it. [crosstalk 00:21:17]. Peter Wannemacher (21:17): No, I think there's a place for two way real-time video chat, and there's a place for broadcast video that's not on demand. But no, I'm really talking about it when you look at what retailers do really well, it's the video content. Simon Powley (21:30): Got it. Peter Wannemacher (21:30): A quick data point on here, because you and I, a lot of this conversation came out because of COVID-19, right? Simon Powley (21:37): Sure. Peter Wannemacher (21:37): During COVID-19, Forrester was looking at the content being provided to bank customers by their banking providers and FinTechs, right? We also looked at firms like Digit, like Emma, Acorns, a bunch of others. Over 90% of traditional banking providers, and this was as of mid-year 2020. So we were maybe... We weren't quite six months into the crisis, but we were well into this crisis. Every bank we looked at had some content around COVID-19. Over 90% had zero video or multimedia content to speak of to help customers understand what was happening, what they could do about it, what their bank could offer. That's in a world where video is increasingly cheaper, relatively cheap and relatively easy. Peter Wannemacher (22:22): My colleague, Nick Barber, has written a lot about video technology that enables banks of any size to offer this. Helping customers understand the situation and maybe things like payment deferrals, how to ask for mortgage pauses, things like this. Or even things that they may not have used before like remote deposit capture. A lot of people used that for the first time during the pandemic. Over 90% of banks offered zero video or multimedia content to help them with that. That's a real shame. Again, I don't mean to diss banks, but I know [crosstalk 00:22:53]. Simon Powley (22:53): No, yeah. No, I get it. Yeah. Peter Wannemacher (22:56): So that's video. I think that we'll circle back to these if you want to in a second. I'll try and go a little bit faster on the rest. Peter Wannemacher (23:03): Search. I mean, there's a lot of good... I mean, there are some great banks that do search well, like Intesa Sanpaolo and mBank, both European banks, interestingly. USAA is better than most American banks, but even they fall short of some of the European ones. Peter Wannemacher (23:18): In terms of retailers, I mean, if you look at what some firms like Amazon offers. I mean, Amazon uses deep learning to improve their search, and in some cases, embed recommendations within search. Peter Wannemacher (23:31): Now, for them, they can be a little more nakedly sort of cross-selling, which banks shouldn't be. But if you instead embed advice or guidance, right? So Scotiabank in Canada does this really well within their mobile app is helping customers as they're looking for something. Not just sort of give them an answer, but guide them to the appropriate product or service or experience. Peter Wannemacher (23:52): There are banks that are improving search, but retailers are ahead of them. Part of that's because retailers have to, right? That's often how they improve sales conversion rates, et cetera. Amazon- Simon Powley (24:04): Got you. Peter Wannemacher (24:04): ... that's what... Over 33%. I think it's somewhere around 35% of Amazon's sales come from recommendations, including within search. So they have to do that. But that's something where banks are falling short. Peter Wannemacher (24:16): Notifications. I'll cite two retailers quickly. Notifications, banks are really good at offering lots and lots of notifications. They're really bad... So if you think about notifications, what you want to be doing, any company, and every executive and strategist and manager should be hearing this pretty clearly, you want to make it as convenient as possible for a customer to enroll in, manage, receive, and take action on a notification or alert as possible, right? That's what you want to be enabling is those four elements. Enroll in. In other words, adopt, onboard, whatever you want to call it. Enroll in, manage, receive, and take action on. Peter Wannemacher (24:55): Banks are good at having lots of alert types, which there's some value in that. But they are really bad at making the notifications experience, the alerts experience valuable for clients, or as valuable as it could be. Peter Wannemacher (25:06): Two quick examples. Sephora. Sephora does a lot of stuff really well. I mean, we look at them around personalization as one of the stronger retailers in the world. Specifically, they have various notifications to their members that are incredibly valuable and relevant and timely, right? They really nail that, especially the last two of those, receive and take action on. Peter Wannemacher (25:27): They have back in stock notifications. So it's very common in retail for someone to want something. It's not there yet, but it will be back. It obviously helps the brand, the retailer, to get them to come back in and buy things. So back in stock notifications seemed like a no-brainer. But Sephora is not the only one to offer them, but they really have some of the strongest ones. And sadly, many retailers, I won't claim to know whether it's a majority, but many don't. And it's helped Sephora. So this is not the only driver, but Sephora has had over 20% growth in 2019. That was before COVID. We can talk about what that impact is, but they were really harnessing the power of notifications. Peter Wannemacher (26:03): And then Starbucks. I cite Starbucks a lot. There are some things that Starbucks doesn't do fantastically, but their calls to action are really valuable, really clear. Now, customers expect something different from Starbucks than they expect from a bank. That's fine. But what they share is when you receive an alert or notification, it should be clear what you're getting, why you're getting it, and what you should do about it if appropriate. Peter Wannemacher (26:25): Starbucks does a good job of helping you understand what the call to action is, and if you want to take it, what we call the post-call to action task flow after you click on the thing is really strong in Starbucks in a way that honestly... I mean, I don't want to pick on too many banks. Besides a couple of examples from... Capital One does some notifications really well. And they're not the... I mean, there are some good examples here, but they're pretty few and far between. Starbucks is much stronger there. Peter Wannemacher (26:52): And then I'll finish up quickly. The incredible value to them. I guess maybe I'm a little addicted to this one example that I really like. And my colleague, Brendan Witcher, shared this with me. But McDonald's, they started partnering with this personalization and AI firm called Dynamic Yield. They eventually acquired them because they were such a competitive advantage to them. My favorite data point, because it's one of the ones that McDonald's thinks is most important, is from 2019 to 2020 in the two like periods, two apples to apples periods, obviously COVID, but we can talk about that separately, drive-through time, when controlling for other factors, decreased 30 seconds. 30 seconds can make a big impact in any experience. Peter Wannemacher (27:32): You and I might have grandparents that are rolling somewhere, maybe beds, maybe in graves, but about the fact that 30 seconds makes such a difference, right? Simon Powley (27:41): Sure. Peter Wannemacher (27:43): We're on our phones while we're watching TV while we're on the internet as well. But putting all that aside, the making fun of modern people, it makes a big impact. And respecting and valuing customers' time is something that banks... If you look at task flows around bill pay, for example, they've actually done an okay job. I mean, this is true of a lot of what I'm talking about around what banks can learn from retailers. Very rarely is it that banks have just failed miserably, right? But they could stand to do a lot better and be more like what McDonald's is doing and others. Again, Walmart does this really well as well. Is just removing a few seconds from the time the person has to be in line is incredibly beneficial, right? Airlines have found this in the past, and it's incredibly powerful. Peter Wannemacher (28:29): The last one I'll mention really quickly is personalized recommendations. A good chunk of customers of any company want... A lot of people do want to be in control of how they shop for something. So we should not ignore those people. But there are many folks, right? It varies by brand, by industry, by segment, by use case. But a large share of folks, sometimes bumping up into 50% or even well above a majority, again, depending on the circumstances, prefer to basically get asked a couple questions. It varies by the complexity of the product. And then get a recommendation. Peter Wannemacher (29:05): Stitch Fix does this really well, right? It's basically in the form of a quiz for them, because it's a fashion retailer, and they use that to accelerate and strengthen the onboarding experience, as well as other aspects of their offering. And as a result, they've seen really... For example, again, I'm stealing this from one of my colleagues, Brendan Witcher. But their six-month retention rate is about 30%, which is really strong for a direct to consumer retail brand, right? People often sort of try something out and then abandon it as banks know in some other areas of our services. So that ability to get people engaged, part of it comes from personalized recommendations. Not the only factor, but it's a really important factor. Any of those you want to dive into? Simon Powley (29:45): I know the personalization piece with Stitch Fix. I actually leveraged that myself. My wife turned me on to that. The app is really easy to be able to leverage that. Is there a way that you see these being solved for in the mobile arena specifically? Because it seems like it's gravitating to that. So when you think about the use of search or personalization, the value of time, it seems like the mobile device was in there. Any comments specifically on what banks could learn from mobile aspect? Because I get a lot of questions about that from my FIs. Peter Wannemacher (30:20): Yeah, I mean, I think... I didn't even realize this until you said it. So while the things I just named are not exclusively about mobile, each of them has an outsized role because mobile is increasingly the hub of people's banking relationships and many other relationships. I want to make sure I'm answering your question appropriately, but my quickest answer is all of them, mobile has downsized. Peter Wannemacher (30:47): I'll give a quick example, and I won't name the bank here. But there is a bank, a pretty large bank in the US, that developed a... I believe it was 55 seconds. It was just under a minute. Short video to help people understand how to use mobile deposit capture. Actually a fantastic little video. They put it on their website and didn't put it anywhere on their mobile app or their mobile website. Nothing. Didn't exist. No guidance to it. Simon Powley (31:14): Wow. Peter Wannemacher (31:18): I don't want to pick on them, because I mean, this is an error that I hope they will remedy very soon. But it's a great example where video... They've done the work of recognizing the value of video, and video has a role to play in traditional PC-based websites. But its impact, especially in that exact example, because the use case is primarily mobile, is really at this point, exclusively mobile. It was an error, but a bad error, right? Yeah. Peter Wannemacher (31:48): So yes, I think that every one of these... I mean, all of them, mobile puts into sharp relief the time that is being utilized by the person, right? So for all of these, including of course the time one that I mentioned, but all of these, that has a big role to play. So yeah, did I answer your question? Simon Powley (32:09): You did. I think it's spot on. Let's keep on the theme of kind of acceleration or transformation in these kinds of services in retail and branch banking. Let's talk a little about COVID. I know our audience, certainly it's still top of mind. We're seeing things creep back up right now. So as operations begin to kind of stabilize and we transition into this new normal, whatever that looks like, we are seeing obviously the role of self-service and digital channels within the branch networks and financial institutions really important within communication and relationship management. So how do you really see that COVID has accelerated this, and what are the kind of downstream implications you can kind of point us to that you're seeing come out of this? Peter Wannemacher (32:54): Yeah. I mean, you said something as a bit of an aside but it's true is we don't yet know what it looks like. There are some things I think we are increasingly confident will be true. There I said we as in Forrester, based on our research and our data. But I'd like to think that the banking industry, the financial service industry as a whole is starting to recognize this. And I think it's a good thing, right? Well, A, it's reality. So you have to recognize it eventually, but it's also a good thing to get ahead of it. Peter Wannemacher (33:18): That is that we've hit an inflection point when it comes to many digital self-service needs for customers or maybe their wants, right? But what I mean by that is a majority, roughly two-thirds, of millennials have tried a digital banking service for the first time during COVID. I cite millennials not because they're... I mean, they are over-hyped, right? Or they're at least hyped, and there's lots of press things about them and we've all seen too many keynotes about them. Peter Wannemacher (33:50): But I actually think for bank executives specifically, and this one more so than retail. It's really not speaking to the bank executives. Millennials are the best leading indicator when it comes to digital experiences, and probably the best leading indicator when it comes to the impact of COVID-19. That's because there is the combination within the millennial segment that is not wholly unique, but especially pronounced. That is they are savvy enough with digital technologies and touchpoints that they are comfortable with that, right? So you don't see some of the same inhibitions or prohibitions resistance that you see in some older generations. And in combination with that, or maybe I'll say at the same time, their financial lives are complex enough that they have needs that are different and are a better indicator of what's to come than their peers that are younger than them, right? Primarily Gen Z. Not to scoff at Gen Z. Gen Z is going to be very important. Peter Wannemacher (34:54): And my goal here is not only serve millennials. But really it's not about who you serve, it's about who you look at to start to get a sense of what the future looks like. Remember, millennials now are heading into their forties. I should say some of them are. Oldest ones are 39, right? Simon Powley (35:10): Right. Peter Wannemacher (35:10): I think even maybe a couple are getting into 40. Again, this is on average, but it's still really telling is their financial lives are more complex. Peter Wannemacher (35:19): Just to be clear, large shares of every generation tried some digital banking service for the first time, but the ones I care the most about are millennials. That brings me to point number two which is among those people who had used the digital banking service for the first time, more than two-thirds say they plan to keep using those even after COVID-19 is quote, unquote, "over," whatever that ends up meaning. Peter Wannemacher (35:41): And the self-reported data... My background is in data and statistics. I want to be careful. It's not that we just take people at their word. But two-thirds is a pretty big jump. Simon Powley (35:52): Sure is. Peter Wannemacher (35:53): Or a pretty large share. And the truth is what I think will really play out is that that will be true for almost all routine interactions and transactions, right? Almost all routine objectives that bank customers have. There will still be some complex ones where... And that's the one that's much less certain. So some will still want to go back to branches. Some will still want to have phone calls, certainly. Some might think about video calls, right? There's a lot of investment there. I think it's too soon to know whether that will play out the way people think or hope. But certainly, it's an understandable area to be investing in. Peter Wannemacher (36:29): Sorry, I'm probably going on a little longer than you needed me to, but the big headline is that there's been this inflection point. And I'll quickly add in another one that our research shows, and this is important. And you and I discussed this a little bit in the past. Not earlier today, but I mean in our past conversations. Peter Wannemacher (36:44): The second point is while that's a big, important headline, that's a big shift that I talked about, right? We've hit a tipping point. We've hit an inflection point. We're literally not going back in many ways, especially around digital payments, lots of routine digital money movement and digital money management. What has not changed, at least as of yet, is the mental model bank customers have of what role banking products and banks play in their lives. So there has not yet been some sort of foundational shift in what I need. Peter Wannemacher (37:20): It's still true that they're increasingly willing to experiment with FinTechs, direct to consumer FinTechs, right? I mentioned Digit. There's obviously Chime and Varo Money in the US I mean. But I think all of those, when you think about the role that banking products and banks play in people's lives, we don't see any reason to think that's changing in 2021 or because of COVID-19. I'm happy to talk about the 20 years down the line questions, but in terms of the impact of COVID-19. Does that make sense? Simon Powley (37:52): Absolutely does. Peter, I want to thank you so much. I have enjoyed the conversation and I always learn lots when I'm here talking with you. So I hope we can do this again soon. I think there's some great takeaways from today. I think we've got a few more topics we can discuss. But listen, I want to thank you again. It's been informative, it's been very beneficial, and I think there's a lot of lessons that certainly can be learned through this. Simon Powley (38:15): Thanks for our listeners for tuning into this episode of COMMERCE NOW. For more information, certainly go to our website at dieboldnixdorf.com, and you'll get a series of experts' perspectives on some of the industry's hottest and most talked about trends. Have a great day.
20 minutes | 3 months ago
Open Retailing - Essential for a Successful Self-Service Strategy
Summary: In this podcast we will discuss how open retailing is vitally important to retailers today. The COVID-19 pandemic has created a lot of changes for retailers and we discuss the importance for retailers to change, adapt and evolve their consumer journey's as quickly as possible. Resources:Whitepaper: Open Retailing Guide Blog: The Importance of Openness in the Future of Retail Nielsen Study: Retail Personas Infographic Brochure: Understanding Why Grocery Shoppers Adopt Technology Websites: COMMERCE NOW Podcast Retail Self-Service Solutions - OPENNESS Host/Guest LinkedIn Profiles: Jerry Langfitt Matt RedWood Transcription: Jerry Langfitt: 00:00 Hello again, this is Jerry Langfitt, your host for this episode of COMMERCE NOW. In today's episode, we are joined by Matt Redwood, global head of self-service for the retail division, who is a known expert at helping our retail customers find a retail strategy that best fits their organization's needs. Today, we will discuss how openness is vitally important to retailers today. There were a ton of changes in retail, what are some of the trends retailers need to adapt to, Matt? Matt Redwood: 00:41 Retailers have really got a difficult period at the moment. Parking COVID for one minute, there's two pressures that are really driving them to evolve their value proposition as quickly as possible. The first is the ever-expanding or rising consumer expectations. Consumers are always looking for that heightened level of experience, particularly in-store, more so when you look at the shift to online. So online is obviously extremely convenient, it's very quick. Consumers are still driven into stores because they value the face-to-face contact with that particular retail brand and the experience that they get in stores. So retailers are constantly under pressure to increase their in-store experience to meet the needs, or hopefully exceed the needs of their consumers shopping within their stores, and to try and capture that sale within that particular store to make sure that that consumer doesn't go elsewhere. Similarly as well, heightening that experience within the store also drives that consumer to come back to that store. So in a period where brand loyalty you could say is at an all time low, it's even more important that they deliver the right experience, as well as a good experience for that particular consumer that's walked through their doors into their store. The second factor that they're really having to focus on is the changing speed at which technology moves at. Technology's always been an extremely fast evolutive business, but it's really, really difficult for retailers to integrate new innovations or new technologies or new solutions in a sustainable way that supports their overall platform and ecosystem. Obviously now COVID has come along, it's thrown another dimension into the mix, which is uncertainty and speed of change. Retailers had to adapt extremely quickly over the last 12 months to not only changing consumer trends as confidence or shopping habits changed, but also different regulations or legal restrictions in terms of how consumers shop within their stores. So, there's three massively fast moving influences here that retailers have to combat and navigate successfully. Jerry Langfitt: 03:01 What's been their struggle right now adapting to that? Is it their own systems? Is it the solution provider systems? Where seems to be the biggest disconnect? Matt Redwood: 03:11 Sure. So I think historically there's been certainly a lack of openness within retail IT, and that's something that's changing extremely quickly. It's being forced to change by retailers' requirement to constantly update or evolve their customer journeys or customer touch points within their store as quickly as possible to stay ahead of these trends. So retailers are really looking for open platforms now that gives them the ability to change, adapt, evolve, and ultimately improve their consumer journeys as quickly as possible. A closed system really doesn't deliver against that. Jerry Langfitt: 03:51 It seemed like, at least in years gone past, solution providers for retail technology would say, "Here's my software, here's my hardware, and we'll change real slowly." So, the solution provider's been just as much to blame as the retailers for not being very open. Matt Redwood: 04:06 Yeah, I completely agree. I mean, if you take the self-service business as an example, historically retailers have procured the hardware, the software and the services from one supplier. Which is absolutely fine and will continue to a certain extent in the future, but you're very much then locked into one particular platform, you're obviously dependent on the roadmap of that supplier. So shifting to a more open infrastructure means that, A, you're not locked into a specific solution, you're not locked into a specific vendor and their defined roadmap and you're not locked into a specific process. So, it gives you the flexibility to be able to bring third parties or new technology or new solutions into your environment much easier and much quicker, but also it's giving retailers the choice and the power over their own IT roadmap. So no longer are they dependent on one particular supplier's hardware or software roadmap, they can actually cherry pick best of breed from the market and bring that into their ecosystem. Jerry Langfitt: 05:08 Well, it's interesting, because when I'm talking to retailers, their level of sophistication with IT has grown exponentially. Whereas before all I needed was a cash drawer and a till, now I have many different types of paths that the consumer can take. IT has had to grow with that, to the point where even they're doing a lot of the software work themselves and they really want to control it. Consumers want to be empowered, as retailers I feel seem like they want to be empowered as well and be able to choose their own path. Matt Redwood: 05:39 Yeah, I mean, ultimately, it's about giving the end consumer the choice to shop in the way that they want to shop. Really to do that, you have to take a good hard look at who shops in your stores, why they shop in those stores or at your particular brand and what good looks like to them. Then it's about building the right IT infrastructure to meet those expectations. So gone are the days where you may have one, maybe max two or three touch points in a store, retailers now really need a kit bag of different solutions that they can pick different combinations of to really tailor the technology to each one of their stores. So it's not a one size fits all anymore, it's really about tailoring the technology, not just to your estate, but to each and every store to make sure that you're actually matching the technology to the expectation of those particular consumers within their store. The best example to use is really when you look at a grocery retailer that may have three or four different store formats, right from the very smallest convenience store, all the way up to the supermarkets and the hypermarkets, the customers that shop in those stores may be the same person, but they may be shopping in a different time of the week, and certainly would be a very, very different consumer journey and expectations. Someone shopping at a convenience store, it may be an inner city worker that's coming to grab a lunch, so three items at lunch, or a couple of items that their wife has asked them to pick up on the way home. Transversely in a hypermarket, you're much more likely to have a family shopping to buy their weekly shop with 50, 100 items. Now it may be that same consumer that's shopping across all store formats, but the expectation related to the customer journey or the shopping journey that they're on, that particular mission is incredibly different. So it's about understanding what are the different customer journeys that you have in your stores, finding the right technology, and then providing them with the touch points to deliver against those customer journeys in the most efficient and value rich way. Looking further forward, retailers are really looking at how can we increase that consumer experience within the store? How can we make it as easy and rich as an experience for that particular consumer? I think what we will see moving forward, and back to the topic of this conversation why openness is so important, it's because some more emerging technologies such as facial recognition, item recognition, product tracker, people tracker. All of these emerging technologies retailers are going to start to use them more and more to make sure that they can deliver a heightened level of experience in their stores to make sure that that consumer not only shops in that store once they're there, number two, they maximize the spend once they're in the store, and number three, they come back to that store to shop again. So being able to cherry pick best of breed in terms of different technologies or different solutions on the market, bringing them into the ecostructure for each store in your estate is going to be the important driver for openness in the future. Jerry Langfitt: 08:44 Retailers, as the consumers need different journeys themselves, so you need a solution provider that can actually, okay, there's going to be a retailer that wants all the work done for them and you're going to have a retailer that wants to do most of the work for themselves. How does openness serve both of those types of retailers? Matt Redwood: 09:04 Sure. I think this is the biggest change that we as suppliers have to appreciate and support moving forward, that every retailer is different. Although they may have stores that are similar, each value a different approach in terms of consumer journey, what's important to that consumer, the level of service they want to give, and also the level of staff interaction and technology interaction. I think we as a supplier to the retail industry need to be very mindful of the fact that every retailer may want a slightly different approach, a slightly different value proposition or technology approach, and we have to be able to support that. The sustainable way of doing that is with an open approach. That gives us the ability to work with one particular retailer who may want off-the-shelf solutions, but they're going to combine different solutions in a different way to create the value proposition for their store. We might have retailer B, who's really looking at taking a lot of the development in-house, so acting a bit like a systems integrator, where they bring best of breed from three or four different suppliers and merge them together to create the right value proposition. So, we as a supplier to retail or technology supplier have to be open in terms of how we work with retailers, how we support their future vision and their strategy, and ultimately how we enable them to take the best of our solutions and maybe merge them with other technologies. Jerry Langfitt: 10:36 I recently read a study from McKinsey and they surveyed consumers this past March, then again this past June. In just 90 days, they recorded a notable increase in self-service preference by consumers. Does open retailing play a role here to adapt to this quickly changing sentiment? Matt Redwood: 10:55 Yeah, absolutely. It's really interesting data that you talk about there, because I guess there was a risk when everything was heavily locked down and governments were changing the regulation almost on a daily basis. Retailers had to really react extremely quickly, not only to how they kept their staff and their consumers safe, but also what technology they used in the store. The interesting trend that was driven out of this was actually consumers' comfort level using self-service devices in stores actually increased quite dramatically. It's a strange one, because the perceived risk is actually among human interaction and not interaction with technology. So, a lot of retailers really leveraged the self-service devices they had in their store, because it gave them more flexibility in terms of how they dealt with the changes. Quite a lot of retailers had a big shift in their operations that they had to deliver, quite often managing queues because they had restricted quantity of consumers inside the store and managing consumers out of the store in the car park. But also inside the store, just making sure they had products on the shelves, because consumers in certain times of the year were panic buying or stock buying. So self-service not only enabled them to deliver the right customer journey, giving consumers that comfort level that they weren't interacting with other humans too much and they were safe, but also it freed up a lot of the staff that would normally be on checkout to actually go and work on some of those other tasks elsewhere in the store. So, I think the underlying message is really that self-service gives retailers the flexibility to run the right operational model within their store, and to balance that, I guess, customer journey with staff utilization and efficiency. I think that's the overarching benefit that most retailers took advantage of through the last 12 months of COVID. Jerry Langfitt: 12:54 Well, to go back to the original point though, what's happening with COVID is more of an acceleration of what we saw happening anyway with what you said about online shopping and needing to make the physical store much more relevant. So these aren't new things, but these are things retailers always intended to work on, and this is just accelerating everything. Correct? Matt Redwood: 13:18 Yeah, absolutely. I mean, ultimately a lot of the trends that we're now seeing were moving in that direction anyway, all that's happened is we've accelerated that trend. I think the other trend that will be accelerated is actually consumers will start to demand more from their retailers and their in-store experience, because not only is it about choice in terms of shopping the way that I want for a most enriched experience based on my needs as a consumer, but also there's this safety and comfort element that consumers want this enriched customer experience, but they also want to do it in a way that they perceive as being safe. So, retailers have really got to look at how they can bring even more touch points or even more customer journeys within their store to give those consumers that level of confidence that they need. So, retail is going to become much, much more diverse over the next couple of years where we see a much more blended view, not only between offline and physical in-store, but also in terms of the different touch points that retailers have in-store. I think there'll be a lot more diversity retailer to retailer, but also among the retailer's estates, it really gives them the opportunity to have different mixes of technology in each one of their stores, depending on what the customer journeys are. So if anything, it will give consumers much more flexibility in terms of how they'll shop in stores in the future, and it will give retailers much more opportunity to engage with that retailer in the right way and ultimately influence that they shop more at their stores. Jerry Langfitt: 14:55 Well, and that to me seems much more critical, because if I'm talking about my bank accounts, it takes me a lot of effort to change banks. However with retail, I can go from the grocery store across the street to the grocery store one block over, and I can get affected by the parking lot and how busy it looks. So it seems like the retailers, it's even more critical that they look to those new journeys to please the customers. No? Matt Redwood: 15:22 Yeah, absolutely. I mean, ultimately competition amongst retailers is the highest it's ever been. Brand loyalty is probably as low as it's ever been, because a consumer knows that if they get a bad experience in one store, they go down the street and there's two or three similar stores that they can shop at. So, they're being very fickle in terms of shopping at the stores that they know that they get the level of experience that they expect. I think one of the interesting phenomena when you speak to consumers is once they have a good experience in-store, that becomes their defacto base level and anything below that is then deemed as a bad experience. So, retailers have really got a tough job to make sure that they are continually enhancing the in-store experience, and obviously technology plays a huge part of that. If we look at the self-service space as an example, friction points associated with self-service devices are 100% the focus among suppliers like ourselves, but also in retailers in terms of how we remove or reduce those friction points as much as possible. So looking at emerging technologies, such as item recognition or customer recognition to actually remove some of those friction points that consumers experience using a particular touch point. Back to our openness topic, having the right open ecosystem that allows them to say bring a third party innovation and integrate it within their self-service environment is going to enable them to deliver a heightened level of consumer experience for the end user, and ultimately differentiate their in-store experience against one of their competitors. Jerry Langfitt: 17:03 Now about that, when a retailer isn't open or when a solution provider isn't, what are we talking about the damage or the time it takes for someone to adapt? I mean, when you say incorporate a new journey, what's the negative of not being as open? It just takes much longer to react to the consumer, correct? Matt Redwood: 17:24 Yeah, I mean, ultimately from a retailer's perspective, if your supply isn't open and there is a new piece of innovation or technology that you want to integrate into your store environment, you're very reliant on that supplier being able to build that particular solution or technology into their roadmap to then deliver to you. Ultimately, that's the wrong way round. It should be us as suppliers that are pushing the envelope with retailers in terms of what technology they should be putting in their store to deliver a heightened level of experience. What the openness gives them is, it gives the supplier the ability to actually go to market and find the parties that may be beneficial, could enhance the solution. But on the flip side, it gives retailers the flexibility to do the same. So, if they have a partnership with a technology supplier that they use elsewhere in their store, and it may be something related to their warehousing or their back office, and they see that there is a potential benefit of integrating that technology in the front office, an open environment allows them to take control of that decision and ultimately get the solution out there quicker. So, it provides much more agility to retailers and it provides much more flexibility to the supplier in terms of what's their value proposition and what their solutions look like. Jerry Langfitt: 18:47 Hmm. It sounds like openness is definitely critical for every retailer's success. I think this is a good place to wrap up our conversation today. Thank you again, Matt, for sharing your insights with us, and thank you to our listeners for tuning in to another episode of COMMERCE NOW. For more information on openness in retail, go to www.dieboldnixdorf.com/selfservicesolutions or click on the link in the podcast show notes. Until next time, please keep checking back on iTunes or however you listen to podcasts for new topics on COMMERCE NOW.
31 minutes | 4 months ago
REPLAY: Self-Service Retail - Shifting Expectations
In honor of International Podcast Day, enjoy a blast from the past. Back to 2018 when COMMERCE NOW podcast began. Overview: Self-service checkout technology is transforming the way Americans think about customer service. Not long ago, good customer service meant properly training sales associates to assist shoppers in need. Now, more and more companies are shifting to tech-based customer service. As of Q2 2018, 95 percent of American consumers had encountered at least one form of self-service retail and 49 percent used them on a weekly basis at the supermarket. In this episode, PYMNTS in collaboration with Diebold Nixdorf, examine survey data collected from 2,170 American shoppers on their experiences with and impressions of self-service retail checkout options. Resources: Visit Retail Self Service on DieboldNixdorf.com Link to Self-Service Report Blogs: From Self-Checkout to Self-Service: The Retail Evolution: https://blog.dieboldnixdorf.com/from-self-checkout-to-self-service- the-retail-evolution/#.W4Vn5DYY7IU Q&A with Frank Natoli, Executive Vice President, Self-Service Technology: https://blog.dieboldnixdorf.com/qa-with-frank-natoli-evp-self-service-technology/#.W4Vod-hKiUk DN website: www.dieboldnixdorf.com COMMERCE NOW website: www.commercenow.libsyn.com Transcription: PYMNTS Representative: 00:00 The early days of self-service were a bit bumpy in terms of functionality and obvious usefulness. Diebold Nixdorf's VP of Retail Strategy, Arvin Jawa, told Karen Webster. "That," he noted, "is getting better. The technology is becoming cheaper and easier to operate and consumers are getting more enthused for it by the moment." But he says, "In order to get all the way there, retailers need to think less about self-service as a new series of consumer touchpoints, and more about how to use it to reset the customer retail journey entirely." Amy Lombardo: 00:32 This is "COMMERCE NOW." Hi, it's Karen Webster and our topic today is self-service retail checkout. With me to have the conversation is Arvin Jawa, VP Retail Strategy at Diebold Nixdorf. Arvin, thanks for joining me today. Arvin Jawa: 00:59 Hey, happy to be here Karen. Thanks again. Karen Webster: 01:02 This is to take a little bit of a deep dive to go under the hood with the data from the survey that we collaborated on, to get to know what consumers think about self-service checkout, how they use it, and what they'd like to see more of. So shall we dig in? Arvin Jawa: 01:23 Sounds great. Looking forward to it. Karen Webster: 01:24 All right. So here we go. Interesting, perhaps not surprising, 82% of consumers have used self-service checkout at least once in the last year. And people like it. In fact, 80% of people said they'd frequent a merchant if they could use self-service checkout. Why do you think that is? Arvin Jawa: 01:48 Oh yeah. We see this as a really great trend. Of course, we have a favorable view of self-service technologies of course and we agree that generally, consumers also have a favorable view of self-service technology. Clearly, there's a movement towards more adoption of these solutions in the recent years, attributable to some really big implementations. You've probably heard of Amazon Go. I'm sure everyone has heard of Amazon Go. Everybody knows Macy's in the US and Macy's has announced a recent deployment of self-service mobile application where they're allowing their consumers to scan-and-go within the store. And of course, everyone's favorite place to go and grab burgers and fries, McDonald's. A company we're very fond of. They've got a great deployment coming out here with self-order kiosks within their stores. So there's really a great buzz in the US around new self-service technology. Karen Webster: 02:48 Is that because of the convenience that consumers get in order to basically be self-serving themselves in terms of getting in and out of the store quickly without having to wait for someone to check them out personally? Arvin Jawa: 03:05 You know, it's a great question and it was something that I found really compelling within the research. You see that there are lots of reasons for why consumers like self-service technologies. But ultimately, it comes down to creating value for the consumer. Consumers really enjoy either saving time, saving money, or really, really enriching their shopping experience. Retailers who have determined how to create that kind of value for consumers through self-service technologies have figured out how to actually have really good deployments. McDonald's is a perfect example of that, right? As I mentioned, they're implementing self-service kiosks and in order to figure out where they could create value for their consumers, they started looking at the journey, they started looking at where are the ways that consumers can actually order with us? For a long time, there were only two ways to do that: you either had to go to the counter and speak to somebody and place an order, or you had to drive and go to the drive-thru and speak to a machine with a person on the other side of it. They really reevaluated their journeys and how to reshape those beyond those two traditional ways of ordering. Where they were able to then give their consumers more choice in the ordering options, a way to actually create some sort of customization mechanism for the order they're making. Do I want lettuce on this Big Mac or not? The kiosks allow for a self-guided customization, but also self-enablement on the payment choice as well. Now the consumer has various options on how they want to pay: cash, credit, debit, or new fangled mobile technology payments. But then beyond that, they could take it another step further and say, "Hey, we're going to actually allow you to go seat yourself. Just go over to a table, take a tent card, and we're going to bring your food out to you." So they really reshaped the journey in a way that made it faster, more compelling, and more enriching for the consumer. When you look at those value elements, that's the type of thing that helps consumers really start to adopt usage of self-service technology. Karen Webster: 05:22 And I think the technology has also improved the reliability and accuracy of the experience too. We'll talk in a little bit about self-service at supermarkets and drugstores, but it's now more efficient and faster to use these self-service checkout devices than, perhaps, they've been in the past. Arvin Jawa: 05:43 Absolutely. You know, I think there were a lot of earlier generation type of self-service implementations. The early self-checkout systems within grocery stores or do-it-yourself retailers, they were really clunky and not very user-friendly. In fact, they were probably the antithesis of self-checkout because you would always find a need to intervene a transaction because, well, you couldn't get past the age verification on an alcohol purchase. "I want to buy my wine, but I still needed someone to validate my driver's license," or, "I couldn't scan this item properly and so I needed some assistance," or, "The weight scale didn't necessarily integrate well with my purchase." So the reality is they were far from convenient. They had lots of issues in the user interaction. Same thing happened with kiosks and also a number of mobile apps that were early renditions of today's mobile and self-checkout solutions. Probably because the technology was sort of leading. It was almost the hammer looking for the nail, as opposed to, "Let's see what the journey is that we can improve and figure out how we can then deploy technology to eliminate the friction or reduce the time in the process." Karen Webster: 07:09 It was interesting that those who don't use self-service options don't use them because they're not available at the places they shop. What is it that retailers need to do in order to implement a self-service technology? You talked about McDonald's, and the journey, and the flow. Is that what's getting in the way of retailers embracing this trend? Arvin Jawa: 07:36 There are a couple things and I mentioned a few issues around consumer adoption, which I think is one-half of the equation in the obstacles, in the barriers. Early generation technology wasn't necessarily great. But the second-half is probably even more of the reason for why there hasn't been wide scale adoption. On the retailer side of things, frankly, things are complicated. If you think about retailers having investments and legacy software platforms, they have to maintain these, and they have to integrate these. Point of sales software is a perfect example, right? Now, all of a sudden you want to implement a self-service checkout system or a kiosk system nearby the storefront. What happens is we have to then, retailers have to find a new way to integrate these new touchpoints because they would typically run on their own software, or they had their own software stack. This all costs money. It's expensive. It requires new integration and new certifications. The other thing is that retailers didn't have a lot of options. The vendors who were the first generation of solution providers for self-checkout technologies, they were very costly and they weren't the best solution providers. Now, I think there's greater choice and they have more options. But the other thing is, as I said before, retailers weren't necessarily looking at self-service as anything more than another touchpoint in the store. What we've found in our retail implementations of self-service technologies is that when retailers shift their mindset to thinking about self-service as a business transformation through the implementation of self-service technologies, then they really start to realize real benefit. The benefits case for deploying these solutions are amazing. They start to say and realize, "Hm, we can actually improve throughput and reduce the checkout area size within the store." In other words, "We can optimize the real estate." Second, "We actually improve overall customer satisfaction or net promoter scores because we're more judicious in where and how we allocate our store associates' time." In other words, "It's disproportionately geared towards helping customers who need help, as opposed to spreading ourselves in a peanut butter-like fashion across every customer. We can focus our customer service on those who need it most and that optimizes our payroll investment. So now, when we improve throughput in a smaller checkout space and optimize the real estate footprint, and we do that with better customer support, we can actually start to see that we're increasing sales because we're allocating or reallocating our staff time towards upselling and cross-selling." That's why we see success with self-service technologies without customers. We start with designing and enabling the journeys that our retailers want for their consumers. We don't start with the technology, but we instead start with addressing the pain points and the friction inside those journeys that the consumers experience, and then we design the optimal journeys that our retail clients want for their consumers. We call this Storevolution is the term we use. It's where we put the consumer at the center of the journey and we make the physical store a digitally enriched or enhanced experience that's always on and always secure. Karen Webster: 11:11 It's interesting. I'll not share the name, but a QSR where I go every morning to get my coffee and breakfast sandwich implemented kiosks, but they were so cumbersome to use that the only people who use them now are the people behind the counter, which of course, defeats the whole purpose of having a self-service kiosk in the store. I thought that was kind of the craziest thing I'd ever seen. Arvin Jawa: 11:40 Yeah, yeah. No, I totally understand. And quick service is a really great place or a great space for self-service technologies to be utilized in. You know, I will name names. I love to go to Chipotle. I love to go to Starbucks. I love to go to Chick-fil-A. These are my favorites, partly because of kids, but also because I have a caffeine addiction. These are retailers who implemented self-service technologies. Some did it really well, some didn't do it so well, and some have learned along the way. I love eating at Chipotle, but I was really, really ... I wasn't happy with their initial outlay of their mobile self-ordering app because I could never find the way to maximize or optimize my time. I could never time up when I would place my order to when I would get it in the store and pick it up at the counter. There was always a synchronization of that process. They figured it out. They allowed me to then select the time that I want to come and pick up my order, which makes it a lot easier. Chick-fil-A did something really interesting. They don't want you to walk away with food that's cold or not fresh. And so you can place your order, but they won't actually start to make your order until you "check-in," which is basically geo located to some fence around the store location. So when you're within 100 feet of that location, you can then check in and say, "I'm here" and they'll start your order. The proximity to the store is an added feature to their mobile self-ordering application. But I still say the gold standard is Starbucks. They did a full-on business model change, right? This wasn't just about self-service technology; they started off as a digital gift card, really, is what they're mobile app was, and then they found a way to allow me to top up my store value amount on a regular basis. When it dropped below a certain level, I would always get topped up. But then, they took that to another level and said, "Hey, we're going to let you order from this app, therefore you can skip the line." So not only did I have my payment vehicle already in my hand and on my phone, but now I had an ordering capability. Then they integrated the loyalty points program, the stars, the rewards. And better yet, they encouraged me by changing my behavior or suggesting that, "Hey, you're going to gain more points if you actually use the mobile ordering app." That's when true adoption occurred. I don't have statistics at hand, but I think everybody that's in the industry understands that Starbucks has done a bang up job on deploying their self-ordering or mobile ordering ahead technology. Karen Webster: 14:41 Oh, for sure. Arvin Jawa: 14:42 Their program is fantastic. They can use the data now to determine how to readdress or reassess their store footprint. How much are they going to serve by mobile ordering? How much are they going to serve by in-store ordering? How much are they going to do through drive-thru ordering? They can then re-staff or redeploy their staff accordingly. So fantastic business model change. Karen Webster: 15:04 So they report earnings later in the week, so we'll be able to know exactly, quarter-by-quarter, what their progress has been. I agree with you. Arvin Jawa: 15:04 Exactly. Karen Webster: 15:12 And it sounds like to do it well, what retailers need to understand is how to engage the consumer by addressing the pain points for which they want to use mobile order ahead to begin with. When I've used it in places where it's relatively new, there's always been that friction of cold food or there's been a mismatch in when I want to pick it up and when it's actually ready. So I know that it takes a little bit of trial and error, but it's like the kiosk experience; you have to be prepared to onboard the consumer at the same time the retailer's trying to onboard the technology, and those two things have to sync pretty quickly and pretty well. Arvin Jawa: 15:58 Yes, completely agree. I think retailers really need to convince themselves that they think it's good for their business, and once they've done that, they have to convince the consumer that it's a matter of demonstrating a value. What value is going to be provided to the consumer? Is that going to come in the time savings or is it going to come in the enrichment of the shopping process? If they can do that, they can create a value on both sides, for them and for the consumer. Karen Webster: 16:26 So supermarket was probably one of, at least as I remember, one of the early adopters of self-service checkout. I found it to be useful for small numbers of items. For a full grocery order, boy, that was pretty tedious. And of course, with Amazon Go, they've taken that concept even further. Consumers like that. They like the option of being able to go in and go out. And almost more than a quarter, approaching 30% of consumers, say they'd visit those merchants more if they gave them self-service options to check out. Again, it goes back to, in this case, it seems like a pretty straightforward implementation. Why aren't more grocery stores looking at that as an option? Arvin Jawa: 17:19 Yeah. It's a great question. I ask myself that when I go to my favorite local grocery store. They're fantastic. It's the best produce around. They're the nicest people around. Maybe that's why they won't do it because they love the interaction that they are able to give with their consumers from their store staff, but there are time where it's just not convenient for me to stand in line. You have a couple, you have a small basket, or the lines are long because it's a very popular grocery store. I'm not the only one around that likes the local grocer. But again, it comes back to retailers determining the journeys for consumers. If they continue to just try to improve only those journeys that they have that are based upon a manned checkout station, then they lose the opportunity to create value for the consumer in different ways. If I can save or at least perceive that I save an extra few minutes in this particular shopping event because I could go and check myself out either through a self-checkout station, or through a scanning app on my phone, or through a personal self-scanning device that they may hand to me when I walk in the door, if any of these solutions can save me that extra few minutes, I'm more likely to come back to that store. Right? Karen Webster: 17:19 Mm-hmm (affirmative). Arvin Jawa: 18:52 And so they have to recognize that the value proposition that's created through time savings or the value proposition that's created through perhaps an app that suggests to me that when I buy this kind of rice, I should buy these beans, these are the types of added value that consumers prefer and these are the things that create loyalty amongst consumers and the retailers or brands that they shop. Karen Webster: 19:22 Well, I would think that in certain segments, and not to stick with grocery, but let's, the opportunity to bring people into the store is now, perhaps, more important than it's ever been. And creating those efficiencies in the physical footprint called the store would be things that, if I were running a supermarket, I'd certainly want to investigate pretty heavily. Arvin Jawa: 19:47 Yes, definitely. If you think about the space a retailer uses for a grocery store, it's massive. The real estate investment is incredible. So the staff has to be appropriately allocated to the things that are the highest value added activities. Frankly. Being stuck behind a cash register isn't always the most highest value activity at any given point in time. Sure, during peak periods, it's always necessary to have the right amount of staff. No doubt. But there are also times where that staff can be redeployed into helping stock shelves, helping serve consumers, helping in different ways within the store. And so retailers have to think about how to leverage that physical asset. We think physical is a very, very important part of the retailing future. It's definitely not dead, as a lot of people tend to say, but instead, their physical space is evolving to be a more purposeful and useful arrow in the retailer's quiver, especially an multichannel or an omnichannel retailer. And digital isn't just a channel; it's as much an enabler or a fabric that binds the consumer journey, whether they're at home, or at work, or at the café, or the restaurant, or in the grocery store, or on their phone shopping. What we see is that a consumer-centric design of digitally integrated or digitally enabled consumer journeys within the physical environment that are free of friction is what retailers really, really need to think about. And so if self-service is a component of that journey, we really think that retailers are going to win. Karen Webster: 21:37 I also think that what you've said all along is that it's not a one size fits all, so it is about that customer journey, and then adapting the self-service technologies accordingly. So I don't know, do you think that retailers have this mental picture of what it means to have self-service, and in their environments, they think that either won't work because of store format or the type of store, and they're not opening their minds to think about things like scan-and-go in department stores or the Amazon Go experience in smaller formats? Arvin Jawa: 22:15 Yeah, that's a great, great question and a great observation Karen. I think it's frankly, it was at the heart of what we ourselves were looking to understand about the US market. What is it that's holding back consumers in adopting or more importantly, retailers, in deploying self-service technologies in the US at clearly what's a lower rate than the rest of the world? We're a global organization. We see what's happening in Europe, we see what's happening in Asia, and those parts of the world are definitely much more advanced in their adoption of self-service technologies. Some of the stats you've mentioned and some of the stats that are within the study are about consumers not being compelled to increase their frequency within a given retailer, even if self-service technology is available because they just don't see the value. I think you might be right in that retailers probably have a preconceived notion that, "Self-checkout is this and it must be this." When we look at it from the perspective of the journey, then the technology falls to the background and it becomes only the enabler of the journey that we want to create. And so I think your point is great. What we see in Europe, for example, we have some data from our own implementations that European customers, 53% of consumers prefer to use self-checkout in stores and 21% of retailers plan to actually increase the density of their self-checkout deployments. In other words, they already see the value. It's more than just self-checkout in a grocery store kind of solution. These are personal self-scanning, they're scan-and-go with the mobile device, they're kiosk solutions. So I think if you open up or reframe the mind to say, "I really want the consumer to have the best experience possible and that experience can be this or that," that's when you start to see retailers looking at this as a really positive way for their consumers to shop. Karen Webster: 24:34 I would agree. And in some of the other studies that we've done, particularly in retail environments, apparel and accessories stores, consumers want the ability to scan-and-go because stores don't have has many people wandering around for help, and consumers are always time pressured. What they want is to be able to buy what they want when they see it. Certainly retailers, particularly now, should be thinking about how to enable that efficiently so that consumers walk out with something in a bag rather than walking out without having purchased anything at all. Arvin Jawa: 25:12 Absolutely, absolutely. I've spent a lot of time in the apparel and accessories field and actually, I think there's a really fascinating use case around self-service technology with a company, I'm sure you've heard of it, Rent the Runway. Internet pure play, right? Karen Webster: 25:12 Yup. Arvin Jawa: 25:27 A subscription retailer who's really banking on the sharing economy. Fantastic business and interesting model. They've opened up, I think, about five stores in the US and recently deployed a scan-and-go solution in their stores. Karen Webster: 25:44 Interesting. Arvin Jawa: 25:44 You'd say, "Five stores? Can't be that big. Do we really need self-service technology?" Well, the fascinating thing is that they looked at the journeys that the women who were shopping their stores or who were part of their club, they found that women were actually coming in before work, perhaps on the way from the gym or the way to the gym, and using that time period to trade out the clothes that they had gotten the week before and that they wanted to actually trade out today, so that they could wear something new to the office on that very day. Karen Webster: 25:44 Oh really? Interesting. Arvin Jawa: 26:25 And so as a result, they were time pressed in their journey into the store location. They found that by creating some very, very simple self-service kiosks that had a scan-and-go type technology that was integrated to the mobile app, it allowed these consumers to very quickly help themselves, be able to return the items that they were bringing back, and take the number of items they were going to take on that day, and get on right away without ever interfacing with any of the store associates. So really, really fantastic utilization. Perhaps it's the mindset of having been a digital player before a physical player, but it really speaks to the idea of looking at what it is your consumer is trying to do in their daily life and specifically, in their journey with you as a retailer or as a brand, and trying to improve that in a way that gives them some perceived value. In this case, time saving. Karen Webster: 27:30 That's great. Before we wrap, what was the one thing or one observation from this study that surprised you? Was there something that you sat back in your chair and said, "Huh, I didn't expect to see that"? Arvin Jawa: 27:49 Yeah, you know, I would say that this is both something I didn't expect and something that I did expect. There was a portion of the study which was related to the payment method, the various payment method would drive user satisfaction or frequency were most utilized by the members of the surveyed audience. I was not surprised by the utilization of debit, credit, and cash, especially in the US economy. You expect that. We tend to be a more credit and cash-driven society in retail. But I was really surprised by the very, very low utilization of tools like Google Pay or Apple Pay. That was something that was really, really fascinating to me. I would have expected, especially for consumers who were using more, what I would like to say more advanced technologies like self-service, either mobile ordering or scan-and-go or self-scanning or a self-checkout, that they would have a higher propensity to utilize newer digital payment mechanisms. But in fact, we see the opposite. I couldn't really explain it, but it was definitely an ah-ha. But I guess it mimics a lot of what we see in the rest of the world. We definitely see that in Asia, where digital payment is more highly utilize than in markets like, say, Germany or in the US which tend to be more cash or credit- driven, we see that the self-service technologies in Asia are also dominated by the utilization of WeChat or Alipay as the preferred mechanism. So perhaps this is more aligned towards the cultural norms than it is to the technology deployment. Karen Webster: 29:50 Yeah, I think it also has a lot to do with acceptance, right? Consumers, if they're not sure and they're time pressed, are going to use a payment method that is reliable, maybe even on file in their app, and that isn't necessarily one of the alterative players, at least today. Arvin Jawa: 30:09 Agreed, agreed. Karen Webster: 30:12 Interesting. Well Arvin, thanks so much for your time. Great conversation, great insights on an area where there's certainly a lot of familiarity from both consumers and retailers on the value, but perhaps an opportunity to rethink in the context of the customer journey and what new technologies exist at the intersection of self-service and mobile to make that journey more favorable and enriching for both parties. I really enjoyed it, the conversation. Thanks again. Arvin Jawa: 30:43 I did as well. Thank you Karen. Great to speak with you. Karen Webster: 30:46 Thank you. Buh-bye now. Amy Lombardo: 30:47 Find other episodes of "COMMERCE NOW" on iTunes or your favorite listening channel. Until next time.
30 minutes | 5 months ago
Pulse Check on Impacts to FI's During the Pandemic
Summary: In the midst of the COVID-19 pandemic, we've experienced a major shift in the industry dynamics that will fundamentally alter the economics of the financial industry and require changes in how banks and credit unions interact with their customers moving forward. On this episode we will cover how best to stabilize operations in order to take control of and execute your business continuity plan, establish a plan of action with vendors and partners, and continuously assessing your execution plans and operating through a hierarchy of monitoring Resources: On-Demand Webinars Referenced in this Podcast: How to prepare your FI for a Post-Pandemic Marketplace Websites: COMMERCE NOW Podcast Diebold Nixdorf Advisory Services Guests/Host LinkedIn Profiles: Scott Harroff Scott Weston Simon Powley Jim Flannery Transcription: Scott Harroff: 00:16 Hello again. This is Scott Harroff, your host for this episode of COMMERCE NOW. In the midst of the COVID-19 pandemic, we've experienced a major shift in the industry dynamics that will fundamentally alter the economics of the financial industry and require changes in how banks and credit unions interact with their customers moving forward. Throughout April, May and June, my colleagues, Simon Powley, Jim Flannery, and Scott Weston hosted a series of webinars to help keep you informed and provide guidance during these unprecedented times. Today, I'm happy to have everyone here together again to discuss how technology investments will provide adequate return on investment as operations begin to stabilize. There will be a few focal points we're going to discuss today. Stabilization of operations in order to take control of and execute your business continuity plan and adhere to realtime guidance from federal state and local government. Next, establishing a plan of action with vendors and partners to align new realities and test new solutions and new processes. And finally, continuously assessing your execution plans and operating through a hierarchy of monitoring an objective key result dashboards to ensure nimble execution and shift the conversation to focus more on the technology we are seeing. While banks have been journeying through the paths of branch transformation and self-service strategy, these journeys have been accelerated by the coronavirus pandemic. One of the most notable changes to combat the impact of COVID-19 has been the push to self-service and digital channels for communication and customer interaction. Today, as we look to the transition of a new normal, let's explore the question of what's next. With that, welcome Simon, Jim and Scott. Thank you for joining me today for this very important discussion. Scott Weston: 02:00 Yeah. Thanks for inviting me. Jim Flannery: 02:02 Thank you, Scott. It's good to be with us. Simon Powley: 02:04 Yeah. Great to be with you today. Thanks, Scott. Scott Harroff: 02:07 Simon, to give our listeners a little bit of background, could you please start off by telling our listeners a little more about the webinar series the team delivered earlier this year? Simon Powley: 02:16 Yeah. Thanks, Scott. It was great. It was really a three-part series that we developed as we saw kind of the implications and what was happening in the industries. One of the things that we at our advisory services group really are tasked with is keeping our customers up-to-date on changes that are relative to the marketplace, and obviously COVID had a lot of impact on those. And so we worked diligently and got some good information. The first one really was about the impacts of location-based delivery channels. So what was really happening out there and some of the unique solutions that FIs have put into action as a result of this with digital automation being at the forefront of it. And then finally, how things were changing very, very quickly with personalized experiences and what the impacts were to operational efficiencies given this unparalleled time. The second one, Scott led, and that was really about learning from the COVID-19 experiences. What were the various stages of recovery that were going on? What kind of things that they could mitigate, financial institutions could mitigate in the short-term and how to really plan for the duration of this recovery and a general banking or industry outlook of what we could tell was happening in real time as a result of COVID. And the third was, what were the new expectations of customers as a result of this? We saw digital transformation and digital adoption really skyrocket throughout this, due to customers being forced in some cases to digital channels, and how to really capitalize and operate efficiently as a result of that. And finally, adjusting those branch workflows and new traffic patterns based upon those customer needs, which allows changes in roadmaps. And finally, at the end of that, Jim really put together some ideas or suggestions of what kind of technologies we're seeing come out of COVID-19 and how to prioritize or look at those based upon our level of expertise. One of the things I think that was really interesting throughout this, as we got into the webinars, is we were very interactive with the customers and had a lot of polling questions to really gauge what was on the mind and to make sure that we were seeing the same thing that our customers were. That, as we had really good attendance, was a great time to do that. One of the questions that we intentionally delivered on all three of them to see the consistency in how things were changing over the course of the webinar series was, when do you anticipate your organization will resume business-as-usual operations? And you can tell it's somewhat ambiguous intentionally to allow that perspective. And then gave them a myriad of answers that they could choose from. The interesting thing with this was that, in every webinar overall, overwhelmingly I should say, the results were that they expected that within the next three months, they would be back to business as usual, which really puts us into late summer or early fall timeframe, which was surprising to us. Scott Harroff: 05:11 Thanks for that, Simon. But as I listened to the governor of Ohio and a bunch of other news media feeds, it seems like things aren't getting better. They might even be spiking a little bit. So how do you see things progressing given that? Simon Powley: 05:28 Yeah. Well, it's a great question. I think there's a lot of things that are changing. I mean, I think from a health perspective, we won't focus on that here today. I think we'll focus more on the industry perspective, but certainly we're beginning to see, and we covered this too at our webinar, that there could be what we consider to be a second wave, or this could have longer-term implications to financial institutions and certainly our economy overall. In terms of getting back to normal and that specific question, what we're seeing specifically is I would say we're getting into a new normal. I don't believe, I don't think the group believes that we'll ever go back to the way things were, the way that the customers' interactions were, the channels that customers were using at that time, specifically branches, those kinds of things. I don't know that it'll ever go back to, but we are already moving into what I think we'll see and evaluate as a new normal. And so banks are very flexible. I've been very proud of them in terms of managing their operations and changing things and adjusting their operations accordingly, and they are functioning. And so what we're seeing is banks are really still evaluating their networks. In some cases, branches have not reopened, and in some cases we're seeing reduced hours. In some cases they're operating with less staff. And certainly with social distancing guidelines it is changing the operational role of the branch in these cases, but they are operating, I guess, in more of a new normal. And we'll continue to see that play out here in the future, and maybe we can get Scott Weston to comment on that a little bit more as we get into today. We're still seeing corporate staffs largely working remotely and distancing. And so we're still seeing just a handful of people at what traditionally would be a headquarters with many, many people in many, many operating groups to do that. And we don't know when or if that will return back to normal. In many cases, large digital providers, such as Google or Microsoft or those companies, are already announcing that they will not go back until sometime in 2021, or in some cases I'm hearing will never go back to the way things were or leverage their headquarters the way that they have in the past. And so those are certainly very consistent with what we're seeing in banking. Digital channels are really being leveraged by both bankers and their customers to operate, again, normally, or to not disrupt their operational roles or the way that they're interacting with their banks. And so you're seeing that transition and continue to modify and change a little bit. Finally, mortgage operations, for example, are functioning normal. They're very, very busy right now, given this unparalleled interest rate environment and still extremely busy. However, the interactions are different in more of a new normal way. Things are much more virtual than they used to be. Whether that's face-to-face meetings on Zoom or via Skype or certainly leveraging the telephone or even mobile apps in a much more effective way to track the status of your loan to provide documentation as opposed to handwritten documentation or bringing in paper to a branch in the past. And so those kinds of things are all things that continue to evolve that are much different and much more utilized than they were even just a few months ago. Currently, what I'd say is transaction levels are beginning to return a bit to more normal things. So when I think about this, I don't know that it's going back to the way things were, but they are functioning and operating. Scott Harroff: 08:59 Simon, I agree with you completely. The financial institutions that I interact with and I do business with, I'm definitely seeing a push towards self-service and definitely seeing a push towards digital channels for communication. It seems to me like the old playbooks are sort of kind of out the window right now. So a question to the group, what are you individually seeing your financial institutions focusing on? Because it seems like everybody's playing a slightly different game now than they used to. Jim Flannery: 09:28 Well, I will say that the priorities for financial institutions are still very similar to what they were. They've just been accelerated. They're still trying to improve efficiency, obviously generate revenue and enhance the customer experience, but they're doing this in a slightly different way right now. So we all know that they're going to be under a lot of cost pressures over the next couple of years as they are today, and one way to drive cost out of the network is to optimize your branch and ATM network. And when I say optimize, that could be consolidations, which will drive a lot of cost out, but it's beyond that. It's also making sure that they're still holding to those trends and priorities, but they have to do that in a more efficient way. So by doing that, they can relocate branches. They can reformat their branch network to kind of fit the demographics of the market, to fit how their consumers are actually using their branch network and their other channels. And part of this could be to open up some off-premise ATMs. So we're working with a number of clients right now, helping them do this. We're helping them close permanently some of these branches that they've closed over the past couple months due to COVID. And now we're helping them work through one, which branches should they just keep closed permanently, two, what is the impact to their consumers going to be, their customers and their members? And three, how do they offset some of the capacity issues that might be prevalent after that consolidation? So those transactions that were going to that branch are going to go somewhere, right? So are they going to go to other branches, or are they going to go to self-service channels? So in a lot of cases, adding off-premise remote ATMs to kind of offset those attrition numbers is a much cheaper solution than just keeping that branch open. And then the cost savings that they're going to collect from or gain from those branch consolidations, now they can reinvest that back into the network. And they can focus on more deposit automation, teller automation, video, having channel marketing, core integration, things like that that will hold true to those trends and priorities of generating revenue, improving the customer experience and such. But they're doing it in a more analytical or strategic way than they were before. And end of the day, everything's net positive for not only themselves, the institution, but also the customers as well. Scott Weston: 11:57 Yeah. And if I can add something to that. I think there's still a lot of unknown out there. I think the shift of consumer behavior to a lot of FIs are seen as maybe temporary, but they're expecting at least a portion of consumers to return to the branch. So I think there is probably a little bit of hesitation in pulling the trigger on big closures, consolidations that I think a lot of analysts earlier predicted, right, where we could see mass branch closures. Obviously, the role of the branches is going to change. It's going to be more sales and more service-oriented, less transactional. And was Scott's point, being able to optimize that as a touch point, making sure that it's an [inaudible 00:12:37] that's positioned within that branch is there to optimize the space and provide as much free time, we'll call it, for the staff to do those more complex things. So I think there's still some learning that has to happen. I mean, I bet there's certain markets that haven't seen the bottom yet. As Simon mentioned earlier, we're starting to see some data anecdotally come in from our customers, and year over year, it's bouncing back. It's still probably 15 or 20% off of where it was this time last year. But as more of the economy opens up, as we get more optimistic about what's going to happen with the vaccine, clearly we're going to see a lot of people returning to the locations that they were traditionally using, but they may be using them in a different way. Simon Powley: 13:20 I think that's really important. Let me ask this. Because you're talking to these financial institutions about optimizing networks and changing other transactional mix and so forth. Are these new concepts for them? Are they brushing off things to say, "I've been thinking about getting rid of this branch for a long time" and they're finally doing it? Is it that they're completely reevaluating their branch network, where we've never thought about closing branch before? That was kind of a way that we really focused on for our clients, and now they're reevaluating? What are you really seeing when you're talking to these financial institutions about this? Jim Flannery: 13:56 Yeah, it's really a mixed bag actually. There's more smaller FIs, say 20 branches or less, that are now considering consolidating a branch or two where they typically would not have done that before. Because a lot of the community banks, they pride themselves on customer service, and the expense of having these branches open was just a cost of doing business. But now their business models are changing a little bit. They might not be under the cost pressures today, but they can see that coming down the road, and the only way that they can maintain that high-level customer service that they've had in their business model and still grow the business in terms of adding replacement customers or replacement members, they have to have a better technical offering, and they have to have a self-service offering. And the only way that they can do that is if they squeeze some costs out of the network and then reinvest those dollars. But I think the smaller FIs, this is a new concept for them. They have not typically done this before, so they are reaching out to us for help, and they want to make sure that they're doing this in a strategic way to minimize the impact to their customers and their business. Scott Harroff: 15:17 So question for you guys. We keep hearing on the news that folks are choosing to stay home. Folks are choosing to not maybe go to work and maybe take care of children that are now home that are not in school. How do you see staffing models maybe impacting branch operations? Maybe someone who would come in every day that worked a teller line or worked in an office. How do you see that changing the model? Jim Flannery: 15:45 Well, I think to begin with, for the most part, most branches are going to require less staff. So starting with the frontline folks, the ones that are interacting with the public on a daily basis, clearly, we saw that early on a hesitation to have too much interaction with people, and the ability to social distance was important. And I think one of the technologies that we've talked about a couple of times, video-enabled ATMs where you have a video teller on a terminal, I think it really has an interesting future for this. Because there's at least a couple of institutions that I talked to that are sincerely looking at how likely is it that we could have our tellers work truly remotely and when they mean remotely, from home. So instead of having them maybe coming to a call center or having some sort of centralized place where you have a bunch of people reporting to take these video interactions, you're actually looking at setting these folks up at home, having them essentially work from their home as a teller. So there's at least one institution that's doing this at a very small scale but has been getting some press, which I think is pretty interesting. But I wouldn't count that out as being at least on a lot of banks' radar. It's something that could be very flexible and something that they could spin up quickly if required and really offer that attended service that we know was lacking early on in the lockdown, the pandemic, and being able to really be at the forefront of offering a Class A customer experience. Scott Harroff: 17:14 Thanks very much for that, Jim. So Scott, how do you see the changing staffing dilemma impacting branch operations and technology usage? Scott Weston: 17:23 The changing staffing operation model in branches will absolutely affect the way people self serve, right? So as branches tend to have less staff inside and their staffing model is becoming more of a consultative experience, that in itself is going to drive more transactions out of the branch. So if we think of ourselves as customers and we're doing deposits, we're doing withdrawals, we're doing transactions that could be done in a self-service manner in the branch, eventually the staffing model will continue to say, "Well, did you know that you could do this at the ATM? Let me show you how." So eventually that's going to change consumer habit, right? So the more times consumers will use a self-service device, the more they're going to feel comfortable with it, doing it by themselves later on. Scott Harroff: 18:21 And one thing that we heard directly from an FI is that they're being very careful about how many people they're bringing back because they almost want to subtly discourage long lines at the teller. So they're trying to get people to maybe adopt more self-service because if they go on the teller line and have to wait more than a couple minutes, and they don't want to make it too easy for customers to do simple transactions at the teller. They want to really almost nudge them to self-service by making it slightly uncomfortable for them. So, I mean, it's not necessarily a strategy that a lot of banks are adopting, but I think you'll subtly see some FIs are, right? They're not overstaffing their teller line. They're certainly looking at what things the consumer is doing and looking at the cost of doing simple transactions, comparing it to what that cost would be at a direct channel and figuring there's a certain number of interactions that you just don't want to make it easy to happen at a person. Jim Flannery: 19:19 Yeah. I agree with you completely. I see people that I know that before would have walked into a branch once a week to go up to the teller to get their cash for buying groceries or doing other things, they are really thinking about, "Do I really want to get out of my car and put on a mask and go into that building and wait in line? Or huh, maybe I start using my drive-up ATM. Maybe I start using my phone." I am also seeing a lot of folks reconsidering what they used to do as customers and changing to something that maybe is a little bit risky for them. Simon, thoughts? Simon Powley: 20:00 Yeah. Well, I would agree. I take a little different angle on it. I agree with everything that you all are talking about, that we're talking about here today. The thing I think about is our financial institutions and especially those small to midsize financial institutions and how this really changes their customer journeys, their member journeys and the impact to their people. So from an HR perspective, training, onboarding, hiring the right talent all has to change because we still saw in many cases, traditional roles where we had tellers on a teller line. Whether we called them something or not, that was really their role, personal bankers, managers, those kinds of things. Now we're talking about much fewer staff. We have to talk about people that can be cross-trained to do multiple activities and handle things very differently, not just in the traditional sense of new account opening or getting someone to a loan specialist and handling transactions, but think about the digital capabilities that they now have to be subject matter experts on to be able to troubleshoot, help support and provide guidance on to customers, to show them how well this can be done to help protect them. And then also add on to that the COVID implications, how to socially distance and how to do those kind of things. So I think we've got to make sure that financial institutions, and what I'd recommend to our partners out there is, do not lose track of that. We've got to start with your people in terms of how they can drive that change and how they're molding to these operational efficiencies and changes that are happening in these journeys, both how the customers face and deal with those, but also the internal processes, how those are changing. So I think about it in terms of that as well. Scott Harroff: 21:35 Yeah, it's a delicate balance because you don't want to alienate good customers that have a preference for choice in how they interact, but at the same time, conscious of the broader whole of what the branch should be. Simon Powley: 21:49 All right, Mr. Harroff. One thing we haven't talked about, I think that's really important for us to consider is the security issues out there. You talked to us a lot about this internally. We should probably talk a little bit about what's going on out there from a security compliance standpoint. Can you tell us a little bit about that? Scott Harroff: 22:06 Yeah, sure, Simon. Happy to do that. There's a couple of things going on right now that are pretty relevant and relatively time sensitive. First, we saw the bad guys as the United States closed down, if you will. We saw a drop-off in bad guys out on the road and moving around and doing things at either point-of-sale terminals or ATMs. But as the United States opens back up again, what we're seeing from local law enforcement, state and federal law enforcement like the FBI and secret service, we're seeing the bad guys opening up their business as well. They're back out on their routes going up and down the East Coast and the West Coast, and Texas especially is having some challenges right now, especially in the Houston market. The bad guys are back at it as well. So as our financial institutions and our retailers consider how they're opening back up for business and considering how they're going to change their operations, I think now is a very good time for our financial institutions and retailers to sit down and say, "Okay, this is the security I used to have. Is this the security that I need going forward? Is my as-is environment really ready for the new to-be model? Should I be looking at what I'm doing and reaching out to an expert to consider what I should be doing differently, seeing what my peers might be doing differently and really building a roadmap for what I should be considering for security and fraud for the next six, 12 or 18 months?" That's one thing. And the second thing that we're also looking at is there's things that are happening right now that are pretty time sensitive. The migration to Windows 10, for example, is still ongoing. We're moving towards the end of the year where the Microsoft critical updates will be expiring in December. What's my thought on what I want to do after December of this year? If I still have an Optiva ATM, I have an old encrypting PIN Pad Version 5. That can only do Shaw 1 certificates. Should I be buying encrypting PIN Pad Version 7 so I could run Shaw 2? Have I had the conversation with my network to see if they support that? Have I reviewed what my network does for fraud? For example, we're seeing transaction reversal fraud coming up in the United States now where somebody will go to an ATM and they'll ask for $100, and the ATM dispenses $100. They take $80 out, and they leave a 20 there. The ATM retracts the cash, thinks that, okay, well, the customer must have driven off and not taken any of the cash. So it credits the account back immediately. Is my host really holding that debit transaction, if you will, so somebody goes to the ATM and verifies that I get $20 back or I get $100 back? So I really do think that now is a good time to reinvestigate my whole ecosystem around security and see it's what it should be in plans for the future. Jim Flannery: 25:07 Gentlemen, we've covered a lot of information, and we've given our listeners a lot of ideas to consider. And I really do appreciate your open and candid dialogue. We could go on with this conversation for quite a while, but I think this might be a good time to wrap it up unless somebody else has something to add. Simon Powley: 25:24 One of the things I'm interested, Jim, because I know our time is getting short here. You talked a lot about roadmaps. You talked a lot about the sequencing and what's the kind of technologies and put in there kind of your rating scale of what technology should be in there. And that's been really well received by our customers. What are you seeing changing from a roadmap perspective? I know we touched on video. Maybe you want to touch a little more on that. I think that's probably one. But who are you really seeing changing from roadmaps in the FIs that you're talking to? How are they changing things or what are the technology that they made moving up and prioritizing what they want? Jim Flannery: 25:56 Yeah. I think broadly you have to look at the shift in mentality on how they rationalize what to invest in. Historically, it's been all about payback ROI and what's the return. But as we moved through the COVID, what we found is that certain things took precedent, not because they had the best payback, but because they offered the greatest customer experience or offered the highest level of safety and security for both staff and consumers. So I think, first and foremost, I thought that was interesting. It was no longer about competing departments saying, "I want to do this. I want to do this. What's the cost? What's the benefit?" It became more of a, "What are some quick hits that we can do that are going to solve things now and then also set us up for future success?" So really, are there certain solutions that we can build off of in offering something now, but potentially make that into a greater part of our delivery strategy down the road. And I think we talked about some of those. I think the core integration, being able to utilize the ATM to directly tap into the accounts of the consumer and offer a broader range of transactions. That's something that you can do in pieces. You can start with some and add functionality as you go through it. Certainly video, and we talked about that a couple of times. That's one that we see. Well, and then the third one is really the marketing piece. We haven't really talked much about that. But this whole idea of using the ATM or self-service in general to do more of your communications. Historically, it's been primarily banners about products and rates, but really when you think about well, there's a big chunk of consumers that you're probably not seeing on a regular basis, they may not be engaged in mobile or web usage as a channel. So using the ATM to really communicate with those consumers, telling them what's happening as we move through things, what's the best channel to do certain interactions. There's a lot that you can really offer from that, that I think people take for granted. They assume that when we talk about the marketing communication on the ATM, it's all about product, pushing product when, in fact, it can be so much more than that. Scott Weston: 28:04 Well, Yeah, Jim, to build off that a little bit, I remember the conversation you and I had with that financial institution yesterday. One of our partners was they were actively involved as there was a line building at one of their locations, and they are actually out there troubleshooting and really interacting with their customers to figure out why are you waiting in line, right? What are the resistances that's making you actually want to stand here in this line under these circumstances to, in this case, cash a $54 check at the teller line? Can we move this to maybe taking a picture of this from a mobile deposit perspective? Can we get you cash back at the ATM of 40 to $60 that would cover that check? And that customer, as you recall, said, "No, I'm here. I've got my $54 check and I want $54." And so they're actively pursuing denomination selection as a result of that at their ATMs, because they're trying to solve for these kinds of nuances of how they can really help drive and adopt to that. So there is a lot of changes there, Jim. I think you're right. Scott Harroff: 29:05 With that, thanks again, Simon, Jim and Scott on behalf of all our listeners for joining us today. If you're interested in scheduling a conversation with anyone from the advisory services team, listeners, please visit dieboldnixdorf.com/advisoryservices or click on the link in the podcast show notes. Until next time, keep checking back on iTunes or however you listen to your podcasts for new topics on COMMERCE NOW.
17 minutes | 7 months ago
Stacking Benjamins - Fintech Friday
Summary: On this episode of COMMERCE NOW, you will hear from Diebold Nixdorf CMO Devon Watson, who recently was a guest on the Stacking Benjamins podcast. Devon spoke with Joe Saul-Sehy, and was on their Friday FinTech segment, where they discussed the hottest new tech hitting your wallet, and the merchants you'll someday shop with again. Resources: COMMERCE NOW Podcast Diebold Nixdorf Devon Watson Stacking Benjamins Podcast Joe Saul-Sehy Transcription: Speaker 1: 00:15 On this episode of COMMERCE NOW, you will hear from Diebold Nixdorf CMO Devon Watson, who recently was a guest on the Stacking Benjamins podcast. Devon spoke with Joe Saul-Sehy, and was on their Friday FinTech segment. We hope you enjoy this special segment of Commerce Now, as we come together with the Stacking Benjamins podcast. Doug: 00:42 Live, from Joe's mom's basement, it's The Stacking Benjamin Show. I'm Joe's mom's neighbor Doug. Hey there Stackers. On our Friday FinTech segment, we'll talk to a guy sitting at the backbone of some of the hottest new tech hitting your wallet, and the merchants you'll someday shop with again from Diebold Nixdorf, It's Devon Watson. And now the guy that can blah, blah, blah, all this away, except now with a mask, it's Joe Saul-Sehy. Joe Saul-Sehy: 01:27 It's amazing. When I was seven, I always wanted to wear a mask and now I get to do it. It only took me a few more years, but sadly we are at that point. Hey everybody. Welcome to another quarantined edition of The Stacking Benjamins Show. I'm Joe Saul-Sehy. Average Joe Money on Twitter. So I'm so happy today that we're going to hello to Devon Watson. How are you, man? Devon Watson: 01:46 Fantastic. Glad to be here. Joe Saul-Sehy: 01:49 I'm so happy you could talk Friday FinTech with us. You guys, I think different than a lot of the FinTech companies, Devon, that we talked to, you guys are a little more in the background. We are more consumer facing where I think you guys, I think of you as more B2B, but you're really right at the intersection of a lot of these solutions that we talk about every week. Tell me about what you guys do so we can kind of bring everybody up to speed. Devon Watson: 02:15 Sure. So you can really think of us as B2B to C. Diebold Nixdorf is a top 10 global financial company. We're in about a hundred countries worldwide, about four and a half billion in revenue. We're really the software, the services and the devices behind many of the, every day banking and shopping channels that people use. So, from the digital experience, you might have banking or shopping on the go to the self checkout that you're using at the grocery store, to the ATM that you're using outside the branch. Even the point of sale device that you interact with at maybe one of your favorite retailers, we provide those solutions. In the branch, in the store or online with your mobile, we're there automating and digitizing the way people bank and shop. Joe Saul-Sehy: 03:07 It's actually funny Devon. I think about you guys the same way that I think about Cisco for the internet, like you're everywhere. We just don't really, you know, as a customer, we don't see you a ton. Every once in a while we'll see the name Diebold but not that often. Devon Watson: 03:20 Yeah, exactly. And you know, if you start looking for it, you'll see it all over the place. When you're not looking forward, it's one of those seamless things that just keeps running and keeps powering the way you bank and shop. Over 2 million ATM and checkout devices globally, if you look hard enough, you'll see us about a third of the time. Joe Saul-Sehy: 03:40 Well, I want to start out with banking. I want to talk about two different things. Let's talk banking first and then let's talk commerce second, but pain points, as you know, better than I do Devon. Every day, you've got bank branches closing down, right? Making it harder for people to do face to face banking, which means that we're relying on devices even more than ATM's. Tell me kind of what you guys are working on there. What are the big pain points you guys are trying to solve for customers now? Devon Watson: 04:07 Sure. So in the banking sector, innovation these days is really about digitizing the user experience. You know, as you rightfully observed, there is a reformatting of the bank branch networks globally. That's a global phenomenon. They're not always just closing, they're reformatting, they're making smaller ones or opening different ones in new locations. And I'd say right-sizing, but you know, more than anything, the bank brands have to compete for consumer's attention. It's a global war for the attention of a consumer, and that applies to every participant in the ecosystem. So for a bank, they've been focused for the last several years on this vision of omni-channel, which for many bank brands meant taking their branch experience, their online experience, their mobile experience, and making those things cohesive. That's been helpful, right? That's I'd say step one of the journey, but when you kind of look at what that did, it made it a better journey for a very small piece of what somebody might be trying to do. So the example I use is, Joe, if you decide that you want to have Joe's Famous Donut Shop, and you can go to your bank to open up a small business loan, the technology trend over the past several years around omni-channel would say, let's make sure that that loan origination process for Joe is pretty seamless, no matter what channel he uses. But that's not enough to really compete for Joe's business, because to Joe, opening up the small business loan is only a small piece of your journey to being a small business owner. You got to figure out where's the best place to put a donut shop? How am I going to run my checkout? What's the merchant acquiring I'm going to do so I can swipe a credit card when somebody comes in and tries to pay with their Amex? Where am I going to get my equipment for the back office? Do I need insurance? Et cetera, et cetera, et cetera. The brands that can help you and can address the larger journey that you actually have, are going to be the ones that win. The vision that we have for our bank clients is to really engage that larger consumer journey, use API ecosystems in order to work with other players, that can bring value to Joe is he's on his small business, opening a process and compete for that. If you look at what's happening in the retail world, that's already playing out. So I'll use the quick example of Amazon. They follow me every single place I go, whether it's at home with an Alexa device in the living room, I got an Echo Dot in my little gym area, I've got their app on my phone. They're absolutely following everything I do so that whatever the need is, they can be there to try to fulfill it. That's what the leading brands are doing, and the banking industry is quickly learning from that and trying to figure out how do we also compete along all those steps of the journey to own that customer relationship. So that's the big idea. Joe Saul-Sehy: 07:21 It's funny you mentioned Alexa because Gertrude, our social media manager had a joke online recently about, she told her husband a joke and she laughed, Alexa, laugh, Google laughed. Like everybody's listening to you. It seems like Devon, there's a fine line between being helpful and feeling a little big brotherish. I bet That's got to be difficult for institutions to navigate those waters. Devon Watson: 07:45 So that's a key backlash. I actually use a tweet, a screen capture of that exact joke in a talk I give to banks. And I think that's something that the bank brands have learned from. There's in all technologies, there's this helpful versus creepy line that you don't want to cross. There's definitely a little bit of a pushback on the retailing side of this. You're starting to see consumers take their privacy more seriously. We have GDPR in Europe, which is, I think the right move for protecting consumer privacy's online. Bank brands are very cautious about how they experiment with whatever the technology might be. Whether it's banking by voice, things like that, not crossing that line. But at the same time, if you don't experiment with these new technologies, whether it's biometrics, whether it's voice banking, et cetera, you're going to be left out. So the trick is to learn from some of those mistakes, to be very, very smart about how you're handling consumer privacy and security, especially, but still innovate. Joe Saul-Sehy:
21 minutes | 8 months ago
How Consumer Behavior is Changing
Summary: On this episode of COMMERCE NOW we will discuss how DN can help FI’s adapt and provide new – or maybe not so new technologies to help with how consumer behavior is changing. Supporting Content: Registration Link for COVID-19 upcoming May 20th Webinar COVID 19 Landing page Diebold Nixdorf Website Transcription: Jeff Bender: 00:08 Well, this is Jeff Bender. I'll be your host for today's episode of COMMERCE NOW. We really are living in some unprecedented times right now, and the longterm impacts of COVID-19 on consumer behavior and the financial services industry in general are truly unknown. We do know that both consumers and the FIs do you want to get back to business and the FIs doing everything that they can to make sure they're helping their customers adapt to what will be this new normal in terms of consumer behavior, whatever that might actually look like. So, today I'm joined by Simon Powley who leads our Diebold Nixdorf Global Advisory Consultant Services organization, as well as Heather Gibbons, who leads our US Regional Software and Services organization. Jeff Bender: 00:57 And on this episode, we'll discuss how DN is helping financial institutions adapt and provide new, or maybe even not so new technologies to address these changes in consumer behavior. So with that, Heather, Simon, welcome and thank you for joining us today. Simon Powley: 01:10 [crosstalk 00:01:12]. Heather Gibbons: 01:10 Thanks for [crosstalk 00:01:12]. Jeff Bender: 01:12 Heather I [inaudible 00:01:13] the first question to you. The current situation, obviously, a lot of [inaudible 00:01:18] were shutdowns. We see that there's desire for consumers to social distance, not interact in person as much. And in some cases, obviously government is restricting the ability to actually interact in person as much. So how do you see FIs being able to maintain meaningful connections with those consumers through this pandemic and in a post COVID world? Heather Gibbons: 01:38 Thanks Jeff. Today, we're seeing consumers and retailers across industries modify the way they're doing business. Just as you mentioned, if I even look at how I grocery shop today versus two months ago, I can guarantee that I won't fully go back to the way I did pre-COVID-19. This isn't to say that face to face or retail in-store in the cases of financial institutions and branch transactions, won't take place in the future, but more and more consumers are going to now be more comfortable using technology. And they're also going to realize that some transactions can be done in a more convenient and efficient way than maybe they were before. For financial institutions, this translates to bridging the physical and digital divide, looking at how different consumer endpoints can work better together. I often reference how Amazon and Kohl's teamed up when speaking with customers, because it's really about the physical and the digital coming together and joining forces. Heather Gibbons: 02:35 In this case, it was for Amazon returns and it makes it much easier, much more convenient. You can pre-stage everything on your mobile device or through online. The same can really hold true. When you look at consumers and small business journeys for financial institutions. If you take a closer look at both of those journey maps, I believe it will really lead to more core integration for better data sharing, access to more information. It's also going to lead to face-to-face interaction through video, and basically a more personalized approach while increasing the types of transactions at the self service devices and through online and mobile. Simon Powley: 03:14 Yeah, I would agree with that, Jeff, this is Simon. I think there's a lot of different things going on. I think Heather said it very well. What we're seeing around social distancing is many of the same things that retailers are doing in terms of spacing out people in their branches, certainly monitoring their ability to come in various ways, even taking their temperatures in some cases. And so, that's not the best way to establish a meaningful connection to [inaudible 00:03:37] point. So, when you look at that, I think that there's a real focus on moving the horizon forward, so to speak in terms of digital capabilities and technology. We've done a lot of research on this and people really want to and prefer to transact digitally and interact physically. And so that's been the primary role of the branches to provide those services that can't be done digitally, such as the meaningful conversations about wealth management or taking an in depth look at financial aspects of their life. Simon Powley: 04:07 That's done more in a conversation and when we're having this, and we're beginning to see the changes here over the years, and it depends on the financial institution. The large providers, the Bank of America, the Chase of the world have really led this kind of charge. And now it's really come down to the regional banks to really look at how they want to change and interact with their value proposition and to do that, they have to make their digital channels work better and educate their employees on how to use these and how to educate their customers on those. And we've seen a lot of interesting things happen with COVID such as texting customers links to their mobile sites or tutorials on how to leverage their mobile capabilities or their online capabilities so that they can interact or places to find their most convenient ATM machine to get cash or make a deposit. Simon Powley: 04:57 And we're seeing adoption being driven to those customers that maybe you didn't see value, or maybe they were laggards in technology, so to speak. They're now seeing more and more interest and leveraging these digital channels in new and creative ways. So, I think there's going to have to be continued education. And then I also see a re-inventing of marketing. I think the marketing capabilities that a lot of financial institutions have invested in are brilliant, very targeted ads. Sometimes we're even as far as [inaudible 00:05:25] based, being able to specifically target offers, that's really resonates with their particular customers, which is a really good experience for them and allows them to learn more about their products and services. We're going to continue to see that evolve and they're using it for messaging now on terms and information about COVID, how to protect themselves, but also messaging on which branches are open or how they're shortening their hours. Simon Powley: 05:46 So those kinds of messaging. So you're going to see those kinds of interactions begin to really change where they can continue to drive their value proposition in a meaningful and convenient way for their customers in a digital channel. Jeff Bender: 06:00 Well, that makes a lot of sense. And so Simon, how do you see that actually translating to the small business space as well? Is there a role that technology is playing there in relationship with the small business owners? Simon Powley: 06:11 Well, sure. I'll tell you what we do know. The first is that small business owners are really the highest users of branches and are very what we'd call branch dependent on that. So they come in more often than a consumer would and in many cases that's weekly. On average, small businesses spend over an hour per week transacting in a branch. And in the same time, less than 80% of them have a dedicated relationship manager for their business and only 13% of them are really truly satisfied with their financial institution in terms of their offerings and capabilities to support them. So, there's a lot of opportunity for financial institutions specifically with small businesses. And they've got to cope with that in a number of ways. First, I think Heather talked about the journey mapping that's really gone on in the consumer space. That same rigor has not been done within the small business journey mapping. Simon Powley: 07:03 And so, the first thing financial institutions have to look at is, how are they going to define their journey maps and what can they do to alleviate their business rules and make it more conducive for them to be able to use automation to make their deposits, withdraws. They need faster access to their cash, they don't want their cash cycle disrupted. And in many cases right now, technology does that for them. And so, how do they change their interactions with their small business customer to be able to make that more consumer friendly or more like their consumer journeys. And so, access to those cash from the business rules, locations to be able to generate more activity in those particular cases. In many cases, the hardware now is being made with a deeper throat, so to speak. So more bills can go in there to help with those journey capabilities. Software capabilities need to be able to keep up with that, to ensure th
10 minutes | 9 months ago
Financial Institutions are Finding New Ways to Serve Their Customers
Summary: In today's podcast, our Head of Advisory Services and Consulting, Simon Powley, will touch on what FIs are doing to protect their employees, while continuing to serve their customers during COVID-19 Crisis. Replay On-Demand - April 29th Webinar: https://www.dieboldnixdorf.com/en-us/banking/insights/ondemand-webinar/whats-next-for-financial-institutions-during-the-covid-19-crisis Related Content:Diebold Nixdorf COVID-19 Web Page: Page:https://www.dieboldnixdorf.com/en-us/about-us/news-and-events/covid19 Transcription: Amy Lombardo: 00:15 Hello again, this is Amy Lombardo, your host for this episode of COMMERCE NOW. During a recent Diebold Nixdorf webinar with guest Forrester Research, we shared ongoing research tracking how financial institutions are responding to the COVID-19 pandemic and what and how they are communicating to customers in this time of crisis. As the pandemic continues to grow and our economies continue to be impacted, how can financial institutions respond? Amy Lombardo: 00:43 Well today I'm joined by our head of advisory services and consulting, Simon Powley, and we're going to touch on what FIs are doing to protect their employees while continuing to serve their customers during this unprecedented time. So welcome Simon to COMMERCE NOW. Simon Powley: 00:59 Oh, thanks Amy. It's great to be with you again. Amy Lombardo: 01:01 Awesome. So let's get started here. My first question for you is this webinar that we had recently here, we saw new consumer behaviors and also shifts in channel usage. Based on these changes, how are we seeing banks initially adapt and really cope with COVID-19? Are we seeing an importance for more digital initiatives and the usage of those digital channels? Simon Powley: 01:27 Yeah. It's a great question, Amy. There's a lot of exciting things happening in the turmoil caused by COVID-19, especially for banks and financial institutions that are impacted by this. Simon Powley: 01:39 I thought it was a great webinar. I listened to it a few weeks ago. I thought it was fantastic. Simon Powley: 01:44 We're seeing a lot of changes. Early adaption is really driving a lot of changes in the way that they are operating and really touching customers. We're seeing branches being closed or certainly reduced hours. We're seeing call center volumes increasing dramatically as customers who are used to trying to reach out and communicate with their banks and be advised and guided through this. Obviously with the closures of banks they're looking to other channels to be able to service them. So it's been very interesting to see those changes. Simon Powley: 02:17 I think not only are our customers beginning to see the value associated with these digital channels in times like this. What I mean by that is people that we were talking to executives out there and a lot of our customers with banks, they're getting a lot of questions from people who either did not see value in digital channels in the past or were reluctant to use them for whatever reason, really beginning to gravitate and begin to not only have interest in these particular channels and how they can self service their deposits or get questions asked or check balances or what have you. They're really looking for solutions from their banks on how to do this in a new vibrant way. Simon Powley: 02:58 So we're certainly seeing those digital strategies and initiatives begin to change a lot for banks. It'll be very interesting, and we'll talk more about this in future, be very interesting to see how banks are defining their channels as a result of this and how they're leveraging that with their customer base. Amy Lombardo: 03:16 Right. That makes complete sense, and we see the news cycles and note that responses and reactions that they're changing quite constantly. Right? We're in this different place today than what we were weeks ago, a month ago, even at the turn of the calendar year. Amy Lombardo: 03:31 So with that said, what themes are you seeing emerge as the weeks change? Are bankers holding to their continuity plans? Are you seeing more gut reactions? What's that type of feedback you're hearing? Simon Powley: 03:45 Yeah, it's a mixed bag. Absolutely. Things are changing extremely quickly. I think if asked, most senior executives or even CEOs within the organizations, over the last couple of days we've seen JP Morgan Chase and Bank of America kind of come out and everybody is repositioning and changing their 2020 strategy. Certainly you're seeing that from an earnings and how they're really dealing with this downturn in different ways. Simon Powley: 04:10 So yes, certainly things have changed from the beginning of the year in the guidance that they're giving and their strategies are changing. From a week to week and a fluid environment I would call it is I think financial institutions are learning from this. So we're seeing a lot of trends emerge such as how do we leverage our digital channels again to be able to change with our customer base? Simon Powley: 04:34 I saw an article come out even this morning from Lloyd's Bank that they will be providing educational seminars for people on their digital strategies and giving away iPads to customers that are impacted by COVID-19 and I think specifically for customers that are over 70 for instance. Amy Lombardo: 04:53 Oh wow. Simon Powley: 04:53 Yeah. So those kinds of strategies are obviously new, and I think I'm hearing from a lot of banks really from an internal standpoint is as they're doing this they're saying, "Okay, here's ways that we've always done things. Everything's on the table right now. How do we open up and change the way? What are we learning for this and what ideas of solutions do we have from our teams in the organization on how we use this to begin to change the way we interact with our customers and clients? How do how we support them during this time?" So you're seeing a lot of interesting things and things come out, which is just exciting even in the midst of terrifying weeks in some cases for people. Simon Powley: 05:30 So I think these continuity plans will continue to change. I think that we'll see a lot of people looking at new ways to reinvent the business and leverage a new way to talk to consumers. Simon Powley: 05:42 When we look at how customers really want to be interacted with, you have to look at the experience driven by Amazon or a Microsoft or an Apple in terms of how you leverage the customer journey. Right now those journeys have been completely disrupted in the traditional sense. So those are completely being reinvented. Simon Powley: 06:06 This I think in the long term will be very good for banks, and allowing them to be focused on PPP, the small business loans. The banks did not have long to stand those up and get those moving and being able to process those. So that took a tremendous amount of capacity. Simon Powley: 06:25 When you have digital channels, and some of these strategies already outlined on how to help your customers without being touched by a human being for all of their needs, you're able to adapt and adjust a little bit more quickly. So they're fairing a little bit better I think right now. But even in the smaller maybe community banking space, they're coming up with good creative ways, and I think that they will re-look at how they want to interact with their customers and the value proposition of technology. Amy Lombardo: 06:55 Right. You mentioned something interesting about the tablets available for the elderly. It's interesting how the topic and the importance of financial inclusion is now coupled with how banks and credit unions are communicating how they can help here during this crisis. Simon Powley: 07:13 Yeah. We touched on it a little bit and certainly we can talk more about this down the line. But around that I talked to several folks in the industry and you're absolutely right, Amy. What we're seeing is a proactive stance not only on driving the awareness of digital channels, but outreach to help customers in some very unique and interesting ways. Amy Lombardo: 07:34 Sure. That's an interesting point. Okay, so Simon, last question here. Is there a recommendation or best practice that FIs can use or approach with their business plan? Maybe eve
15 minutes | 10 months ago
SMBs are the Backbone to the Global Economy
Summary: In this podcast, we sit down with Scott Murison, Co-Owner of Wild Rock Outfitters, located in Ontario, Canada and we discuss how FI’s should consider the importance of enabling small and medium businesses to focus on their own customers by simplifying and streamlining banking – especially around cash operations - to deepen their relationships with small and medium businesses (SMBs). Related Links: Wildrock Outfitters website: https://wildrock.net Diebold Nixdorf Website: www.dieboldnixdorf.com Scott Murison LInkedIn: https://www.linkedin.com/in/scott-murison-413205a/ Transcription: Scott Anderson: Hello again, this is Scott Anderson your host for this episode of COMMERCE NOW. The relationship between small and medium businesses and financial institutions should not be underestimated. Small and medium businesses or SMBs are the backbone of modern economies and their banks are a critical [00:00:30] partner in their success. In the United States 99.9% of companies are classified as small by the U.S. small business administration. In Europe the situation is similar, small and midsize companies make up 99% of all businesses. Two thirds of the workforce belong to the SMB category. However, from the small business perspective it's not at all about what they contribute to the FIs bottom line it's about being part of their community and focused on connecting with their local customers. Scott Anderson: Today, I am onsite at Wild [00:01:00] Rock Outfitters located in Ontario, Canada and joined by Scott Murison one of the co owners. And on this episode of Commerce Now we will discuss how FIs should consider the importance of enabling small and medium businesses to focus on their own customers by simplifying and streamlining their banking especially around cash operations to deepen their relationships with small and medium businesses. So welcome to COMMERCE NOW Scott and thank you for hosting me today at Wild Rock Outfitters for this very chat. Scott Murison: Well, thank you very much for having me. I'm looking forward to it. Scott Anderson: Excellent. [00:01:30] To give our listeners a little bit of background can you start off and tell us a little bit more about your business? Scott Murison: Absolutely. We're a retail operation. We've been in business since 1992. We're at 16,000 square feet so in some means that's a large retail operation and other means it's a small retail operation. We deal in the specialty outdoor gear industry which is bicycles, self powered outdoor gear like kayaks, canoes, snowshoes, skis, and we sell a lot of clothing and footwear [00:02:00] as well. Scott Anderson: Yeah, and I unfortunately have a lot of frequent flyer miles at your store so thank you very much for that. Maybe you can tell us a little bit about how you conduct your banking transactions on a day to day basis. Scott Murison: Absolutely. So automatic every day at the end of closing we are doing transactions through our debit and credit machines and making deposits that way and at least twice a week if not three times a week we are physically going to a bank to do cash deposits or wire transfers or check deposits. Scott Anderson: Great. [00:02:30] And I know you're a strong community guy and you strongly support local jobs. We've been discussing in the past how you can have some concerns around how banking automation and automating everything to reduce staff could have some some pain points in the community. I believe financial institutions need to strike a balance but from your perspective Scott if there's ways to release capacity in a branch and automate some of those time consuming cash processes to spend more time for direct interaction and service for you and your business how [00:03:00] would that change your relationship with your local branch? Scott Murison: I think anything that a bank can do to facilitate our monotonous jobs just cash deposits would be great and if it freed up capacity so that when we do have one off things we need to make a wire transfer. When we have a more technical issue that takes more staff power from ourselves as well as the bank it would be great if that line up wasn't long. Scott Anderson: Great, great point. So typically when [00:03:30] you're in the branch how long are you spending with a cash transaction? Scott Murison: It completely depends on the day and it's a bit random and it's not a stressor but it is occasionally an issue. You go out thinking you're going to be 15 minutes to make a deposit and sometimes the lineup is itself 15 minutes long and sometimes it's two minutes and there's no way of guessing before you're actually physically in the bank. And I would say 50% of the time your two minute job takes 50 minutes and the other 50% your two minute job takes two [00:04:00] minutes. Scott Anderson: So what time of day are you typically hitting the branch to conduct these types of transactions? Scott Murison: Often just before lunch. So the deposits are gathered in the morning at store opening for cash and then a deposit slip filled out and then walked down to the bank. Scott Anderson: Okay. And are you getting a cash float to support your tills for the day at the same time or is that a different task that you're doing? Scott Murison: No, absolutely that would be on the same trip. So we are getting change in the way of coin and small bills in exchange for [00:04:30] larger bills. Scott Anderson: Interesting. Speaker 3: Camping line one, that's camping line one. Scott Murison: See it's a real outfitter store. Scott Anderson: That's okay. I like the fact that you've got some of that real store background noise it's all good. So when you're making your cash deposits or going into the branch for some of those routine transactions is it typically you or some of the co owners or are you sending other staff members to do this as well? Scott Murison: It's usually our accountant. Scott Anderson: Oh, okay. Scott Murison: Because they are tabulating all the day ends and they're making sure they balance. So you have one of your highest [00:05:00] paid people leaving the building and doing a fairly mundane task but it's just to keep the whole assignment of the job to one person as opposed to splitting it up. But so yes the less time that she were out of the building the better. Scott Anderson: The better it would be okay. And is there ever a situation where there's other people involved or is it typically always your accountant who's going to do this? Scott Murison: If she's on vacation or going to be away she'll assign it to somebody else. Scott Anderson: Okay. So is there any impact with her going midday leaving operation to go into [00:05:30] the branches? Would there be a better time or is there a better way that you think would help her perform these tasks? Scott Murison: I'm not sure if there's a better time because the things in business happen at random times so it's more the amount of time, the less time at any point during the day that she can be away would be better. Scott Anderson: Okay, fair enough. So if we were to look at ways that banks could potentially automate some of these simpler transactions both in person and business bankers being able to free up [00:06:00] teller lines and help your accountant get in and out quicker and help them enhance the customer experience is that something that you think would be useful to your business? Scott Murison: Absolutely, that would be a win win situation. We'd have one of our highest paid employees more often able to do their higher end work as opposed to standing in lines to do more mundane tasks, that would be a win win situation for us. Scott Anderson: Okay. Is there situations where your accountant then is dealing with some of those more complex transactions and having to speak to somebody versus performing some of those [00:06:30] mundane transactions? Is that typical for your business? Scott Murison: Absolutely. On a consistent random basis we would have to be dealing with wire transfers to Europe to prepaid hotels for our travel business or things like this that we would require a teller to do for us. And then we'd also have special occasions where we have let's say we're doing a larger buy and we need to talk to somebody about upping our line of credit for a short term. We need to talk to real people, real managers for that and the less time that can take [00:07:00] the better. Scott Anderson: The better. And is that something where you have a good relationship in your branch where you're recognized when you walk in so a personal banker or a small business banker knows that they can go talk to your staff or is this really hit and miss based on what you're in the branch for? Scott Murison: Our bank managers know our staff, our accountant and ourselves the owners but the actual tellers for a wire transfer may not know us at all but the larger asks are usually pushed up [00:07:30] further anyway. Scott Anderson:
17 minutes | a year ago
The Year of Retail Self-Service
Summary: Today's podcast is an oldie but goodie. A podcast we first released in May 2019 was so popular we decided to share it again! In this episode, we take you on a journey of how self-service has woven its way into so many of our daily activities from paying for gas to checking in for a flight and really what are the consumer expectations for these types of offerings. Resources: Chart your Path for Retail Growth - Connect with our Retail Experts here Blog: Retail Self-Service: Today, it's WAY more than self-checkout Transcription: Amy Lombardo: Hello again, this is Amy Lombardo, your host for this episode of Commerce Now. In today's episode we're joined by Matt Redwood who is the head of self service checkout for Diebold Nixdorf's retail division. And today we'll discuss how self- service has woven its way into so many of our daily activities from paying for gas to checking into a flight and really what are the consumer expectations for these types of offerings. So hi, Matt and welcome to COMMERCE NOW. Matt Redwood: Thank you for having me. Amy Lombardo: Always a pleasure to talk to our friends in the retail division. So Matt, let's talk a little bit about your background first. Can you tell the listeners a little bit about yourself? Matt Redwood: Absolutely. So as you said, my title is head of self service for Diebold Nixdorf. Been in the company about 15 months now. It was brand new position within the company and DN saw the need to put more focus on the self-service checkout. So look after the self-service checkout business for Europe, Middle East and Africa. I've been in and around self-service my whole career. I've been in retail for a nearly 10 years. So, I've worked with multiple different retailers all across the globe on their self-service strategy. But also that self-service implementations to make sure they're deploying the right solution into the right place. Amy Lombardo: Very good. So Matt, what I wanted to do was start at a very high level and talk about some macro trends that are shaping the retail industry because you can't get away with reading any headline of any major industry publication these days without seeing something about self-service in there. So can you talk a little bit about some of those macro trends that are shaping the retail industry today? Matt Redwood: Sure. So self-service in the form that we see at most grocery stores has been around for 15 years, which you know in the retail landscape is a long time. But it's taken a long time I think for retailers really to understand self-service checkout to get to a position that deploying it in the right way and of course for the consumers to adopt it in the right way. I think we're really at a tipping point now where from a consumer perspective is, there's self-service in every part of our life. Whether you go to the gas station, whether you go to the train station on the app or you go to the grocery, there is a self-service option and what we see in our data is that consumers really now see it as point of convenience for them. They see the benefits of self-service checkout and they've moved past the point of not only wanting it but they actually now dictate it to retain it. Matt Redwood: So we have a lot of retail customers that come and want to work with us purely because that's [00:02:30] amazing that stores are actually demanding it. I think when self-service initially came on the scene and a lot of retailers saw it as a great way to strip costs out of that store. And so a lot of retailers, particularly in grocery, really went for very very high density self-service checkout deployment. They stripped a lot of stuff out of their stores but what they came to realize that actually they saw a bit of a drop in the consumer experience within their stores and I think the assumption was that they put self-service checkout and they remove staff, customers will use it and everything will be fine. But actually what happened is that had a detrimental effect on the consumer experience in the store because there weren't staff to help where consumers really valued the experience within the store. Matt Redwood: So what other retailers now do is actually, it's not about a reduction in staff, it's about a redistribution in staff. Amy Lombardo: Right. Matt Redwood: If you take tasks that were normally done by the system and you give it to the customer to do, that frees up that member of staff to then be in other areas of the store to make sure that customers can find products, or the shelves are well stocked, they're well priced. So actually getting the experience right or getting the efficiency right at the self-service checkout as a knock on effect on the customer experience all the way right back through the store. Amy Lombardo: Right. So Matt, can you explain how consumer's knowledge and their comfort level is shifting in terms of how consumers are engaging with the self-service technology today versus maybe what they did when retailers first started introducing it many years ago? Matt Redwood: Sure. So I think there's really a perception shift with self-service checkout that's happened over recent years. I think when self-service was first introduced to stores, there was a bit of negativity and a bit of push back from consumers because they saw it as a replacement of the members of staff within the store, especially very loyal consumers that went to the same store every single week to do their shopping. They built a reputation with the member of staff. The thought of that member of staff being taken away and replaced by a machine was hit with a lot of negativity from consumers. The shift that's really happened over the last couple of years is consumers value the choice, the choice to check out or to interact with a brand, a retailer in the way that they want. Matt Redwood: So now what we see a lot of retailers doing is focusing on giving consumers as many channels to shop within their stores or checkout within their stores as possible. So the role of the assistant has changed completely from just a member of staff and the checkout to really kind of a customer experience manager within the store. So the tasks that would normally be done by an assistant at a point of sale system will now be done by the consumer either on a mobile device or self-service checkout or a kiosk. Matt Redwood: And that frees up that member of staff to actually deliver the right level of customer experience within that store. So I think the perceptional shift has been away from that machine is taking a member of staff's job to actually that machine is an option for me to check out of the store and it's freed up the member of staff to deliver a better customer experience somewhere else in the store where I wouldn't normally get it. Amy Lombardo: So Matt, I wanted to comment on what you just said because I think about how when I go to my local grocery store and I use self-checkout all the time, maybe because I'm a control freak and I like to see what I'm actually scanning and paying for. I let my kids do it sometimes, but then I hear time and time again, you'll see certain generations that come up and they say, I don't want to use this, this takes longer. And there's always a problem with it. And I'm just wondering is that a perception issue? Is it a training issue? You know, can you comment on that a little bit in terms of maybe just generational preferences and using self-service? Matt Redwood: Sure. I always say to retailers, deploying self-service checkout is not as simple as deploying a point of sale solution because innately it's a change in so many processes in your store. So we really refer to self-service checkout as a business change solution because it enables retailers A. To make their stores more efficient and but also B. Delivering a much, much better customer experience to their consumers. But the byproduct of that is because of the interaction is so different between the brand and the consumer, that retailer has to change so many processes in their stores for self-service to really be efficient and work well. Matt Redwood: So things like cash management, how they staff their stores, how the staff interact with the customers, how their customers interact with them as a brand, all changes. So there's a huge amount of operational shift that has to happen. So I'd say a big part of getting self-service right is how you operationalize it. Ultimately it puts a lot more onus on the staff to deliver a better customer experience because you're taking away so much human interaction within the store. But when [00:07:30] staff do interact with consumers, it's that much more important that they deliver a much, much better service. So I think it's probably a combination of not just the technology but how you staff the stores, how you operationalize your stores. It all comes together to really deliver the right customer experience. Amy Lombardo: Got It. And so in self-checkout or really varying ways to shop, it goes beyond just self-checkout. So there's smart phones, there's handheld scanning devices in the stores, [00:08:00] all of these different types of self service options. How have these changed the way consumers engage with brands? Matt Redwood: Well, I think it's giving consumers a lot more choice in terms of how they do interact with the brand. If you think about a customer journey of a
24 minutes | a year ago
Driving Future Growth in Dubai
Summary: Devon Watson, Chief Marketing Officer for Diebold Nixdorf recently traveled to Dubai UAE and sat down with the Dubai Future Foundation - a government initiative driving accelerator programs - as well as a special block chain consultant, to discuss how the region is approaching growth and innovation. Resources: Dubai Future Foundation Website Dubai Future Foundation LI page Mark Balovnev, LI Profile Educhain Website Accelliance Website Diebold Nixdorf Website Transcription: Devon Watson: 00:14 Hello again and welcome to this week's episode of COMMERCE NOW my name is Devon Watson, Chief Marketing Officer for Diebold Nixdorf. Today I find myself in Dubai, UAE. We're at the Dubai Future Foundation, a government initiative driving accelerator programs in the region. I'm joined today with Ghaith Abdulrahman and Karin Gabriel, both of whom are project leads at the Dubai Future Foundation and a special guest Mark Balovnev. He's the founder of Educhain and a partner at Accelliance, a blockchain consultancy based here in Dubai. So maybe to start off, Ghaith, if you could tell us a bit about Dubai Future Foundation and some of the programs you guys are running here. Ghaith Abdulrahman: 00:54 Sure, absolutely. Dubai Future Foundation was born out of the belief in the need to drive future in Dubai. As you know, Dubai is one of the global cities and a major, major regional player and it's been doing really well in a lot of sectors, primarily specific sectors that drove it out of turbulent times in the past and it created a successful business community and society. We've had brands come here and stay and we've had homegrown brands that have gone global. So the need to start planning for the future comes out of the belief that we need to continuously be number one, and it started in the World Governance Summit where we had an exhibition around the Museum of The Future, where we wanted to demonstrate what the future could look like. And instead of demonstrating relics of the past, it was more about what could future sectors look like, what could human interaction technology look like and how could society look like in the future? Everything from government to private sector and the society itself. From that very, very humble beginning. The foundation has over 200 employees, a vast portfolio of projects that range from everything from building capacity for society, government and multinationals around explaining what the future could look like when when emerging technology comes into their sectors to building disruptive programs around with multinationals government about how could we lead on certain sectors? How can we transform government from a nascent and inactive player to a proactive player? Which has been the case for Dubai government for a long time, where they've been pushing and driving the innovation in any economy or any sectors or in the economy, since their inception, and the private sector has been kind of following rather than leading. So that's really to build and capitalize on that effort quite a lot. Some of the programs that we host range from connecting government to very bright startups to entrepreneurs to building capacity on a leadership level to help them understand how is technology changing their sector? How it could change your organizations to working with private sector as well around a similar scope to building capacity with university students and high school students around breaking down myths, breaking down misconceptions around things like AI, blockchain, other parts of technology and how could they be part of that new wave of entrepreneurship, but also how can they use that technology moving forward. So the scope's quite vast. We get into a lot of programs, what we primarily focus on building programs that link regulators or government with a private sector and startups and how do we build the value chain around these three. Devon Watson: 03:38 Got it. And one of the things that you mentioned that I thought was pretty interesting, so as I look around Dubai, the desire to be number one is pretty obvious, the world's tallest buildings and very impressive engineering feats. But there's also this kind of clear trend towards the societal aspect, the satisfaction or happiness. I've noticed that those measurements are kind of stitched in every place I go in the user experience. Can you talk a little bit about how the user experience, as it pertains to really a societal benefit here right, the government is what's actually driving this and how does that marry up to this desire to be number one because many other governments or institutions would view it as one or the other? Ghaith Abdulrahman: 04:23 Absolutely. You're spot on. I mean the general vision is to be number one and that, to different stakeholders and government, that could mean different things, right? From a government centric perspective, one of the things that means is that, beyond creating government entities that are stellar, that are continuously innovating and taking the lead in their sector, there's a huge services mandate towards the people, towards a society that needs to be fulfilled. And that's been a primary concern and primary focus of the government entities here. How can we provide world-class services to the citizens, to the users, whether they're commercial, residential, and everybody who even passes by or transits Dubai, right? How can we give them an experience around service that's not comparable, right? And there's been a lot of focus. Everything from gearing the Government entities internally, whether they're from an organizational perspective or from a services perspective, operational perspective, but also how can we team them up with the best technology that can facilitate providing the best services. So that's been really the focus. And ultimately the common denominator across all that is that we want everybody who hand or deals with Dubai government to be happy with the outcome and the transaction and the experience. Devon Watson: 05:36 Got it. And one of the things that I've always thought a lot about when I go to a different city and I see how they're trying to stimulate innovation is, how you bring the right mix of participants together, right? And you need students, right, that are graduating and becoming risk-takers and new ventures. You need often some sort of government support. You need large corporations that can be acquisition vehicles for these different startups and things like that. And you need capital, right? And one of the things that I noticed that I thought was really interesting is that you've brought a Techstars program here, so maybe you could tell us a little bit about that. Ghaith Abdulrahman: 06:12 Sure. So Techstars program was launched the beginning of last year and it was the first accelerator program we hosted in our flagship project Area 2071. So Area 2071 is an experimentation space between government multinationals and startups focused on identifying a disruptive business models and technology. And out of that we hosted a Techstars for the first time in the region. It was the first endeavor in the region there were sponsored by one of the big family businesses in in the UAE. And we really liked the outcome of the program because the way it was organized and the way that it was structured was in a way that ensured that the companies would not just succeed, but find a home in Dubai. So we found that quite attractive to our mandate and our positioning. So we hosted them for two cohorts over two years. And a lot of these companies are going to get special visas around that enables them to stay for a long period of time, sponsor their teams, and sponsor their families to be based here out of Dubai. So that's the support that we've usually provides any accelerator program or any startup. But that Techstars experience has been quite stellar because it also pushed us to launch a project recently, it was one of the reasons that focuses around how can we incubate ideas on a university level where it's safe to fail, it's safe to experiment with new ideas for businesses and how can we play a role along with the private sector and the government funds around seeding these ventures and graduating a lot more of these ideas. And that's the problem that you find in the Middle East in general, is that there's a lot of talent, there's a lot of bright ideas, but there's very few mechanisms that enable it to go from idea stage to execution stage or a POC stage. And that's kind of where this project, which is called Genie Zones or Alchemy Project has come out from. Devon Watson: 08:01 The way I often p
9 minutes | a year ago
Evolving The Operational Model - Software as a Service
Summary: On this podcast we discuss how to transform from traditional sourcing to an “as a service” economy. Today’s consumers expect “anytime, anywhere” access to the self-service channel, leaving financial institutions with the challenge of optimizing availability without driving up costs. For many FIs, this challenge can quickly become overwhelming. Resources: Blogs: Banking Innovation: 4 Ways You Can Make a Big Impact Quickly The Growing "XaaS" Service Economy Trend Websites: COMMERCE NOW Diebold Nixdorf Transcription: Amy Lombardo: 00:13 Hi, this is Amy Lombardo, and I'm your host for this episode of COMMERCE NOW. We're coming to you live from DN Intersect 2019 in Las Vegas. I'm joined today by Homi Karkaria, who is head of our Solutions Group, and he's presenting to our bankers today a topic that's entitled Evolving the Operational Model, which I think is a little intriguing, due to your role in the software market. So let's talk on the topic of software as a service model and why a banker should think about this as an operating model. So my first question for you, Homi, is where do you think the global software as a service market is headed right now? Homi Karkaria: 00:52 Sure, thank you so much. Well, there has been significant increase in the global software as a service market as we look at things. For example, if you look at everything as a service, or what people would coin XaaS, that market has grown by 38%, or is expected to grow by that by 2020. When you look at the software side, which is the software as a service, that is also growing at healthy double digits greater than 20%, with a cumulative growth rate expected to reach a huge 185 billion by 2024. Amy Lombardo: 01:27 Does that sound about right for the role that you're in? Would you expect to see that? Is it something that bankers are accepting and gravitating now? Homi Karkaria: 01:36 I think bankers are really understanding this and accepting it. They have started realizing the advantages of why this is happening, what's in it for them, and how they could benefit, whether they look at initiatives like branch transformation, more automation, connectivity of physical and digital channels. I mean, all of this has to happen with limited cost, with limited infrastructure, with limited resources that the bankers have, and this is where software as a service can really help them. Amy Lombardo: 02:06 Okay. So dive a little bit deeper into that. You mentioned a few of those benefits there, but can you explain them in a little more depth here for our listeners? Homi Karkaria: 02:15 Absolutely. When you look at customers, customers have different needs. So there are different needs for tier one customers versus tier two entry. A tier one customer might be able to have a large capital expenditure as a part of their budget. A smaller customer might not. So how do I have a solution which translates or which goes from a CapEx mode to an OpEx mode? So that's one benefit for the tier two segments. Homi Karkaria: 02:40 The second thing is, banks want to retain, in certain cases, their own cloud environments, their own private cloud. However, there are certain applications which are not business critical and they want to connect to a public cloud. So how do I build a hybrid solution which connects the best of [inaudible 00:02:57] from what Diebold Nixdorf brings with what the have in-house? Homi Karkaria: 03:01 When you look at the challenges that the banks face today, a lot of it is to do with upgrades. So I have done, you know, how much time does it take to do an upgrade and that could be reduced significantly in software as a service model. Homi Karkaria: 03:15 The other big challenge is, when I have an update, how do I ensure that my install base is not affected because of somebody else? How do I have a faster go-to-market? How do I have a seamless migration to have a positive consumer journey? So those are all the benefits that the standardized solutions which comes as a part of the SaaS models brings to the banks. Amy Lombardo: 03:38 So where does security come into this model? Is it almost you're more protected by going through as a service model, or maybe what are the considerations that a bank needs to think about pertaining to security? Homi Karkaria: 03:52 Security becomes absolutely critical when we go to this model because the benefit is the flexibility across the different channels that brings with it the challenges associated with security. Now, when you look at security you're not just looking at security from a client end-point perspective, which might be the ATM, you also need to look at security from a backend server perspective based on the solution that's hosted in the cloud, and how are these two connected? How do I ensure that my end consumer is indeed the right one and is using the channel effective. Security becomes an extremely critical part of this equation. Amy Lombardo: 04:29 Okay, so Homi, let's move a little bit into the implementation side. What does a banker need to think about as they want to move to the SAS model or are there particular models based on their own environment? Homi Karkaria: 04:43 Yeah, so I give simple example to illustrate what kind of models the bankers can think about. If you are an end consumer, you have multiple options. You could own your own car. That is equal to, in my books, putting a software on-prem at the customer side. But I could decide to lease a car. I don't want to own the car. I do not want to have the headache of it's a maintenance and upgrades, et cetera. And I want to change it after a couple of... so I could lease a car. And leasing a car is then synonymous to software as a service. I could also have a situation where, I don't even want to lease a car, I don't want to drive it. I want to take a taxi. I want to go from point A to point B today. I want to go from point P to Q tomorrow and I want to take a taxi. Homi Karkaria: 05:28 And that would be a synonymous to a managed service model where a customer is requesting, I have not only to deploy the solution but operated on the RBF. And finally when we look at something that we call biz sourcing, it's like taking a train. A train leaves a station, irrespective of the number of consumers that enter it. A train does not deviate. It goes from station A to B to C at a specific predetermined time period. And that's akin to what we call biz sourcing, where solutions ATM as a service come in. So bank needs to think of where are they today? Where do they want to go, how much do they want to invest? What's the level of maturity inside the bank? How do they focus on their core competencies of financial services versus focusing on technology and let us handle it for them. Amy Lombardo: 06:16 Got it. Well that was a perfect example there and made very logical sense to me. You mentioned on premise and off premise servicing. Can you explain the differences there and and really is there any difference for the consumer? Homi Karkaria: 06:34 So from a consumer perspective there wouldn't be a difference. From a bank's perspective, there are a couple of differences. When you look at a solution that is hosted as a service, you have all those benefits, like a standard solution with faster go to market with the quick upgrades and seamless migration, et cetera. However, when you look at an on-prem solution, you have other types of advantages. Namely a customer might want to have a highly customized solution. They might want to have control over the implementation timelines. They might have specific integrations which are very proprietary to the banks ecosystem, so they might have cash on the balance sheet, which they want to invest upfront and they want to pay for the licenses right away rather than distributed over a couple of years. So it's a very different model when you look at on-prem versus SAS and that are advantages and differences between the two. Amy Lombardo: 07:32 So it sounds like there's benefits either way, it's just based on how your organization's makeup is built and where you want to go with the offering. Right, Homi Karkaria: 07:42 Absolutely. I think especially for tier two banks, who do not have significant investments to be made on the technology side and have on faster go to market, I think a SAS solution would be better off than an on-prem solution. But otherwise, work models are very much work in the market marketplace. Amy Lombardo: 07:58 Got it. Okay. So I think this is a good point in our discussion to end here. Homi, I'm gratefu
24 minutes | a year ago
Location and Data Boost Self-Checkout Conversions
Summary: In a follow-up conversation with Karen Webster from Pymnts.com, Carl von Sydow from Diebold Nixdorf recounted that self-checkout store data is not complicated or complex — it’s pretty simple information, including time stamps, the number of items in a basket and whether certain items are age-restricted, but paying close attention to the data will ensure an optimal customer journey throughout the check-out process. Resources: Pymnts.com related articles: https://www.pymnts.com/checkout-conversion/2019/for-self-checkout-location-location-location-and-data-boost-conversions/ https://www.pymnts.com/news/retail/2019/using-data-to-increase-checkout-conversions-in-store/ Blogs: Relevant Retail - the New Norm Retail Self-Service: Today, it's WAY More than Self-Checkout Website: Diebold Nixdorf Previous Carl Von Sydow Podcast: Using Data to Increase Data Conversions In-Store Transcription: Karen Webster: 00:00 Hey, Carl, thanks for joining me today. I'm looking forward to having a follow up conversation that will build on the last chat we had about using data to increase checkout conversions in the store. We talk a lot about checkout conversion online, and in the store, using the right data, can certainly help to increase that process. We set the stage last time we chatted, now we're going to dig into the details of exactly how to do it. So, thanks, as always, for making the time. Carl: 00:43 Well, thank you. Happy to be here again. Karen Webster: 00:46 Okay. So, let's get practical about what to do with the data that has been collected, and observed. Now, action is ready to be taken. How would one go about actually putting a checkout conversion plan together when looking at their data, for figuring out how to do that? Carl: 01:10 Well, first of all, I just want to come back a little bit to what we said last time, perhaps. [Core 00:01:18] data we are talking about, first of all, is not complicated or complex, it's pretty simple information. I don't anyone to believe that we are doing some highly sophisticated, rocket science analysis here. It's more or less about the timestamps, amount, number of items in the basket. Is there age-restricted items or not, et cetera? It's pretty simple information, it's just how you interpret that information. But, coming back to your question, first of all, you have to, when you collect the data, you have to think a little bit about from what period you picked the data. You can have data from a slow week, or a busy week, or some kind of average week, but the important thing is that you know from what type of period you pick your data. Or, you can choose to have a data from a longer period of time, like work with averages. That's one thing that's important. When it comes to conversion rate, you have to look through the data, and put together what might have an impact on your conversion rate. Conversion rate, of course, is being the ratio of customers coming into the store, buying respectively, as not buying anything. You want to have as high conversion rate as possible. You want all customers that comes through your doors to buy something. Typically, the customers that leave the store are customers with few items. They come in, they are in a hurry, they want to buy just a few items and get out of there. The good thing is, like, self-service is ideal for customers like that, with the few items. If you look at your store data, and you can identify a group of customers with small baskets, less than five items or something like that, then you have a good potential to increase your conversion rate if you, then, add more self-service, or add new self-service to that store location. Karen Webster: 03:12 So, when you think about the impacts of conversion, and looking at data on the efficiency of the experience throughout the store ... we're talking grocery stores, I guess, and other stores where people are going in and out, and buying things. Convenience stores, I guess, would be another category. There's the consumer angle to this, which is obviously very important, that drives sales. There are also other behaviors that, looking at data, and trying to make decisions about checkout efficiency, is also very important. Can you talk a little bit about the staff impacts, the management impacts, some of the investments in technology that need to be considered in looking at this bigger picture? Carl: 03:55 We have one example. We have a customer I'm working with right now, they didn't have self checkout. They installed card-only self checkout in their exit area, four lines. We studied the data before and after. All of the after, only a few weeks, we could see that we had an adoption rate of 25%. Karen Webster: 04:17 Wow. Carl: 04:17 Which was really good. Karen Webster: 04:17 Mm-hmm (affirmative). Carl: 04:18 It was four lanes out of a high number of lanes in that store. They were careful with the investment, self checkouts is expensive. They didn't know how their customers would react to this new concept. This is actually this summer, so we retailers just adding self checkout. Karen Webster: 04:38 Mm-hmm (affirmative), Mm-hmm (affirmative). Carl: 04:38 So, what we could see, when we looked at the data, we could see some signs that, perhaps, they have some possibilities for, first of all, add more self checkout. We could easily see that we had a lot of customers going through the normal lanes, still with very small baskets, paying with credit cards, that would be ideal to try to push them to the self checkout. So, the potential was clearly there. We could also see, since we can go in and look in 15 minute brackets when lanes are open, I could see that, for some reason, they didn't open the self checkout lanes until after two, three hours later in the day. They could have several [manned 00:05:18] lanes open before they open the self checkout. So, we had a discussion with that retailer about that. It was all about it being really careful with customer satisfaction, and customer experience, and also staff training. They felt that they didn't have trained enough staff to be able to man the self checkout area. Karen Webster: 05:41 Mm-hmm (affirmative). Carl: 05:42 Then, we went there and made some observations. It's always good to see everything - Karen Webster: 05:46 Sure. Carl: 05:46 - live, as well. Numbers are one thing, but you have to see it for yourself. We could see that as soon as they opened the self checkout, the line of customers waiting for the other manned lanes immediately gravitated towards the self checkout. Because, customers today, they know that self checkout is a very quick way to leave the store, and that's what they want. Karen Webster: 06:12 Mm-hmm (affirmative), Mm-hmm (affirmative). Yeah, I mean, it's interesting because ... I'd be curious to get your thoughts when you observe this. People just don't like waiting in line, right? If they have a small number of items, and they have an option to use self checkout, and they can do that without standing in line, it seems like an obvious choice. So, you get - Carl: 06:33 Yeah. Karen Webster: 06:33
34 minutes | a year ago
How Do Your Solutions Align With Financial Industry Trends?
Summary: In this podcast we will share an interactive panel session we recorded live from Intersect 2019, our marquee partners shared how their solutions and strategies align with financial industry trends and Diebold Nixdorf’s roadmap, such as; more integrated, with devices that enable better service delivery; more available, with optimized service capabilities that enhance the customer experience; and more efficient, with tools that enable you to achieve your customer-experience objectives. Guests:Vanessa Foden, Strategic Planner Retail Banking Hospitality & Education, Intel Ken Pedersen, Business Development Director, KICTeam Bill Stutzman, Director of Strategic Initiatives, Ventus Steve Gilde, Director of Global Product Marketing, Paragon Application SystemsShai Stern, Co-Chairman & CEO, CheckAlt Moderator: Scott Anderson, Brand Evangelism, Diebold Nixdorf Content:More Integrated Video: https://www.youtube.com/watch?v=hsIXFjt0IzA More Efficient Video: https://www.youtube.com/watch?v=w3yPIPmEuak More Available Video: https://www.youtube.com/watch?v=r6PktPP309g Transcription: Speaker 1: 00:00 In this Commerce Now podcast, we will share an interactive panel session we recorded live from Intersect 2019. Our marquee partners shared how their solutions and strategies align with financial industry trends and Diebold Nixdorf's roadmap. Such as: more integrated, with devices that enable better service delivery. More available, with optimized service capabilities that enhance the customer experience and more efficient, with tools that enable you to achieve your customer experience objectives. Devon: 00:31 Next up we have our diamond partner panel, so I'd like to welcome to the stage our Diebold Nixdorf evangelist, Scott Anderson. We're going to have our partner friends, Shai Stern from CheckAlt, Vanessa Foden from Intel, from KICTeam we have Ken Peterson and we have Steve Gilde from Paragon and Bill Stutzman from Ventis. Welcome to the stage everybody, thank you for joining us. Devon 01:09 Awesome. Scott Anderson: 01:14 Thanks everybody. We are between you and alcohol. I do apologize. And we all convinced in the back and we said "You know what? The modern tool that we would like right now is alcohol to help us with this next task", but we'll get you there soon. It's my distinct pleasure to welcome this panel. A group of panelists up on stage today to share with you a little bit about their organizations and talk about how Built To Connect and Built For More actually means more than just an ATM and solutions. Really, to run a banking environment, it takes a community, just like raising a child takes a community. And we have a community of people up here who really have a passion for our business and who help really transform the banking industry along with Diebold Nixdorf's partners and we're really proud to have them up here. So, I want a quick round of applause to welcome these folks up here. Thank you very much. Scott Anderson: 02:06 And while Devin gave us a quick introduction of these individuals by name, I'd love them to take a couple of moments and introduce themselves more personally and share with you who they are and what they do. Let's start with you, Shai. Shai Stern: 02:15 My name is Shai Stern and I'm the CEO of CheckAlt. I do not have a phone on my desk, I run my company on WhatsApp voice notes and I do have my emails printed out. Vanessa Foden: 02:28 I'm Vanessa Foden. I'm with Intel corporation as you noted, and I'm the director of strategic planning for our retail banking, hospitality and education group. I don't print my emails, but I did print some outdated notes for the show. Ken Pedersen: 02:46 Ken Pedersen from KICTeam and for those who don't know what KICTeam does, we manufacture and design cleaning products for currency, print and payment technology, so ATMs, POS terminals, check scanners, TCRs and... Yeah, thank you. Steve Gilde: 03:02 Steve Gilde from Paragon Application Systems. We're all about testing the payment systems. I will say that I could not have predicted that Ben ran 30 minutes over. Who knew that that future was going to happen, but happy to be here. Devon 03:15 Excellent. Bill Stutzman: 03:16 Hi, I'm Bill Stutzman from Ventis. Ventis is a networking company. We work with making sure that you're ATMs are up and running, so that your customers are happy. Scott Anderson: 03:25 Fantastic. Thank you very much for introducing yourselves. I think what we wanted to do today is really focused on all of the cerebral thinking we've been hearing about today. [what rounds 00:00:03:34] the Built to Connect and Built For More, but hone in a little bit on what does that mean and how do the individuals at this panel contribute to that and really make a difference in our overall industry as we go forward. This is a great opportunity for us to have some open conversation. We actually agreed that we don't have to always sit in our chairs, we can get up and kick each other if we don't agree, whatever the case may be. But what I'd like to do is, maybe tee up some questions to the individuals to get things started and of course we'd love to open it up to the audience and get some feedback from you and some direct questions as well. So, let's start with personalization. More personalized. Vanessa, let's start with yourself. What's Intel's point of view on personalization in this industry? Vanessa Foden: 04:14 Yeah, so let me start with, as noted, we're a retail banking, hospitality and education. So, we have the pleasure to see a connection point with use cases across these different sectors. And for retail for example, what we have seen is... And heard and everyone in this room has probably heard is, "Oh, stores are closing into retail as we know it, et cetera, et cetera". And really, what we've found is, that there's opportunity there and yes, there are definitely retailers that are not growing. But then there's the some that are going to different size format and then there's a few that haven't innovated and we know who those are. And yes, some of them are no longer with us. So, when we think about this with branches, we know that there are some shrink happening at the branch that could be in the actual space of the branch or closures. Vanessa Foden: 05:13 So, [Octavio 00:05:14] was talking this morning about 9.000 closures branches in the last five years. Now again, there's opportunity there, because there's different size formats and different technologies and ways to bring in our customers, because it's not just about one solution. And so, what we're really seeing, is opportunity. There is over a billion branches worldwide. So there is still that personal connection with the technology. So, the physical with the digital and that's the way we really need to think about it. And in the sessions today, which I really enjoyed them all, someone asked for a vote, I thought the two I went to are both great and very different. So I couldn't say one was better the other. But, it was very consistent in the message of opportunity and what's available to us in these use cases. So, it's really about understanding from the customer's standpoint, when they walk into your branch, how do they feel? Vanessa Foden: 06:14 Are they employees trained? Do they know how to engage with these customers? And on the flip side, digital. How do we know what our customers want? So, we're always thinking about what are our customers want? When do they want it, and what location should it be? And on and on and on. Right? So we apply that logic within our team to how is that relevant? Whether it is an Interactive Teller Machine, an Automated Teller Machine, a Virtual Teller Machine, POS system, et cetera. So that's how we really look at those use cases and try to apply it to make it personal, whether physical or digital. Scott Anderson: 06:53 Interesting. Steve, I'm going to challenge you a little bit. So, Paragon Systems and Testing, how would that bridge into the personalized world? Steve Gilde: 07:01 Sure. So, we heard this morning a lot about the customizable capabilities that the new DN Series will give to... That Diebold customers will have a chance to give to their consumers, right? You can do all sorts of interesting things, but the last thing you want to do is come up with an exciting new program, a new card, a new something for your high-net-worth customers and then have it fail when it gets in their hands. And being that we engage a lot on the testing side of the equation with customers, we hear a lot "Oh well, we couldn't test that with
28 minutes | a year ago
Technology Has Come A Long Way, But What does the Future Hold?
Summary: Guest Ben Hammersley speaks on his take on how you need to be present today, so you can be future ready for tomorrow. Resources: Hammersley Futures Website Ben Hammersley LinkedIn Profile Diebold Nixdorf Website Transcription: Amy Lombardo: 00:14 Hello and welcome to COMMERCE NOW, your source for FinTech conversations and emerging trends. Today, I have the unique pleasure of talking with Ben Hammersley. He's a globe Trotter and an author an adventure seeker, and he has the most wicked handlebar mustache you've ever seen. And today he's going to give us his take on how you need to be present now so you can be future ready. Sounds easy. Right? Well wrong. Let's get Ben's thoughts. So, Hey, welcome... Ben Hammersley: 00:56 Thank you. Such a pleasure to be on COMMERCE NOW. Amy Lombardo: Oh good. Thank you for that plug. All right, so I'm not gonna be able to do you justice. So why don't you tell us a little bit about yourself? Ben Hammersley: So I'm one of those annoying people that disappointed my parents over the past 20 years by not having a job, they can describe, I'm currently a futurist or is a strategic foresight person. So I run a company called Hammersley futures, and we work with corporations and with governments and some high net worth individuals to sort of help them understand the future and specifically to help them understand innovation and the methodologies behind innovation. And that has come from 10 years of doing that. But, before that I was a technology journalist and I edited wired magazine in the UK and I was a war correspondent in Afghanistan and I've done many, many things. I run a digital studio making digital things for couture houses and luxury brands. And so I have this very strange background, which has come together into this one thing which is helping people understand the nature of innovation. Amy Lombardo: 01:57 Okay. And, and what inspires you about your work? How, did this whole being of Ben Hammersley come together? Ben Hammersley: 02:06 I think what inspires me is sort of two fold. There's this, there's the selfish reason, which is that it enables me to be increasingly eclectic and, and taking lessons and taking influences from, from lots of different things, which is very selfish because I'm, you know, I'm fundamentally sort of unemployable and the regular day job or you know, I'm, how would you put it neuro atypical. And so, so being, having a career where I can travel a lot and taking a lot of input and then synthesize it into something else is a great privileged but also the slightly wider thing. I think the thing that really inspires me over the past couple of years is that I think we've come to a set of methodologies and an approach to our work, which is genuinely helpful for people are at as sort of a holistic level. It's helpful for them in a business point of view, but it's also, I think it's genuinely helpful for them sort of personally and that sort of pastoral care aspect to it. If that's slightly weird way of putting it. Yeah, Amy Lombardo: 03:13 no, that's a unique identifier. Yeah. Ben Hammersley: 03:16 Is actually is very satisfying because, because I get a lot of people coming to me immediately after I get off stage routes out of a meeting or comes to me six months later and say that thing, that approach really changed the way that that I think and it's made my life or my business or you know, whatever it is that they're particularly interested in has made it better. And that's, that's incredibly satisfying. So that's, so I get to, I get to go away and be weird, which is, which is helpful and I, and I get to help people, which is great. Amy Lombardo: 03:47 All right, so we're at a banking conference here. Intersect 2020. So can you give me some examples of areas you think banks are missing the boat? You know, opportunities that they can be capitalizing on. Ben Hammersley: 04:08 So I, I think actually that question really highlights the difference between my approach and, and other futurists or other technologists approaches to these things, which is that I don't think there is a boat as it were or a collection of, of large boats that people are missing or not missing. It's very easy and I am very typical of the sorts of conferences and not just banking conferences but any, any industry conference to say, ah, you know, if you are not paying attention to, you know, subject X or if you're not paying attention to new technology Y then you are than you are falling behind and you're missing the boat as you say. And that's almost universally bullshit to be honest. In the vast majority of those conferences. And the vast majority of those subjects very specifically are things which are overblown and misunderstood and probably aren't at least right now relevant to the, to the individuals in the audience. Ben Hammersley: 05:12 So instead of thinking about the world as in terms of innovation boats that you can get on or not, and if you don't get on them, then you're going to be left behind to continue the imagery. Instead, what I try and teach people is to, is to look at the boat and see if it's something that is suitable for their business in the context of their business. Okay. So another way of looking at this is that the vast majority of futurism that I do, where I, in terms of when people ask me directly, you know, what are the new technologies that we should be paying attention to? Almost all of those technologies aren't things that don't exist yet. They're technologies which do exist and are being used a lot, but they're being used in another place. Okay. And so in a lot of industries you can be very, very innovative literally just by being up to date. Ben Hammersley: 06:02 Right? Banking in the U S is a good example of that. In that, in that if you compare banking in the U S too, as specifically consumer banking, if you, if you compare consumer banking in the U S to consumer banking elsewhere on the planet, you could very easily innovate massively radically for the U S just by being about five years behind Europe or you know, or 10 years behind China, right? Like if you really wanted it to be up to date, just big, just go and do what the Chinese are doing 10 years ago. Those sorts of things. So there is, there is a saying that William Gibson, the science fiction writer said that that the future is already here. It's just not evenly distributed. And that I think is very true. But, but all of these or this sort of talking around this highlights the thing that I like to talk about, which is that innovation is not a step change to a new future that everybody agrees on. Ben Hammersley: 06:54 Instead, it's a methodology of continuous improvement based on your own personal context and the context of your business. And that takes, that looks at those new technologies. It looks at those big boats as you say and says this, the suitable for us is does this, you know, yes, this is getting the front covers of the economist and everybody's very excited about it or whatever. But it isn't necessarily the thing that our customers are most likely to benefit from the most or our business will benefit from the most. And so what do we teach you is a much more holistic and continuous practice of continual mindful attention giving innovation on a daily basis rather than going, everybody needs to be on the blockchain or we're all dead. Amy Lombardo: 07:41 Right? You know, you have this unique thinking on this concept of being present or recognizing what is right around you and you have to be able to capitalize on that before you can look ahead and you maybe unpack that a little bit for me and just give a little more examples. Ben Hammersley: 07:58 Sure. Maybe like some concrete examples of what you see in your business. Sure. So, so let's start actually from the beginning of the talk I just gave, which is that because of the exponential rate of change that we have at this time on the 21st century and rate of change in everything. And you know, as I as I said on stage that that technology and society and culture and business are all interlinked in a fundamental way. When one changes then all the others change in the olden days. So 20 years ago, 30 years ago, technology was, was this specifically technology was the sort of layer on top of business. So you have business and then you have the technology that comes in and makes it a little bit more efficient. Right? Like this fancy bolt-on. Yeah, exactly. And you know, fancy precisely that. And, and the, the CIO of the business or the CIO. Ben Hammersley: 08:48 So the business was probably not even on the board. It's probably one level down at the same level as say the, you know, the facilities manager, something like that. Whereas today, specifically in, in data-driven businesses and financial services and banking are perfect example of that. Your bu
14 minutes | a year ago
It's not a Technology Issue It's a Human One
With $48b in assets, Banco Popular is the largest financial institution in assets and deposits in Puerto Rico. In this podcast, you will hear from Moisés Pena Reyes, VP, Digital Banking for the bank. Moisés is responsible for driving and managing the ongoing evolution, innovation, and strategic direction of Banco Popular’s digital banking platforms by meticulously managing their customers’ journeys via mobile, online and ATM. Hear how his unique “digital-first” approach to their transformation journey has allowed the bank to have more active devices in use to engage with the bank, than actual customers. Resources: Banco Popular Website Moises Pena Reyes LinkedIn Profile Diebold Nixdorf Website Transcription: Amy Lombardo: 00:15 Hello again, this is Amy Lombardo and I'm your host for this episode of COMMERCE NOW. We're coming hot off of the stage from our last keynote presentation at DN Intersect, where Moisés Pena Reyes, from Banco Popular, hope I said that right and did you justice, Moisés . He presented the bank's digital transformation strategy. And so I'm lucky enough to be able to pull him aside for a few minutes here, and be able to share with our podcast universe, your story. It was fantastic for the group that was here, but I couldn't let you get away without getting in my hot seat here to talk to me. Moisés Peña: 00:54 Let's do this. Amy Lombardo: 00:55 Moisés is responsible for driving and managing the ongoing evolution, innovation, and strategic direction of Banco Popular's digital banking platforms. So that's enough from me and let's hear it directly from him. So, welcome Moisés . Moisés Peña: 01:10 Thank you, thank you. I'm excited to be here sharing one of my passions with you. Amy Lombardo: 01:15 So what I learned is you have 17 years at the bank, and 2008 was really when you started on this digital journey. So talk to me a little bit about how you came to this realization and what were the factors that led you to realize that digital is really the place to be for the bank. Moisés Peña: 01:36 Yes, I think that ... 2008 was the year that I arrived at the Internet strategy team, and our customers loved to online banking, and we measured that. And seeing how the volume of transactions were literally making a dent in their behavior and monitoring the tendencies and the new stuff that was coming out, for me was truly engaging to embark on that journey. In the beginning we were just a small group, that admires an alternate channel but we persisted and continue to challenge the way things were done. And day by day, we started to launch new services, transform experiences to the place that we are today, with over a hundred people actually looking out for the top strategy in the bank. Amy Lombardo: 02:37 And you said something that was interesting because you said channels, but really you don't want to think in channels, that word isn't even in your vocabulary. Right? Moisés Peña: 02:47 Imagine that. Alternate channels, no, it's our experiences, our customers and their expectations are the ones that are going to choose where and when they want to do banking. Amy Lombardo: 03:02 Right, right. Because customers say, "I need a bank." Moisés Peña: 03:05 Yeah. Amy Lombardo: 03:05 They don't care. They're not going to say, "I need to go digitally pay my bill." It's just the experience. Moisés Peña: 03:12 Experience and context, it is all about the context of the journey that our customer is going to embark. Amy Lombardo: 03:18 Right. Moisés Peña: 03:18 Yeah. Amy Lombardo: 03:19 Right. All right. Moisés , so you talked a little bit about the journey itself, but can you share some of the innovations that the bank actually deployed? Moisés Peña: 03:27 Yes. We run on a custom core and everything that we want to build, we literally have to build it. So that's a great opportunity for us. We have been at the forefront of iterating our new services. For example, we were between the top five banks in the U.S. to launch Apple watch support. So is really through the different skill sets that we have and do an innovation with them. And in a couple of weeks, we had our mobile app tailor for the Apple watch. Balances, transfers, transactions, payments, and we were in the first five banks in do that. Our cardless cash service, it has been truly revolutionary because of the way that we offer the service to the non-customer. So we did it also ourselves also with the help of our technology partner. And the beauty of it, is that our customers can send money to anyone, even if that person doesn't have a bank account. But we did it the way of making them interact with our app. So they will enroll in our app and get access to their cash but I can truly offer them new experiences via that app because they allow me to send them promotions and cross sell opportunities are beautiful. Amy Lombardo: 04:48 Right. Moisés Peña: 04:48 Yeah. Amy Lombardo: 04:49 So you mentioned something interesting in terms of, okay, "We were one of the first banks to do this," but sometimes that can have the reverse effect because consumers aren't ready or they're not trained, they can't adopt the technology. So how receptive was your customer base to the different phases of this digital transformation? Moisés Peña: 05:10 Yep. I live by the principle that our customers don't wake up in the morning saying, "I want to do banking today." Amy Lombardo: 05:20 Right. Moisés Peña: 05:20 Right. Amy Lombardo: 05:21 Unless of course you win the lottery. Moisés Peña: 05:23 Yeah. But we are competing not with other banks. We are competing with what their expectations are with the ecosystem of applications that they interact with day in, day out right? So in our case, digital adoption is robust. Over 90% of our customer base is enroll in digital banking. So our customers are great in that they are fast adopters, right? So we will try stuff, for example, the Apple watch example, it has a low usage and we learn from that. We did experiment, we [inaudible 00:06:00] the teams collaborated and we monitor their performance and the usage. And we saw that, "Hey, people will still wants to use their phone to do it not the Apple watch." Amy Lombardo: 06:12 I'm going to throw you a little bit of a curve ball here, is there anything that scares you about the pace of change? Moisés Peña: 06:21 Oh yeah, totally. And because of that ... because we are not competing with other banks anymore and we are a big bank on ... honestly, I want to move faster. But obviously Google, Amazon, Apple had a lot of more resources than we [inaudible 00:06:42] and a huge customer base. So what scares me is that we don't move fast enough to be part of that journey for our customers and lose business because a bigger player did it fast than us. So yeah, we keep pounding the rock and iterating and listen to our customers. That important thing. Amy Lombardo: 07:06 So maybe the goal we'll have here is, you know, we hear all about the Amazon effect or you know, you say you Google something, Google became a verb and maybe we'll have the Banco Popular factor right? And people will think about it that way. Moisés Peña: 07:21 Exactly. Amy Lombardo: 07:21 Yes. Okay. You mentioned Google and in your keynote presentation you said that you are embedding Google analytics into your ATM. I almost fell out of my chair because I have not heard a single banker ever say that. So how'd you come to that? Moisés Peña: 07:41 We love to experiment. We do a lot of proof of concepts. We have our own ATM lab in our building and being a group that they're ... our lives has ... have been helping the bank transition that digital transformation. When we start
20 minutes | a year ago
Using Data to Increase Checkout Conversions - In-Store
Summary: Retailers and grocers want to streamline the in-store checkout experience and increase conversions. Diebold Nixdorf’s Carl von Sydow tells Karen Webster from Pymnts.com transaction data can help firms find the optimal checkout footprint that fits, on a case by case basis. Resources: Blogs: Relevant Retail - the New Norm Retail Self-Service: Today, it's WAY More than Self-Checkout Website: Diebold Nixdorf Previous Carl Von Sydow Podcast: Empower Your Retail Customers Transcription: Karen Webster: 00:12 Hey Carl, thanks for joining me today. I'm looking forward to having a conversation about data, in-store point of sale, and the insights that retailers can glean from that data. So thanks for making the time. Carl von Sydow: 00:29 You're welcome, no problem. I'm happy to be here. Karen Webster: 00:31 So, there's been so much written and discussed about improving the checkout experience in the physical store, and of course we're all familiar with the efforts that a number of players, obviously Amazon at the top of that list, have pioneered to really improve that experience. I'm curious to get your take on, first of all, the the landscape around, then the appetite for, using the point of sale experience, reinventing it and making it a more streamlined experience for the customer. Carl von Sydow: 01:10 Yeah. Well first of all, retail and grocery retail and all the other verticals, are going through big changes now in in the checkout process. As you just mentioned, Amazon is one example and we have click and collect, we have all different kinds of self-service solutions or other solutions. Customers has options when they go shopping. But we have a great number of stores and retailers that are still working with traditional retail, and the Amazon idea is good for some locations, but there are a lot of retailers they're still expecting, or looking, for solutions that are, perhaps, not reinventing everything but using what they already have and improving the shopping experience for the customer, with not investing in a lot of technology like the Amazon solution. Karen Webster: 02:03 Yeah, yeah. That is clearly, as you said, for a different kind of a store; smaller format, limited selection and so forth. But your point is a good one, which is stores want to make the experience better. No one wants to see long lines and there are lots of efficiencies that can be delivered within the existing store format today. What are some of the innovations that are helping drive that forward? Carl von Sydow: 02:31 Well, first of all, when we usually try to help a retailer improve their shopping experience in the checkout area and the efficiency and throughput and all that, we start with looking at the store data, what they already have within retail. One store location can be very different from another one. The customer demographies is different from one side of the town to the other. So by looking at the actual store data for a particular store, you can learn quite a lot about how and where you can improve the shopping experience in that particular store. And the T-log data, the transaction data, that will help us to analyze the customer work, or customer shopping journey, the customer journey. And through the store data that we can extract information, like for instance, the average basket sizes, the different payments options that they are using, cash or card payments, coupons, et cetera. How many transactions are used with age restricted items? That will have an impact on the different solutions for self-service that you can implement, of course. But looking at the data, the actual store data, you can get a long way of analyzing and simulating how you can improve that store without spending too much money. Karen Webster: 03:52 So what are some of the the insights? I was listening to you talk, I was reminded of an experience a couple of weeks back in a grocery store on a Saturday, and they didn't have that many items so I decided to do self-checkout. And the lines were actually, in the self-checkout lanes, deeper than I had seen them. So a lot of people are opting in. I happened to get into the line where a woman had a pile of coupons. That was painful because scanning those coupons and putting them in the little holder, I was like, is she ever going to finish? But you mentioned that as an example of a behavior that helps stores make decisions about throughput. What kind of insights, and therefore actions, does that one example provide a retailer in how to think about throughput and efficiencies at checkout? Carl von Sydow: 04:42 By analyzing their own transaction log data, their own facts in a good way. The retailer can optimize the different checkout options for that particular location, for that particular customer demography that they have. Or, like options ... You mentioned coupons, if we look 10, 15 years back in time, we have seen more or less only one type of self-checkout, which is the traditional basket-to-bag self-checkout, as we call it. With a large bagging area, with or without cash, pretty big units. And they accept cash, they accept coupons, et cetera, et cetera. If you look at the T-log data, just as you mentioned, customers with small baskets, typically self-service is very attractive for small baskets, obviously. But today what you can see in stores is that the self-checkouts are for all customers. You can go there and have a customer with 50 items and they are building mountains on the bagging area. And do you just want to go through with three items. So our idea is to look at the T-log data, analyze the different groups of customers that they have in that particular store, and then identify what different self-service solutions, or options, can you add to this checkout area to meet the different customer demands? So the customers with small baskets that just want to go through fast, they pay with credit card, they don't want to wait for someone paying with cash, et cetera. So you should have like a mix of different self-service solutions to meet your customer demands, and that's what the store data can help you to analyze and simulate. Karen Webster: 06:25 Is that, Carl, something that retailers are starting to wrap their heads around? I mean, this particular store, I won't name the brand, but it's pretty pretty big chain and it was interesting that all of the checkout lanes, self-checkout lanes, were identical. You could use cash in addition to cards, as you described. Any number of items could be moved down the conveyor belt, and of course those coupon things, which I found very annoying because she had a lot of them. So are retailers starting to adopt these new ways of thinking about narrowing the options for self-service in some lanes? Carl von Sydow: 07:09 Yeah, I would say more and more retailers are doing that. For quite a while the retailers have been working through the thinking about averages, and one-size-fits-all kind of mentality, and that's what we see on the markets today. And now they're slowly realizing that that is not necessarily what the customers want. There is no one-size-fits-all in self-service anymore. And the customers, they are learning and they are developing and they're doing ... They're fast. They are expecting retailers to offer continuous improvements also in in the checkout area. We have seen quite ... Hasn't been so many different developments for the traditional basket-to-bag self-checkout. It looks more or less the same today like 15 years ago. And the customers, they're trying to ... They are expecting something different now and the retailers are realizing that, but they don't really know how and to which extent they would add like fast lanes or express lanes. And then especially in the United States to go card only. It's a pretty bold decision and a lot of retailers are afraid of that. But if you look at the store data, you can easily see that there is a market, if you like, internally, for that store to actually have card only self-service solutions to meet those customer's demands. Karen Webster: 08:33 What are some of the more innovative options that retailers are embracing who are looking at this data, recognizing that averages don't cut it, and they really do need to be more thoughtful about about checkout options? Carl von Sydow: 08:54 What different self-service alternatives there is, or what do you mean? Karen Webster: 08:56 So, when you think about self-service alternatives, and just looking at checkout holistically, what are some of the more innovative retailers doing
31 minutes | a year ago
Cloud-based Banking has Come of Age
Summary: On this episode of COMMERCE NOW, we discuss how cloud-based banking is really booming and what FIs can do to be on the front side of this upswing. Related Content: COMMERCE NOW Site Diebold Nixdorf Site Transcription: Scott Anderson: Hello again. This is Scott Anderson, your host for this episode of COMMERCE NOW. As some of you have heard, cloud-based IT is booming, even with the core applications of the banks. Scott Anderson: Although migration from conventional IT infrastructures to the cloud can be complex, once it's done, it offers interesting opportunities, not to mention enormous savings potential. Scott Anderson: Today, I'm joined by Michael Engel, Managing Director and Vice President for banking software at Diebold Nixdorf. And on this episode of COMMERCE NOW, we will [00:00:30] discuss how cloud-based banking is really booming and what FIs can do to be on the front side of this upswing. Scott Anderson: Welcome, Michael. Thanks for joining me today. Michael Engel: Hey, it's a pleasure, Scott. Thanks for having me. Scott Anderson: Before we dive in, Michael, I know you quite well, but why don't you begin by telling our audience a little bit about yourself and your background? Michael Engel: Thank you, Scott. I'm in the industry for 20 plus years now and always worked in software and financial industry, [00:01:00] so I have seen a lot of iterations of technology. So all the way from the good solid host-based environments that a lot of FIs are still running, to now all these latest technologies driving banks and FI's around the globe. Michael Engel: So therefore, I would say I have a good view of the historic aspect, [00:01:30] but also as part of my job, talking to customers around the world, and also to technology providers around the globe, have a fairly good understanding of the dynamics in different geographies and markets, towards what is still under discussion and what is basically real and what is in production today. Scott Anderson: Excellent. [00:02:00] And really appreciate that you're joining us with that global point of view. And if we target our focus then to today's topic, can you kick us off and briefly discuss cloud-based software and why you think that's been growing in popularity lately? Michael Engel: Well when we talk about cloud-based software, it is more than just putting a piece of functionality into a central located data center [00:02:30] that is accessible through standard protocols and is hosted by a central organization that gives basically, a cost advantage based on a dynamic usage model. Michael Engel: That is what most people immediately have in their mind, but it's much more than that. It is all around technology around that, so the whole idea of containerization, the whole idea of APIs [00:03:00] to be used and consumed and the whole tools in order to create software, to test software, to deploy software to run and operate. And all of these pieces are now coming from the mobile phone. Michael Engel: This is really, really cool and a bunch of nerds across the globe are looking into that. Into it has become [00:03:30] now, into a state of maturity where, now conservative organizations such as banks are seriously looking into that and the front runners are actually exploring that mission critical application, post development and operation and so showing extremely good results. And then that is what brought us to the point [00:04:00] that from being a buzzword and being the cool thing around the block, it has matured into, it is actually real enough and mature enough for a mission critical environment such as special services industry. Scott Anderson: Interesting. So I know that there are several trailblazers out there globally and you've touched on a couple of their examples and aside from costs, what other [00:04:30] benefits, you know, if we have some financial institutions listening in today, how can you assure them that there are benefits beyond cost with cloud based software? Michael Engel: Well, again, let's, let's fundamentally look at what is happening elsewhere in the industry. And then if you look at, for instance, companies such as Amazon, if you look into Amazon, not as a cloud service provider but as a retail organization, then by [00:05:00] and large the entire Amazon platform. So the shop that you see where you go and look for stuff to buy, but also the whole logistic engine, even engine behind that, everything is a very dynamic infrastructure. Why? Because Amazon has realized that they're living in a very fast changing environment and if they're not able to [00:05:30] adapt changes from the market, changes from customer behavior, integration of new products and services into their offering, then they're falling behind and they no longer stay relevant for their consumers. So as a result, they have worked intensively with other technology providers on a end to end, so called continuous improvement, continuous deployment, delivery chain, [00:06:00] tool chain. Michael Engel: And as a result of that, they are basically creating an ongoing living organism of software that will evolve itself every give and take 12 months. So basically no code in there is legacy code. Everything gets constantly updated, enhanced, improved, and by that, change. Now that is exactly [00:06:30] how a lot of these smaller fintechs are today operating. They are not better or smarter, they are simply faster. And they are faster by utilizing latest technology in order to adapt to customer demands. And in order to automate servicing their customers, you do this by using software which is obvious. But only if your software infrastructure is able [00:07:00] to adapt the rate of change, then you have a real chance to stay ahead of the game. And that is what if you now think about the traditional bank, one of the biggest headaches that the CIO of the bank has, because by and large, the core functionality of the bank and there are parts of bank sells basically virtual parts, mortgages, [00:07:30] not tangible, consumer loans, not a tangible product. Michael Engel: It is basically a digital product. Now if your core infrastructure that creates those products, that manages those products that sell these kinds of products, is sitting on a whole space infrastructure that's 30 years old, and it's very hard to change and very hard to maintain and basically your IT guys are telling you, "Well once or twice a year we can do a minor update [00:08:00] to that system but won't touch anything because it might break." Then this is not really exactly the agile environment that you are looking for in order to compete in a faster and faster moving market. Michael Engel: So and that realization triggered for a lot of front running banks, the question of how do I get to a end to end tool chain that allows me in the same [00:08:30] way like Amazon does it or other tech company do it, how can we utilize really an end to end agile process of deployment? Because today a lot of these agile processes stop right in front of production. So you have people in an agile setup developing new functionality but then the host team says, "Well guys, very nice but two [00:09:00] releases a year. Thank you very much." Michael Engel: Now how to get there. And then this is exactly where we have worked with major FIs to have a look, the tool chains and the technology from how you define functionality and how you develop functionality and how you test and how you deploy functionality. Michael Engel: How to bring that into the context of your requirements of a FI with regards to stability, [00:09:30] reliability and also adding the context of prebuilt microservices functionality for a financial services organization. And that is basically the underlying driving force here. It is not so much predominantly to get the cost advantages of cloud deployment. It is getting into a much more agile way of creating new services for the bank's customers, [00:10:00] and then on top of that be able to deploy the new much more cost effective environment than before. Scott Anderson: Hmm. So if I think about the conservatism of most financial institutions, at least historically speaking, certainly the CIOs are looking at this with an open mind. But if we, if we think about the paradigm of legacy processes like a C-Systems, you know, this demand to go agile yet [00:10:30] still have happening to be waterfall at the end delivery point. You know, how does cloud based software, how would we articulate this to the people who actually have to do the heavy lifting in the financial institutions? Is this, are we automating steps and making their life easier that have been manual in the past? How would you describe that to them? Michael Engel: Well yeah, for a certain time you're actually doing things in parallel. So what you usually do is a step by step approach. You take a certain set of functionality [00:11:00] and you would move that off your existing, cost heavy infrastructure and put that into a much more lightweight or a cost effective production environment. And by the savings you are getting out of that you have so to speak freed up budget for new innovation investments. Michael Engel: So, and when I say that it is, it is a proces
33 minutes | a year ago
Streamlining the Store to Simplify Shopping
Summary: On today's podcast, we welcome Joe Skorupa, editorial director and feature blogger for RIS News and Ensemble IQ Media Portfolio. Recently RIS News released a targeted research study and article on streamlining the store to simplify shopping. Today, we discuss this research and some of the main challenges retailers are dealing with in their shopping journey's. Resources: Infographic RIS News Targeted Research: Streamlining the Store to Simplify Shopping Blog: Retail Self-Service: Today, its WAY More than Self-Checkout Relevant Retail: The new Norm Scan, Bag and Go - Self-Scanning Technology Empowers Consumers to Shop with Ease COMMERCE NOW Site Transcription: Jerry Langfitt: Hello, I'm Jerry Langfitt and I'm your host for this episode of COMMERCE NOW. On today's podcast, we'll welcome Joe Skorupa, editorial director and featured blogger for RIS News and Ensemble IQ Media Portfolio. Joe is frequently named as one of the top influencers in retail and technology and is also frequent speaker at conferences such as NRF, Big Show, amongst others. Welcome to COMMERCE NOW, Joe. Joe Skorupa: Hey there, Jerry. Glad to be here and I'm looking forward to our discussion. Jerry Langfitt: I am too. Joe, you recently did a [00:00:30] study and article on streamlining the store to simplify shopping. We're excited to listen about this research, but let's start at a higher level and talk about the trends affecting the industry right now. What are the main challenges retailers are dealing with? Joe Skorupa: Yeah, Jerry, the study touched upon the fact that shopping is really a journey for consumers and honestly any friction they feel, anything that doesn't smooth things along and speed things up and make things more convenient for them [00:01:00] is not going to provide high customer satisfaction levels, and we know that retailers are searching for that. So from a macro level, this study, I believe, resonated with two big challenges that retailers are facing today. And the first is fast moving consumers and rapid fire changes in shopping behavior. And by that what I mean is that shoppers move onto the next viral trend or the next influencer or tech innovation before retailers can catch up. And essentially the pace of change is accelerating. [00:01:30] And this has significant consequences, especially for slow moving retailers who are dealing with falling foot traffic in stores, empty malls, and of course they're dealing with Amazon and Walmart growing ever larger. Joe Skorupa: I mean these are giants to begin with and they're not catching up to the giants. In fact, the giants are growing bigger. And I have nothing against Amazon or Walmart. I think they are outstanding retailers and exemplaries of what to do and how to change. But it is effecting [00:02:00] all the rest of the retail industry. Joe Skorupa: Now the second big challenge for retailers, I believe, is that they must recognize that they have to continually make investments in their businesses to keep up with consumers. Just because you have a brand and it's working, and it worked for a long time. The challenge is that you have to continually reinvest in your business. And if a retailer can't implement new innovations and new technologies and do them profitably [00:02:30] ... See that's the key. It's not investing, it's investing efficiently and profitably. And if retailers can't do it efficiently and profitably, then they're just increasing their debt, increasing their risk and squandering precious resources. Joe Skorupa: So to sum up, my two main points are, it's a fast moving, accelerating consumer marketplace. And secondly, the challenge is finding the right way to do investment to reimagine your business. Jerry Langfitt: It's interesting that you that, because this kind of [00:03:00] leads right into one of the first questions I had where one of your first figures, key findings in the study is that retailers are split on the topic of self-service technologies. The ratings of the question gave everybody a five out of 10 then it would almost make you think that self-service technologies is not very important, but underneath the data, that kind of, it kind of told a different story, didn't it? Joe Skorupa: Yeah, it did. And Jerry, I do data analysis all of the time. And I also [00:03:30] believe that the RIS news readership represents the entire retail industry. So when I pull data points together, I look at it as a retail industry. And you're right, the average score came out kind of a middle of the road score on the level of importance. But then I looked into it and there are patterns that you can find when you dive into the data and filter it. And when I filtered this data point by [00:04:00] revenue size, I've found that there were two large camps, two blocks of retailers. And retailers with less than a billion dollars in revenue were more likely to rate self-service in stores lower than tier one retailers, the bigger retailers. And so the question then becomes why. And because every net new technology requires net new investment, well that represents a challenge in itself, especially to slower moving and conservative retailers who [00:04:30] are established in their ways. Joe Skorupa: Now, larger retailers have to support the vast size of their enterprise in a different way. They need constant reinvestment and innovation and and just moving forward. Because if they lose their momentum and lose their relevancy with a large part of the population, which is their shopper base, they're going to fade in the shopper's mind and the shoppers will move elsewhere. So large retailers have to stay relevant on a broad national [00:05:00] level. So they're constantly testing, developing and researching new technologies. Joe Skorupa: And during this process they have learned about the value that self service technology offers to shoppers and to their stores financial performance. Now are those same things at the large retailers learned also true for smaller retailers? Yes, there are, there is value to self service technology and it does provide shoppers with a streamlined experience and it does help the store's financial performance. But the smaller retailers are not doing [00:05:30] all the due diligence that the larger retailers are doing. Jerry Langfitt: That's really interesting. It would almost seem to think that the larger retailers would also drag the industry in a certain direction and- Joe Skorupa: Absolutely true. Jerry Langfitt: Almost force, or at least make it hard not to change, to go in that same direction. I mean we see that right now with with McDonald's, installing kiosks across their entire footprint. It's kind of a watershed moment where then other retailers, QSRs mainly would have to say, okay, if I want [00:06:00] to compete I have to do, not just a me too, but I have to do something. I can no longer sit on the fence or it's gonna affect my revenue stream. Joe Skorupa: Absolutely. Yes. So talk about having it your way and maybe that's the theme of a different QSR, but nevertheless it fits our discussion here. Having the ability to do self service is the ultimate have it your way experience. Jerry Langfitt: Now, so look forward. Let's split this into two groups then. The two groups you pretty much indicated. What are the benefits [00:06:30] they are getting from more self service? Joe Skorupa: Well our study found that the primary benefits delivered to shoppers. And we asked about benefits to shoppers and benefits to retailers and they are different questions and they got different answers. So the primary benefits, I'll start with shoppers. There are three primary benefits and they are checkout, payment and price checking. Joe Skorupa: Now each of these things makes a shopper experience quicker and easier and [00:07:00] also it has to be said that shoppers feel like they are in control of the experience and all of these things are very positive for the shopper in any sort of consumer experience in a store. Joe Skorupa: Now the benefits are different for a retailer but possibly even more important. For a retailer, there is an improved level of customer service. Let's face it, this is something that a customer might need, might want, [00:07:30] and there it is. They're able to use it. That is customer service and also when that happens, customer satisfaction metrics are going to be increased for this store. All of these certainly stimulate return visits and that is a key to success for retailers. Joe Skorupa: And speaking of metrics, by the way, I mentioned customer satisfaction metrics. Another big benefit that retailers get is the ability to gather in store customer data through these touch points. Now self service devices are interactive [00:08:00] touch points. The consumer is actually giving the retailer information by the behaviors that are occurring on the self service device. Now this behavior can be examined and tell a retailer about something about how the store operates, about how the shopper's responding to promotions. It tells retailers, you know, what the impact of technologies are in the stores and potentially all of this infor
25 minutes | 2 years ago
ATM Video Teller: Is it Right for Your Financial Institution?
Summary: Today, we're going to discuss when it's appropriate for FIs to implement ATM video solutions. As we all know the banking industry continues to transform and FIs have to transform along with it, but this doesn't always mean that the same solution will work for every FI. Video solutions can be tricky and may or may not be the right solution for your customers. Our panel today will discuss how you will know whether or not video is right for your environment. Related Content: Blog: Interactive Video Teller: Another Dimension of Self-Service Blog: The benefits of looped Cash Cycles: A Conversation with Volksbank Albstadt COMMERCE NOW Website Diebold Nixdorf Website Transcription: Scott Anderson: Hello, I'm Scott Anderson and I'm your host for this episode of COMMERCE NOW. On today's podcast we welcome Diebold Nixdorf's Chris Gill, Senior Director of Global Advisory Services, Dawn Winston, Senior Product Manager DN Banking Teller Products and, Brendan Thorpe, Senior Global Demand Lead for Banking Software. Scott Anderson: Today, we're going to discuss when it's appropriate for FIs to implement ATM video solutions. As well, we all know the banking industry continues to transform and FIs have to transform along with it, but [00:00:30] this doesn't always mean that the same solution will work for every FI. Video solutions can be tricky and may or may not be the right solution for your customers. Our panel today will discuss how you will know whether or not video is right for your environment so let's dive in. Scott Anderson: Dawn, I'd love to start with you to sort of set the stage here. Can you give us a quick overview on the video solutions that Diebold Nixdorf has brought to the table today from a product standpoint? Dawn Winston: Yeah, absolutely and Diebold Nixdorf is committed to [00:01:00] offering several different video teller solutions to financial institutions, banks, and credit unions and really we want to be able to offer what makes sense to a financial institution's business model and branch concept model. So if you, as an institution, are more interested in furthering your customer or member experience and making sure that you have that personal touch or the interaction with an employee at your [00:01:30] institution, then you would be more interested in something interactive video teller. Dawn Winston: And that interactive video teller, essentially, allows the teller to drive the entire transaction session with the consumer standing at a service device, with the consumer just offering input or approving transactions, and that does allow the teller to have that longer touch time with your customer or your member. So they can do things like [00:02:00] improving that customer's experience or even doing things like upselling to your customer or member. Dawn Winston: And then we do offer another solution that really is more about switching your staffing model. So maybe you want to transition some of your teller staff to do other roles like selling or marketing some of your products and you're more concerned about efficiency of your financial institution, so in that scenario they're not spending as much [00:02:30] touch time processing transactions. They really are focused on doing things like cardless authentications or overrides and approvals of checks and the transaction at the consumer's end switches back into a self-service mode freeing up more time for your branch staff or your central office staff to work on other roles within your institution. Scott Anderson: Great stuff, thanks for sharing that. And given some of the capabilities that our portfolio offers today in the marketplace, Chris, I'd like to [00:03:00] ask you from the perspective of our advisory teams and the customers you're speaking with, what are some of the more common use cases for the deployment of video by banks and credit unions today? Chris Gill: There are really three different categories of use cases that we've seen in the market. Chris Gill: The biggest one is really around improving branch operational efficiency and in this case the institutions are looking to impact the staffing costs in the branch where they're servicing the drive-up, and they may have certain tellers that [00:03:30] are servicing the drive-up. Whereby replacing the drive-up lanes with ATMs with two-way video, they can impact the staffing levels in the branch and reducing the costs of operating those branches. At the same time, sometimes, there are some branches where the drive-up area is removed from the lobby area, and it creates some inefficiencies in handling branch traffic, so a video solution there can again, help with the operational efficiency [00:04:00] and require less staffing. Chris Gill: We do see there are some instances where there are certain types of branches where the use case is more compelling. We've had a couple customers that are looking at in-store supermarket branches where they're eliminating the teller counter and replacing it with ATMs with two-way video. That way they can focus in those branches on opening up new accounts and interacting with people in the store and not doing transactions so that's kind of [00:04:30] one use case in this category. Chris Gill: Another one would be where they have branches in smaller markets or remote markets, where the low transaction volume branches, yet they still have to maintain a certain minimum level of staffing to handle transactional activity. And in those cases again, they could really eliminate the teller role but still provide the routine transaction capabilities but with video agents instead of tellers in a branch. So for the most [00:05:00] part improving operational efficiency is really the primary business case. Chris Gill: Now, I think the use case around institutions that are looking at expanding their branches into new markets or to fill gaps in their existing markets, but they're looking to do it at a lower cost. So we've had discussions with a number of organizations that the opportunity here is to build a branch where they can still provide routine transactions using video, and they [00:05:30] have a couple people in the branch that are there for customer service and opening up new accounts. So it's perceived as a way of not having to spend as much money on a new branch, but they can still provide that face-to-face service albeit over video. Chris Gill: And then the last kind of use case that we've seen is around improving customer convenience and hours of operations. So some institutions have video tellers that are available until [00:06:00] let's say 7:00 PM or even 10:00 PM, that provides a competitive advantage in the market where they can provide teller service at longer hours of service. Or we've seen a couple institutions that are in markets where they are competing against institutions that are seen in stores that are offering longer hours and so their competitive response is offering video to match their competitor's hours of operation advantage. Chris Gill: So in North America, I would say those are really the key use cases. Now in, [00:06:30] outside of the US, we've seen, typically in the Middle East, where they're using video primarily from an expanded transaction set point of view. So for example, the Middle East where they can provide greater withdrawal amounts in cash leveraging video rather than enabling at an ATM, so they can provide longer hours for that but provide that capability leveraging an ATM with video. Chris Gill: So again, in some markets they're looking at the [00:07:00] ATM with video as an opportunity to provide additional transactions that cannot be done on a standard ATM. Scott Anderson: Interesting, so lots to think about for financial institutions who are trying to make some decisions around what video might look like as part of the retail banking strategy. What do you think some of the key criteria that institutions need to consider when they're contemplating video as part of their retail banking strategy? Chris Gill: So I think there are really three different areas that institutions need to consider when contemplating [00:07:30] video. Chris Gill: Number one, is looking at their customers and members, currently serving or in the markets that they're looking at serving. So we've done some research in this area around consumer acceptance of self-service and video and not surprisingly younger consumers tend to be more self-service oriented and so they tend to have a higher level of interest in video than older consumers okay. So looking at your existing customer [00:08:00] member base, or the markets that you're in, it's important to really look at the characteristics of those consumers and are they more open to using alternative methods to doing their transactions than other segments are, so I think that's number one. Chris Gill: Secondly, is important to look at what kinds of activities are they doing, are you doing in the branches and again, to some extent, the customer mix. So are you doing fairly routine deposits and withdrawals in your drive-ups [00:08:30] or in the lobby that can be ea
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