Forrester Research Report on Five Trends Shaping Digital Banking

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Trends 2013: Five Trends Shaping
The Next Generation Of North American
Digital Banking
by Catherine graeber, May 1, 2013
For: eBusiness &
Channel strategy
Professionals
Key TaKeaWays
Customers’ digital Financial expectations are high
With the proliferation of digital devices, consumers are highly connected to
their financial providers. And with adoption of each new device comes higher
expectations of those providers, especially among the younger generations. Get it
wrong and you risk losing their loyalty.
our app-driven World Will Require Flexible and extensible digital
platforms
Creating a durable competitive advantage, one that can’t easily be copied, includes a
move to open platforms. An open platform strategy will allow financial firms to use
third-party providers to create app solutions that will create differentiation through
a personalized user experience and segment-specific capabilities.
successful Firms Will identify and design For Cross-Channel
experiences
Customers move between channels during complex sales and service interactions.
But channels are not integrated, causing broken experiences. The next generation of
digital banking will identify when human assistance is needed and help customers
start a process in one channel and finish in another, gracefully passing information
between the channels.

© 2013, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available
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For eBusiness & Channel Strategy Professionals
Why Read This Report
In this report we explore five trends that will affect the next generation of digital banking. Rising digital
customer expectations, advances in technology, and continued digital disruption threats from outside the
industry will change the game for banks and credit unions. eBusiness and channel strategy executives who
succeed in their efforts will be those who understand the urgent need to reinvent today’s digital financial
services to both stay relevant to digital customers and thwart disruptors determined to take over those
customer relationships.
Table Of Contents
Five Trends Will Affect The Next Generation
Of Digital Banking
1. Rising Expectations Of Digital Banking
Customers
2. Use Of Open Platforms To Differentiate Digital
Offerings
3. Mobile Innovations That Solve Customers’
Real Problems
4. The Digital Customer Need To Cross
Channels For A Single Interaction
5. Continued Threats From Digital Disruptors
Supplemental Material
Notes & Resources
Forrester interviewed vendor and user firms,
including: Fiserv, Intuit Financial Services,
Moven, Personetics, and Simple. We
also used data from our global Consumer
Technographics®
surveys in this report.
Related Research Documents
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April 1, 2013
2013 Mobile Trends For eBusiness
Professionals
February 13, 2013
Digital Customer Experience Trends To
Watch, 2013
January 30, 2013
Global Financial Behaviors, 2012
January 28, 2013
Next-Generation Digital Financial Services
March 11, 2011
Trends 2013: Five Trends Shaping The Next
Generation Of North American Digital Banking
by Catherine Graeber
with Benjamin Ensor, Tiffani Montez, Peter Wannemacher, and Douglas Roberge
2
15
May 1, 2013

Trends 2013: Five Trends Shaping The Next Generation Of North American Digital Banking 2
© 2013, Forrester Research, Inc. Reproduction Prohibited May 1, 2013
FIVE Trends Will affeCT THE NEXT GENERATION OF DIGITAL BANKING
Two years ago Forrester laid out our vision of the next generation of digital financial services, arguing
that eBusiness and channel strategy executives needed to build a new generation of services that are
simple, ubiquitous, personal, empowering, and reassuring.1
Changing digital financial customer
behavior, advances in technology that we see in the marketplace, and our work with clients all make
clear that those trends are already shaping digital banking in North America in 2013.
1. Rising Expectations Of Digital Banking Customers
Getting digital banking right is more important than ever. Digital customers aren’t just comparing
your offerings against other financial firms; they are comparing the experience you deliver against
all other firms that are using digital channels to sell and service. It is critical that digital banking
teams understand the people they are developing for when they create digital solutions. Digital
banking teams can get this right by understanding:
■ Digital financial adoption and behaviors. Consumers continue to connect to their financial
providers wherever they are, aided by the growth in mobile device ownership. Seven in 10 North
American online adults are active online bankers, while one in five is an active mobile banker (see
Figure 1-1). The activities that mobile bankers conduct mirror what we see in online banking —
for now. As long as mobile banking functionality mirrors online banking functionality, mobile
bankers don’t have the opportunity to do more. The top three mobile banking activities in the US
are: 1) checking a balance; 2) viewing a recent transaction; and 3) transferring funds between
accounts.2
With many remote deposit capture (RDC) offerings coming to market last year, 13% of
online adults who have done mobile banking activities in the past three months reported
depositing a check by taking a picture with their mobile device (see Figure 1-2).3
■ The most mobile-savvy generation. Gen Yers (ages 24 to 32) are the most mobile-savvy
generation, followed closely by the younger Gen Z group (ages 18 to 23) (see Figure 1-3).4
In terms
of activities done on a mobile phone at least monthly, Gen Yers lead in almost every category. They
are the generation most likely to use a mobile device to research products for purchase and to
apply for the product. This is key for financial firms developing mobile solutions — know your
target customers, and understand where they are in their financial lives. Digital banking teams
developing mobile sales capabilities will need to include life-stage-appropriate products for these
segments, such as credit cards and auto loans. Other banks should follow the example of leaders
like USAA that have begun to promote their products and generate sales leads through mobile.
■ The cost of not taking mobile seriously. In our Technographics research, we found that roughly
one in eight online Canadians say they would consider switching banks if “another firm offered
better mobile banking services.”5
Google recently did a study on mobile banking that found that
two in five mobile users will turn to a competitor’s site if their bank is not mobile-optimized.6
And 48% of US mobile users report they feel frustrated and annoyed and believe “the company
doesn’t care about my business” when a site doesn’t work well on a mobile phone.7

Figure 1 Digital Banking Adoption And Behaviors
Source: Forrester Research, Inc.94621
The majority of online adults in North America use online banking1-1
Base: 57,449 US online adults (18+)
*Base: 5,359 Canadian online adults (18+)
Source: North American Technographics® Online Benchmark Survey (Part 1), Q2 2012 (US, Canada)
US Canada* US Canada*
Used online banking in the past three months: Used mobile banking in the past three months:
76%73% 22%26%
Sixty-nine percent of US mobile bankers check their balances, and 13% have deposited a check1-2
Base: US online adults (18+) who have done mobile banking activities in the past three months
Source: North American Technographics Financial Services Online Benchmark Recontact Survey, Q3 2012 (US)
Note: Not all responses shown
The top mobile banking activities done in the past three months:
(Seven of the top 10 responses shown)
Checked bank account balances
Viewed a recent bank transaction
Transferred funds between bank
accounts at the same ﬁrm
Deposited a check by taking a
picture of it with mobile phone
Paid bills at a bank’s or credit union’s site
Paid bills at a biller’s own site
Received text-message (SMS)
alerts from bank or credit union
69%
42%
28%
15%
13%
12%
11%

Figure 1 Digital Banking Adoption And Behaviors (Cont.)
Gen Yers are the most mobile-savvy generation1-3
Source: North American Technographics Online Benchmark Survey (Part 1), Q2 2012 (US, Canada)
Gen Y
(24-32)
Gen Z
(18-23)
Activities done on primary cell phone at least monthly:
Total US
Younger
Boomers
(47-56)
Older
Boomers
(57-67)
Golden
Gen
(68+)
Gen X
(33-46)
Base: 53,427 US online adults (18+) with a mobile phone
Send or receive SMS/
text messages
Access the Internet
Send or receive
personal email
Access social
networking sites
Research products
for purchase
Check financial
accounts
Purchase products
0% 100%
The data associated with this figure is located in the spreadsheet online.
2. Use Of Open Platforms To Differentiate Digital Offerings
Face it: Financial products became commoditized long ago. In the early days of the Internet, a web
presence could set apart a financial firm. And being an early leader in mobile banking had the same
effect. But now solutions offered through digital channels have become pretty much commoditized,
too. Few banks in North America have proprietary digital platforms; the vast majority use vendor
platforms. The downside to that? Banks have similar solutions with minor user experience
differences and struggle to differentiate their offerings.
Being able to offer something different from the competition is an important step in creating a durable
competitive advantage that can’t easily be copied. Doing this requires uncovering important, unsolved
customer problems that you can solve well and bring to market (see Figure 2). A move to more open
platforms will help digital banking teams innovate faster and differentiate by more easily incorporating
solutions by third-party providers — or a bank’s internal developers — via application programming
interfaces (APIs). Open platforms and the associated APIs will help digital banking teams:

■ Personalize a user’s experience. Consumers already use technology to get and create
personalized experiences across their lives — updating their Facebook profiles, building their
own music playlists on iTunes, and downloading tablet apps to match their interests. The next
generation of digital banking will need to be just as accommodating. We believe there is a prime
opportunity to do this for the micro-small business customer who wants to mingle personal
and small business accounts and wants an integrated experience when it comes to money
management and cash flow forecasting.
■ Deliver segment-specific capabilities. Open platforms allow for the introduction of
functionality that can be provided to specific segments of digital users. A large credit union
serving high-net-worth employees of several high-tech firms uses Intuit Financial Services’
digital banking open platform. The credit union needed to meet the sophisticated investment
needs of its members. Rather than waiting for Intuit to develop a wealth management solution
for all of its clients, the credit union was able to use Intuit APIs to quickly bring its members
access to Raymond James’ Investor Access Portal.
■ Bring new solutions to market faster. Another benefit to open platforms? Reducing the time
to market for new solutions. With slim internal development resources and a history of long
delivery times, banks can’t react to market changes quickly enough. But all this can change with
open platforms, as Crédit Agricole, the largest retail banking group in France, found. The bank
opened up its platform to external developers. Those developers created 19 new apps in six
months, compared with the two years it took the bank to create its own mobile banking app.
Figure 2 What Is A Durable Competitive Advantage?
. . . and bring the
solution to market.
A durable competitive
advantage gets created here.
. . . that you can
solve well . . .
Find an
important,
unsolved
customer
problem . . .

3. Mobile Innovations That Solve Customers’ Real Problems
Mobile’s momentum continued to accelerate in 2012 — with more than 1 million apps available,
more than 150 million tablets sold, and more than 1 billion smartphones in consumers’ pockets
globally. Most banks have just scratched the surface of mobile’s potential by moving online banking
functionality to the mobile device. Smart firms will create a mobile competitive advantage by
understanding how smartphones can solve the needs customers have today. Consider how the
following firms have innovated to do just that:
■ U.S. Bank makes it easier for consumers to switch banks with mobile photo bill pay. Why do
banks love online bill payers? Because they’ve got their electronic hooks into them and know
these customers will be hesitant to switch banks because of the hassle of having to unwind
online bill pay and establish all of their payees all over again at their new bank. U.S. Bank
recently introduced a mobile photo bill pay solution from Mitek Systems to knock down that
barrier. All a switching customer needs to do is use her mobile phone to take a picture of her
bill and the app does the rest — correcting for image distortion, reading relevant data, and
autopopulating all of the payee info (see Figure 3-1). The simplicity of the process will also help
U.S. Bank encourage existing bill payers to increase the number of bills they pay digitally.
■ Simple answers the question customers really want to know. Being able to quickly check
a balance on a mobile phone before attempting to make a debit card transaction is a real
convenience, especially for younger consumers. But that capability is a commodity these days,
not a competitive advantage. Simple, one of the newer US direct banks, understood that the
customer’s hidden need was to find out “What can I spend right now?” The bank’s Safe-to-
Spend feature does just that by using a customer’s current balance and subtracting pending
transactions and upcoming payments to create a forecast that can automatically show the user
what he can safely spend without overdrawing the account (see Figure 3-2).
■ Intuit solves the needs of mobile tax filers with simple returns. Through ethnographic
research, Intuit’s TurboTax group discovered a hidden need of young US taxpayers with simple
returns who wanted to use their mobile phone to quickly prepare and file their return.8
To meet
those needs, Intuit developed TurboTax SnapTax (see Figure 3-3). For the 2010 tax year Intuit
began offering the free iPhone and Android app in all US states. Rather than tax filers having to
input all of the salary and tax withholding info found on their annual W-2 form, they can use
their mobile device’s camera to snap a picture of the W-2. The form’s data is then imported to
the tax form. The tax filer answers a few questions and can file her return via her mobile phone
or on the Web.

Figure 3 Mobile Solutions To Solve Real-Life Problems
Adding a payee is a snap with a mobile device3-1
Source: Mitek Systems website
Steps 1 - 4
User logs in using two factor authentication, selects“Pay Bills”then taps“Use Photo Bill Pay.”
User then takes a photo of the bill for the payee they want to add.

Figure 3 Mobile Solutions To Solve Real-Life Problems (Cont.)
Unsolved customer need:“What can I spend right now?”3-2
Source: Simple website

Figure 3 Mobile Solutions To Solve Real-Life Problems (Cont.)
SnapTax uses the mobile camera to speed up tax filing3-3
Source: TurboTax website
4. The Digital Customer Need To Cross Channels For A Single Interaction
A multichannel strategy is a given in today’s digital financial services world. But multiple channels
bring challenges. Consumers are increasingly using multiple channels on a single financial journey
(see Figure 4-1).9
Six in 10 US consumers who researched online and applied for a checking
account or a life insurance policy subsequently applied for the product in an offline channel (see
Figure 4-2). Typically a cross-channel user begins by serving himself but moves to a different
channel to obtain human assistance. But the reality is that a cross-channel journey often results
in a broken customer experience. And it is critical to maintain the loyalty of cross-channel users.
Wells Fargo recently reported that its customers who use four channels are 1.8 times as profitable
as customers who use one.10
Few firms dissect the customer journey across channels to determine where developing a cross-
channel experience is warranted. For example, offering human assistance to an online researcher
to select the right product and apply makes sense for complex products like mortgages. But for
credit cards — a simpler, lower-value product that customers apply for often — developing a cross-
channel experience would not be warranted. To adequately serve the cross-channel customer, digital
banking teams will identify the cross-channel opportunities that can:

■ Help online researchers get offline human assistance on complex products. Forrester has long
advocated the strategy of right-channeling — getting customers to use the right channels for the
right interactions by balancing technology efficiency with human effectiveness.11
Consumers
look for human assistance to apply for a product when the process or the product is complex.12
State Farm Mutual Automobile Insurance built a cross-channel experience that allows auto
insurance applicants to switch channels at any time for human assistance (see Figure 4-3). In the
transition to an offline channel, the online researcher can forward his quote to his local agent.
■ Make it easy for those researching a product via mobile to transition to the Web to apply. A
cross-channel sales experience won’t always be online-to-offline. Expect to see mobile phones
play a role in the initial research process. But with its limited screen size, a mobile phone won’t
always cut it to apply, especially if a customer is not an existing client of the firm, so many
mobile researchers will want to switch to the Web to submit an application. Commonwealth
Bank of Australia offers its credit card applicants that functionality (see Figure 4-4). Mobile
researchers can use a credit card selector tool to find the best card product. They can continue
to use the mobile device to apply, but if they prefer, they can transition to the bank’s website to
complete the application process.13
■ Deliver intelligent contextual help in digital channels. When Isracard, the largest credit card
issuer in Israel, analyzed its call volume, it found that one-third of its calls related to specific
credit card transactions. To reduce the cost of those calls, the firm rolled out Personetics’ Digital
Banker virtual assistant in June 2012, embedding it in its online and mobile applications with a
chat-like interface.14
Think Siri for the iPhone and you’ve got the picture. Isracard receives about
1,000 inquiries a day through Digital Banker, helping customers get service assistance without
incurring the cost of talking to a call center agent. In the US, BBVA Compass Bancshares
worked with SRI International to develop a “Virtual Personal Assistant” to bring the simplicity
and reassurance of in-branch banking to the digital world using conversational natural language
understanding, reasoning, and an in-depth knowledge of banking.15

Figure 4 The Need For Cross-Channel Experiences
The percent of online researchers who move offline to apply differs greatly by product4-2
Source: North American Technographics® Online Benchmark Survey (Part 1), Q2 2012 (US, Canada)
Checking
accounts
64%
Life
insurance
55%
Mortgage
(refinance)
54%
Savings
accounts
57%
IRA
35%
Brokerage
18%
Credit
cards
24%
Base: US online adults (18+) who researched online and applied for
the above financial products in the past 12 months
Online researchers who applied offline:
(Branch, phone, mail)
Customers typically use multiple touchpoints in a single sales journey4-1
Source: September 29, 2011,“Best Practices In Multichannel Financial Services Sales”Forrester report
Consideration Decision PurchaseAwareness
Multichannel sales
Starts
purchase
Gets product
information
Asks a
question
Finishes
purchase
Email/mail
Internet
Mobile
Call center
Branch/agent
Receives
product offer

Figure 4 The Need For Cross-Channel Experiences (Cont.)
State Farm built a seamless cross-channel experience into the online application process4-3
Source: State Farm website
State Farm provides
contact info for the user’s
local agent on every page
in the quote process.
The users can send a State
Farm agent their online
quote at any point in the
process.

Figure 4 The Need For Cross-Channel Experiences (Cont.)
Commonwealth Bank allows mobile researchers to move to the Web to apply4-4
Source: Commonwealth Bank of Australia mobile website

5. Continued Threats From Digital Disruptors
Digital disruptors are unleashing a storm of innovation that is disrupting every industry, including
retail banking.16
The question for banks is this: Will you disrupt or be disrupted? In some ways
banks are at a disadvantage, in that they can’t always easily disrupt or quickly react to a disruptor
because they are in a highly regulated environment built on inflexible legacy systems. Expect to see
disruptors upset the status quo in 2013 in the following areas:
■ Direct banking. While disruptors like Moven and Simple are focused on taking customers’
primary checking accounts away from traditional banks with an “all digital” approach, we don’t
see that happening. Direct banking makes sense for products like high-yield savings, credit
cards, and mortgages — but not for checking, where the branch remains important even to
digital customers.17
But we do believe these firms are disrupting the industry with their focus
on simplicity and robust digital money management tools that are the hub of a user’s digital
experience. Traditional banks can take a lesson from these firms on how to simplify today’s
banking experience and deliver best-in-class usability.
■ Payments. Dramatic transformation in the payments industry is rare. But firms like PayPal,
the leader in online payments, and newer entrant Square, with a flat monthly fee for small
businesses to process unlimited card payments, have disrupted traditional payment providers.
Banks and card issuers did not address the payment needs of micro-small businesses, which
wanted a cheaper alternative to establishing a merchant relationship and did not want to be
tied to a terminal to take card payments. Banks and card issuers can expect more to come.
Digital banking teams serving the small business segment face a dilemma on how to win
digital payments revenue: Either reduce fees or invent a faster, cheaper, simpler alternative to
disruptors such as Square, Intuit GoPayment, and PayPal Here.
■ Lending. Firms like Prosper Funding, Zopa, and LendingClub were “digital disruptors” back
in 2006 before anybody was even using that term.18
In mid-2012, P2P lending passed the $1
billion mark.19
We believe the next disruption in the P2P space is crowdfunding, the funding of
startup companies by selling small amounts of equity to many investors.20
Firms like Kickstarter,
SoMoLend, and Rebirth Financial are a few of the crowdfunding firms. While banks may not
want to be directly involved with crowdfunding, smart firms will figure out how to leverage
P2P firms as an alternative referral source for small business startup customers that don’t meet
traditional underwriting criteria. If younger consumers and small business startups start their
lending relationships with bank alternatives, how will banks garner their loyalty down the road
as their credit needs increase?

Supplemental Material
Methodology
For its North American Technographics® Online Benchmark Survey (Part 1), Q2 2012 (US,
Canada), Forrester conducted an online survey fielded in April and May 2012 of 58,068 US and
5,635 Canadian online adults ages 18 to 88. For results based on randomly chosen samples of these
sizes (N = 58,068 in the US and N = 5,635 in Canada), there is 95% confidence that the results
have a statistical precision of plus or minus 0.4% of what they would be if the entire population
of US online individuals ages 18 and older had been surveyed and plus or minus 1.3% of what
they would be if the entire population of Canadian online individuals ages 18 and older had
been surveyed. Forrester weighted the data by age, gender, income, broadband adoption, and
region to demographically represent the adult US and Canadian online populations. The survey
sample size, when weighted, was 57,499 in the US and 5,347 in Canada. (Note: Weighted sample
sizes can be different from the actual number of respondents to account for individuals generally
underrepresented in online panels.) Please note that this was an online survey. Respondents who
participate in online surveys generally have more experience with the Internet and feel more
comfortable transacting online. The data is weighted to be representative of the total online
population on the weighting targets mentioned, but this sample bias may produce results that differ
from Forrester’s offline benchmark survey. The sample was drawn from members of MarketTools’
online panel, and respondents were motivated by receiving points that could be redeemed for a
reward. The sample provided by MarketTools is not a random sample. While individuals have been
randomly sampled from MarketTools’ panel for this particular survey, they have previously chosen
to take part in the MarketTools online panel.
Forrester also used data from the North American Technographics Finance And Customer
Experience Online Survey, Q4 2011 (Canada). This was an online survey fielded in October 2011
of 5,502 Canadian individuals ages 18 to 88. For results based on a randomly chosen sample of this
size (N = 5,502), there is 95% confidence that the results have a statistical precision of plus or minus
1.32% of what they would be if the entire population of Canadian online individuals ages 18 and
older had been surveyed. Forrester weighted the data by age, gender, income, broadband adoption,
and region to demographically represent the adult Canadian online population. The survey sample
size, when weighted, was 5,302. (Note: Weighted sample sizes can be different from the actual
number of respondents to account for individuals generally underrepresented in online panels.)
Please note that this was an online survey. Respondents who participate in online surveys have in
general more experience with the Internet and feel more comfortable transacting online. The data
is weighted to be representative for the total online population on the weighting targets mentioned,
but this sample bias may produce results that differ from Forrester’s offline benchmark survey. The
sample was drawn from members of MarketTools’ online panel, and respondents were motivated by
receiving points that could be redeemed for a reward. The sample provided by MarketTools is not a
random sample. While individuals have been randomly sampled from MarketTools’ panel for this
particular survey, they have previously chosen to take part in the MarketTools online panel.

Companies Interviewed For This Report
We would like to thank the individuals from the following companies and others who generously
gave their time during the research for this report.
Fiserv
Intuit Financial Services
Moven
Personetics
Simple
Endnotes
1
Rising customer expectations and the growing importance of the Web and mobile as sales and service
channels mean that financial services eBusiness and channel strategy executives need to fundamentally
improve the way they serve customers via digital channels. eBusiness and channel strategy executives
need to develop a new generation of digital financial services that are SUPER: simple, ubiquitous, personal,
empowering, and reassuring. See the March 11, 2011, “Next-Generation Digital Financial Services” report.
2
Consumers primarily use mobile banking for information. See the August 13, 2012, “The State Of Mobile
Banking 2012” report.
3
US mobile bankers mainly use basic services like checking account balances, viewing recent transactions,
and transferring funds via their mobile phones. See the January 28, 2013, “Global Financial Behaviors, 2012”
report.
4
Gen Zers live and breathe the Internet. Member of this generation — ages 18 to 23 — grew up with digital
technologies as a major part of their lives. Gen Yers — ages 24 to 32 — are at the age where they appreciate
and are interested in new devices and technology. They also (finally) have the financial means to buy them.
See the December 19, 2012, “The State Of Consumers And Technology: Benchmark 2012, US” report.
5
Source: North American Technographics Finance And Customer Experience Online Survey, Q4 2011
(Canada).
6
Source: “Our Mobile Planet: Global Smartphone Users,” Google, February 2012 (http://services.google.com/
fh/files/blogs/final_global_smartphone_user_study_2012.pdf). The study included survey data from 1,000
smartphone users.
7
Source: “Our Mobile Planet: Global Smartphone Users,” Google, February 2012 (http://services.google.com/
fh/files/blogs/final_global_smartphone_user_study_2012.pdf). The study included survey data from 1,000
smartphone users.
8
TurboTax is a division of Intuit. TurboTax estimates that 88% of 1040 and 1040-EZ tax filers will be able to
use the TurboTax SnapTax solution. Source: Intuit interview, March 2013

9
Customers often switch channels when buying financial products. Empowered with more information,
they increasingly expect a connected experience across all touchpoints. Most financial services firms built
their channels one by one, which results in poor customer experiences and lost sales when customers try
to switch channels. See the September 19, 2011, “Best Practices In Multichannel Financial Services Sales”
report.
10
Jonathan Velline, executive vice president at Wells Fargo in charge of ATMs and branches, recently spoke at
the Best Practices in Retail Financial Services Symposium about the firm’s multichannel strategy. In terms
of managing channels, he stated that the bank looks at channel and enterprise loyalty metrics, rather than
cost-cutting measures. Its goal is to increase customer engagement within all of its channels. Source: Best
Practices in Retail Financial Services Symposium, March 13-15, 2013.
11
CRM efforts won’t fix cross-channel experiences. Right-channeling — getting consumers to use the right
channels for transactions and interactions — will deliver superior experiences, retain customers, and lower
costs. This was outlined in a June 20, 2002, report titled “Right-Channeling Financial Transactions.”
12
We continue to believe that human beings remain the best sales and service channel for many high-value
interactions — such as converting mortgage researchers. See the March 11, 2011, “Next-Generation Digital
Financial Services” report.
13
Commonwealth Bank of Australia assigns a unique application number to every product application that
is started — via any channel. The bank ran a two-year project to integrate digital channels with in-person
channels and the bank’s multichannel customer relationship management (CRM) system. See the August 13,
2009, “Case Study: How Commonwealth Bank Of Australia Redesigned The Secure Site For Sales” report.
14
Customers who need help identifying a card transaction can use the virtual assistant to get information
as to when and where a purchase was made, any other purchases that were made that day, and if they’ve
purchased something from that merchant before. Think Siri for the iPhone and you’ve got the picture.
15
In 2012 BBVA announced it had been working for several years with SRI International to develop the next
generation of virtual personal assistant (VPA) technology beyond Apple’s Siri. In the future, BBVA plans to
expand VPA-based assistance to other channels.
16
Thanks to digital platforms, your customers live in a world of heightened expectations and abundant
options; they can get more of what they want, in more places, at more times, than ever before. Seizing this
opportunity, digital disruptors threaten to make you irrelevant by delivering a more compelling product
and service experience than you can and at a lower cost, often without even knowing that they’re upending
you. See the October 27, 2011, “The Disruptor’s Handbook” report.
17
The branch is the most used banking channel in the US. Sixty-eight percent of US adults visit a bank branch
at least once a year. See the July 26, 2010, “How US Banking Customers Use Different Channels” report.

18
These pioneers were actually like virtual banks, taking in deposits (from individual investors) and then
turning around and lending money out to individual borrowers. At first, government regulators were
unsure of how to oversee these firms, but that changed in 2008. Both Prosper and Lending Club spent time
in “quiet periods” in 2008 and 2009, where the firms operated but didn’t take in new money from individual
investors. This was due to the U.S. Securities and Exchange Commission (SEC) requiring that they register
all of the loans on their platforms with the government as promissory notes. Now all notes are registered
with the SEC, and financial results for both companies are publicly available.
19
The pace of P2P lending continues to grow for some firms like Lending Club. In February 2013, the firm
reported funding more than $120 million in loans for the month. Source: John Shinal, “Lending Club’s
peer-to-peer lending business growing,” USA Today, March 10, 2013 (http://www.usatoday.com/story/
tech/2013/03/10/lending-club-peer-to-peer-skype-e-trade/1974147/)
20
Crowdfunding is booming. Forecasts called for $2.8 billion to be raised worldwide in 2012. There are more
than 450 crowdfunding platforms. Source: “The new thundering herd,” The Economist, June 16, 2012
(http://www.economist.com/node/21556973).

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