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Inhibitors to buying online #2 – Financial Services Rizwan points out a revealing survey from Forrester as to why consumers do not buy products and services online. The post is set in the context of tangible – clothes, books, groceries etc. but it’s interesting how the research resounds in the world of intangibles such as Financial Services products and services. Inhibitors cited (by rank) are: 1. I want to be able to see things before I buy them 2. I don’t want to give out my personal financial information on the Net 3. I feel no need to buy products online 4. I prefer to research products online then actually buy them in a store 5. I don’t trust the products will be delivered in good condition 6. I’ve heard about bad experiences that others have had buying online 7. It’s too complicated 8. Delivery costs are too high 9. I don’t want to wait for products to be delivered Of this list, half, (items 1, 5, 8, 9) relate purely to tangible products, suggesting that it should be much easier to sell intangibles online as half of the inhibitors are irrelevant. So why are FS institutions finding it so difficult to transact online? Unsurprisingly, very similar factors apply. Rizwan suggests focusing on better product display and improving the security messaging on the site. The former is really about making products more understandable and accessible. In a world of broadband and rich media tools, a website is surely the easiest place to convey the complexities and subtleties of FS products. A well executed website will educate consumers of the benefits of a product category, use decision tools to guide them to suitable options, offer forums to discuss the alternatives and critically, simplify the acquisition process. The matter of security has particular resonance for me as it was a subject I spent many a late night sweating over early in my career in technology. The epiphany for me watching a presentation by Bruce Schneier (who writes excellent monthly posts) where he explained that the key to security was education and communication. Educate a set of users effectively on potential threats and they will become part of the solution. Ignore them and they will be part of the threat. Sadly, many finance houses still seem to adopt the “head in the sand” approach, relegating any security information to the depths of an FAQ section. More enlightened organisations are tackling the issue openly. On Bank of America’s online banking site, security is the first subject discussed. In the UK, The Co-op’s Smile bank currently even post a survey on it’s homepage to draw them to a section discussing how to ensure your online security. I’d add a third item to the list of “must do’s” and that’s to ensure communication is joined up across the channels. If consumers still see your website as a tool to research products, provide them with options to move them forward through discussion and selection to close. This could be offering a call-back from the contact centre, book an advisor meeting in a branch, or even seek the advice of others through open discussions. Just make sure the customer’s next step is towards buying a product from you rather than your competitor.
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It seems that September was the month for contact-less payments. Barclaycard launched the three-way OnePulse, touted as a panacea for Londoners as it combines a credit card with a contact-less payment store and the essential Oyster card for access to the Underground, buses and a growing number of commuter train services. The contact-less element of the card is based on VISA’s payWave system (adverts for which currently seem to adorn every major tube station) which can be used for payments up to £10 in value and similar the Oyster card can be automatically topped-up from your bank account. A respectable selection of retailers have already signed-up include BooksEtc, Thresher group Off-licenses, Eat sandwich bars, Krispy Kreme stalls, Yo! Sushi and Coffee Republic – indeed many of the stores you’d expect to see at a mainline train station or other places people want to be in, out and gone in a short space of time. Also, RBS has teamed up with the rival MasterCard for a trial of their competing PayPass system choosing to launch at a MacDonald’s drive-through in London and focusing efforts in the City and London Docklands. Finally in London, the Evening Standard has launched the Eros Card, ostensibly to bolster sales of the newspaper in face of free rivals The London Paper stable-mate London Lite. Further afield, VISA has extended the form factor of its payWave offering to a Micro Tag-embedded key fob. So what will make or break these initiatives? Essentially, it boils down to two related factors, positioning and critical mass. Establish enough well-targeted vendors on board and customers will see it as a worthwhile addition to their purse or wallet. So here’s my starter for ten to ensure any contact-less offering moves beyond a major metropolis trial: · Express-O Breakfast, lunch and coffee stores: Get the ubiquitous Starbucks to inter-operate its own stored-value card. Add in other major chains like Pret à Manger, Costa, Caffè Nero and that Decaf Soya Latte with wings will really fly. · Make Fast Food quicker: Some Burger King, KFC and MacDonalds already sport ‘express’ lanes – make these contact-less only and you can quickly get away from the screaming kiddy tantrums in the corner. · Meals ready sooner: Tesco Express, M&S Simply Food and Sainsbury’s local have become the corner shops of the 21st Century. Get your Chicken Tikka Masala and Jacob’s Creek on the table in time for Eastenders. · Speed reading: WHSmith has scraped a survival over the last few years with the success of its small outlets in train stations, airports and now motorway service stations. Get back on the road with your Werther’s Orginals, Red Bull and 80’s Dance Hits CD. · Feed the meter: Why-oh-why is there still parking that requires a fistful of coins? Especially when you’re in a hurry? Why not swipe in and swipe out like on the Underground? Finally – a word to my own bank, make a Debit card version of OnePulse, please!
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A colleague at Conchango posted a mail to the Financial Services Community asking I anyone else had noticed a polite letter from First Direct in their post this morning saying that they were due to impose a £10 monthly charge on accounts where with credits or an average balance of less than £1500. As a First Direct customer of many years, I thought I’d get online straight away to investigate. Unsuprisingly, such as story easily made the BBC News site front page and yesterday was sitting at No.2 of their most emailed articles. What did surprise me was the throw-away line that “85% of customers would be unaffected” So it does affect a whopping 15%!
Now, I’ve no idea how many customers FirstDirect have, but given that they are about the biggest telephone/internet operator out there I’m guessing that 15% amounts to rather a huge number of people. And in a highly competitive market like retail FS, giving marching orders to 15% of your customers is not something you’d enter into without carefully considering the consequences.
So why are they doing it? The competitive landscape certainly shows no sign of getting any easier. Market entrants such as Egg , MBNA and more recently ING have extended their reach from savings and credit cards to personal loans, insurance and mortgages – products where margins are healthier than the standard current account that remains the anchor of the high street players and their phone and web spin-offs. The FSA also continues to extend its influence and make financial products more ‘transparent’ and fair to customers, reducing the ability for providers to subsidise free current account banking with high penalties for overdrafts.
The BBC quotes First Direct’s CEO Chris Pilling as saying "Some customers are more important than others because those customers who have the deepest relationship with us, benefit from the offer we have got". Well, that’s certainly true of most businesses, though few would state it quite so publicly. It also says that they want to ditch unprofitable customers with single products. If you look at who’s ‘in’ and who’s ‘out’ of their favourite customer list, it looks like they are employing some pretty drastic skimming.
Now, £1,500 in monthly deposits totals £18,000 a year. To achieve that (assuming you lose roughly a third of your income in tax and NI), you’d need to be earning around £27,000 a year. A quick glimpse at the National Statistics website (if I read it correctly) places the UK median annual salary at just short of £19,500. To achieve a salary of £27,000 you would need to be in the top 30% of earners in the UK. 70% of the population amounts to one hell of an exclusion. Of course, there are other ways of avoiding the charge – take out higher margin products such as Mortgage, Credit Card, Loan, Savings account, car or house insurance or pay £12 a month for FirstDirectory – a product bundle including mobile phone and travel insurance. Either way, a lot of people are going to be upset.
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Moving home has long been regarded as a
stress-inducing activity, so when on Friday after six months of grief, my
partner and I finally exchanged contracts thinking it would be plain sailing
and paint pots from hereon in. Then I went about contacting the various
companies that provide Financial Services to me and realised I was wrong.
Now,
I’ve consolidated FS providers a lot over the past few years, as although I do
review performance and pricing of financial products, I really don’t have time or
inclination to review every single product on a regular basis to ensure I get
absolutely the best value for money every time. As long as I’m happy it’s in
the top 10-20%, and it convenient and flexible to acquire and service, I’m a
happy bunny. I’m guessing I’m far from the only person out there like this. Besides, there’s been so much consolidation
and acquisition in retail financial services to drive better profits, customer
service is surely razor-sharp to reduce churn. Right? Well, let’s see…
Company
1: My “Bank”
– Changing my address is about the only thing I you can’t do with their
website, so I had to phone the call centre. But this is never a chore, as they
are the undisputed masters of phone banking (and phone insuring, investing
etc.). One brief and pleasant call (at 9pm) to the consistently well-trained call
centre updated two current accounts, two savings accounts, a credit card,
mortgage, an ISA, and a share dealing account. These guys live and breathe
customer-centricity.
Company
2: Credit Card – Another good website that easily
lets me manage my account, view previous bills and order additional cards for
my nearest and dearest (yeah, right!) – there’s even a link to change my contact
details. Unfortunately, I’m told I’m not eligible to do so as either I have a
corporate card (which I haven’t), may not be the main account holder (which I
am) or may not have the card registered with the website(which I have). Ggrrrr!
Frustrating, but the call centre is open 24/7 and they sort out the address
change quickly.
Company
3: ISA – In the days when I was a “rate tart”
paying off my MBA tuition fees, I used to have a credit card with these guys.
They also offered competitive car insurance where I got a further 10% discount
for paying with the card (cunning ploy for further revenue, but I paid off
straight away, so they never made further money out of it).
Within a couple of years I had taken out insurance
for two cars, one house and annual travel for two people and I also invested in
an ISA with them. Why? They offered well-priced, quality products (which
equates to good returns for investments and good coverage for insurance) which
were easy to acquire and service – They
made it easy for me to spend money with them. BTW – Changing my address
took under a minute online – and they even sent a confirmation email which
further reassured me that they had actioned the request.
Company
4: Two
pensions (previous employers), one
endowment (I know! I was young and impressionable at the time) – each
arranged through different brokers – and some
shares from demutualization. Aha! I
found a “Customer Log In” facility, but subsequently I struggled to find it
again when writing up this blog (it’s prominently displayed on the .co.uk
site, but very hidden on the .com site).
There’s a well polished registration screen
which confirms your identification, but then I notice they snail-mail your
password to you. Damn! Don’t really have enough time for that, so will have to
wait ‘til after I’ve moved. I resort to phoning the number on a letterhead. I’m
quickly passed to someone who takes a policy number, and other identification
details, notes the address and informs me the other policies have been updated.
(which I hadn’t even mentioned at this point). Impressed – I look forward to
checking out the customer site.
Company
5: Buildings and Contents Insurance: My partner
made this call as we never got round to adding my name to the policy. The ten
minutes of earache I got afterwards, indicated that things hadn’t gone well.
She spent fifteen minutes enjoying music on hold to be transferred on a crackly
line to an offshore call centre where the agent was poorly trained and had very
a poor command of English. She was further unimpressed when a call from our
solicitor requested that the new house goes on risk before we move in,
requiring a second call. Then a third call when the insurance company get the
dates wrong. I promise to do the rest of the calls and swiftly arrange for replacement
cover with a competitor’s website. These guys are REALLY BIG
in general and life insurance (among other things) and shouldn’t be encouraging
customers to walk away.
Company
6: Current
pension: I ‘Google’ the company name only to find they’ve re-branded under
the parent company’s name – which I’d never heard of, partly because they
hadn’t informed me (and I received an annual summary just a few weeks ago). Not
a great start to maintaining a dialogue with your customers. I do notice that
there’s a (well hidden) Customer Login page where I can register (again
passwords are posted) and make a note to do so after the move as I’d like to
review the funds I’ve invested in – hopefully they will show this and even
allow me to review and select new funds. A reasonably painless phone call
amends the address.
Company
7: Life policy:
Another name change I was unaware of and adding “.com” to the company name
directs to me to a site which boldly declares “This web site is for intermediaries and investment professionals only”,
but then doesn’t provide me any direction of where to go as a customer.
When I phone them, I discover they had my previous address on file (from renting
some 8 years ago). Given that the policy was taken out in support of the
purchase of my current home, I was surprised they were so out of date. They’re
now part of a multi-national offering pretty much the full range of consumer
finance products – any of which I may have taken them up on if they’d taken
steps to maintain a dialogue with me.
Company
8: Financial Adviser: The BT ‘1571’ service that
replied when I rang wasn’t even in the realms of acceptability – I didn’t even
know whether I’d called the right number. An email I sent not-so-long-ago when
I wanted to up my pension contributions also went unanswered. I won’t be
contacting them again. Ever.
So what can providers of Financial Services
products draw from this little episode?
- An
informative customer-centric website allows interaction with an
organisation that is relatively cheap to maintain, can be accessed when it suits the customer,
and allows an organisation to target promotions relevant to each customer.
Provision of snapshot account or portfolio positions will encourage
customers to use the site regularly. The opposite position of a low-grade
call centre with poorly trained and ill-informed agents will have
customers running a mile.
- Maintaining
full, accurate and up-to-date contact information for is surely
kindergarten-level CRM. Simply keeping an email address provides a cheap
and effective way of communicating with your customers. Letting customers
know their monthly or annual statement is available on the website or that
an insurance policy is approaching renewal pulls customers back to a
site. Company 3 are particularly
good at this, which probably explains why I’ve adopted so many other
products from them.
- Good site
design from the homepage down
will draw in existing and new customers alike. Company 7’s website told me
“We’re not interested in you”. Company 6 may offer a good service online,
but they weren’t shouting about it and Company 4 gets it spot-on (at least
pre-login) – but only from the .co.uk site. The .com
site (providing corporate brochureware site) omitted the critical “I’m a
customer – CLICK HERE” link – or makes a good job of hiding it.
- Tightly
integrating and dovetailing the comms channels provides a consistently
good customer experience (Richard and
Paul have
both written about this). Company 1 send me text messages when my accounts
hit a defined threshold of funds – I log on, move money over from another
account and spot a message (advert) for a new service inviting me to speak
to someone in the call centre. If a company has a great website where I can
service my products letters I receive from these companies should
advertise the fact. Equally, If I’m “enjoying” music on hold, let me know
the website can deal with many of my requests.
- Finally,
a wish-list item. I have reasonably straightforward finances and even then
I was surprised at how many FS organisations I have a relationship with.
I’m not even in the position (yet, at least) of being in the market for
some of the more exotic (and often profitable) products out there. What
I’d really like is a one-stop shop where I can see the position for all my
financial services products from all my providers – if someone offered
this I’m sure to spend a lot of
money with them.
I’d be interested to know how others have
fared when interacting with financial services companies – let me know the
good, the bad, and the downright ugly.
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There’s been a visible increase in the take-up of Agile development methodologies in the last year or so, but it’s often just seen as ‘the latest fad’ when we initially start talking to an existing or prospective customer about how it can increase the return on a technology investment. As a relative ‘old timer’ in IT (some 12 years and counting) I can relate to people’s ambivalence to the ‘next great thing’ being trumpeted. Part of the problem is communication.
I worked with an organisation not too long ago who were so impressed with how productive and responsive the Conchango team were in delivering an application using agile methods, they thought they’d adopt it across the whole programme we were involved in. The trouble was, this fact was communicated to the troops on the ground with a blanket email that said “Agile is great. We’re gonna use it with immediate effect. Read these ten documents to find out more.”
Unsurprisingly, a good chunk of the next couple of weeks was spent pulling people down from the ceiling and explaining that it wasn’t the latest ‘junk Yank management fad’ and was really just about applying a bit of common sense to your day-to-day.
A couple of weeks ago I had a rare respite from the daily commute into London and spent a day in the leafy suburbia that is Egham (well, at least it had a Nero’s these days). I sat next to a colleague who was preparing a for a presentation he was giving to technologists in the Financial Services sector about Conchango’s pedigree in delivering Business Intelligence solutions in the sector. He’d recently completed a BI projected that we’d delivered using the ‘Scrum’ agile framework and wanted to talk a bit about his experiences and posed aloud the question “How do you best go about selling ‘Agile’?”
“It depends who you’re selling it to” was the perhaps unsurprising consultancy response, but a valid one all the same. Having worked with a few clients in the last couple of years where the Agile methodology proposed was new to most people involved, I’ve often been in the position of needing to explain what it’s all about and how it’s going to impact various members of a project or programme team, from business analysts, developers and testers through to infrastructure, training and support folk and we certainly shouldn’t forget the user community, investment board and other stakeholders.
People are often somewhat deflated when I open with “Well, essentially it’s about common sense”, though many are quick to recognise that sense is typically un-common when it comes to IT project delivery. Agile has lots to offer for people involved throughout the whole project lifecycle:
· Prioritisation of activity by business value helps ensure a return on investment.
· Focus on delivering production quality increments of functionality helps avoid the last minute scramble of bug-fixing (which all-too-often gets cut short).
· Empowering the delivery team helps foster a sense of ownership and pride in what is being delivered.
· Honesty and transparency in the process, which is often the biggest culture shock helps highlight problems sooner rather than later, reducing the cost of corrective action.
· Continuous feedback on progress means that what gets delivered is what users and stakeholders actually want
· A recognition that change is inevitable and should be built into the process helps avoids the bun fight of change management, late delivery and cost overruns.
In short, Agile is about a set of principles that are pretty obvious if you take the time to reflect on it. The challenge is in living by a set of disciplines that make it work – which will be the subject of my next post.
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I read an interesting article recently in Wired magazine about a Spanish start-up, Fon, who are promoting a free WiFi Community.
The principle is simple - share your WiFi Internet connection with other users and you can use theirs wherever you spot one in range. Initially the service is being offered to people and organisations willing to share their connection for free ("Linuses"), This will extend later also to "Bills", someone who wants to make some money from opening up their connection. (Bet you can't guess where the names come from!)
To join the community you need to have a compatible router or cable-modem. Currently only some Linksys models are available, but you can also buy on these on the site at a discounted rate of $25 / €25 (while stocks last).
You then need to install some FON software onto the router, register your connection and you're away. Fon ask for your postcode, so that you can easily look-up where the nearest Fon hotspot is from the Fon Map, (which overlays Google Maps).
They also seem to have addressed security reasonably - the Fon blog explains how a separate VLAN is created on your wireless connection, segregating 'public' wireless from 'private'. I'm not sure yet though if you can also throttle the bandwidth you make available publicly using the software - I'll let you know as soon as I replace my now-ageing 11mbps Intel WiFi with a Fon-friendly Linksys one!
Throw a wi-fi phone into the mix and mobile telco's may have another thing to worry about!
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OK, OK, OK, I admit I should know better, but when reasearching SharePoint 2007 for a client, I just couldn't stop myself from downloading the Beta 2 release of Office Pro Plus (with added caffeine, presumably) 2007. I should probably admit at this point that as a business consultant Word; Outlook and Powerpoint are my tools of the trade, and messing around with a "production" environment is never a good move. Sometimes you just need a new toy to play with on the tedious commute home from the City.
The install itself couldn't have been smoother - all I need to do was enter the product key and press the 'Upgrade' button rather than install a new copy (spotted my first mistake yet?) and 20 minutes and 1 restart later it was done.
I should have known something was amiss when I spotted the icons for the Word docs on my desktop now sport a '2003' banner across the bottom. The Office team just couldn't resist introducing a new default document format (*.docx this time), but hey, who needs standards and interoperability anyway?
But boy, was I in for a shock when I opened Word! Someone had stolen my menus, poured a good dose of growth hormones into the toolbar and hid all the really useful stuff (Open, Close, Save, New, Print and Send) under a "Office" button in the top left of the screen. The real fun started this morning, when needing to get a revised document out of the door I complete froze when I couldn't find the "Undo" button. In a few minutes of blind panic, I couldn't help feeling like I was in last night's Dr Who repeat with the Cybermen telling me I needed a brain upgrade.
Panic over, Undo and Redo have been upgraded to the "Quick Access" (ha-ha!) bar next to the "Office" button, I found that there is an incredible lack of consistency in the ways you have to interact with the new applications (and I've only been brave enough to open Word and Outlook so far).
As Office is Microsoft's cash-cow, they obviously need to keep the upgrades rolling in order to keep the cash flowing in, the contextual toolbars are helpful and native RSS support in Outlook means I can read blogs on the train. I can't help thinking though that if I'm struggling, as a hardcore laptop-wielding Office user of 12 years or more, who in their right mind would recommend an enterprise roll-out across that will have helpdesk phones across the planet ringing non-stop. I just hope M$ offer a 'classic' interaction model in the final release.
NB: This blog entry was written in WordPad whilst I prayed that Marlon doesn't give me an earful when I ask him to return me to the relatively simple world of Office 2003.
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