Next Generation of Banking: Faster

NEXT GENERATION
OF BANKING.
CUSTOMER EXPECTATIONS ARE EVOLVING
& BANKS NEED TO KEEP UP
THE LATEST INSTALLMENT OF OUR:
Near Future Of Series

ABOUT.
At LHBS, we believe in continuously observing and
learning from what’s happening in the market.
We’ve created our Near Future Of (NFO) series which
consists of inspiration and insights reports designed to
highlight what is happening today and how it can
share tomorrow for brands, businesses and entire
industries.
This issue explores the key challenges of traditional
banks, and evolving consumer expectations in the
world of banking and ﬁnance to help legacy
organizations to identify opportunities for
differentiation and adding customer value.
We hope you enjoy this deck and ﬁnd inspiration
for your innovation process.
DISCOVER DEFINE DEVELOP DELIVER
LHBS // NFO: NEXT GENERATION OF BANKING INTRODUCTION.
- 03 -

CONTENTS.
CONTEXT
CHAPTER 02: BANKS NEED TO BE FASTER
- BE OBSERVANT
- BE RESPONSIVE
- BE QUICK
EXPLORE YOUR OPPORTUNITIES
P 08
P 26
P 54
P 81
P 103
- 03 -

LHBS is a marketing & innovation firm with
offices in Berlin and Copenhagen. We help
clients to understand today's emerging
customer expectations and to shape their
business offerings for tomorrow.
www.lhbs.com
Kathleen McCaffrey
Analyst at LHBS
lhbs.com | kmc@lhbs.com
Once run by a few large banks, it has been taken over by
smaller, more nimble and technology-driven disruptors
who are putting the power back into the hands of
consumers.
Banks need a more customer-centric way to do business
and to differentiate themselves in new ways.
This report will explore the most crucial changes
happening in the finance industry, and how legacy
banks need to act today to be around tomorrow:
• Banks need to be bolder by standing for a value or
experience that differentiates them from the crowd.
• Banks need to be faster by identifying changing trends
and expectations, and applying insights to quickly
innovate around new opportunities.
• Banks need to be smarter by harnessing their mass of
customer data for more personalized experiences and
adapting external technologies and knowledge.
THE FINANCE INDUSTRY IS EVOLVING.INTRODUCTION.
INTRODUCTION.LHBS // NFO: NEXT GENERATION OF BANKING
- 04 -

CHAPTERS
INTRODUCTION.LHBS // NFO: NEXT GENERATION OF BANKING
- 05 -

BANKS NEED TO
BE BOLDER.
BANKS NEED TO
BE FASTER.
BANKS NEED TO
BE SMARTER.
CHAPTER 1 CHAPTER 2 CHAPTER 3
CONTENT.LHBS // NFO: NEXT GENERATION OF BANKING
- 06 -
Download
chapter I here
Coming soon

In chapter 01, we explored the five key expectations defining today’s generation of consumers.
Here we will dive deeper into one of the fastest growing and most challenging expectation of real-
time services, and how exactly traditional finance brands can react, respond and adapt to this.
CHAPTER 01 RECAP.
IN CHAPTER 01 WE EXPLORED
5 KEY EXPECTATIONS OF TODAY’S
CONSUMERS.
- 07 -

CONTEXT OF CONSUMER
EXPECTATIONS.
CONTEXT.LHBS // NFO: NEXT GENERATION OF BANKING
- 08 -

BANKS NEED TO RE-EVALUATE HOW THEY
MONITOR THESE EXPECTATIONS, BECAUSE
TODAY, CONSUMER EXPECTATIONS ARE
CHANGING AT AN INCREASINGLY FASTER
PACE.
- 09 -

THE RATE OF CHANGE
TODAY IS EXPONENTIAL.
“translates to us experiencing 20,000 years of
change in the 21st century.”
Google’s head of engineering, Ray Kurzweil recently stated that this…
- 10 -

SPEED ITSELF HAS EVEN BECOME AN
EXPECTATION OF BRANDS BY CONSUMERS.
IT QUICKLY MADE THE TRANSITION
FROM ‘NICE-TO-HAVE’ TO ‘NEED-TO-HAVE’
AS WE BECAME ACCUSTOMED TO AN
ON-DEMAND ECONOMY.
- 11 -

EXAMPLES OF EXPECTATION-
DRIVING SERVICES.
Netflix are the No.1 example of always
providing customers with new content
to discover, personalized for their likes,
dislikes and past actions.
CUSTOM RECOMMENDATIONS
FOR NEW CONTENT
Prime dramatically changed how
consumers thought of delivery for
products, introducing next-day delivery
and quickly turning it into a standard.
NEXT-DAY DELIVERY AS
STANDARD
Now seen across a multitude of industries,
one to look to is airlines. Real-time
notifications around flight information is
becoming the norm.
INSTANT NOTIFICATIONS
OF ACTIVITY
- 12 -

Send money in
minutes within
banking apps.
Quick transfer of
money worldwide.
Financial information
and comprehensive,
personalized ﬁnancial
plan in minutes.
AI for mortgages -
streamlining on-
boarding and
generating best offers.
When it comes to the banking industry, here’s just
a handful of the businesses that exist to solve the
pain-point of traditionally slow processes:
Speeding up the
tenancy deposit
system.
- 13 -

So what’s contributing to this
ever-growing expectation for
brands to deliver value faster?
- 14 -

50%
MOBILE APPS
Over 50% of Millennials use
mobile apps exclusively.
30%
DISRUPTORS OFFERING
ALTERNATIVE SOLUTIONS
30% of Millennials already have at
least one financial product from
an institution that isn’t their bank.
80%
PERSONALIZATION
80% of consumers said they’d
be more likely to do business
with a company who offered
personalized experiences.
OVER
Being smaller, simpler versions of
desktop sites essentially makes the
mobile app a shortcut for users.
Start-ups arose to replace traditional solutions
with specific solutions minus the pain points,
and to enhance usage of financial services.
Personalizing the CX is at the forefront of many
businesses, which to consumers means the most
relevant products and info is reached faster.
CONTRIBUTORS.
Source: Anatomy report, CCG Catalyst, Epsilon
- 15 -

ALWAYS LOOK BEYOND YOUR
INDUSTRY FOR TOMORROW’S
EXPECTATIONS OF BANKS.
REMEMBER:
- 16 -

You are no longer competing only within
your industry, but with every business in
the world on customer experience,
regardless of industry.
Newer ﬁnance businesses are
already acting on this in their
design and user experiences.
- 17 -

“We try to
reimagine how a
bank should work
and we tried to
build something
that is like using
Uber or Spotify or
any of these apps
you love to use.”
VALENTIN
STALF.
CO-FOUNDER
AND CEO,
NUMBER26.
- 18 -

87%
OF CONSUMERS NO LONGER MEASURE
BRANDS’ EXPERIENCES AGAINST THEIR
COMPETITORS, BUT AGAINST A SELECT
FEW, SUPERIOR BRANDS (E.G. AMAZON,
NETFLIX, STARBUCKS ETC.).
Source: Wunderman: Wantedness - 19 -

HOW CAN BANKS BEST
PREPARE FOR CHANGING
EXPECTATIONS?
- 20 -

02.
BANKS NEED TO
BE FASTER.
“It’s no longer the big beating the small, but
the fast beating the slow.”
Legacy companies need to focus on
increasing their speed in not only monitoring,
but also reacting to trends and changing
customer expectations with innovations.
New disruptors - particularly fintechs - built
on modern technologies have influenced
consumers’ expectations of what banks can
and should be doing.
While it’s not often the processes themselves
which are expected to be sped up,
consumers do expect that their banks are
responsive in their innovations that answer
real needs or reflect current trends i.e.
paying via mobile, international payment
options etc.
LHBS // NFO: NEXT GENERATION OF BANKING
- 22 -

WHAT GOALS CAN BANKS SET TO
KEEP UP WITH THE PACE OF CHANGE
OF CONSUMER EXPECTATIONS?
BANKS NEED TO BE BOLDERLHBS // NFO: NEXT GENERATION OF BANKING
- 23 -

BANKS SHOULD BE OBSERVANT TO
EVOLVING TRENDS AND SUBSEQUENT NEW
COMPETITORS, AND ACTIVELY RESPOND
WITH INNOVATIONS.
TO KEEP UP WITH THE INCREASING PACE OF
CHANGE THEY SHOULD CONTINUOUSLY
EXPLORE WAYS TO SUSTAIN AND QUICKEN
THIS INNOVATIVE WORKFLOW.
- 24 -

BE
OBSERVANT
BE
RESPONSIVE
BE
QUICK
THREE KEY BUSINESS GOALS:
1
To accelerated shifts in
customer experience with
effective monitoring.
With building, sharing and developing these
innovations through new ways of working
and effective collaborations.
With innovations that
answer these trends and
expectations.
BANKS NEED TO BE FASTER.LHBS // NFO: NEXT GENERATION OF BANKING
2 3
- 25 -

GOAL 01.
BE OBSERVANT
To accelerated shifts in customer experience
with effective monitoring.
- 26 -

Observing behavioral shifts, changing
expectations and even willingness of
consumers to adopt new solutions
should be a daily event.
- 27 -

JEFF
YABUKI.
“The only thing
advancing faster
than technology is
consumer
expectations.”
PRESIDENT
AND CEO,
FISERV.
- 28 -

BANKS CAN TAKE THREE STEPS TO
ENSURE THEY STAY RELEVANT TO
THEIR AUDIENCE, AND AVOID
BEING NEGATIVELY SURPRISED.
- 29 -

ROUTINELY
TALK
ACTIVELY
LISTEN
STORE &
SHARE
WITH YOUR
CUSTOMERS
DIRECTLY.
TO YOUR
CUSTOMERS ON &
OFFLINE.
YOUR INSIGHTS
WITH THE ENTIRE
TEAM.
- 30 -

ROUTINELY
TALK
ACTIVELY
LISTEN
STORE &
SHARE
WITH YOUR
CUSTOMERS
DIRECTLY.
TO YOUR
CUSTOMERS ON &
OFFLINE.
YOUR INSIGHTS
WITH THE ENTIRE
TEAM.
- 31 -

To keep up with changing expectations, and
to predict those greater shifts in societal
trends, banks need to connect with their
audience directly and often.
- 32 -

WHY ROUTINELY TALK WITH CUSTOMERS?
After direct engagement with
customers, especially face-to-face
interactions it’s hard to disregard
customer needs. This kind of regular,
personable interaction are powerful
ways to keep employee mindsets
focused on delivering value that
directly meets the needs of the
customer.
Through connecting frequently with
customers, more customer data can
be collected to create a more
complete audience profile.
“The person who holds the consumer
data has the power” Robert Bonwell,
CEO EMEA, JLL.
Power in this context meaning the
power of a successful product with
relevant marketing to customers, in
turn meaning a successful business.
By making direct engagement with
customers a habit, banks can build a
reputation of being a brand that
actively involves customers in their
development and decisions.
As customer experience becomes the
next competitive battleground, simply
talking with customers regularly
demonstrates a brand is not just
talking the talk, but walking the walk.
BECOME KNOWN FOR
CUSTOMER CARE
THE POWER IS IN THE
CONSUMER DATA
DON’T LOSE TOUCH
WITH AUDIENCE
- 33 -

Part of Zipcar’s rebranding scheme
saw them begin hosting regular
“member roundtables” which
brought together real customers
and Zipcar staff to interact directly
about their needs, desires and
experiences.
Customers were selected from their
new target audience - millennials -
and it created a powerful experience
that quickly changed their
employees’ mindsets and thus their
behaviors.
ZIPCAR HOST MEMBER
ROUNDTABLES.
EXPLORE SIGN
BEST PRACTICE.
LHBS // NFO: NEXT GENERATION OF BANKING // BANKS NEED TO BE FASTER.
- 34 -

Banks let their customers design
product experiences - they are now
product developers instead of just
end users.
Challenger banks like Monzo are
rolling out labs that involve users in the
testing of new features. This customer-
involvement is part of designing new,
relevant customer journeys and
releasing product iterations to growing
customer groups.
CUSTOMERS ARE
CO-DEVELOPERS.
EXPLORE SIGN
BEST PRACTICE.
- 35 -
A STEP FURTHER…

ROUTINELY
TALK
ACTIVELY
LISTEN
STORE &
SHARE
WITH YOUR
CUSTOMERS
DIRECTLY.
TO YOUR
CUSTOMERS ON &
OFFLINE.
YOUR INSIGHTS
WITH THE ENTIRE
TEAM.
- 36 -

Changing consumer behavior - particularly
online - is affecting the way banks are used to
operating.
Today banks - and every brand - need to do
less talking and pushing, and more seeking
out and listening - to customer needs,
opinions and complaints.
- 37 -

CHANGING BEHAVIORS.
“We’re finding it challenging to adapt to our customers’
behaviors. They tweet, they chat, they text; they don’t
want to go online and log a case.”
A recent quote from a customer support executive sums up
the shifting behavior of consumers when it comes to
engaging with businesses.
Consumers are no longer coming to brands with feedback
and complaints, but instead going direct to social channels.
Businesses now need to go to where their audience are -
and listen.
THE IMPACT ON BANKS
- 38 -

Why listening and not always
engaging directly? Well…
96%OF THE CONSUMERS
DISCUSSING BRANDS
ONLINE DON’T FOLLOW
THOSE BRAND OWNED
SOCIAL PROFILES.
Source: 188Bet Survey
- 39 -

WHY SOCIAL LISTENING?
This helps businesses to measure
brand popularity and overall
sentiment, within an environment
where customers are more likely to
speak their honest opinions.
Direct engagement, while it has it’s
benefits, can elicit less valid findings
as consumers are likely to not be
completely honest, especially when it
comes to criticism of the brand.
KNOW WHAT
PEOPLE ARE
SAYING ABOUT YOU
Brands can discover genuine
reactions and feedback to products &
services.
Brands can take these real reactions
from customers and react quickly with
improved service and campaigns
reflecting current trends, events and
societal issues their audience care
about.
With the greater number of people
talking about brands but not actively
following any of their profiles, brands
should avoid ‘vanity
measurement’ (counting brand
followers or likes) as a metric for
determining visibility and success.
Exploring beyond a following with
social listening can bring brands to
more accurately benchmark their
business.
AVOID MISSING THE
FULL PICTURE
PERFORM PRODUCT
RESEARCH
- 40 -

JetBlue are now able to monitor all
social media channels in one place,
enabling the airline to be more
responsive and less likely to lose
track of conversations.
JetBlue have collaborated with
startup Gladly, to help them
consolidate all their social channels
into one feed. Their new system
incorporates emails, phone messages,
and texts, as well as tweets and
Facebook Messenger conversations
together.
CROSS-PLATFORM
CUSTOMER SERVICE.
EXPLORE SIGN
BEST PRACTICE.
- 41 -

Coka-Cola have systems in place
that can identify when their product
name or that of a competitor is
mentioned or posted within a photo
- anywhere in the world - and
algorithms then determine the best
way to serve advertisements in
response.
It’s been found that ads created in
this highly targeted way are four
times more likely to be clicked on
than other methods of targeted
advertising.
COCA-COLA’S
INTELLIGENT ADS.
EXPLORE SIGN
BEST PRACTICE.
- 42 -
A STEP FURTHER…

SOCIAL LISTENING =
SOCIAL INTELLIGENCE
FOR BRANDS.
REMEMBER:
- 43 -

ROUTINELY
TALK
ACTIVELY
LISTEN
STORE &
SHARE
WITH YOUR
CUSTOMERS
DIRECTLY.
TO YOUR
CUSTOMERS ON &
OFFLINE.
YOUR INSIGHTS
WITH THE ENTIRE
TEAM.
- 44 -

A COLLABORATIVE TREND PLATFORM FOR
TEAMS BRINGS TOGETHER ALL THE MOST
RELEVANT AND IMPACTFUL INNOVATIONS AND
BRAND MOVES INTO ONE PLACE, INSPIRING
TEAMS TO INNOVATE AROUND OPPORTUNITIES
AND ANSWER CHALLENGES.
- 45 -

On this platform should be an
aggregation of the latest brand
moves and consumer insights to
keep teams up-to-date.
From this platform users will
begin to see patterns in behavior
emerging - or trends.
- 46 -

TRENDS ARE SIGNS
OF CHANGE.
Here’s some examples…
- 47 -

WHAT’S
HAPPENING.
In an effort to increase adoption and
security of their fingerprint
authentication cards, Mastercard are
enabling people to set up and verify
biometric identities from home.
Mastercard’s new battery-powered sleeve
can be sent to customers’ homes where
they can set up the fingerprint
identification, without having to go into a
branch. Mastercard see this new
possibility as a step towards encouraging
more people to adopt the biometric
verification feature - inexpensively and
conveniently.
WHAT BRANDS ARE
DOING ABOUT IT.
MASTERCARD
SCALE BIOMETRICS
FINANCE
SERVICE
CUSTOMERS
WANT
CONVENIENT
SECURITY
WHY IT’S
HAPPENING.
90%
60%
The two most important
factors when opening a
new account online was
“secure” and “easy".
SECURE
EASY
Source: IDology report
EXPLORE SIGN
- 48 -

MyPiggy is the new digital service
for families to begin teaching
children about the value of money
and financial responsibilities.
MyPiggy consists of a physical piggy-
bank with a digital display, where kids
can save money as cash or digitally,
both instantly showing up on their
account balance. Parents have a
connected app so they can always
keep an eye on how their children are
progressing with their savings..
MYPIGGY FOR
FINANCE EDUCATIONYOUNGER
PEOPLE ARE
SEEKING
FINANCIAL
ADVICE
WHY IT’S
HAPPENING.
WHAT’S
HAPPENING.
This demonstrates an
increased reliance from
younger generations on
their parents to teach
them crucial finance skills.
84%of Gen Zers rely on
parents or family for
financial information.
WHAT BRANDS ARE
DOING ABOUT IT.
EXPLORE SIGN
- 49 -Source: Raddon

The Plynk app allows small amounts
of money to be transferred between
friends with emojis, photos and GIFs -
to avoid those awkward moments.
The app can be described as a cross-
over between a messenger and a
money transfer app - made for
friendship groups. It is aimed at
younger people and students with the
goal of being used to split small bills
such as restaurant checks and taxi fares.
Users are also able to use their Plynk
account online, and receive a virtual
Mastercard when they sign up.
YOUNGER
GENERATIONS
WANT FASTER
TRANSACTIONS
TRANSFER MONEY
WITH AN IMAGE
WHY IT’S
HAPPENING.
WHAT’S
HAPPENING.
AVG
.PO
PULATIO
N
M
ILLENNIALS
G
EN
XERS
76% 85%93%
Younger generations
expect faster payments,
saying it is at least
somewhat important that
payments they make are
made in real-time.
WHAT BRANDS ARE
DOING ABOUT IT.
EXPLORE SIGN
- 50 -Source: Fiserv, Harris Poll 2016

FABIOLA
LEWANDOWSKA.
“Passively observing consumer trends is not enough.
Businesses should never stop asking “why is this
happening” and predicting how will it shape their own
clienteles’ expectations.
Seemingly non-related shifts in consumer needs,
expectations or new definitions of value can have the
biggest impact on your own business. After all,
remember that once your customer experiences a better
level of service or convenience, it will be almost
impossible for them to accept the way things were
before.
This is how you avoid being disrupted out of the blue.”
LHBS
CONSULTANT &
SIGNMESH
PRODUCT
MANAGER.
- 51 -

Employees already recognize
the beneﬁt of having frequent
insights within their team.
Source: LHBS Survey
97%BELIEVE THAT AN EFFICIENT
METHOD OF SAVING, SHARING
AND DISCUSSING INSIGHTS
WITH TEAM MEMBERS CAN
IMPROVE THE QUALITY OF
THEIR WORK.
- 52 -

KEEPING THE TEAM INSPIRED
& INFORMED ENCOURAGES A
CULTURE OF INNOVATION FOR
CONTINUOUS CREATION OF
NEW SOLUTIONS.
REMEMBER:
- 53 -

GOAL 02.
BE RESPONSIVE
To accelerated shifts in customer experience
with effective monitoring.
- 54 -

Responding to the evolving needs identiﬁed
through observing trends and expectations is
more important than ever because of the
increasing pace of change.
- 55 -

“RESPONSIVE” MEANS FASTER WITH
INNOVATIONS - NOT IN SPEEDING UP
ALL PROCESSES.
It’s important to note:
- 56 -

1. THEY INNOVATE IN THE RIGHT PLACES
2. THE INTERNAL CULTURE SUPPORTS
ACCELERATED INNOVATION
TO SPEED UP THE PROCESS OF
INNOVATION, BANKS MUST FIRST ENSURE:
- 57 -

IDENTIFY
STARTING
POINTS
THE GREATEST
NEEDS WILL GIVE
OPPORTUNITY FOR
INNOVATION.
CULTIVATE
CUSTOMER
FOCUS
CULTIVATING A
CUSTOMER-FOCUSED
CULTURE MAKES
INNOVATION THE NORM.
- 58 -

IDENTIFY
STARTING
POINTS
THE GREATEST
NEEDS WILL GIVE
OPPORTUNITY FOR
INNOVATION.
CULTIVATE
CUSTOMER
FOCUS
CULTIVATING A
CUSTOMER-FOCUSED
CULTURE MAKES
- 59 -

WHERE CAN BANKS IDENTIFY
STARTING POINTS FOR
INNOVATION?
- 60 -

The following survey saw
consumers’ rank their
“top wants” from banking brands:
Asking customers directly
what they want from their
bank can be one approach.
- 61 -

81%“Reward me for my business"
61%“Give me ‘anytime, anyplace’ access to my balance”
58%“See me as a person”
55%“Provide me with wealth-building advice”
52%“Show what i’m spending on and how to save”
Source: CGI Group
- 62 -

This can give banks starting points for innovations. A problem with
this is that often customers will make general suggestions about
how they would like their experience to feel and more added-value
features. Therefor banks need to read between the lines and
identify the underlying need from what the customer is saying.
- 63 -

Identifying the greatest pains and
frustrations can be a way to more
accurately pin-point speciﬁc needs
and innovation opportunities.
- 64 -

Here’s the top pain points of
traditional banking customers today…
- 65 -

The journey towards
achieving a goal does
not seem linear and
customers don’t feel as
though they’re moving
forward.
Bank processes don’t
follow their customers’
logic, instead they
follow industry logic.
Products and
services are not
based on needs.
Having to re-enter
information more
than once.
The biggest pain points of navigating banking
processes are:
- 66 -
Expectations are not
clearly managed and
so there is a difference
between what the
customer expects of a
process and what they
receive.

IDENTIFY
STARTING
POINTS
THE GREATEST
NEEDS WILL GIVE
OPPORTUNITY FOR
INNOVATION.
CULTIVATE
CUSTOMER
FOCUS
CULTIVATING A
CUSTOMER-FOCUSED
CULTURE MAKES
- 67 -

A CUSTOMER-FOCUSED CULTURE DOES
NOT MEAN MAKING ALL YOUR
EMPLOYEES EXPERTS IN COLLECTING
THE RIGHT CUSTOMER DATA, RATHER TO
MAKE THEM EXPERTS AT USING THE
RIGHT CUSTOMER DATA.
It’s important to note:
- 68 -

THE RIGHT CUSTOMER DATA
MAKES THE DIFFERENCE.
90%OF DEVELOPMENT
EFFORTS FOR NEW
PRODUCT INNOVATIONS
FAIL.
When key customer-centric
knowledge is not agreed on or
adhered to when it comes to
new product innovations, it’s
highly likely the development
will fail - as it so often does.
86%OF COMPANIES UTILIZING
CUSTOMER INSIGHTS TO
DRIVE PRODUCT
INNOVATIONS SUCCEED.
By applying customer insights,
and specifically driving innovations
with the desired outcomes of
customers, companies see a
success rate which is five times
the industry average.
- 69 -

Changing cultural mindsets within a legacy
organization is not a simple task, particularly within the
ﬁnancial services industry. The risk-taking nature of an
innovation culture very often challenges the DNA of
the ﬁnance industry, which focuses on minimizing risk
and always being cautious of strict regulations.
- 70 -

PRESTON
THORNTON.
SENIOR
DIRECTOR &
PRODUCT
MANAGEMENT
AT INLET.
“There's always going to be some
level of fear of the unknown.
Senior management ultimately
has to set the tone by being
completely brought in to the
future direction. They must also
demonstrate that the evolution in
culture ultimately puts customers
ﬁrst, which will have lasting
beneﬁts for the organization
and all stakeholders.”
- 71 -

Ultimately, the beneﬁts of a
customer-centric approach will
outweigh the concerns and
arguments against transforming
banks’ traditional cultures and
processes.
- 72 -

HOW DOES A CUSTOMER-CENTRIC
CULTURE ACCELERATE INNOVATION?
EMPOWERS EMPLOYEES
TO DO WHAT’S BEST FOR
THE CONSUMER AT ALL
TIMES.
Handing over more decision-
making power to employees gives
them the feeling of being trusted,
leading to higher productivity and
greater quality of work as the
responsibility for their decisions will
lie with them.
INSIGHT-DRIVEN
DEVELOPMENTS MEANS
HIGHER SUCCESS RATES
OF NEW PRODUCTS.
A higher success rate naturally leads
to a more positive and motivated
team as they have confidence in their
ability to serve customers and that
the work they’re doing will not got to
waste on a failed product or service.
- 73 -

Here’s some examples of how some banks
have made moves to instill a customer-centric
culture and encouraged employee innovation
within their organizations.
- 74 -

SUPPORTING &
ENABLING INNOVATION.
First National Bank (FNB) based in South Africa say they’re all about
people and being connected. The began their innovation efforts
years ago with a reward program for employees’ innovations, and
since then have only grown the opportunities for employees with
learnings, knowledge sharing and trainings - even via a YouTube
channel.
They built up a supportive infrastructure that includes implementation
teams as they believe experimentation is crucial. Their focus on
innovation is all to keep up with the rapidly changing needs of their
customers, and their desire to always deliver them something new and
valuable.
- 75 -

MERGING EMPLOYEE &
CUSTOMER EXPERIENCE.
Macquarie Bank wanted to make a move towards a more high-
performance culture and organization through delivering on
customer experience. They aligned everything they did and focused
on helping employees to understand the role they played, personally,
in delivering the strategy.
They fostered enterprise agility as a bank to deliver quicker decisions
and decrease levels of bureaucracy. By also focusing on encouraging
engagement from employees and including them in all customer
experience research, trainings and brainstorms, they felt more secure
to raise concerns, bring crazy thoughts and ideas to the table and
ultimately feel partly responsible for the CX.
- 76 -

Here’s some more examples from
outside of the ﬁnance industry.
- 77 -

CUSTOMER DELIGHT
ABOVE ALL ELSE.
Intuit’s innovation catalyst “Design for Delight” enables the
company to put the customer first with Design Thinking methods.
Their three basic pillars are:
“deep customer empathy” - a deep understanding of what the
customer needs or wants to achieve
“go broad to go narrow” - collecting many ideas first (divergent
thinking) and then narrowing them down (convergent thinking)
“rapid experiments with customers” - testing new prototypes as early
as possible with target groups and iterating to make them better.
- 78 -

SHOWCASING REAL
USE-CASES.
A leader in commercial storage and shelving, Spacesaver began
putting up giant posters of their products in use by various
customers. This included the huge storage system used by the Field
Museum in Chicago to store dinosaur bones and fossils.
This gave every employee the often missed line of sight from
innovation to end product and customer experience, motivating
behavior daily.
- 79 -

OFFICE DESIGNED FOR
CUSTOMER-CENTRICITY.
Rackspace have designed their unique office space around the way
their employees work best and how they communicate with
customers. They realized it needed to reflect this approach to really
embed the culture in the place they carry out this work everyday.
Their office’s unique design reflects that of a ‘home’ feel with spaces
specifically for different working styles, as well as creating a visually
pleasing and welcoming space when customers visit.
Their designated client hub was designed to the needs of their
customers, all demonstrating that they really do listen and act on the
needs of their customers as well as their employees.
- 80 -

GOAL 03.
BE QUICK
With building, sharing and developing these
innovations through new ways of working and
effective collaborations.
- 81 -

BANKS NEED TO NOT ONLY INNOVATE, BUT
FIND WAYS TO SUSTAIN AND ACCELERATE
THE PROCESS OF INNOVATION TO KEEP UP
WITH THE INCREASING PACE OF CHANGE.
- 82 -

This can be achieved through changing
internal ways of working and adapting
new technologies to automate and
reduce effort of certain processes.
- 83 -

However, banks’ processes and systems simply
weren’t built for being sped up or adapted.
Often legacy cores are wrapped in new layers and
only some processes are moved to newer systems
- anything to avoid a complete core replacement.
But the need for greater change due to disruptive
technologies is imminent.
- 84 -

DISRUPTIVE TECH.
Technology has massively impacted the banking industry, to
name just a few, the rise of mobile, the introduction of
cryptocurrency and the explosion of social media has shaken
traditional banks into rethinking their business models.
Today, it’s not only about ‘beating’ these tech-savvy start-ups.
Traditional banks still have the sticky customer base and image of
security and stability on their side, and combined with an adoption
of new technologies could become more worthy competitors.
However, even the larger tech corporations are moving into the
world of banking, which would bring about even greater
challengers to banks.
THE IMPACT ON BANKS
- 85 -

TRADITIONAL BANKS ARE NO LONGER
ONLY UP AGAINST FINTECH STARTUPS,
BUT NOW EVEN LARGER TECH FIRMS
OUTSIDE OF THE BANKING INDUSTRY
ARE MOVING IN.
- 86 -

TODAY’S BIG TECH FIRMS ARE POISED TO DISRUPT
THE BANKING INDUSTRY.
EXPLORE SIGN
AMAZON PILOT BANK
ACCOUNTS FOR TEENS
FACEBOOK CONNECT
TO USERS’ BANKS
PAYPAL MOVE INTO
BANKING
EXPLORE SIGN EXPLORE SIGN
- 87 -

Generation Z are coming to
expect ﬁnancial solutions from
the big tech players:
44%EXPECT TO CONDUCT
FINANCIAL BUSINESS WITH
AN ORGANIZATION LIKE
APPLE, AMAZON OR
GOOGLE RATHER THAN
WITH A TRADITIONAL
BANK.
Source: Raddon
- 88 -

BAIN & CO.
PARTNER AND
LEAD OF THE
BANKING
SECTOR.
GERARD
DU TOIT.
“It’s just a matter of time before
we see the big tech players enter
retail banking in the U.S.
You’re going to see a Darwinian
battle between banks and tech
firms, and some surprising
combinations on how they get to
market.”
- 89 -

SO WHAT CAN BANKS DO?
- 90 -

‘Competitors’ of traditional banks today are often not competing in the traditional sense. Startups especially are likely competing
on segment or intention-specific products or services, and both sides would benefit from either the technology know-how or
deep industry knowledge of the other. Opportunities for collaborations with new competitors should always be considered by
traditional banks.
BANKS SHOULD RE-EVALUATE HOW
THEY LOOK AT NEW COMPETITORS,
AND SEE A COLLABORATIVE RATHER
THAN A COMPETITIVE LANDSCAPE.
- 91 -

MIKE
SIGAL.
“Incumbents that
don’t seek to
partner will die.”
EARLY-STAGE
INVESTOR,
ENTREPRENEUR
& CORPORATE
INNOVATION
ADVISOR.
- 92 -

Fintechs are succeeding today due to their fast and
flexible working processes and foundations built on
technology. But once the big tech firms move into
their space they may find their lack of a stick
customer-base a great weakness and be disrupted
themselves along with legacy banks.
- 93 -

Collaboration with Fintechs is an approach
already tried and tested by a number of
traditional banks to start adapting processes to
the connected customer without having to
drastically re-structure the core organization.
- 94 -

Royal Bank of Scotland (RBS) has
partnered with Ezbob to offer
automated lending platform, Esme
Loans.
RBS unveiled a digital site named
"Esme". The platform will allow small
and medium-sized businesses to
obtain loans quickly, even outside
working hours, and including those
who are not customers of RBS.
Starting with the lending site, RBS
wants to step up the efforts in
digitizing banking services.
EXPLORE SIGN
DIGITAL LENDING
PLATFORM FOR SME.
BEST PRACTICE.
- 95 -

Morgan Stanley is partnering with
Twilio to digitize communications
between ﬁnancial advisors and
clients.
The partnership focuses on advisor-
client communications, but is part of
a broader mission to digitize
communications company wide. The
partnership with Twilio suggests the
company is investing in improving
the digital experience for existing
clients as well.
EXPLORE SIGN
MORGAN STANLEY
DIGITIZE THEIR COMMS.
BEST PRACTICE.
- 96 -

Santander partnered with several
content businesses to launch
“Prosper and Thrive”, a content hub
to help millennials navigate the
financial world.
The aim is to give them access to
practical advice for financial well-
being and digestible descriptions of
financial jargon without it sounding
like it’s coming from a traditional
bank. They partnered with several
content businesses including
SapientRazorfish, Contently and
Newscred.
EXPLORE SIGN
SANTANDER’S CONTENT
HUB FOR MILLENNIALS.
BEST PRACTICE.
- 97 -

Fintechs are ready - and
waiting - to collaborate,
and banks should grasp
the opportunity. 75%
OF DIGITAL
DISRUPTORS / STARTUPS
SAY THEIR PRIMARY
OBJECTIVE IS TO
COLLABORATE WITH BIG
BANKS.
Source: Capgemini
Their main reasons being to gain
visibility, achieve economies of scale,
earn customer trust and establish a
better distribution infrastructure.
- 98 -

WHY FINTECH COLLABORATION?
Evolving expectations of consumers is something
Fintechs are not only prepared for, but built for.
Often working with an Agile approach, or a similar
customer-focused process they can easily adapt
internal systems and products to suit these
changing needs, and even to engage with
traditional banks’ existing ecosystems, as they’ve
always found ways to leverage what currently
exists..
This offers traditional banks a secure outlet for
trialling new innovations with minimal risk to the
core business.
Consumers are already aware of and
actively using Fintech products and
services, even more so in the last few
years.
Awareness of Fintech capabilities rose
from 62% in 2015 to 84% in 2017, and
adoption of money transfer and
payment Fintech solutions rose from
18% in 2015 to 50% in 2017.
Startups benefit from being connected to a
more stable (in terms of funds and
infrastructure) organization to gain distribution
and general industry expertise and can more
easily scale to sustain their business in the long
run.
Traditional banks have access to valuable
know-how, particularly digital knowledge and a
data-driven way of approaching the banking
experience. This approach is more informative
but comes with lesser costs and increased
efficiency - banks can learn a lot for what is on
their part a small investment.
WIN-WIN:
INDUSTRY KNOWLEDGE
FOR STARTUPS & DIGITAL
KNOW-HOW FOR BANKS
ADOPTION OF
FINTECH SERVICES IS
RISING
FINTECHS ARE
BUILT FOR
FLEXIBILITY
- 99 -

CAUTIONS OF FINTECH COLLABORATION.
To get the most from any collaboration, the
strengths - and more importantly - the
weaknesses of both sides should be
understood from the start.
One positive outcome of this is that final
decisions can then be designated for
various steps in the project to those with
greater expertise without a feeling of
unfairness.
Plus, when a business can look honestly at
their own shortcomings, better, more
effective improvements can be made
sooner to benefit business.
As Fintechs are so advanced when it comes
to customer experience, both sides need to
be aware that while this is the right focus for
today’s market, management of risk (the
primary focus of most traditional banks)
should be taken into consideration, and
perhaps given more attention by Fintechs.
To increase the chances of a successful
collaboration, both Fintechs and traditional
banks should continuously share their market
insight throughout the collaboration.
BE AWARE OF THE
DIFFERENCE IN
FOCUS
KNOW BOTH
STRENGTHS &
WEAKNESSES
Fintechs often run into problems as a result
of not being sure about which regulations
apply to them within the finance industry.
This is particularly true when it comes to
privacy and security measures.
Banks should be prepared to educate Fintech
partners on the regulators and governing
bodies they should be aware of for a more
seamless and open collaboration.
FINTECHS MAY LACK
REGULATORY
KNOWLEDGE
- 100 -

“When banks and ﬁntechs collaborate, innovation
and speed-to-market foster a better customer
experience like never before.”
Sankar Krishnan
101
PARTNER AT CAPGEMINI, AUTHOR.

Be observant to evolving trends
and shifting expectations through
frequent customer engagement,
social listening and making these
insights accessible and applicable
by the entire team through a
collaborative platform, such as
signmesh.
SUMMARY.
BE OBSERVANT.
Be responsive to the observed
trends and expectations through an
accelerated innovation process.
Extracting needs and pain-points
from your consumer insights gives
your team specific opportunities
and starting points to begin
innovating on new solutions.
Be quick in identifying these opportunity areas,
developing and executing new innovations. As the
pace of change grows legacy organizations will
find it more and more difficult to keep up with
changing consumer behaviors and wants without
restructuring existing processes. Collaboration
with tech-based fintechs is a great place to start
without a complete systems overhaul.
BE RESPONSIVE. BE QUICK.
GOAL 01 GOAL 02 GOAL 03
- 102 -

NOW IT’S YOUR TURN.
- 103 -

- 104 -
signmesh is the collaborative platform created for
teams. Tailor your hub to any department, industry
and interests and receive the most recent, curated
signs each day to stay inspired.
SIGNMESH DEMO.
START YOUR
START DEMO
TODAY
FABIOLA
LEWANDOWSKA
Product Manager
+49 151 6462 0741
ﬂ@lhbs.com
Agile Sprints is an approach to accelerated
innovation we take with many legacy clients,
enabling them to uncover their full potential in a
short time, with real, tangible results they can move
forward into development.
AGILE INNOVATION.
SCHEDULE TODAY
WORKSHOP
STEFAN ERSCHWENDNER
Managing Partner
+49 151 6462 0729
se@lhbs.com
BOOK YOUR FIRST
TO BE OBSERVANT. TO BE RESPONSIVE & QUICK.

ABOUT.
A marketing & innovation ﬁrm, we work primarily with
legacy organizations to adapt their customer value
proposition to meet emerging customer expectations.
Together with our clients we discover business
opportunities and deliver integrated customer offers for
products, services, experiences and communication.DISCOVER DEFINE DEVELOP DELIVER
Explore further on our website, and
discover more industry insight reports.
- 105 -

THANK YOU.
You can explore more industry insights
reports on our website.
- 106 -

Next Generation of Banking: Faster

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