APT’s State of Business Experimentation Report for Financial Services Institutions Reveals Improving Customer Experience is Top Priority for Most Banks

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Banks are responding to the omnichannel world from all directions—70% are prioritizing improving their online banking platforms and 63% are enhancing the in-branch experience

Today, Applied Predictive Technologies (APT) released the results of its annual State of Business Experimentation survey for Financial Services Institutions (FSIs). The report details how leading FSIs are experimenting across the business to improve the customer experience and combat disruptive competitors. Click here to view the full set of insights.

Will Weidman, APT Senior Vice President, commented, “The State of Business Experimentation survey results accurately mirror some trends we’ve seen in the financial services industry for a few years now, including streamlining the physical network, adding new technology to the branch, and increasing channel migration. Through the survey, we’re also seeing leading banks exploring cutting-edge applications such as mobile app development and hyper-targeted cross-sell campaigns.”

Summary of Findings

When asked about future strategies, FSIs consistently report being focused on enhancing omnichannel offerings to meet the needs of a rapidly evolving customer base. Specifically, banks highlighted the following priorities:

1. Offering a seamless experience across channels—FSIs’ strategic priorities in 2016 include enhancing mobile and online banking platforms (70% of FSIs), channel migration (60%), new branch formats (60%), and new labor structures (60%).

2. Improving the online banking experience—100% of FSIs say they are focused on improving digital onboarding processes to accelerate channel migration. Additionally, 78% say they are marketing for new mobile and online app features, and 56% say they are running mobile deposit promotions.

3. Combating rising FinTech players—88% of FSIs say their companies are improving mobile capabilities to compete against FinTech, while over 60% cite improvements to the branch experience and small-format branches as key strategies.

For each of these initiatives, banks are finding that business experiments maximize learning and profits. To that end, FSIs conducted over 25 tests during 2015 on average, with the top quartile of banks conducting nearly 50 tests during the year. APT clients also reported that over 40% of their ideas did not break even, enforcing the need to test each new idea before broad rollout. By testing each new initiative with a subset of branches, markets, or customers, and comparing performance to similar entities that do not receive the new initiative, banks can learn which ideas are most successful. Testing also allows banks to learn how initiatives can be refined for further success and targeted to only a subset of the network or customer base for maximum benefit.

Preview of the Full Report

Testing by Functional Area in 2015 (percent of FSIs testing in each area):

  •     Marketing & promotions: 88%
  •     Distribution & branches: 75%
  •     Capital expenditures: 63%
  •     Labor & operations: 63%
  •     Customer relationship: 38%
  •     Products & services: 38%
  •     Pricing: 13%
  •     Other: 13%

Transforming the Physical Network (percent of total tests):

  •     “Branch of the Future” remodels: 21%
  •     Branch closures: 19%
  •     Adding ATMs: 14%
  •     New branch concepts: 14%
  •     Cannibalization: 10%
  •     Hub & spoke distribution: 10%
  •     Adding smart ATMs & self-serve kiosks: 3%
  •     Branch signage: 3%
  •     In-store & satellite branches: 3%
  •     Other: 2%

To view the full State of Business Experimentation report for Financial Services Institutions, please visit: http://download.predictivetechnologies.com/apt-state-of-business-experimentation-financial-services/.

The State of Business Experimentation report is part of a larger set of reports that also includes insights for retail, restaurants, manufacturing, and other industries. All results are based on self-reported data by a subset of APT’s clients. APT’s clients include 8 of the top 15 North American banks.

About APT

APT, a MasterCard Company, is a leading cloud-based analytics software company that enables organizations to rapidly and precisely measure cause-and-effect relationships between business initiatives and outcomes to generate economic value. Our intuitive and proprietary Test & Learn® software utilizes sophisticated algorithms to analyze large amounts of data, enabling business leaders to conduct experiments and allowing them to make optimal decisions and implement business initiatives at scale. APT also offers products that support decision-making for specific business needs including transaction analysis, space planning, promotion design, category management and location selection. APT’s client portfolio features some of the world’s best known brands, including Walmart, Starbucks, Coca-Cola, Victoria’s Secret, American Family, Hilton Worldwide, SUBWAY, TD Bank, T-Mobile, and others. APT has offices in Washington, D.C., San Francisco, London, Bentonville, Taipei, Tokyo, Sydney, and Chicago. Visit http://www.predictivetechnologies.com to learn more.

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Cathy Baker
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