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How institutions compete and win with data analytics
Foreward 4

1.0 Executive summary 5

2.0 Major competitive growth forces 8

2.1 From the information age, to the personalisation age 8
2.2 The network effect - protection or opportunity 9
2.3 Cloud - it’s not new technology, it’s new business models 11
2.4 Cognitive technologies that educate themselves, support expression 12
2.5 Competitive growth model - where to enter, adapt or be exponentially out-competed 14

3.0 The data analytics industry and consumer research 18

3.1 Methodology 18
3.2 Asia pacific financial institution and service provider competitive readiness study 18
3.2.1 Attributes of analytical competitors 18
3.2.2 Assessing the degree of analytical competitiveness 20
3.2.3 Level of strategic importance 21
3.2.4 Expectation on improving results 21
3.2.5 Level of investment 22
3.2.6 Departmental stakeholders 22
3.3 Analytics-enabled consumer experience study 24
3.3.1 Concept description and perceived banking experience 24
3.3.2 Appeal and impact of concepts 27
3.3.3 Incremental appeal 28
3.3.4 Impact of concepts on retention 30
3.3.5 Impacts of concepts on acquisition 31

4.0 Technology for the analytics-driven business in a smart connected world 33

4.1 The consumer environment - a smart connected world 33
4.2 The financial service provider environment - data infrastructure analytics and actioning 36
4.2.1 Key infrastructure technologies 38
4.2.2 Key analytics technologies 39
4.2.3 Key technologies for actioning insights 40
4.3 Analytics-enabled experiences 41
4.3.1 Experience 1: ‘Contact.Me’ 41
4.3.2 Experience 2: ‘Branch.Me’ 44
4.3.3 Experience 3: ‘Digital.Me’ 46

5.0 Conclusions 52

6.0 About the author 53

7.0 Acknowledgements 54

8.0 Notes and references 56


Welcome to Telstra’s latest financial services industry thought

leadership report: Analyse This, Predict That.

This report considers It’s clear that organisations that use We then present research on consumer
how institutions analytics extensively and systematically attitudes toward a range of interactions
compete and win are rapidly out-thinking and out- that can be enabled through data
with data analytics. executing their competitors. Traditional analytics, and analyse the impact these
players are swiftly coming to the would have on their relationship with
While our core needs their financial services providers.
realisation that they must prepare
for money – to save,
to adapt their settings for this new
spend, borrow, Lastly, we present a vision for a smart
competitive landscape – as is evidenced
invest – may not have connected financial services world. Here,
by the speed at which this topic is
changed much over we both explain the key technological
climbing higher on the corporate
the centuries, the way we interact with developments and discuss the role that
strategic agenda.
financial institutions has, and continues next generation digital communication
to drastically change. To date, this has We are now witnessing the first wave of and media technologies can play in
been largely due to disruption caused by start-ups and established information helping your organisation map out its
the ‘three-Ds’, being: services players challenging traditional journey.
models with propositions such as peer-
1. Demographic changes; This research was only made possible
to-peer lending, mobile payments, and
by the many generous contributions and
2. Digital technologies; and personal financial management service
insights from numerous leaders within
propositions. At the heart of all these
3. Design of the customer experience. the financial services industry, for which I
examples is the creative application
sincerely thank you.
These are topics that I have of data analytics – a catalyst that is
comprehensively researched over the providing innovative new ways to satisfy Rocky Scopelliti
past six years and presented in previous customers’ centuries-old core needs. Group General Manager -
reports. This report, the ninth in my Industry Centre of Excellence
This study concentrates on data
series, adds a ‘4th D’ into the mix – data. analytics. The report examines, firstly, the Telstra Global Enterprise Services
This report argues that data, as an major forces in play and how these are
accelerant of disruption, is setting the re-shaping the competitive environment.
financial services industry on a new Secondly, we report on how financial
competitive trajectory. services institutions are adjusting their
Just think of Google, Amazon, and PayPal strategies and capabilities for this
or – more specifically to the world of transformation.
finance – Capital One or Progressive
Insurance in the US.

In a Smart Connected World, data analytics are having a
profound impact on the competitive growth trajectory of the
financial services industry.

This is particularly relevant in the Asia 1. Major Forces Shaping Digital 2. Strategic Market Gaps Exist –
Pacific region, which is predicted to be Competition and Growth these can either be Closed by
home to two thirds of the world’s middle There are four key forces altering Incumbents or Exploited by
class by 2030 – a staggering 3.2 billion the competitive growth trajectory of New Entrants
people1. This region is also predicted to the financial services industry: There’s a major gap between the
overtake North America as the largest Personalisation, Network Effects, strategic priority of incumbents and their
wealth management market in the world Cloud Business Models and Open readiness to execute. New entrants are
by 20152. Source Artificial Intelligence based already exploiting that gap. Financial
Data analytics bring new risks to financial Technologies. institutions are now making a significant
institutions, particularly around the The intensity of competition has, and is investment in transforming themselves
appropriate use of data. Data analytics anticipated to increase exponentially, as into analytical competitors to close
will require a new consumer engagement the convergence of digital proliferation the gap.
model – one that ensures that analytics and inter-generational wealth transfer We studied 43 financial institutions
enhance value whilst also reinforcing makes traditional financial services across the Asia Pacific region. The results
the trust that consumers place in their markets increasingly attractive for new indicate a significant gap of 68% in the
financial institutions. players. We are now seeing these new organisational readiness of institutions
Business models, operational structures entrants venturing into the financial to compete on analytics, with only 32%
and markets are being disrupted and services market with increasing perceiving that they are on the verge of, or
contested by non-traditional and start- regularity. Global investment in FinTech ready to compete, using data analytical
up players unconstrained by proprietary ventures clearly illustrates this trend, capability. Further, there was a 17%
systems, processes and technologies, with investment tripling from US$928 strategic priority gap identified, with only
and able to compete ingeniously with million in 2008 to US$2.97 billion in 2013. 83% reporting a commitment to data
democratised data and open sourced Indeed, FinTech investment is outgrowing analytics from their CEO and leadership
models. These players understand that overall venture capital growth by a team. These gaps explain the significant
digital has irrevocably changed how factor of four, with nearly a third going investments – averaging 6% of an
customers expect to engage financial into ventures focused on data analytics organisation’s budget in FY14 – being
services. Institutions from the 20th and personal financial management. allocated for data analytics projects, with
century that choose not to adapt, but The epicentre market for disruptive expectations of a resulting performance
to rely on what worked in the past, can innovation includes Generations X and improvement averaging approximately
expect to be comprehensively out- Y, who today are responsible for more 6.3%. Clearly, growth is the major
competed. than half of all spending and borrowing incentive for such an investment, with
in Australia (a pattern likely to be similar 68% of Sales and Marketing departments
in most developed nations). We’ve now driving the data analytics strategy,
developed a Competitive Growth Model requirements and investment programs
that highlights where to enter, adapt or be (see Section 3 – Asia Pacific Financial
significantly out-competed (see Section Institution and Service Provider
2 – Major Competitive Growth Forces). Competitive Readiness Study).


3. Data Analytics – The Catalyst for online mode. Instead, it suggests that 4. Pervasive Connectivity and
Altering Consumer Perceptions with personalisation, it can remain Intelligence for the Analytics-Driven
Analytics-enabled financial services, a fundamental part of what makes a Business
and the experiences these capabilities financial services provider appealing The Smart Connected World where
provide, have the capacity to alter the to consumers in the Asia Pacific region. everyone and everything is connected,
perceptions of consumers across the • When it comes to retention, in intelligent and measured.
Asia Pacific region, as well as to support Australia, the digital advice concept
strategies to acquire, engage or retain (e.g. virtual/digital advice access to The emerging consumer environment
customers – whether executed through experts via video, chat, social media) is marked by high-speed connectivity
a branch, contact centre or digital has the greatest impact on customer and pervasive distributed intelligence,
consumer channel. retention, with a retention factor and features a better awareness of the
(satisfaction and advocacy) of 86%. consumer’s context than ever before. By
Our study involved over 3,100 consumers 2020, it is predicted that:
Within the Singaporean, Indonesian
across Australia, Singapore, Malaysia,
and Hong Kong markets, those who • 95% of people in the developed world
Indonesia and Hong Kong. The results
would use the personalised in-branch will be connected to the Internet – up
indicate that in all countries, each of the
experience gave it a retention value from 77% today;
five digital analytics-enabled service
of 92%, 97% and 90% respectively.
concepts researched achieved high • There will be 4-10 connected devices
Malaysian consumers who would
appeal levels, and the nine experience for every person on the planet; and
use the personalised digital banking
metrics tested demonstrated positive • 140 sensors per person.
service gave it a 95% retention score.
perceptual impacts for each concept.
Specifically: • When it comes to acquisition, Intelligence is being built into an
digital advice, again, is featured. For expanding range of devices, as well as
• The results clearly show the value Australians, the digital advice concept infrastructure and the environment.
of a personalised digital banking had the highest acquisition impact Analytics will remove friction from
experience (e.g. tools, insights, alerts, (consideration and switching) at 80%. businesses and consumers’ lifestyles
recommendations, notifications For Singapore, it was 88%, Hong Kong and deliver substantial operational
on saving, spending, borrowing or 86%, and Indonesia 93%. In Malaysia, economic and lifestyle benefits (see
investing) across the Asia Pacific this ranked third at 88%. Section 4 – Technology for Analytics-
region, with this concept ranked in the Driven Business in a Smart Connected
• Mobile banking is now heavily
top two most appealing in all Asian World).
penetrated across the region. Hong
markets. Demand for personalisation
Kong leads the way with 68% of the
extends to the branch, with the
population using smartphones to
personalised in-branch experience
access financial services, followed
(e.g. recent interactions, history,
by Indonesia 64%, Singapore 63%,
context) also ranked in the top three
Malaysia 53% and lastly Australia
at 42%.
• Across all five concepts, consumers
indicated that ‘Knows me and my These results illustrate the significant
financial situation, irrespective of how potential impact of analytics on the
I use the bank or financial institution’ design and execution of personalisation
and ‘Access to banking experts when I strategies, digital tools, insights and
need them through my preferred way advice across channels to acquire,
to interact with them’ experiences engage and retain customers. However,
achieved strong positive results. as these digital services would be
enabled by large-scale analytics, it
• When it comes to maximising appeal,
is now becoming clear that modern
interestingly, in all countries, the
financial services providers need to have
personalised in-branch experience
well-developed analytical information
concept appears in the top three
gathering capabilities (see Section –
concepts. This finding may contradict
3.3 Analytics-Enabled Concepts and
the suggestion by some commentators
Experiences: Asia Pacific Consumer
that the in-branch experience is dying
Experience Study).
and will eventually be replaced by the

5. Valued Analytics-Enabled • Digital.Me: Shows how providers can
Customer Experiences combine analysis of saving, spending,
Cloud technologies connected by high- borrowing and investing behaviours
bandwidth, low-latency networks with social analytics and broader
make the infrastructure and expertise market analytics to create online and
required to harness advanced analytics mobile tools that help customers more
much more accessible. They create a effectively manage and use financial
step change in the ability of financial services.
service institutions (both traditional This vision of a truly analytics-driven
providers and disruptive new entrants) customer experience is underpinned
to deliver the highly personalised, highly by secure and highly scalable storage
contextual, analytics-driven experiences of customer data connected to a wide
customers now expect. range of specialised analytics services
The combination of the four key forces (often hosted on high-performance cloud
mentioned in Key Finding 1 Major Forces platforms) by high-speed, low-latency
Shaping Digital Competition and Growth networks (see Section 4 – Technology
and the democratisation of analytic for Analytics-Driven Business in a Smart
capability poses a threat to traditional Connected World).
financial service providers. But it also This report explores the financial
creates a limited window of opportunity services sector’s analytics capabilities,
for those incumbents who are prepared and how players may use analytics to
to move swiftly and embrace this new win in a competitive growth environment.
world. By doing so, they will also be able This has been based on the extensive
to exploit their existing advantages over Telstra research in the Asia Pacific
the newer entrants: namely, their unique region, and contributions from industry
position of trust, strong customer leaders in different fields and industries.
relationships with Gen X and Y and
multiple touch points.
We show three analytics-driven Digital technology has irrevocably
customer experiences to highlight how changed how customers expect
embracing an analytics-driven approach to engage financial services.
can help channels to evolve: Institutions from the 20th century
that choose not to adapt, but to rely
• Contact.Me: Combines and extends on what worked in the past, can
the vision of a personalised contact expect to be comprehensively out-
centre and intelligent personal competed.
assistant, blending an intelligent
personalised virtual financial
assistant with a physical (but remote)
relationship manager through an
engaging and consistent interface.
• Branch.Me: Turns the branch into an
environment for identifying visitors
and understanding their intent
and engagement preferences so
that branch staff (and even branch
infrastructure) can deliver personally
optimised content and interactions.

We begin the discussion by considering how analytics will
impact four major competitive growth forces, and how these
will redefine the environment in which tomorrow’s financial
service providers will compete and grow.

These forces are: 2.1 From the information age,

to the personalisation age Institutions that have a wider,
1. The Age of Personalisation – how the more valuable relationship with
convergence of digital proliferation the customer can leverage that
and changing demographics has ‘Information about relationship to discount the cost
fundamentally changed customer
expectations from simple access
transactions, at some of collecting valuable data in the
future – providing them with a
to information to the intelligent point in time, will become significant competitive advantage.
application of that information;
more important than the
2. The Network Effect – how new The Future of Financial Advice reforms
entrants in multi-sided markets
transaction themselves.’ introduced in Australia in 2013 reflect,
can move and scale quickly, and Walter Wriston, among other things, a move towards
how incumbents can either adapt former Chairman and CEO of Citigroup unbundling information and insight
leveraging the complexity of the from products. Arguably, such a
market to protect themselves, or be Much of the innovation that occurred shift would have been unthinkable a
exponentially out-competed; in the 20th century financial services generation ago, but has been made
industry was about providing access to possible by the public’s increasingly
3. Cloud Business Models – we propose money. For example, credit cards gave sophistication approach towards the
shifting the conversation from thinking consumers a chance to pay without value of information. If the rapid evolution
about cloud in a computing sense, to needing the cash on hand, while of social media and the explosion of
thinking about cloud as a business automatic tellers gave 24-hour access information shared through it is anything
model; and to cash. The most important attribute to go by, future generations may be
4. Open Sourced Artificial Intelligence for institutions in this model was trust; even more relaxed about unbundling
based Technologies – we discuss how primarily trust that the money placed information.
next generation cognitive systems are with them would be returned when
needed. The Internet reinforced reluctance on the
coming online faster and with much
part of consumers to pay for information
greater intensity. Such systems are The early 21st century has been about that they are used to getting for free.
positioned to help solve problems that access to information. Consumer Similarly, they have greater expectation
have never been solved before. marketing and services have collided of recompense (in some form or other)
We then bring these forces together into with financial products through loyalty for the value of the information that they
a Competitive Growth Model3 that depicts schemes, tailored interest rate offers share with institutions. A good example of
their inter-relationships and provides the and integration of financial management actually paying customers can be found
framework for how financial institutions tools with regular banking products. in the collection of up-to-date contact
should consider their strategic options. Increasingly, information is gaining value information. An insurance company
in its own right. Whether it is simple wanted to ensure the accuracy of
Davenport and Harris (2007), in their information (in terms of rapid market customer details and ran an experiment.
research, defined analytics as ‘the data) or complex (such as advice from a Three randomised groups of customers
extensive use of data, statistical and professional based on detailed analysis received forms in the mail to update their
quantitative analysis, explanatory of an individual’s situation), consumers details together with a pre-paid envelope.
and predictive models and fact-based are increasingly willing to assign value to The first group were simply asked ‘please’.
management to drive decisions and data and information in its own right. The second group were offered a nominal
actions. Analytics are a subset of fridge magnet as a ‘thank-you’. The third
what has come to be called business This shift in behaviour runs in parallel
was offered a more substantial financial
intelligence: a set of technologies with the assumption by consumers that
and processes that incorporates the institutions will treat their personal
collection, management and use of data information with both care and respect
to understand and analyse business – care in terms of protecting it from
performance’4. Meanwhile, Siegel (2013), abuse, and respect in terms of not
in his research on predictive analytics abusing the privileged access that the
defines it as ‘technology that learns from individual is allowing by agreeing to use
experience (data) to predict the future the institution’s banking, insurance or
behaviour of individuals in order to drive investment products.
better decisions’5. These definitions have
been adopted in this report.

The results were surprising. While the 2.2 The Network Effect – Protection Financial services relationships range in
first group (with no returned value) or Opportunity nature from highly transactional through
had a poor response rate, the second to highly consultative and collaborative,
and third groups had little to separate involving many participants (e.g. the
them in terms of return rates. The ‘Peer-to-peer lenders consumer, merchants, traders, banks,
conclusion was that customers put a like SocietyOne are very schemes, their families, employers,
value on their relationship with the financial advisers, brokers, regulators
insurer, which provided a part-payment well placed to offer more and third parties). The buyers pay in a
for the information, with only a small creditworthy Australian variety of forms, including access to their
incremental payment required to realise money, future promises of interest and
that value. In light of that conclusion, borrowers a better deal and access to markets through their buying
institutions that have a wider, more
valuable relationship with the customer
give more investors direct activities. Financial services products
are, in fact, usually best described in
can leverage that relationship to access to attractive new terms of networks, with all of the actors
discount the cost of collecting valuable connected together through ecosystems
data in the future – providing them with a
fixed income asset classes. with complex business rules. Economists
significant competitive advantage. This is why peer-to-peer might describe this as a ‘two-sided
market’ (see Figure 1).
lending works.’
Matt Symons, CEO SocietyOne

Figure 1: Illustration of Two-Sided Markets


Source: Deloitte Research and Telstra Research, 2014


A two-sided market is a sophisticated Chart 1: Combined Peer-to-Peer Issued Loans January 2014 by Lending Club and
relationship between buyers and Prosper (Billions US Dollars)
sellers. The market’s nature is to have a
group of customers who have a many- 4.5
to-many relationship with a group of
providers (who may themselves also 4.0
be customers). In the middle is the
facilitating organisation, in this case
a financial institution, thus creating a 3.0
‘multi-sided platform’. Examples of two-

sided markets, or organisations providing

multi-sided platforms, are the major
credit card companies, social networks
or – more contemporarily – peer-to-peer 1.5
lenders. In each case, these platforms
provide a network benefit that amplifies 1.0
as the number of participants increases, 0.5
as demonstrated by the rapid growth
of organisations such as Lending Club, 0.0

Jun 13

Dec 13
Dec 07

Jun 08

Dec 08

Jun 09

Dec 09

Jun 10

Dec 10

Jun 11

Dec 11

Jun 12

Dec 12
Prosper in the rapidly growing peer-to-
peer market, and PayPal in the payments
market (see Charts 1 and 2).
Prosper Lending Club
As scale is such a significant advantage
for multi-sided market platforms,
consolidation tends to occur very quickly. Source: Lending Memo
For example, Alibaba (China’s equivalent
to Amazon), became a US$16 billion
Chart 2: PayPal Annual Mobile Payments Volume 2008-13 (Millions US Dollars)
lender in less than three years and
China’s largest seller of money market
funds in only seven months6. While
there are periods of innovation when 27000
lots of new entrants join the market, the
winners quickly emerge and are either
acquired or begin to do the acquiring.
This is a turbulent period for incumbents,
as they need to make the right bets to
ensure their scale advantage puts them
in a position to be doing the acquiring
15000 14000
rather than risk losing market share and
potentially being acquired or eliminated.
A recent example of this is Australia’s
Westpac Banking Corporations new
venture capital fund taking an equity
stake in Sydney based peer-to-peer 4000
lender SocietyOne.
Whilst new entrants in multi-sided 25 141 750
markets can move and scale quickly, 0
incumbents can also adapt by leveraging 2008 2009 2010 2011 2012 2013
the complexity of the market and their Source: Statista
understanding of its nuances. However,
a player that chooses not to adapt, Whilst new entrants in multi-sided markets can move and scale quickly,
relying on the complexity of the network incumbents can have the advantage of understanding both the complexity and
to protect them, can be rapidly out- nuances of the market.

2.3 Cloud – it’s not new technology, Smart institutions will use this data It is likely that we will see an increase
it’s new business models and analytics on it to help consumers in financial institutions partner with
simplify their lives by anticipating their third parties such as retailers to provide
needs and creating value-added services an integrated online experience. Why
‘Ultimately, the cloud is that support the increasingly dynamic would a customer want to go all the way
the latest example of lifestyles we choose. The smartest through to an online store if all they want
institutions will take a leaf from the to do is repeat a purchase they made
Schumpeterian creative leading technology companies and in a previous month? Their credit card
destruction: creating encourage their customers to curate their statement on the Internet banking portal
own data to improve its accuracy, and is the ideal place they could go to repeat
wealth for those who the accuracy of the associated insights the purchase. Done properly, this could be
exploit it; and leading to the derived from it. The customer wins by
receiving a more personalised service
a true cloud service with a seamless set
of rich shopping applications embedded.
demise of those that don’t.’ and the organisation wins by improving
Joe Weinman, Senior Vice President at Telx and
the quality of predictions applied to the
broader market as well as the individual. Everyone is looking for an edge. With
author of Cloudonomics: The Business Value of
cloud, a third party can participate
Cloud Computing
The competitive market for customers in the client experience and derive
means that everyone is looking for an value from it while leaving the
But what of the innovative ideas and edge, something to bundle or a new way original client relationship intact.
products sitting on top of these multi- to add value. With cloud, the third party
sided platforms? Many of these will becomes a service that can participate
be delivered in app-centric services in the client experience and derive While change is a challenge to
that help simplify consumers’ lives by value from it while leaving the client incumbents (who have scale), cloud
synchronising data, simplifying contact, relationship intact. An example of this is computing provides an exciting
integrating online purchases, accessing the Commonwealth Bank of Australia’s opportunity to create an agile
and aggregating content. To say Property Guide – this augmented organisation with an extended ecosystem
consumers have adopted this approach reality app is powered by realestate. into other industries, and to launch
is a wild understatement. Consumers will and and bundles products in response to new entrants
typically quickly embrace a simple way property information into a value added almost as quickly as they appear. The
to manage their banking or investment application for consumers searching for ability to source data, analyse it and
(particularly superannuation) products in real estate. respond to the resulting insights will
a similar way. become a distinguishing characteristic
of banks competing digitally. Importantly,
The common attribute of these services cloud affords enterprises with the
is data. Almost every action taken by a necessary agility to reduce the latency
consumer using cloud services generates and associated risks associated with
masses of data that can be used to the lifecycle from the opportunity event
augment the existing customer data that through to taking action (see Figure 2).
financial institutions already hold – often
substantially increasing its value.


Figure 2: The steps involved in taking action to respond to business events

Potential Business Value

Analytics Latency
Business event
Response Latency

Data captured
Insight delivered

Decision made
Action taken

Action time Time

Source: TIBCO

2.4 Artificial Intelligence Cognitive Unsurprisingly, he built his computers As a consequence, our world is flooded
technologies that educate based on mathematical ideals, with this messy, imprecise, and yet
themselves, support expression and programmatic logic, and defined rules. amazingly useful information – in the
deliver expertise, continue to evolve For over 60 years, this is what we have form of words, pictures, video, and audio
come to know of computing. recordings. In fact, 80% of all the digital
information in the world is in the form of
‘Analyse the past, consider Unfortunately, what we have come this unstructured information. Everything
to know of life is far less structured,
the present and visualise organised, absolute, or even logical. Just
else is beyond the reach of traditional
computing, leaving the vast richness
the future.’ take a look at how we communicate. Our of unstructured data to the limitations
language is full of innuendos, subtleties, of what can be unlocked by the human
Thomas J. Watson, Senior –
idiosyncrasies, synonyms, metaphors mind. Given that 90% of the world’s data
IBM Chairman 1914-1956
and complex concepts for expressing was created in the past two years7, this is
When John Von Neumann started work abstract ideas. Why is it that noses run?
an exceptionally tall task.
in the 1940s on what has become the Can houses really burn up as they burn
blueprint of all modern computers down? Our communication with each However, with the advent of Cognitive
he imagined that computers could other is ambiguous, illogical and very Systems, that is changing. When IBM’s
solve any problem. Von Neumann was imprecise. And yet, it also turns out to Watson bested the two grand champions
a mathematician. He saw the world be very effective. The paradox of the (Ken Jennings and Brad Rutter) in the
through a mathematician’s eyes, human condition is that it is our ability U.S. game show Jeopardy!, it represented
believing anything could be modelled to reason, infer, and extrapolate from our a historic milestone and proof point
with mathematical precision using the interactions with others that makes us that computers could go beyond what
language of mathematical symbolism. so efficient at affecting results with each Von Neumann had envisioned. It was a
other. Our minds are especially adept at system that read, understood, learned
producing and consuming information in and, arguably, began to reason.
this imprecise form.

Consider a financial question that needs Many of the more important questions To understand this better it is worth
to be resolved and the complexity of we ask are really quite complex – delving deeper in to what defines a
that question. Consider this wealth involving contextual history, judgments, cognitive system. For example, IBM’s
management example: priorities, assumptions, observations, Watson is a system that is able to learn
assessment, pre-conditions, and so its behaviour through education; that
Steve, a financial planner, conducted a forth, as a preface to the actual question supports forms of expression that are
quarterly financial review with a client we want to ask. And that preface can more natural for human interaction;
today. He is 38-years old, married, be full of jargon, technical elements, whose primary value is its expertise;
father of two (12 and 14) and has a relative values, grammatical devices, and that continues to evolve as it
moderate-risk investment tolerance. and subtleties that are significant to experiences new information, new
His goals continue to be aligned with his the disciplines of the domain. But the scenarios, and new responses; and does
children’s education and retirement. He use of the language can convey far so at enormous scale. We refer to these
is currently heavily weighted towards more significant information that any as the ‘four-Es’ of cognitive systems.
small-cap growth funds, including a enumerated list of structured data could
24% stake in International Small-Cap ever offer – all of which is germane to
mutuals. He also has a 14% portfolio answering the question. Access to information often leads
stake in a property fund that specialises to new insights for the user that
in retirement properties that is in its 3rd And, of course, to find an answer to the enables them to discover risks and
year, and is showing signs of being sold question also requires the evaluation opportunities that might otherwise
out to a well-funded investment group. of complex ideas, knowledge, art and be elusive.
This client captured losses last year science captured in enormous reams
that significantly reduced his income of literature. The task of reading the
thousands of reports, articles, papers, Today, Watson is able to command the
tax burden, but is not likely to repeat
journals, studies, books, blogs, forums, language of the domain, from which it
that against the broad market gains
and web pages that are produced every can answer questions, becoming the
he’s enjoyed this year with his current
day (over 2.5 quintillion bytes or about perfect assistant, coach, or concierge.
allocation. He’s looking to explore
170 newspapers for every man, women, That has the power of enabling users to
shifting more of his holdings into tax-
and child on the planet8) – even when find important information for their job
sheltered municipal bonds. However,
– information that would otherwise be
he is suspicious of the stability of narrowed to just those sources that are
too hard to find in the river of literature
large municipalities, given the recently relevant to our discipline – is practically
flooding in to their work every day. More
reported bankruptcy of a large city in impossible.
so, access to this information often leads
that region.
This is the significance of a cognitive to new insights for the user that enables
Steve asks, what alternative bond funds system: to be able to understand the them to discover risks and opportunities
would address my clients concern and language as well as we do ourselves, be that might otherwise be elusive. Banks
align to his long-term goals? able to read mountains of literature to such as DBS Bank in Singapore, Citi in
find answers in seconds, and learn from the USA, ANZ in Australia and Nedbank
the experience getting smarter with in South Africa have been early pioneers
each action, outcome and new piece of with Watson in financial services.


2.5 Competitive Growth Model We now bring these four competitive We are now seeing new entrants
– where to enter, adapt or be forces together into a model to explain venturing into the financial services
exponentially out-competed their inter-relationships while also taking market with increasing regularity. Indeed,
into account the impact of technology the competitive forces outlined almost
proliferation and inter-generational invite entrants from non-traditional
‘Frankly, I am more wealth transfer on the financial services industries, who can leverage their cloud-
concerned about those landscape. enabled data holdings and the analytics
capabilities they have developed (see
two guys in a garage than The intensity of competition has
Chart 3).
increased significantly – a trend that will
the competitors I already only accelerate as digital proliferation
know about.’ and inter-generational wealth transfer
make traditional markets attractive for
Jeff Bezos – founder new entrants.

Chart 3: Competitive Growth Model

Technology Proliferation New entrants disruption zone
wealth transfer

1.4% 10.7% 21.7% 66.2%

1.7% 22.2%

Age 14-20 (Z) 21-34 (Y) 35-49 (X) 50+ (boomer, pre-boomer)
0.2%(z) 20.2%
47.8% 31.8%

0.4% 7.6% 27.1% 65%

Save Total Deposits
Spend Amount spent (last four weeks) on credit and debit cards (i.e. does not include cash or direct payments)
Borrow Total amount outstanding on all loans and amount intending to carry forward on credit card
Invest Total direct investments, managed investments, property investments (excluding primary residence) and superannuation
Source: Roy Morgan and Telstra Research, February 2014

Today’s competitive forces almost invite entrants from non-traditional industries, who can leverage their cloud-enabled
data holdings and their analytics capabilities, to enter the market.


The twin mega-trends of technology These entrants share some common Governments, too, are noting the
proliferation and inter-generational strategies: importance of these new entrants and
wealth transfer places a new epicentre new models. In a move to encourage
1. Deliver Personalisation through
of disruptive innovation squarely focused greater access to credit, the UK’s
creating digital propositions that
on Generations X and Y. This opportunity Chancellor of the Exchequer invited
are based on meeting the lifestyle
has attracted new entrants in the form proposals to establish an independent
needs of customers (as opposed to
of technology-based start-ups and 21st referrals exchange process so that small
product orientations). Examples are
century information businesses pursuing businesses turned down for credit by a
Movenbank and Simple for digital
adjacent strategies. This point was bank would be automatically referred to
mobile services;
highlighted in a recent Finextra article other credit providers, such as crowd-
(2014) titled ‘Millennials look to tech 2. Design Network Platforms to reach funding and peer-to-peer platforms15.
firms to replace unloved banks’9 referring connected communities. These have In Australia, in its submission to the
to a report on a three-year study of demonstrated explosive growth, Financial System Inquiry, Federal
10,000 people10, some of the key findings moving swiftly from start-up to mass- Treasury has requested it consider
of which were: market relevance. Examples are PayPal the scope for promoting services
in payments and Lending Club in peer- by redesigning product disclosure
• 33% believe they won’t need a bank at
to-peer lending; requirements for the digital age; it
all in the future;
suggested innovation to enable the
• Nearly 50% are looking to tech start- 3. Operate Cloud Business Models by growth of ‘information intermediaries’
ups to overhaul banking; and, reducing barriers to scale with agile that can apply expertise in presenting
operations. Examples include Google information in a more effective way.
• 73% would be more excited about a
Wallet for consumer and merchant
new offering from Google, Amazon,
payment services and Estimize – a Data analytics are at the heart of how
Apple, PayPal or Square than their
service that facilitates aggregation these new entrants are establishing,
of data from analysts for trading and competing and disrupting. We now
In another development, it was reported investments; and consider how ready traditional players
by the European press that Facebook has are for this new competitive environment,
sought approval from the Central Bank of 4. Leverage Open Source Artificial and discuss the transformation
Ireland to start a service that would allow Intelligence Based Technologies in implications.
users to store money on Facebook and open collaboration that promotes
use it to pay and exchange with others11. universal access and redistribution.

These attitudes are coming from Some major financial services Nearly a third of FinTech funding in
generations that today include the incumbents are already responding, 2013 went into ventures focused
greatest number of buyers of financial including the Spanish bank BBVA, with on analytics and personal financial
services. In the near future, inter- their recent acquisition of Simple, and management.
generational wealth transfer will also the direct investment by Australia’s
ensure these generations will hold the Westpac, via its new venture capital fund,
greatest pool of wealth in most countries. into SocietyOne. Interestingly, Westpac’s
If their needs are unfulfilled, the research investment reflects a broader trend of
suggests they are quite willing to look global investment in FinTech ventures
beyond traditional providers. These as captured by CB Insights, which tracks
non-traditional entrants, referred to venture capital and emerging industries.
by futurist Alvin Toffler as ‘The Micro- Their data shows FinTech investment
Multinational’, are often staffed by tripling from US$928 million in 2008
teams you can count on both hands and to US$2.97 billion in 2013, outgrowing
are unencumbered by legacy systems, overall venture capital spending by a
legacy processes or legacy technologies. factor of four13 (see Chart 4). Key to note
These players don’t see themselves as is that nearly a third of this funding
banks, but rather data companies. One in 2013 went into ventures focused
such example is Zopa, a peer-to-peer on analytics and personal financial
lender founded in 2005 whose CEO, Giles management (see Chart 5).
Andrews, tellingly said: ‘The business is
not a bank and I’m not a banker, we’re
more of a data company’12.

Chart 4: FinTech Financing Activity (US$)

500 3500

Investments (SM)
Deal volume

250 2000

200 1500
0 0

United States Europe Asia-Pacific Other Global Investment

Sources: Accenture CB Insights, 201314

Chart 5: FinTech Investment Areas

2008 10% 10% 6% 70% 5%

2009 32% 4% 6% 53% 6%

2010 26% 11% 7% 50% 6%

2011 33% 4% 8% 49% 7%

2012 23% 9% 10% 46% 12%

2013 29% 10% 19% 28% 14%

Banking & corporate finance Capital markets Data analytics Payments Personal finance management

Sources: Accenture CB Insights, 201314

Having now considered some of the competitive and growth
forces at play – and the importance of personalisation, the
network effect, cloud business models and open source
technologies – we now turn our attention to evaluating
financial institutions, their customers and the opportunities
for transformation.

Firstly, we gain an understanding of This study consisted of 3,106 surveys The objective of this study was to
the strategic importance, competitive with a sample of consumers who have understand how institutions viewed
readiness and maturity of financial at least one of the following products current and future levels of readiness
insitutions in the Asia Pacific region for personal use: general transaction/ to compete analytically. Here we
and how any transformation may savings account, home loan, credit card, assessed their level of capability
affect them. Secondly, through new high interest account, term deposit, maturity, its strategic importance to their
consumer research, we look to gain an personal loan or investment (e.g. unit organisation, levels of investments, the
understanding of what analytics-enabled trusts or managed funds). The online benefit expectations, and importantly,
experiences consumers value, and their surveys were conducted from February which group within the organisation is
associated business impact. to March 2014. The dataset in now driving strategy, requirements and
each country was weighted to be investments in analytics. The framework
3.1 Methodology representative of the total population used in section 3.2.1 and 3.2.2 was
This section has two parts. In 3.2, we aged 20-69 years, according to region, developed and published by Davenport &
summarise the key findings from a age and gender. Harris (2007) and applied to the sample.
qualitative study conducted by Telstra
up to May 2014 from interviews and 3.2 Asia Pacific Financial Institution 3.2.1 Attributes of Analytical
surveys with 43 C-Level executives from and Service Provider Competitive Competitors
banks, credit unions, insurance providers, Readiness Study Davenport & Harris (2007) define an
payment schemes, trading exchanges analytical competitor as ‘an organisation
and consumer and commercial finance that uses analytics extensively and
providers across Australia, New Zealand ‘I wanted to build a systematically to out-think and out-
and Asia. The objective of this research company. I had no money, I execute the competition’. Based on
was to understand the competitive their study, they found that the most
readiness of institutions, the maturity had no business experience analytically sophisticated and successful
of their analytics capabilities, and and I had no business idea. organisations had four common
their expectations in terms of their
investments and the returns on this So I was perfectly qualified. 1. Analytics supported a strategic,
investment. I didn’t want to build a distinctive capability;
In Section 3.3, we present the key
findings from a quantitative study,
bank. I wanted to build 2. The approach to, and management of,
analytics was enterprise-wide;
commissioned by Telstra, of consumers a technology company.
in five countries: Australia, Singapore, 3. Senior management was committed to
Malaysia, Indonesia and Hong Kong.
Many days I went to work the use of analytics; and
The objective of this research was to wondering if it would be my 4. The company made a significant
understand attitudes towards current
financial services providers in local last day. There were many strategic bet on analytics-based
markets and determine the current near-death experiences
digital behaviour of consumers.
Additionally, we wanted to gauge local over the first five years.
perceptions of five analytics-enabled Our idea involved doing the
experiences and assess the potential
impact of these on current behavioural business differently and
that was hard to sell.’
Rich Fairbank, CapitalOne CEO

Importantly, they describe each of Figure 3: Four Pillars of Analytical Competition
these characteristics as being broadly
equivalent in terms of importance for
defining an analytical competitor. The
characteristics were not independent
of each other, but should rather be
viewed as four pillars supporting an
organisation’s analytical capability.

Increasingly, analytics is being seen

as an enterprise-wide issue, rather
than being the sole province of one
line of business.

Our study of financial institutions

confirms these characteristics, but
identified a 17% gap with only 83%
Senior management commitment

reporting to have senior management

commitment to data and analytics. This
was reflected structurally too, with 49%
Enterprise-wide analytics

of respondents reporting an enterprise-

Large-scale ambition
Distinctive capability

wide approach to analytics – thus

indicating a shift from the capability
being managed by a single or multiple
line(s) of business to being organisation-
wide through a centre of excellence (see
Figure 3).

32% 49% 83% 16%

Source: Reproduced with permission from Harvard Business School Publishing Corporation and
Telstra Research, 2014


3.2.2 Assessing the Degree of Analytical Competitiveness

Davenport & Harris (2007) also detail a maturity model that outlines five stages on the path that an organisation follows – from
having virtually no analytical capabilities (Stage 1) to being an analytical competitor (Stage 5). Figure 4 summarises these stages.

Figure 4: The Five Stages of Analytical Competition


Analytically Impaired Localised Analytics Analytical Aspirations Analytical Company Analytical Competitor

5% 17% 46% 27% 5%

Organisation: Organisation: Organisation: Organisation: Organisation:

• Flies blind • Opportunity-driven • Begins efforts to • Enterprise wide • Enterprise wide
• Asks what happened usage integrate data and perspective analytical capability
to business • Asks what can it do to analytics • Able to use analytics generating big
• Focused on getting improve analytical • Asks what’s for point advantage performance results
accurate data to capability happening now • Knows what to do to and sustainable
improve operations • Uses analytical • Can extrapolate get to next level, but competitive
• No analytical capability to improve trends not quite there yet advantage
performance one or more functional • Uses analytics to • Asks how analytics • Asks what’s next,
measures in place activities improve distinctive can help innovate and what’s possible, how
• Measures ROI on capabilities differentiate to stay ahead of game
IT: individual applications • Measures are based • Builds broad • Is an analytical master
• Data quality low on future analytical capability fully competing on
• Multiple data IT: performance and • Measures analytics as analytics
definitions • Collects transactional market value drivers to improve • Measures success by
• Poor integration of data efficiently business performance how analytics are the
data and analytics • Lacks right data for IT: and create value primary driver of
into systems decision making • Proliferation of performance and
business intelligence IT: value creation
tools and data • High quality data
warehouse • Enterprise wide IT:
• Data remains analytics plan, IT • Fully fledged analytic
unintegrated, non processes and architecture that is
standardised and governance enterprise wide, fully
inaccessible data and • Some embedded or automated and
analytics automated analytics integrated into
processes and highly

Source: Reproduced with permission from Harvard Business School Publishing Corporation and Telstra Research 2014

The results of our study indicate that, Approximately 17% of respondents 3.2.4 Expectation on Improving Results
to this point in time, 5% of financial perceive their capabilities as being more Respondents were asked to what
institutions across Asia Pacific consider localised (Stage 2). They are more likely percentage performance improvements
themselves to be analytical competitors to be using analytics to support tactical they were expecting from the
(Stage 5). This result was consistent with activity, such as reporting, but do not introduction of analytics capabilities. The
the study by Davenport & Harris, who use the capability to compete. Only a result of 6.3% was an average across the
identified that analytical competitors in small proportion (5%) perceives their sample, and reflects how the majority of
their US study were from information- organisations as analytically impaired institutions reported being Stages 3, 4,
intensive services firms – four of (Stage 1) (see Figure 4). and 5 in their degree of competitiveness,
whom were financial services firms. with a clear understanding of benefits
The overall results indicate a significant
Of interest in our study was that one (see Figure 6).
gap of 68% in the data and analytics and
of these organisations was an online-
competitive organisational readiness, Figure 6: Results Performance
only institution born in the 21st century;
with only 32% perceiving that they are Improvement Expectations (%)
another was a 20th century institution
on the verge of (Stage 4), or ready (Stage
that had transformed.
5) to compete using data and analytical
The results indicate that approximately capability.
one in three (27%) are on the verge of
competing analytically (Stage 4). We
can expect that these organisations are Nearly half the organisations
likely to have already made the large surveyed have analytical
investments in the requisite technology, aspirations, but still require major
people and processes and are now
progressing to embedding the capability
investments in capability. They are
most likely to still be developing
strategy rather than capability.
into strategy, products and systems. A
survey by Gartner16 found that the Big
Data hype was translating into increased
investments in, and adoption of, Big 3.2.3 Level of Strategic Importance
Data technology. The industries furthest Respondents were asked where data
along the adoption curve came from analytics ranked in their organisation’s
the banking sector, with 13% already strategic priorities for FY14. The result of
deployed. ‘4th’ was an average across the sample,
but it was reported that it has made Source: Telstra Research, 2014
Nearly one in two (46%) respondents a very rapid entry onto the corporate
perceive themselves as having analytical strategic agenda (see Figure 5). In a
aspirations, but still require major global retail banking study by PwC, 90% Companies that invest in Big Data
investments in capability (Stage 3). They of executives agreed that ensuring they analytics outperformed their peers
are most likely to still be developing can harness the power of Big Data is one by 5% in productivity and 6% in
strategy rather than capability. They are of the six key priorities for leading banks profitability.
also likely to be developing business today. Of interest in that same study was
cases to support capability investments that only 20% feel well prepared or are
across the organisation. This result is investing to address those priorities18.
consistent with the broader findings
of a study by SAP and Bloomberg of Figure 5: Ranking in Top 10
100 banking executives in 2013. That Strategic Priorities
study found that only 46% of banks can
analyse external data about customers,
only 32% could analyse social media
activity, and only 29% could analyse
share of wallet17.

Source: Telstra Research, 2014


3.2.5 Level of Investment 3.2.6 Departmental Stakeholders service-related activity with marketing
Respondents were asked what Respondents were asked to select (at 39% of respondents) now emerging
percentage of their organisation’s which departments were stakeholders as the clear leader in driving strategy,
budgets was allocated toward analytics in analytics capabilities. What we found requirements and investments in this
projects. The result of 6% again reflects was that 66%-85% of respondents are area (see Charts 4 and 5).
the level of strategic importance and using analytics for sales, marketing and
benefit realisation that this area now
occupies in the organisational program
(see Figure 7). This result is consistent Chart 6: Departments Using Data Analytics (%)
with Ovum’s findings that investment by
retail banks is expected to accelerate 85% 83%
between 2014-2018, with the growth 78% 78%
rate ranging between 5.3% and 6.4%19. 66%
Gartner further reported that 34%
of bankers and 26% of insurers have
already invested in Big Data, with 24% of
bankers and 40% of insurers planning to 32%
invest within the next two years. Gartner
also noted that 44.7% of organisations
across many industries in the Asia
Pacific region have ambitious plans
to invest over the coming two years20.
Human Resources





Customer Service

Executive Management
In another study by McKinsey and
Massachusetts Institute of Technology, it
was reported that companies that invest
in Big Data analytics outperformed their
peers by 5% in productivity and 6% in
Figure 7: Data Analytics FY14 Budget
Proportion (%)
Source: Telstra Research, 2014


Source: Telstra Research, 2014

Chart 7: Department Leading Data Analytics Strategy, Requirements, Investment (%)
The overall results indicate a
significant gap of 68% in the
readiness of institutions to
compete on data analytics, with
8% only 32% perceiving that they are
on the verge of competing, or ready
to compete, using data analytical
capability. Further, there was a 17%
strategic priority gap identified with
only 83% reporting to have senior
management commitment to data
analytics. These gaps explain the
24% significant investments (averaging
6% of organisational budget in
FY14) being allocated for data
analytics projects. Corresponding
YES expectations for performance
improvements averaged
39% approximately 6.3%. Clearly, growth
is the major driver of investment,
with 68% of Sales and Marketing
departments now driving the data
analytics strategy, requirements
and investment programs.


Operations Marketing Sales Executive Management Other

Source: Telstra Research, 2014


3.3 Analytics-Enabled Consumer Those who indicated they found the During the evaluation of each concept,
Experience Study concept appealing and were likely respondents who had indicated they
Respondents across Australia, to use it, were also asked to indicate were likely to use that concept were
Singapore, Malaysia, Indonesia and Hong how the concept would impact on then asked to rate how well or poorly
Kong were asked to evaluate a series of their satisfaction levels, likelihood to each concept would deliver on these
analytics-enabled service concepts. The recommend their provider to friends and same experience measures if provided
concepts were shown to respondents family, the impact on consideration when by a financial institution (i.e. a ‘post’
in a random sequential order in order to switching financial services provider measure). Not all metrics were rated for
ensure a reliable analysis of all concepts. and the impact on consideration when each concept, only those experiences
Descriptions of each concept are opening new accounts with their current that were appropriate for that concept.
provided in 3.3.1. financial services provider.
For the analysis of this data, the
For each concept, respondents were As well as these metrics, respondents difference between the pre measure
asked to indicate the level of appeal of were also asked about the likely impact and the post measure was calculated
that concept, as well as the likelihood of each concept on their perceived to create an impact score. The impact
of using this service if it were offered by banking experience. Nine items were scores were then averaged out across
their main financial service provider. tested as baseline (i.e. ‘pre’) measures the five countries to provide a single
prior to the concept evaluation; for experience impact score for each of
example, one of the tested items was: the nine attributes. In this report, we
‘Knows me and my financial situation, highlight which two experiences are
irrespective of how I use the bank or most impacted (across all countries) for
financial institution (e.g. in person, in each concept.
a branch, contact centre or online)’.
The full list of items is shown in Table
1. Respondents were asked to indicate
how well their main financial institution
performed on each item.

3.3.1 Concept Descriptions and Perceived Banking Experience

A Personalised In-Branch Experience

An in-branch experience that is personalised and customised to your needs.

This is a service you would opt-in to use which would allow bank branch staff to receive a notification as soon as you arrive at
a branch. This notification would contain information about your recent interactions with the bank and your financial history,
allowing the branch staff to offer a more customised and personalised experience in your visit to the branch without you
having to explain it.

B Personalised Contact Centre/ Telephone Experience

A contact centre/telephone experience that is personalised and customised to your needs.

This is a service you would opt-in to use which would allow your call to a bank call centre to be personalised and customised based
on the financial products you hold, or have enquired about with that bank. For example, the menu options you hear once you have
identified yourself when waiting on the phone would be customised so that you only hear options that are relevant to you.

C Personalised Digital Banking Experience

Personalised digital banking experiences.

This service would allow you to access digital tools and insights to help manage your finances such as saving, spending,
borrowing or investing. These tools and insights could include things like calculators, tracking of your spending and savings
in real time with relevant ads, alerts, recommendations and notifications sent to you based on your financial behaviour. This
service would be accessed online on any device (e.g. a smartphone, tablet or computer).

D Digital Advice

Integrating banking, financial and insurance services advice.

This service would allow you to access specialist advice on banking, financial and insurance services. This service would offer
advice in a number of different ways: virtual/digital advice (e.g. advice accessed using speech/voice recognition technology
or online), access to a specialist/expert in person, via video chat or over the phone and advice via social networking with
customers who have similar banking and financial services needs to you.

E Insurance Customised to Behaviour and Lifestyle

Insurance customised to your behaviour and lifestyle.

Insurance where your premium is calculated according to your specific usage patterns. Because you are only paying for what
you use, the key benefit of this concept is that it will result in a fairer premium.
• Comprehensive motor insurance where your premium is calculated based on how often you use your car, how far you drive,
and where you drive or park your car. This information is accurately captured by a GPS type device installed in your car and
transmitted back to your insurer.
• Private health insurance where your premium is calculated according to your specific lifestyle, such as how often you
exercise and receive medical check-ups. This information may be captured via an application (app) you install on your
smartphone or another device.
• Home and contents insurance where your premium is calculated according to the monitoring devices installed on windows
and doors throughout your home. This information is accurately captured by a monitoring device installed in your home and
transmitted back to your insurer.
• Life insurance where your premium is calculated and adjusted according to your lifestyle - for example whether or not you
use public transport, exercise regularly and receive medical check-ups. This information may be captured via an application
(app) you install on your smartphone or another device.


Table 1: Perceptions of Banking Experiences

1. Provides easy-to-understand, digital explanations of products

2. Access to banking experts when I need them, through my preferred way of interacting with them

3. Proactively recommends products and services that are relevant to me with enough information on the product
for me to make decisions

4. Provides information on products in an engaging way

5. Provides information in a way that is easy for me to access

6. Provides information that helps me achieve my goals, such as saving, spending, borrowing or investing

7. Knows me and my financial situation, irrespective of how I use the bank or financial institution
(e.g. in person in a branch, via a contact centre or online)

8. Provides me with tools and insights to help me manage and control my finances, specifically saving, spending,
borrowing and investing

9. Alerts me when something relating to my finance occurs that I need to know about

The following section outlines the 1. Cultural factors can encourage As such, specific results should always
research findings of the concept some respondents to indicate more be viewed in the context of all concepts
evaluation. Please note that throughout positively when evaluating potential within each country (i.e. what is the
the analysis, the scores in Asian market concepts; and highest ranked concept as opposed to
countries are consistently higher than the lowest ranked concept in Australia?)
2. The Internet may be less integrated
those in the Australian market. While this rather than across countries.
into the general population in some
is the case, it does not necessarily mean
Asian markets. As a result, the online
that all of these concepts will perform
population in these countries may
better in these Asian online markets than
represent a more ‘early adopter’
in the Australian market, as there could
orientation than in more mature
be several reasons for this, two of which
markets such as Australia, where the
online population is now considered to
be broadly representative of the total
population. This will result in Asian
consumers being more open to trying
new market concepts.

3.3.2 Appeal and Impact of Concepts
Each of the five digital service concepts achieved high appeal levels in all countries.
Chart 8 shows the appeal ratings for each concept by the individual countries, as well as the experiences most affected for each
concept, across all countries.

Chart 8: Appeal and Experience Perception Impact by Country

Perceptions Changed Impact on Experiences with Financial Institutions

Access to banking experts when I need them
through my preferred way to interact with them

Proactively recommends products and

services that are relevant to me

Knows me and my financial situation,

irrespective of how I use the bank
or financial institution

Provides me with tools and insights to

help me manage and control my
finances, specifically saving, spending,
borrowing and investing

A. Personalised B. Personalised C. Personalised D. Digital E. Insurance

In-Branch Contact Centre/ Digital Banking Advice Customised to
Appeal Score Card Experience Telephone Experience Behaviour and
Experience Lifestyle
(%) (total population)

Australia 41 43 38 28 50
Singapore 57 56 62 45 61
Hong Kong 57 60 58 51 50
Malaysia 64 60 70 57 61
Indonesia 82 78 86 78 78
Indicates top two experiences per concept Indicates two highest concepts per country
Source: Telstra Research, 2014


Australians found the customised These results show quite clearly the This indicates that each concept has
insurance (50%) and personalised value of a personalised digital banking the potential to improve consumer
contact centre (43%) concepts most experience for the various markets perceptions of financial institutions.
appealing. Singaporeans found the across the Asia-Pacific region, with this
With that in mind, the ‘Knows me and my
personalised digital banking experience concept ranked in the top two most
financial situation, irrespective of how
and customised insurance concepts appealing in all Asian markets.
I use the bank or financial institution’
most appealing, with around six in
Alternatively, those who did find the digital experience achieved strong positive
ten indicating that they found each
advice concept appealing in any country results across all five concepts (in the
appealing (62% and 61% respectively).
showed strong support for the concept top two for all concepts). The ability to
Amongst Hong Kong consumers, the in terms of satisfaction and advocacy access banking experts when needed
personalised contact centre (60%) and scores. This would suggest that it could was also a common benefit across
personalised digital banking (58%) develop a strong niche position with the personalised in-branch experience,
concepts were considered the most Asia Pacific region and provide a useful personalised contact centres and digital
appealing. customer acquisition tool. advice. Finally, the provision of tools and
insights that inspire and help consumers
In the Malaysian market, the highest
The personalised digital banking to manage their finances was a strong
level of appeal was achieved by the
experience was highly valued theme across the personalised in-branch
personalised digital banking experience
across all markets in the Asia- experience and personalised contact
(70%) and the personalised in-branch
Pacific region. The digital advice centre experiences.
experience (64%). Indonesians were
experience could also help with
generally positive, with 86% indicating 3.3.3 Incremental Appeal
customer acquisition and retention.
that the personalised digital experience Analysis was conducted to identify the
Interestingly, in all countries the
was appealing, and 82% finding the optimal number (and combination) of
personalised in-branch experience
personalised in-branch experience concepts. This analysis looks to identify
concept appears in the top three
appealing. the combination of concepts that obtain
the greatest number of people who find
at least one of the concepts appealing.
All nine experience metrics achieved Chart 9 shows the incremental appeal
positive results (for every concept for levels for each market as concepts are
which they were measured – note, some added to the concept portfolio.
experience metrics were not relevant
to the concept and therefore were not

Chart 9: Incremental Appeal of Concepts (based on five concepts)





These levels of appeal
are based on specific
concept combinations
50 as shown in Table 2.

1 Concept 2 Concepts 3 Concepts 4 Concepts 5 Concepts

Australia Singapore Hong Kong Malaysia Indonesia

Source: Telstra Research, 2014

Appeal generally begins to plateau at three concepts in Australia, Singapore, Hong Kong, Malaysia and Indonesia. In Indonesia,
marginal appeal is relatively limited as new concepts are added to the portfolio. This is a result of the overwhelming appeal levels
of all concepts (NB. this may be a result of the low penetration of digital financial solutions in the market as whole, which would
mean that these concepts are relatively foreign to the Indonesian online market and therefore potentially represent a new and
somewhat exciting prospect for financial services in the country).


To achieve the maximum appeal in each country, a specific combination of concept should be utilised. Table 2 shows the ideal
combination of services in each market.
Table 2: Concept Combinations (based on five concepts)

Australia Singapore Hong Kong Malaysia Indonesia

Incremental Incremental Incremental Incremental Incremental
Appeal Appeal Appeal Appeal Appeal

1 Concept E 50 C 62 B 60 C 70 C 86

2 Concepts EB 64 EA 77 CB 75 EC 82 CB 90

3 Concepts EBA 72 ECA 85 CBA 81 ECA 86 DBA 92

4 Concepts ECBA 75 ECBA 89 DCBA 85 ECBA 89 DCBA 93

5 Concepts E D C B A 76 E D C B A 90 EDCBA 87 EDCBA 91 E D C B A 93

A. Personalised B. Personalised C. Personalised Digital D. Digital Advice E. Insurance

In-Branch Experience Contact Centre/ Telephone Banking Experience Customised to Behaviour
Experience and Lifestyle

Source: Telstra Research, 2014

Personalised digital banking and customised insurance appear in the top two concepts for each country (with the exception
of Indonesia). Interestingly, in all countries the personalised in-branch experience concept appears in the top three concepts.
This finding may contradict the suggestion by some commentators that the in-branch experience is dying and will eventually
be replaced by the online mode. Instead, it suggests that the in-branch experience is still a fundamental part of what makes a
financial services provider appealing to consumers in the Asia-Pacific region.
3.3.4 Impact of Concepts on Retention
Chart 10 shows the impact of each concept on retention amongst those who indicated they would use the concept.
Chart 10: Impact of Concepts on Retention by Country

Retention Score Card (%) A. Personalised B. Personalised C. Personalised D. Digital E. Insurance

Average of impact on satisfaction and impact on In-Branch Contact Centre/ Digital Banking Advice Customised to
recommendation scores amongst those who find Experience Telephone Experience Behaviour and
concept appealing and are likely to use Experience Lifestyle

Australia 82 80 82 86 78
Singapore 92 88 62 90 89
Hong Kong 90 88 85 87 87
Malaysia 94 91 95 91 93
Indonesia 97 97 97 96 96
Indicates two highest concepts per country
Source: Telstra Research, 2014

In Australia, the digital advice concept service gave it a 95% retention score, strong retention scores achieved by
has the greatest impact on customer while the digital advice and personalised the personalised in-branch concept
retention amongst those who would contact centre offerings were both indicates that there is no surrogate for
use the concept (86%). Within the scored at 91%. Finally, Indonesia was split high quality in-branch service.
Singaporean market, those who with the personalised in-branch, contact
3.3.5 Impact of Concepts on Acquisition
would use the personalised in-branch centre and digital banking concepts all
As well as measuring the impact on
experience give it a retention value of achieving the strongest retention scores
customer retention, the research also
92%. In Hong Kong, the personalised (97%) amongst those who would use
measured the impact on customer
in-branch experience drives customer them.
acquisition for each concept. Once again,
retention with a factor score of 90%
These results show the ongoing the questions were asked of those that
amongst those who would use the
importance of a good in-branch indicated they would use a concept.
service. Malaysian consumers who would
experience. While digital services have Chart 11 shows the results for each
use the personalised digital banking
proven to be an appealing and useful concept by country.
supplement for financial services, the

Chart 11: Impact of Concepts on Acquisition by Country

Acquisition Score Card (%) A. Personalised B. Personalised C. Personalised D. Digital E. Insurance

Average of impact on consideration when In-Branch Contact Centre/ Digital Banking Advice Customised to
opening a new account and impact on Experience Telephone Experience Behaviour and
consideration when switching amongst those Experience Lifestyle
who find concept appealing and are likely to use

Australia 72 67 78 80 75
Singapore 83 79 81 88 87
Hong Kong 83 78 80 86 85
Malaysia 92 86 88 88 93
Indonesia 94 93 94 96 93
Indicates two highest concepts per country

Source: Telstra Research, 2014


Amongst those Australians who would

use each concept, customer acquisition These results indicate that, in
was highest for the digital advice concept general, analytics-enabled digital
(80%). Singaporeans who would use financial services may provide
digital advice indicated an acquisition consumers across the Asia Pacific
score of 88%. The Hong Kong market region with a deeper feeling of
showed similar results to Australia connection with their bank or
and Singapore, with the digital advice financial services provider. By
concept achieving an acquisition score integrating these services, banks
of 86%. In Malaysia, those who would and other financial service
use customised insurance gave it a 93% providers can provide a more
acquisition factor, while Indonesians who customised service to the modern
were inclined to use the digital advice consumer that can help promote
concept gave it a 96% acquisition score. customer acquisition, engagement
and retention. However, as these
Across all countries, the personalised digital services can only be enabled
contact centre service does not appear by large-scale analytics, it is
to be as effective as other concepts now becoming clear that modern
at generating customer acquisition, financial services providers need
receiving the lowest acquisition score to have well-developed analytical
of all concepts in each country. Given information gathering capabilities.
that this service also did not perform
as strongly as other concepts in the
retention analysis in several countries,
the results would suggest that a
customised call centre concept should
be adopted in certain countries only
if it achieves better outcomes for the
financial service operator in terms of
reduced costs or some other strategic

The research now leads us to consider the technology
environment from both a consumer and financial institution

Here, we present our vision for a Smart Figure 8. Growth in connected devices
Connected Financial Services World. We 30-75 Billion devices
then provide guidance on how analytics
and communications technologies can
be used to respond to the changing
competitive environment, and how the
design of experiences that are valued by
consumers can deliver growth.
4.1 The Consumer Environment - A
Smart Connected World
10-12 Billion devices
‘Smart networks,
smartphones and smart
software are putting
technology right at the
heart of the Australian 2013 2020
economy and connection has been the ability for people to in 2010, HFT accounts for 40% of
at the heart of the connect with each other more readily, equity order volumes in Europe, over
with almost two billion active social half of volumes in the US and for
Australian way of life. platform users globally and more than Asia about 5-10% with potential for
Technology is connecting 6.5 billion mobile phones in a world of rapid growth27. Others report that
about 7.2 billion people24. algorithmic trading accounts for half of
everyone and everything all trading on the New York and London
• Everything is connected
- and creating new The next phase of the age of
exchanges28. Demand for ‘trading at
the speed of light’ and the need for
opportunities for all of us’. connectivity focuses on connecting
shaving nanoseconds of latency has
devices and exposing data from those
David Thodey, CEO Telstra Corporation Limited22 seen organisations like Telstra make
devices, primarily for consumption
significant investments in cable
The Smart Connected World has many by other devices (i.e. not humans).
systems linking global markets and
pseudonyms: the Internet of Things, the Underpinning this machine-to-
Internet of Everything, and the Industrial machine connectivity is a range of
Internet. However, in each version this high-bandwidth, low-latency, short- • Everything is intelligent
vision is essentially underpinned by five range communications technologies, Intelligence is being built into an
basic premises: such as Fibre, Bluetooth 4.1, IEEE ever-increasing range of devices,
802.15.4 and WiGig. Various sources infrastructures and environments.
• Everyone is connected predict the global ecosystem of Looking at the consumer space,
We are near the end of one phase of connected devices will increase to every day we see announcements for
the connectivity revolution where the 30-75 billion devices by 202025 - that’s intelligent appliances29, intelligent
focus has largely been on connecting between 4-10 connected devices for vehicles30, home automation products
people to the Internet, typically via every person on the planet. In fact, and even intelligent toothbrushes31.
‘traditional’ devices such as PCs, Cisco estimate almost 3% of all ‘things’ For signs of the rise in embedded
smartphones and tablets. In developed on earth will be network-connected intelligence, we only need to look at
economies, we are rapidly reaching a by 2020 – up from 0.6% in 201226. Of shipments of the processors used
point where, for most purposes, we can course, the trend to pervasive high- to control consumer devices, where
assume all those wishing access to the speed connectivity isn’t restricted 32-bit microcontrollers and System-
Internet can have it. The ITU estimates to people and individual devices – it on-Chips are rapidly supplanting the
77% of people in the developed world applies equally to more complex relatively dumb 8-bit microcontrollers
use the Internet today23. At current abstract entities such as markets. traditionally used to power appliances,
growth rates, this will reach 95% in The high-frequency trading (HFT) etc. It’s clear that this is being driven
2020. Of course, one of the headline market has now become globalised. by the need to provide the network
stories of personal connectivity The Bank of England estimated that connectivity described above32.


• Everything that can be measured • Analytics will remove friction from dividend of the Smart Connected
will be measured business and lifestyle processes World for industrial applications
As we interact with the world, The final and key premise of the Smart alone to be over US$32 trillion
whether physically or digitally, we Connected World is that analytics annually35. And when IT consulting
leave footprints. In the digital world, will be used to improve decision- group Tata conducted a broad survey
for example, our trail includes making and to remove friction from on Big Data activity, they found that
clickstreams on websites we visit, our existing processes of all kinds. In financial services organisations had
search queries, the content we view Section 3, we saw consumers’ thirst the second highest expected return
and much more. Technologies such as for personalisation. We saw that on investments in Big Data, with an
Micro Electro-Mechanical Systems customers believe financial services expected mean ROI of 69%36.
make it possible to deploy arrays of providers have more than enough
highly advanced sensors both widely information to be able to tailor
and very cheaply. Janusz Bryzek from products and customer service to suit
Fairchild Semiconductor talks of a them. The first four premises above
trillion sensors deployed by 202033 – ensure that financial service providers
that’s about 140 sensors per person. have more data available than ever
In fact, of all the connected devices before to understand their customers’
mentioned above, IDC predict that needs and their context. There are
14% will be fully autonomous devices also substantial operational economic
largely devoted to collecting data34. benefits to be had. GE estimates the

Infographic: Vision for the Smart Connected Financial Services World

• Application processor shipments 30-75 Billion connected

grew 47% in 2013 devices by 2020
• Shift from micro-controllers to general • 3% of all “things” on earth
purpose CPUs and System-on-Chip. will be connected in 2020

• Amount of data in
• 1.5B smartphones the world doubles
globally every seven months
• Smartphone • Over four Zettabytes
penetration: Hong in storage currently
Kong/Singapore 87%,
Malaysia 80%,
Australia 75%, China Sensor
71%, Indonesia 23% Cloud Interconnected
Cloud Storage

• 177M wearables
by 2018
• 515M health/ fitness/
wellness sensors
shipped annually by
2017 Sensor

Everything is connected
• 60-100 sensors
in new cars now - Interconnected 3rd Party
200 by 2020 Cloud Analytics Aggregators
• 50% of new cars
network connected
by 2015, 100% Sensor
by 2025 Cloud

• 5.7 connected
devices & sensors
per home in 2013
growing to 30
by 2018 Sensor
Cloud Marketing 3rd Party

• Over 6.5M free

Wi-Fi hotspots
• Nokia has mapped
the interior of over
50k buildings and
Google more than 10k Sensor Multichannel Alerting
Cloud Contact
• Over half of all
trading on the NYSE
and LSE is HFT
• Every
millisecond lost in Anything
HFT, results in that can be
$100m pa measured will Dynamic Operational
opportunity loss Everything Pricing Management
be measured is intelligent
• 500M Tweets daily
• 189B emails daily
• 400M Snapchat
Everyone is connected

“snaps” daily
• 4.75B items shared Fraud & Product Design
on Facebook daily Risk & Selection

• 2.5B Internet
users globally
• 131k person years
spent online daily
• In Australia: 14.5M
card transactions,
7.4M direct entry &
2.2M ATM Analytics
transactions daily
removes friction
• Globally 9M PayPal
transactions daily


4.2 The Financial Service Provider The ability to manage and effectively Maintaining such focus in the face of
Environment – Data, Infrastructure integrate not just internal data, but also the challenges described in Figure 9 is
Analytics and Actioning externally sourced data and insights, no easy task, even for the most capable
is a key capability for analytics-driven financial service organisation. Similarly,
organisations and is only likely to many organisations are challenged to
‘Data helps us form a become more important into the future. strike an optimal balance between the
picture of the customer’s Analytics-driven business in a Smart
agile and innovative analysis and uses
of data with the security and governance
life journey, the next step Connected World requires access to
of data, required to maintain consumer
unique and often-rare skill sets that
they will take and how we are increasingly in short supply38. This
trust and meet regulatory requirements.

can help.’ fact was highlighted in a study by The

Economist Intelligence Unit, which
Today’s financial institutions also have
an enormous advantage over likely
Karen Ganschow – Westpac, Head of Customer showed lack of in-house skills was competitors in terms of the quality of
Relationship Marketing considered the most reported hindrance the data that they hold. More than a
to adopting such business models decade of focus on data governance
The first and most obvious impact of the globally. Indeed, 45% of respondents in and quality by the Australian Prudential
Smart Connected World is data and lots the ASEAN region saw lack of in-house Regulatory Authority and similar
of it! Financial services organisations skills as the biggest blocker to adopting regulators internationally has provided
already deal with large volumes of analytics-driven business models39. an advantage that flows through to
customer data – although this is typically analytics. The better the data you start
transactional in nature. However, the Today, financial service providers hold with, the more reliable the results of
Smart Connected World poses significant a unique and hard won position of trust your personalisation, contact and
challenges to even the most capable with customers. However, increasing marketing analytics.
data teams and advanced information public scrutiny regarding how potentially
architectures. One useful way to think sensitive information about individuals
about some of these challenges is the V7 can be mishandled, means that trust Today’s financial institutions have
model shown in Figure 9. can dissipate very quickly if constant an enormous advantage over
and vigilant focus is not maintained on likely competitors in terms of the
The data challenge posed by the information and data security. quality of the data that they hold.
Smart Connected World does not stop
The better the data you start with,
at organisational boundaries. It is
the more reliable the results of
important to recognise that in an area
your personalisation, contact and
such as financial services, which touches
marketing analytics.
on so many aspects of people’s lives,
much of the data required by analytics-
driven competitors cannot be sourced
internally. In fact, a survey by Tata
indicated that 30% of the data used by
financial services organisations across
Big Data initiatives has been sourced
outside the organisation37.

Figure 9: The V 7 Model

Volume Validity Volume Validity Volume Validity

Velocity Veracity Velocity Veracity Velocity Veracity
Variety Volatility Variety Volatility Variety Volatility
Value Value Value

The first three Vs talk about the The next three Vs refer to properties Finally, one major data challenge
flow of data. Obviously the Smart of the data we use and the insights posed by the Smart Connected
Connected World generates vast we infer from it. Data and the World is not technological. Obviously
volumes of data about customers insights we infer from it are not data and the insights derived from
and prospects. Soaring volumes absolute and immutable things. it have intrinsic value. However,
are accompanied by increased They exist in a spectrum of validity organisations typically have not
velocity – a growing demand for real- (how correct, accurate and precise yet developed the tools to treat
time and near-real-time analytics it is) and veracity (how complete, them alongside other classes of
driven by ever increasing service how relevant and how up-to-date assets whose value is actively
expectations from customers. This it is), which must be continuously measured and managed. In fact,
has been one of the key drivers managed if we are to understand value is often not ascribed to data
of demand for high-speed, low the applicability of those insights. and insights at all, but rather to
latency networks, particularly What is more, both the data and the the infrastructure hosting them or
for trading environments. Finally, insights age – they are volatile – and to the processes they impact. This
the sheer variety of data types, the levels of volatility are highly is one possible factor driving the
sources, structures and formats variable. fragmented organisational approach
is also increasing rapidly. Deciding we saw in Section 3 of this report.
how to best handle a particular This issue has seen the rise of a
single customer call may involve new discipline, often referred to
analysing structured data (e.g. as infonomics, which is the study
traditional CRM and transaction of the economic value of data and
records), unstructured data (e.g. information. The Electronic Trading
speech analytics of the in-flight call) part of the financial services market
and semi-structured data, such is one exception. Real world mining
as customer comments on social companies understand the value of
media. geological data; for institutions, the
equivalent is their customer data.


4.2.1 Key Infrastructure Technologies Advanced SQL – No SQL No SQL is an early adopters’ market
Advanced SQL is a technology where the brunt of technology is open
and market that is ready for source, tooling is crude (where it exists),
How best can we manage and
prime time, with major IT and the vendor ecosystem is only
interact with the vast amount of
platform players having in the beginning to establish itself. For early
data available, so we can find new
past year planted their flag in this space adopters of No SQL that can get access
and useful relationships and ways
through acquisition. The key question to previous skill sets (Hadoop skills
of using that data?
here is one that applies to any market are rare), it’s time to look at pilots and
that is in a consolidation phase: which prototypes. No SQL platforms such as
Now let us examine just some of the players will get successfully integrated Hadoop, DataStax, MongoDB are based
key technologies that are being used by into their new parent companies on open source software and are not
organisations to enable analytics-driven and leverage the larger go-to market known to be enterprise grade. There is
business in the face of the challenges presence that big players provide? an acknowledged worldwide shortage
posed by a Smart Connected World. Advanced SQL platforms, such as those of data scientists conversant with
provided by IBM Streams, tend to be these platforms (see the Data Analytics
considered more enterprise grade and to Framework below).
have an appropriate resource pool.

Data Analytics Framework









Source: Ovum, Big Data Strategy Report, 2012

Hadoop & Co. Complex Event Processing Human language is also a very high
Hadoop and a number of Complex Event Processing bandwidth channel for our brains to
competing platforms are (CEP) involves combining interact with the outside world. Classical
actually frameworks that streams of data from multiple speech interfaces are typically simple
consist of a number of items: (typically high volume) sources stream command-response. Natural language
to look, in real-time, for priori patterns interfaces fronting cognitive systems
a) A way to distribute data and enable much richer and more flexible
that indicate a particular event has just
objects across massive networks of aspects of language such as abstraction,
occurred or is likely to occur. For example,
computers yet still retain the ability which can be helpful when interacting
a particular pattern of withdrawals
to access that data quickly; with large and complex sets of data.
across the ATM network may indicate
b) A way to efficiently manage and a fraud ‘blitz attack’ is underway; or a What is more, cognitive systems can
distribute computing tasks across pattern of interactions across channels shoulder some of the discovery load
the network; and coupled with a pattern of transactions themselves – learning the types of
may indicate a particular customer relationships and features that are
c) Libraries and APIs, simplifying the has reached a critical decision point useful and interesting, and proactively
task of writing programs to run about whether to churn; or instructions identifying them.
across the network. based on a set of variables such as
Speech and Text Analytics
These frameworks have gained price, quantity or timing to execute
The conversations that
popularity for complex analytical tasks an algorithmic trade without human
customers have with staff
across large, and often distributed, intervention. By utilising large in-memory
and that customers have
farms of computing resources. Many of databases and statistical decision trees,
with each other are an enormously
the major cloud platform providers offer CEP systems allow organisations to
rich source of information about the
Hadoop or alternative frameworks on define patterns of interest and to trigger
customer’s needs, interests and their
their infrastructure. particular actions when those patterns
attitude to the organisation. Text (and
are observed.
In-memory Databases speech transcribed into text) can be
Data stored in primary 4.2.2 Key Analytics Technologies simply mined for keyword ‘triggers’
storage (typically called or, using the types of technologies
Discovery Technologies mentioned in this section, can be
RAM) can be accessed One of the key problems
much more quickly than data stored on analysed holistically in the context of a
with vast streams of complete conversation. More advanced
secondary storage (e.g. spinning disks or heterogeneous data is how best humans
Solid State Drives [SSDs]). So, logically, speech analytics also look at features
can interact with them to understand like pacing, tone and vocal stresses to
a database residing entirely in RAM will their structure and explore them to
be substantially faster. Improvements estimate the customer’s emotional state.
find new and useful relationships and Are they confused? Angry? Eager? Is
in memory density and reductions in ways of looking at that data. Probably
the cost-per-gigabyte of dynamic RAM their sentiment becoming more or less
the highest bandwidth channel human positive as the conversation progresses?
(the most common type of RAM) make brains have to the outside world is our
it economically feasible to keep much This is potentially critical information to
visual cortex. Many people find it easiest help inform how the customer should be
larger data bases entirely in primary to think and communicate visually.
memory. This is the concept of the in- treated.
Over the last decade, there has been
memory database. Rapid developments significant research focus on tools and
in SSD technology and forthcoming environments to help explore large data
memory technologies such as sets using the power of the visual cortex.
memristors40, magneto-resistive RAM41
and Restive RAM42 promise interesting Some of that focus has been on new
changes in the way data is stored and display paradigms from simple word
analysed. clouds to graphical representations.
Others have focused on the environment
itself, creating large case immersive


Social Analytics Intelligent Contact

While conversations are Case Study 1. Bloomberg uses Management
extremely rich sources of social analytics to support traders One of the major levers
information, knowledge of financial services
To help traders using its
the personal connections organisations possess to influence
professional desktop trading
and social structures through which the choice of their customers is by
tool, Bloomberg provide tools to
they occur is also extremely valuable. directing inbound contacts to the
help traders understand the flow
Social Network analytics typically right person to handle that contact.
of social commentary regarding
use information exposed by social In some cases, the rules for routing
current or prospective investments.
platforms such as Facebook, Twitter and the contact are straightforward, as
Traders are provided with a stream
Snapchat to understand the structure would be the case for a customer with
of content and trending topics,
and dynamics of these relationships. It a designated relationship manager.
mined from Twitter, related to the
seeks to answer questions such as which For other customers, a more detailed
investment. Additionally, sentiment
individuals are influential regarding understanding is required, including
analysis of the content stream
a particular topic and who do they factors such as the likely intent of the
gives an indication of the state of
influence? Which customers are genuine customer, the likely impact of current
public sentiment regarding that
advocates and which are detractors? contact on customer value and customer
Another branch of social analytics – satisfaction, the previous history of
social monitoring – looks at the content contact regarding the likely subject,
of publicly available posts on popular 4.2.3 Key Technologies for the costs associated with the various
social platforms to identify artefacts Actioning Insights options for routing the contact, current
such as rapidly emerging news or trends Next Best Action resourcing and staff availability, the
and shifts in public sentiment. Next best action (NBA) sensitivity of this customer to levels
technology (also known as of service and much more. Modern
Predictive Analytics intelligent contact management systems
Predictive analytics is the next best offer technology)
primarily focuses on give the flexibility to use complex
overarching term for a wide analytical systems to select the best
variety of techniques aimed guiding a contact centre agent or staff
member on the best course of action routing strategies for this specific
at predicting an individual contact from this particular customer.
customer’s needs or actions based on to take with this customer. In reality,
data about their previous actions, the most organisations simply limit the Targeted Marketing
actions of their peers and their current recommendations to the most likely and Outbound Contact
context. Increasing the accuracy of products that could be successfully Management
predictions generally involves sourcing up-sold or cross-sold to this customer. A classical use case for
extensive and accurate records of the More mature organisations use NBA analytics-driven decision making is to
previous behaviour of the customer systems as the basis for personalised ensure that marketing messages, offers
population (to create better predictive advice and recommendations. NBA and content are targeted as tightly
models) and instrumenting interactions systems are used primarily on inbound as possible at those who are likely to
with the individual customer to provide contact channels. Ideally, the analytics perceive that contact positively. There
better data to feed into those models. should be dynamic, including information are many drivers for accurate targeting,
The use of predictive analytics in an area about the state of the current in-flight including reducing the cost of marketing,
as wide ranging and with decision points contact; however, many organisations decreasing the likelihood the customer
as critical as financial services obviously limit NBA advice to predetermined will perceive the organisation as prone
requires access to varied and extensive recommendations. to spam, and increasing the ability to
customer data. This reinforces the point create highly personalised offers and
made previously in this section that the messaging, which in turn maximises the
ability to effectively integrate internally likelihood of conversion. Ultimately, the
and externally sourced data will become desire of the organisation to understand
an increasingly critical capability. the customer’s context and predict their
needs must be balanced against the
customer’s desire for privacy.

Scheduling and targeting of outbound 4.3 Analytics-Enabled Experiences Other organisations are exploring
contact beyond marketing is a complex We now bring the research in previous augmented intelligence (AI) technology
discipline. On the one hand, outbound sections, together with the technology – one of the early pioneers being the
contacts can be extremely effective at aspects discussed thus far, to provide Australian-born company MyCyber Twin,
limiting the impact of a poor customer guidance on how financial institutions who use avatar-based web interfaces
experience and at influencing the can create valued experiences for their to create Intelligent Personal Agents
customer during critical decision points customers. (IPAs). Customers ask questions and give
such as decisions to churn or during instructions using natural language and
major life events. On the other hand, 4.3.1 Experience 1: ‘Contact.Me’ the virtual agent infrastructure exploits
outbound contacts that are mis-targeted the customer profile and context data to
– which occur at the wrong time or on the ‘It would save time interpret and action the requests. IPAs
wrong channel – are wasteful and can are software, usually accessed through a
easily damage a customer relationship. explaining all my smartphone, which tie together:
Analytics-driven selection of targets, circumstances.’ • Awareness of personal context;
times, and channels can assist in
Verbatim – Personalised Contact Centre/ • Deep insights into customer
improving the performance of
Telephone Experience – Telstra Research, 2014
outbound contacts. behaviours and intentions, enabled by
predictive analytics;
The relationship manager is one of the
most powerful tools available to financial • The ability of natural language
Case Study 2:
service providers who wish to deepen interfaces to interpret the user’s goals;
Westpac’s ‘Know Me’ Program
a customer relationship. The term and
relationship manager is interpreted very • A highly engaging smartphone
differently by different organisations. interface, often including a speech
We refer to an individual who acts interface.
Westpac’s ‘Know Me’ program uses
as the major touch point for a given The paradigm is that an IPA is always
customer analytics to execute
customer into the organisation and its with you, always familiar with your
effective customer interactions on a
services. Telstra’s research in Section 3 activities, behaviours and needs, and
one-to-one basis through every one
demonstrates that there is very strong always working to meet and anticipate
of the banking group’s online and
customer demand for the personalisation those needs. Our research indicates that
offline touch points. The Westpac
and convenience that relationship in the relatively brief time Intelligent
Group has more than nine million
mangers typically provide. Unfortunately, Assistants have existed, they have been
customers and a multi-brand
direct relationship management is widely and rapidly adopted. Results show
strategy. Since launching in 2013,
relatively expensive and is typically Singaporeans leading with 70% of the
Westpac has completed 812,000
restricted to very high value customers. population using IPAs on smartphones,
next best offer conversations with
customers in branches, resulting Some financial services organisations followed by Indonesia (66%), Malaysia
in a 37% take up rate. Through the such as BBVA (see Case Study 3) seek (64%), Hong Kong (63%) and Australia
call centre, 490,000 customers have to extend the relationship management (59%). The best-known IPAs today are
been targeted through the program, functions using a personalised contact general-purpose tools (such as Apple’s
with 60% taking up an additional centre approach (as tested in Section Siri and Google Now). IPAs targeting
product, a significant uplift in 3 of this report). Typically, these use specific applications such as banking and
Westpac’s cross-selling efforts. existing customer preference data finance are emerging, including Lola from
Targeted online communications and interaction history data to drive BBVA (as described in Case Study 4).
that appeared in 80% of online intelligent contact management
banking profiles also generated solutions, allowing the customer to deal
incremental revenue’44. consistently with one particular agent
who is familiar with their needs and
holdings or a current matter. Additionally,
this data can be used to prime the agent
for an interaction – providing customer
summaries, identifying in-flight
episodes or providing next best action
recommendations (for example cross-
sell and up-sell opportunities relevant
to this customer).


Contact.Me combines and extends the

Case Study 3. BBVA Contigo vision of these two approaches, blending Scenario 1: Contact.Me in action
Contigo is BBVA’s approach to an intelligent personalised virtual Steve has a mortgage, owns a
providing relationship-centric financial assistant with a physical (but couple of small businesses and
personalised service to digital and remote) relationship manager through a some investments. He’s just finished
telephone channels via a contact single, engaging and consistent interface. lunch in his van and fires up his
centre model. The initial purpose Scenario 1 shows what an interaction Virtual Relationship Manger app.
of Contigo is to replicate the best with Contact.Me might look like. Note “What’s the balance on the business
aspects of the branch experience. that even this simple interaction account”?
Customers can have preferred features:
Contigo agents with whom they • Awareness of accounts and holdings;
regularly deal. Intelligent contact “...and the home loan?”
• Ability to identify relevant products
management is used to steer
and provide content relating to them; “$145,612.80 remaining Steve.”
contacts to the preferred agent
(subject to availability). • The ability to blend channels including
“Hmmm…can I use the business
mobile, Internet, email and phone;
Contigo agents are highly cross- account to offset the mortgage?”
• Knowledge of a preferred relationship
skilled to be able to support “Do you want to see the product
manager, the ability to estimate their
individual customers in a broad description for a mortgage offset
availability and the capability to
range of interactions45. account?”
schedule an outbound contact; and
Case Study 4. BBVA Lola • The ability to prime the relationship “No – I don’t have time. Email it to
manager about the context of the me. Can I speak to Neil?”
BBVA have also worked with contact.
SRI (who developed much of the “Neil should be available in about 10
technology used in Apple’s Siri IPA) minutes – do you want him to call
to develop Lola – a virtual agent you back?”
for financial services. Lola provides “Yes please.”
a natural language interface to a
range of transactions, financial A few minutes later Steve is on the
information and educational way to his next job when his phone
material46. rings.
“Hi Steve, it’s Neil. I believe you’re
interested in offsetting your
Contact.Me brings together the mortgage. We’ve got a new product
best of a virtual IPA and a real, but you might be interested in. Can we
remote, relationship manager in a talk now or wait until you’re not on
single, engaging interface. the road?”

Diagram 1: Thematically Analysed – Personalised Contact Centre/Telephone Experience Concept (Australia)

Source: Telstra Research, 2014

Unlike some other blended channel concepts, Contact.Me does not seek to blur the line between support from virtual assistants
and human agents. There is ample evidence (including the evidence reported in Section 3) that customers are not just accepting of
self-service, but often actually prefer it. However, some tasks are more amenable to self-service and some are more amenable to
mediated support – the boundary between the two varies from person to person and context to context.

Figure 10. Anatomy of Contact.Me

My Relationship
Interface Accounts Portfolio Location Predictive Customer Automated
Management Analytics Profile Workflows

Identity Presence CRM Core Virtual
Mobile App Loans Reports &
Services Banking Assistant

Customer Alerting Cards Calling & Messaging

Intelligent IP
Contact Unified Virtual
Management Communi- Relationship
Natural Requests & Applications cations Manager
Language Handset Sensors

Content Delivery
& Discovery Intelligent Service Orchestration

Source: Telstra Research, 2014


4.3.2 Experience 2: ‘Branch.Me’ The branch is, to some extent, a captive

environment and potentially a highly Branch.Me is all about personalising
the customer’s experience while
‘Knowing that the branch immersive one. The Branch.Me concept
turns the branch into a machine for they are visiting the branch – should
staff know what I need and sensing visitors, gauging how they engage they opt in for this level of service.
with the branch and, where customers
want and not having to have opted in, for delivering personally Once we’ve established identity (at some
explain myself.’ optimised content and services. level of confidence and with permission),
Verbatim – Personalised In-Branch Experience – The Branch.Me concept is underpinned we are in a position to utilise any existing
Telstra Research, 2014 by three key capabilities: knowledge we may have about the visitor
to help tailor their experience in the
When we talk about analytics-driven • Identifying visitors to the branch – so branch. Case Study 5 demonstrates what
personalised customer experiences, we can utilise our existing knowledge this branch digitisation may look like.
the research demonstrates that the of them;
branch can be both an excellent venue Modern front of house systems can
• Understanding the context of their visit offer cues to staff members as to the
to differentiate via personalised to the branch – so we can optimise
interaction and a rich source of customer identity of the visitor, the nature of their
their experience; and relationship with the bank and the
intelligence. The branch is still a highly
• Personalising their interactions with branch, and even offer details of any in-
preferred channel for relationship-
branch staff and branch infrastructure. flight episodes with the customer. When
centric activities, such as loan and
mortgage applications and financial Obviously, the key enabler for any integrated with next best action systems,
advice47. In fact, of all of the channel- personalised experience is the they can also prompt staff regarding
centric concepts tested in Section 3, a identification of the visitor. A variety of appropriate cross-sell and up-sell offers
personalised branch experience showed approaches can be used – each with for any given customer.
the greatest capability to influence strengths and weaknesses: Intelligent signage allows content to be
satisfaction, advocacy, attractiveness • Card check-in: Existing customers tightly targeted to the current audience
and churn among those customers likely swipe/tap an account card through a – even down to an individual level. Some
to use the service. reader at the store entry; intelligent signage is audience-aware
and can provide valuable data about
• Social platform or app check-in:
Case Study 5. The Branch as an the audience, for example, embedded
Visitors use either a social platform
innovation showcase cameras can estimate demographics,
like Foursquare or a mobile application
measure audience dwell times and even
to check-in at a branch;
track which items on-screen draw the
• Video analytics: Facial recognition viewer’s gaze (and hence their attention).
is used on branch camera feeds to
identify known visitors; Staff tablets offer the opportunity to
DBS in Singapore make extensive
service a given customer anywhere
use of intelligent digital signage • Wi-Fi analytics: Wi-Fi devices (e.g.
in the branch. Using an approach
to engage visitors and passers-by. smartphones) each continually emit
called clienteling, pioneered in retail
In-store and shopfront window a unique signature – even when not
environments, staff can utilise tablets
displays equipped with Microsoft connected to a network – which can be
to show customers content such as
Kinect motion sensors detect used to identify visitors in the branch;
interactive videos and live models to
people passing and engage them and
demonstrate the impact of particular
with highly interactive, entertaining, • Bluetooth/Wi-Fi/Sonic or visible light choices.
gesture-based content. They beacons: Beacons emitting a unique
also perform analysis of passing signature are placed in the branch. Interactive surfaces have great potential
traffic and people who interact The visitor’s smartphone senses the for creating engaging collaborative
with the platform. The branch beacons and registers the presence experiences where, for example, a
ecosystem includes iPads (to with an app or a back-end service. customer and a staff member can
display personalised content explore different scenarios and visualise
and to complete electronic the impact on the customer’s portfolio.
forms), virtual digital queues, and
intelligent virtual assistants to help

Figure 11. Anatomy of Branch.Me

Infrastructure Sensing Analytics Actioning Staff Customer

Systems Devices Devices

Smart Cameras Motion Card Video Predictive

Signage Sensing Readers Analytics Analytics Staff PCs Staff Tablet Smartphone
Smartphone Sensing
Facial Speech
Recognition Analytics Collaborative Devices
Next Best
Wi-Fi Bluetooth Wi-Fi Location Action
Beacons Beacons Monitoring Services
Real-Time Footfall Intelligent Videoconferencing Staff
Decisioning Analytics Surface Unit Tablet

Light Sonic QR NFC Tags
Insights Targeting
Beacons Beacons Codes Self-Directed Devices

CRM Customer
Profile Messaging Kiosks Digital Interactive
Signage Video Wall

Rules Behavioural

Source: Telstra Research, 2014

Of course, interaction is not limited to

branch infrastructure. Most customers Scenario 2: The Branch.Me in Action indicates she has a term deposit
already carry capable, highly engaging just about to reach maturity.
Jalyn visits a flagship branch of her
smartphones, which are capable of He wanders over.
bank. The mobile banking app on her
playing a key role in an omni-channel smartphone detects a pre-registered “Hi Jalyn, I’m Ben. Let’s have a look at
branch experience. The smartphone can (opted-in) app and notifies the branch’s some investment options.”
be used to deliver content such as offers, systems of her presence.
product collateral, educational material He takes Jalyn to a bench. As he puts
and even details of the collaborative She talks to the greeter on the floor, his tablet on the interactive surface,
planning scenarios discussed above. indicating she’d like to talk to an details of Jalyn’s deposit and a number
It can also be used to facilitate virtual investment specialist. The greeter tells of relevant investment products
queuing and as a means of secure her that one will be available shortly. appear on the interactive bench top.
identification. As she wanders past a display, it Ben can interactively show Jalyn
We’ve seen numerous “branch of the invites her to view a quick interactive how her investment behaves as she
future” initiatives focused on digitising video about balancing risk and return. balances it across different products.
the branch and engaging the customer. The system notes Jalyn leans towards
Jalyn doesn’t want to commit
However, most of these fall short of conservative strategies, consistent
immediately so Ben drags a couple of
the Branch.Me concept. The real value with other videos she has viewed
the profiles Jalyn is most interested
is in positioning the branch as a key on the banks website through her
in to her account symbol and they’re
component of a holistic, blended, and smartphone and tablet devices.
instantly available for her to read
above all personalised omni-channel Ben is an investment adviser. His through, either using the mobile
approach to financial service delivery. tablet shows him Jalyn’s location and banking app or online.


Diagram 2: Thematically Analysed – Personalised In-Branch Experience Concept (Australia)

Source: Telstra Research, 2014

4.3.3 Experience 3: Digital.Me Digital.Me, shown in Figure 12, • Control over whom I share my data
conceptualises how the financial service with and how they use it.
‘Makes me more provider can bring together the disparate
elements of the digital self in a way
There are five key capability areas
enabling Digital.Me. The first of these
knowledgeable about my that benefits the consumer, and how a are the aggregation services that gather
highly trusted financial service provider
situation.’ can help customers to manage access
together the various streams of data
that make up the digital self from a
Verbatim – Personalised Digital Banking to their digital selves. As a consumer, financial services perspective (such
Experience – Telstra Research, 2014 Digital.Me provides: as transaction and account records,
All of the trends reported in the first • One place where I can get a payments and bills). Forrester49 talks
half of this section point to the growing consolidated personalised view of my about four categories of data that make
importance of the distributed body of financial services, and the state of my up the digital self, all of which Digital.Me
data and insights that organisations use personal finances, including my saving must support:
to form a picture of who we are, how we spending patterns – and some of the • Created. Content explicitly uploaded
behave, what is important to us, what we factors driving them; by you, e.g. a house title, a will or a copy
like and what we don’t like. This corpus • A place to keep important documents of a birth certificate, or statement of
– sometimes called the digital self – is of all types, ranging from the title advice;
used every day as the basis for decisions document for my house to a receipt for • Mutual. Information mutually held
about what products and services we the stationery I just bought at the local by you and your service providers,
will be offered, how they will be priced, office supplies store; e.g. passwords, explicit customer
how organisations and other people will
• Education, tailored to me, about the preferences, PINs, Biometrics;
engage with us, how we will be provided
behaviours that suit what I want • Received. Transaction and activity
with customer services, and whether we
from my financial services, and records, e.g. invoices and bills; and
are trusted – it becomes our digital self.
encouragement to implement them;
Nowhere is the state of our digital self • Recorded. Data generated as part
more critical than in financial services. • Strong protection from fraudulent use of your day-to-day activities, e.g.
of my financial services or my data; payment transaction records.

Secondly, Digital.Me makes extensive Central to Digital.Me is easy-to-use, fine-
use of analytical services. Behavioural grained, access control. This enables Case Study 6. Moven
models and predictive analytics are the customer and their financial service
used to understand individual spending, provider to tightly and explicitly control
saving, borrowing and investing patterns, which services and what data regarding
as well as to understand what drives the customer is exposed to third party
Moven, a US start-up, provides
those activities. Social analytics help service providers (for example, retailers
a mobile personal finance
to identify peer groups the user can be or other financial service providers)
management tool that helps
compared with, as well as to identify and to other individuals (such as family
customers understand the impact
events that may change behaviours members or financial advisers).
of their social life on their spending.
with regard to financial services. Market
Finally, at the core of Digital.Me is a Moven has no physical branches, but
analytics deliver insights into the broader
range of personal financial management relies on a banking partner (currently
economic environment, whether at a
tools to help the customer understand CBW Bank) to provide core banking
macro or micro level.
and optimise their finances and their services such as the underlying
Digital.Me uses and exposes a wide financial services in an intelligent and accounts.
range of services to establish the identity highly personalised way: tools to assist
Using a well-designed, modern and
of the users and to be able to gather and with effective financial planning; tools
engaging user interface, Moven
provide evidence regarding that identity, to help the customer understand their
provides an array of features aimed
whether to internal systems, or third position in an increasingly complex
at helping users understand their
party-provided services. Globally, the financial environment; tools to help the
spending behaviour and encouraging
financial services industry continues to customer identify and take advantage
good spending and saving
struggle with identity paradigms that of opportunities; and, importantly, tools
balance the need for stronger evidence to help protect finances and sensitive
of identity with ease of use and minimal information about themselves and their • Users can set saving targets, track
intrusion on transactions such as loved ones (see Case Study 6). Chart 12 their progress against them and
purchases. Even as adoption of two- features how these smartphone-enabled even receive rewards for progress
factor authentication continues to grow activities have become pervasive across against those goals;
in the industry, many organisations and the Asia Pacific region, particularly in
some domains are seeing a need to push Indonesia and Hong Kong. • Customers can track and
to three and four factor authentication – categorise their spending, either
and beyond that to adaptive multifactor by funneling payments through
solutions. As the connected device most a debit MasterCard provided by
strongly related to the individual and Moven’s banking partner or from
most frequently on the person of the third party accounts;
individual, the smartphone and all its • Moven provides analysis of how
extensive capabilities is a key component the customer’s spending patterns
of Digital.Me identity services. are changing over time; and
• To encourage users, Moven
provides gamification features
relating to spending behaviour,
aimed at encouraging good
spending and saving behaviours.


Chart 12: Digital Financial Services Smartphone Behaviour

Those who use a To Access To Access Use Use Video Use tools to Share Learning how To Access
smartphone to do Financial Updates on Intelligent Calling monitor Trading to manage Financial
Services Financial Assistants financial finances on News &
each activity across Markets performance savings, Information
on savings, borrowings,
total population (%) borrowings, investment
investment and spending
and spending

Australia 42 9 59 40 14 5 8 10
Singapore 63 31 70 55 26 14 21 34
Hong Kong 68 43 63 50 28 30 24 46
Malaysia 53 24 64 64 27 26 20 28
Indonesia 64 36 66 73 36 39 28 37
Average of impact on consideration when opening a new account and impact on consideration
when switching amongst those who find concept appealing and are likely to use

Indicates the highest penetration across Asia Pacific

Source: Telstra Research, 2014

Digital.Me isn’t just about using Scenario 3: Digital.Me in action loan for her dream system. Digital.
analytics to help the customer Me generates a simple online loan
Lianne gets a notification from her agreement form for the balance, and
manage their finances more easily
bank’s Digital.Me application that Lianne applies her digital signature to
and effectively, it’s also about
she’s reached the savings target she agree to the loan on the spot.
creating a platform that will allow
set for the deposit on a new home
providers to offer as yet unthought-
entertainment package. The message The salesperson rings up the sale
of new services that customers
also tells her that a retailer Lianne has and asks for Lianne’s mobile number.
will value.
used before is offering triple rewards Digital.Me draws on several factors
points at the moment. – including her smartphone location
Scenario 3 gives one picture of how and the authentication steps she has
a customer might interact with the Later that day, Lianne visits the already taken – to satisfy her bank
Digital.Me concept. It also shows how retailer, decides on an entertainment that Lianne is the person in-store
financial service providers can leverage package and negotiates a great deal and using the phone. A message
the Digital.Me concept to create new with the salesperson. Lianne opens pops up on the smartphone: ‘To
and monetisable services – acting as a the Digital.Me app on her smartphone, authorise payment of $14,750 to
trusted party to facilitate transactions enters her PIN and selects “Finance a Home Entertainment Palace, reply “OK
and manage the flow of data between purchase.” Digital.Me asks Lianne to 77665.”’ Lianne replies and payment is
the customer and third parties, such say the answer to a secret question. immediately transferred via the real-
as retailers. Once her answer and her voiceprint time payment network.
have been verified, Lianne enters a few
details. Digital.Me analyses her saving A few seconds later the receipt,
and spending pattern, including when warranty, loan agreement and loan
the family’s major bills are expected, product disclosure statement appear
and immediately approves a personal in Lianne’s Digital.Me document safe.


Diagram 3: Thematically Analysed – Personalised Digital Banking Experience Concept (Australia)

Source: Telstra Research, 2014

Today, we are already seeing some Additionally, comprehensive identity Federated identity solutions from global
aspects of the Digital.Me concept solutions are emerging from bank Internet companies such as Facebook
coming to life, with Personal Finance consortia and mobile operators, and Google offer huge customer reach,
Management (PFM) tools such as those including BankID in Scandinavia50 and but, to some extent, risk displacing the
provided by Moven (see Case Study 6) KDDI’s Au brand in Japan51. trust relationship between the customer
and the recently acquired Simple Bank, and their financial service provider.
American Express’ Bluebird and Serve
platforms, and Mint from Intuit, perhaps
the longest established non-bank PFM.

Figure 12: Anatomy of Digital.Me

Data Aggregation Services

Accounts Investments Transactions
Core Banking
Systems Third Party
Loans Insurance Superannuation
PFM Services

Document Bills Statements Receipts

Third Party Safe Alerting Reports & Educational
Data Forecasts Material
Analytic Services

Price Search Payments Recommend-

Market Behavioural Predictive Social
Analytics Models Analytics Analytics

Identity Services Family Finance Goal Setting Digital.Me

Management & Tracking Identity

Location SIM Accelerometers Fingerprint

Voice Facial Life Sign eSignature

Biometrics Biometrics Biometrics

Source: Telstra Research, 2014

In Section 3, we saw that consumers expect their financial service providers to use the data at their disposal to deliver
better, more personalised and streamlined customer experiences. We also saw that customers are willing to recognise
those providers who do successfully deliver such experiences. Earlier in this section, we also examined how the evolving
Smart Connected World makes a much broader array of data available to help us understand the customer, their needs and
their current context – each of which is a prerequisite for delivering highly personalised, low friction services. Of course,
the practicalities of collecting the required data, analysing it and actioning the resulting insights will challenge many
organisations – as will the paradigm shift required to embrace an analytics-driven mode of operation. However, the three
customer experiences we portrayed show that this paradigm shift could be game changing.


This report has demonstrated that the financial services

industry has entered a new era where the pace, intensity and
impact of change in how information is used to service
customers can easily outstrip the capability of incumbents,
creating a gap that is being exploited by new entrants.

Access to data and the ability to • Analytics-enabled financial services • We show three analytics-driven
effectively manage analytics will decide and experiences have the capacity to customer experiences highlighting
which financial institutions will prosper radically alter consumer perceptions how channels can evolve through
and which will be supplanted during this across the Asia Pacific region and embracing an analytics-driven
next wave of transformation. to support customer acquisition, approach:
engagement and retention strategies 1. Contact.Me: Combines a
What we have observed is: – whether executed through a branch,
• The intensity of competition has personalised contact centre and
contact centre or digital channel. intelligent personal assistant,
increased exponentially. This is only
likely to accelerate as the twin mega • The results indicate that in all blending an intelligent personalised
trends of digital proliferation and countries, each of the five analytics- virtual financial assistant with a
inter-generational wealth transfer enabled concepts we researched physical (but remote) relationship
make traditional financial services achieved high appeal levels, and manager through a single engaging
markets increasingly attractive for new the nine experience metrics tested consistent interface.
entrants. achieved positive perceptual impacts 2. Branch.Me: Turns the branch into an
for each concept. This means that environment for identifying visitors,
• The epicentre of disruptive innovation either incumbents or new entrants
is Generations X and Y. Today, these understanding their intent and how
have the ability to compete and win on they engage with the branch in order
generations are responsible for more the basis of analytics-driven services.
than half of all spending and borrowing to provide personally optimised
in Australia (and probably other What do we need to do? content and interactions with branch
developed nations too). • As these digital services would be staff and branch infrastructure.
• Personalisation, Network Effects, enabled by large-scale analytics, it 3. Digital.Me: Shows how providers
Cloud Business Models and Open is now becoming clear that modern can combine analysis of saving,
Source Artificial Intelligence based financial services providers need spending, borrowing and investing
Technologies are the forces that are to have well-developed analytical behaviours with social analytics and
defining where and whether new information gathering capabilities. broader market analytics to create
companies enter the market, and • For new entrants, Generations X online and mobile tools that help
whether traditional players adapt or and Y are seeking offerings beyond customers more effectively manage
are out-competed. traditional financial services products and use financial services.
• There is a major gap between strategic and are prepared to look outside • This vision of truly analytics-driven
priority and incumbent readiness to traditional providers to fulfill these customer service is underpinned
compete analytically. New entrants needs. by secure and highly scalable
are already exploiting this gap, so • For incumbents, a limited window of interconnected storage of customer
incumbents are seeking to close the opportunity exists to adapt, close the data connected to a wide range of
gap through major investments in gap quickly and exploit their existing specialised analytics services (often
capability. advantages, namely their unique hosted on high-performance cloud
position of trust, strong customer platforms) by high-speed, low latency
relationships with Generations X and Y networks.
and multiple touch points. • For all players in the market, entering
into analytics needs to be done so
safely and in a way that respects
customer privacy, enhances trust, and
delivers greater value to consumers.


Rocky Scopelliti is the Group General Manager, Industry Centre

of Excellence at Telstra Global Enterprise Services. Rocky is
Telstra’s thought leader in Banking, Finance & Insurance.

Rocky has more than 20 years’ senior • Cross Industry Innovation – the secret
management experience in the may well be in another industry (co-
information technology and financial produced)
services sectors, encompassing Product • Towards a Clever Australia – Banking,
Development, Strategy and Planning, Financial Services & Insurance
Business Development, Research and Industry Insights Whitepaper
Strategic Marketing.
• The Digital Investor
Over the past six years, Rocky has • Analyse This, Predict That – How
authored a number of thought Institutions Compete and Win with
leadership research reports that provide Data Analytics
recommendations on technologies
that financial services institutions Educated in Australia and trained in the
can leverage in order to better serve United States, at Sydney University and
customers, improve productivity and Stanford University respectively, Rocky
drive growth. These include: has a Graduate Diploma in Corporate
Management and a Masters in Business
• ICT as a Driver to Improve Service to
Administration. He is also a Graduate
Generation Y for Financial Services
and Member of the Australian Institute of
• Servicing Micro Businesses – What Company Directors.
Financial Services Need To Know
• Mobile Innovation – The next frontier
for growth and productivity for insurers
• 2012 for the Financial Services CIO
– Why agile IT strategies are key to
meeting the requirements of a new
financial age
• The Digital Media Bank – how video
can better engage your customers and


Warren Jennings Focused on the creation of value and Stephen Gold

Warren Jennings is a Senior Technology growth, and known as an employer of Stephen Gold is Vice President,
Strategist in Telstra’s Chief Technology choice for innovative human resources Ecosystem and Partner Engagement in
& Innovation Group. He has decades programs, they are dedicated to helping the IBM Watson Group. He has global
of experience in developing strategies, their clients and their people excel. For responsibility for partner development
products and service offerings that more information, please visit Deloitte’s and bringing Watson’s transformative
combine emerging technologies and website at capabilities to the market. As a member
mature technologies from a wide variety of the senior leadership team, he is
Liability limited by a scheme approved
of disciplines to solve real-world issues working to help commercialise industry
under Professional Standards
for organisations and their customers. solutions based on IBM’s cognitive
technology. He has a 20-year winning
Warren has honours degrees in science
Member of Deloitte Touche Tohmatsu track record of leading successful
and engineering from Monash University
Limited. enterprises and building businesses
and a Masters degree in Electronic
across industries (technology, software
Commerce from Deakin University. © 2014 Deloitte Touche Tohmatsu. and services) and geographies (domestic
Deloitte IBM Watson and international) for both high growth
Thanks/acknowledgement to Deloitte for Thanks/acknowledgement to the IBM private and multi-billion dollar publicly
their input. Watson Group for their input. traded corporations.

Deloitte refers to one or more of Deloitte Nearly three years after its triumph on Rob High
Touche Tohmatsu Limited, a UK private the television quiz show Jeopardy!, IBM Rob High is an IBM Fellow, Vice President
company limited by guarantee, and its has advanced Watson from a game- and Chief Technology Officer of the
network of member firms, each of which playing innovation into a commercial IBM Watson Group. He has overall
is a legally separate and independent technology. Using natural language responsibility to drive Watson technical
entity. Please see processing and analytics, Watson strategy and thought leadership. As
au/about for a detailed description of processes information akin to how a key member of the IBM Watson
the legal structure of Deloitte Touche people think, representing a major shift Group Leadership team, Rob works
Tohmatsu Limited and its member firms. in an organisation’s ability to quickly collaboratively with the Watson
analyse, understand and respond to engineering, research, and development
Deloitte provides audit, tax, consulting, teams across IBM.
Big Data. Now delivered from the cloud
and financial advisory services to public
and able to power new consumer and
and private clients spanning multiple Roy Morgan Research
enterprise services and apps, Watson
industries. With a globally connected Roy Morgan Research is the largest
is 24 times faster, smarter with a 2,400
network of member firms in more than independent Australian research
percent improvement in performance,
150 countries, Deloitte brings world- company, with offices in each state of
and 90 percent smaller – IBM has
class capabilities and high-quality Australia, as well as in New Zealand,
shrunk Watson from the size of a master
service to clients, delivering the insights the United States and United Kingdom.
bedroom to three stacked pizza boxes.
they need to address their most complex A full service research organisation
business challenges. Deloitte has in Named after IBM founder Thomas specialising in omnibus and syndicated
the region of 200,000 professionals, all J. Watson, Watson was developed in data, Roy Morgan Research has more
committed to becoming the standard of IBM’s Research labs and is now being than 70 years’ experience in collecting
excellence. accelerated into market by the new objective, independent information on
Watson Group. As part of the group, IBM consumers.
About Deloitte Australia is investing $1 billion to introduce a new
In Australia, the member firm is the In Australia, Roy Morgan Research is
class of cognitive computing services,
Australian partnership of Deloitte considered to be the authoritative source
software and apps, and investing $100
Touche Tohmatsu. As one of Australia’s of information on financial behaviour,
million to spur innovation for software
leading professional services firms, readership, voting intention, consumer
application providers to develop a new
Deloitte Touche Tohmatsu and its and business confidence. Roy Morgan
generation of Watson-powered solutions.
affiliates provide audit, tax, consulting, Research is a specialist in recontact
Watson’s ability to answer complex
and financial advisory services through customised surveys that provide
questions posed in natural language
approximately 6,000 people across the invaluable and effective qualitative
with speed, accuracy and confidence is
country. and quantitative information regarding
transforming decision-making across
customers and target markets.
a variety of industries, including health
care, financial services and retail.


1 Telstra (2014): Make for Asia 18 PwC (2014) Retail Banking 2020: Evolution 26 “Connections Counter: The Internet of
or Revolution Everything in Motion”, Cisco Systems
2 Capgemini & Royal Bank of Canada (2013) (
Asia-Pacific Wealth Report 19 Ovum (2014) Examining Use Cases for Big content?articleId=1208342) accessed
Data in Banking March 6th 2014
3 Telstra Corporation Limited and Roy
Morgan Research (2014). Analyse This, 20 Gartner (2013) Survey Analysis: Big Data 27 Bank of England (2010) Patience and
Predict That. Australia Adoption in 2013 Shows Substance Behind Finance
the Hype.
4 Thomas H. Davenport, Jeanne G. Harris 28 The Guardian (2014) High-frequency
(2007) Competing on Analytics – The New 21 McKinsey & Company (2013): Applying trading is a blight on markets that the Tobin
Science of Winning. Harvard Business advanced analytics on consumer tax can cure
School Publishing Corporation USA companies.
29 For example:
5 Eric Siegel (2013) Predictive Analytics – The 22
Power to Predict Who Will Click, Buy, Lie, or business/in-depth/john-duries-ceo- – I n January 2014 Belkin announced
Die. John Wiley & Sons, Inc Hoboken, New survey-2013-david-thodey-telstra/story- a smart, network controlled slow
Jersey fngmlzq7-1226777161214%23 cooker (
6 Wayne Busch & Juan Pedro Moreno (2014) 23 “Key 2006-2013 ICT data for the
HBR Blog – Banks’ New Competitors: world, by geographic regions and by – I nternet-connected refrigerators have
Starbucks, Google and Alibaba level of development”, International been commercially available (with very
Telecommunication Union, (http://www. limited success) for more than ten years.
bigdata/ statistics/2013/ITU_Key_2005-2013_ICT_ –M
 edia-centric appliances such as
data.xls) televisions and game consoles have been
8 commonplace for some time. Digital
bigdata/ 24 “Social, Digital & Mobile Worldwide in TV Research predict almost 27% of the
9 Finextra (2014) Millennials look to tech 2014”, We Are Social, 9th January 2014 world’s TVs will be Internet connected by
firms to replace unloved banks ( 2018.
10 Scratch (2014) The Millennial Disruption 30 While most of the world’s major automotive
Index. USA 25 Compiled using data from: groups such as Volkswagen, BMW,
Mercedes Benz, Nissan and GM are
11 – Natasha Lomas,“10BN+ Wirelessly researching autonomous vehicles (http://
technology/facebook-to-enter-payments- Connected Devices Today, 30BN+ In,
arena/ 2020’s ‘Internet Of Everything’, Says ABI telematics technology to track vehicles
Research”, TechCrunch May 9th 2013 and remotely monitor performance of both
12 BBC News (2014) Start-ups challenge big ( vehicles and drivers are quite mature.
banks’ technology internet-of-everything/)
31 At CES 2014 Kolibree announced a
13 Finextra (2014) London enjoys fintech – “Connections Counter: The Internet of Bluetooth connected toothbrush which
investment boom. CB Insights & Accenture: Everything in Motion”, Cisco Systems measures brushing behaviour and allow
Global Boom in Fintech Investment 2013 ( monitoring via a mobile app (http://www.
content?articleId=1208342) accessed
14 FinTech Venture Capital and Private Equity
March 6th 2014
Report – CB Insights
32 See, for example “MCU market turns to
blog/fintech-venture-capital-report – “Gartner Says Personal Worlds and 32-bits and ARM”, EE Times, 30th April
the Internet of Everything Are Colliding 2013, (
15 Finextra (2014) UK to explore legislation
to Create New Markets”, Gartner Inc. asp?doc_id=1280803)
to make banks refer small businesses to
November 11th 2013
alternative platforms
33 Janusz Byzek, “The Emergence of Trillion
Tony Danova, http://www.businessinsider. Sensor Opportunity”, Semicon 2013, (http://
16 Gartner (2013) Survey Analysis: Big Data
Adoption in 2013 Shows Substance Behind
connected-to-the-internet-by-2020, org/files/docs/SW2013_Janusz%20
the Hype.
Business Insider, 3rd October 2013 (http:// Bryzek_Fairchild%20Semiconductor.pdf)
17 Bank Systems & Technology (2014) – Banks
set stage for customer acquisition with devices-will-be-connected-to-the-
data analytics internet-by-2020-2013-10)

34 “The Internet of Things is Poised to 43 “Bloomberg adds social sentiment
Change Everything”, IDC 3rd October analytics to trading terminal”, Finextra, 3rd
2013 ( March 2014. (
jsp?containerId=prUS24366813) news/fullstory.aspx?newsitemid=25794)
35 “Industrial Internet: Pushing the 44 CMO (2014) Customer-led big data
Boundaries of Minds and Machines”, G.E., programs deliver millions to Westpac’s
26th November 2012. bottom line
36 “The Emerging Returns on Big Data”, Tata 45 See
Consultancy Services, 2013 subhome/gestor-bbva-contigo/index.jsp
37 “The Emerging Returns on Big Data”, Tata 46 See
Consultancy Services, 2013 virtual-personal-assistant-banking and
38 For example: 47 “Rebooting the branch: Reinventing
branch banking in a multi-channel, global
– The McKinsey Global Institute estimates environment”, Price Waterhouse Coopers,
the U.S. faces a shortage of 140,000- December 2012 (
190,000 people with deep analytical en_US/us/financial-services/publications/
talent. “Big data: The next frontier for viewpoints/assets/pwc-reinventing-
innovation, competition and productivity”, banking-branch-network.pdf).
The McKinsey Global Institute, June 2011
48 “Tablets and Kinects used in DBS’ new
– Gartner estimate 4.4 million jobs will be flagship branch”, CNET 6th December
required globally to directly support Big 2012 (
Data activities by 2015. “Gartner Says kinects-used-in-dbs-new-flagship-
Big Data Creates Big Jobs: 4.4 Million branch-62219680.htm)
IT Jobs Globally to Support Big Data By
2015”, Gartner Inc., 22nd October 2013 49 “Services For The Digital Self”, Forrester,
( September 3 2013.
50 See
39 “The hype and the hope: The road to
big data adoption in Asia-Pacific”, The 51 See
Economist Intelligence Unit, November
40 For an explanation of memristor technology
please see
41 For an explanation of Magneto-resistive
RAM technology see http://en.wikipedia.
42 For an explanation of Resistive RAM
technology see