Cognizant Reports

U.S. Retail Banking: Prescriptions for Channel Integration and Beyond

To achieve the dual goals of satisfying tech-savvy customers and boosting the bottom line, banks must first lay the foundation for integrated channels and fulfillment processes. Here is how they can embark on this two-laned path.

cognizant reports | December 2013

Executive Summary
In the age of consumer-centric banking, the absence of integrated channels and fulfillment processes can adversely impact banks. Consider the following scenarios. Emma, a longtime customer of a leading regional bank, comes across a new product advertisement online and attempts to talk to a call center representative to obtain more details. She finds that the representative is unaware of the advertisement and ill-equipped to meaningfully answer her questions. She drives to the branch the next day and interacts with a branch manager who helps her understand the offer and terms of the loan advertised. However, the branch informs her that back-office documentation could take one to two weeks before the deal can be closed. Emma gives up and begins to look elsewhere. Sarah, a customer of another large bank, stumbles upon a similar online campaign. While she is in the midst of exploring the online campaign, a bank representative appears online and invites her to a video chat. Over the chat, the rep clarifies her doubts, offers a discount because of her ongoing relationship with the bank and guides her to a one-click option. The system presents Sarah with an application form pre-filled with Sarahs data and asks her to answer a minimum number of questions. The application then notifies the backoffice systems, which trigger documentation protocols and run automated risk assessment processes. The deal closes within a few hours. These contrasting scenarios highlight the opportunity that channel integration and fulfillment can introduce to banks. By instilling a customercentric culture across the institution, and applying existing insights about customer behavior and preferences, banks can drive more streamlined and efficient operations. An era of digital transformation is rising across the banking industry, with customers leading the change. For many banks, responding is easier said than done. They are caught in a tangle of traditional business models, structures, practices and systems that conspire to prevent true multichannel strategies from taking hold. As the bulk of routine transactions moves to digital channels including mobile the number of transactions on all digital channels is rising significantly. In fact, most consumers use multiple

channels to fulfill nearly all their banking needs. Research shows that customers prefer digital channels for routine transactions but opt for hightouch personal interactions for complex financial decision-making. While there are generational differences in channel preferences, the consumer universe unequivocally demands superior service, lower fees and charges and, most importantly, security of their sensitive information. The biggest impediments to creating a seamless multichannel experience that meets customer expectations and drives business objectives include the following:

Traditional

business models dating back to the branch-dominant era, and the operations, goals, metrics and processes built around them. The burden of legacy systems, with their inherent integration and migration challenges, inhibiting movement to the SMAC StackTM (social, mobile, analytics and cloud technologies). Ubiquitous security concerns, such as vulnerability to fraud caused by proliferating use of multiple channels. The need for additional new channels to meet customer demand, even while the issues associated with integrating traditional channels have not yet been addressed. Inability to recoup the added cost of addressing all these issues by monetizing the added convenience that multiple channels provide to customers.

Banks can counter these multichannel transformational challenges with carefully calibrated moves. To stay ahead, we recommend that banks consider the following steps:

Involve top leadership in adopting the change to a customer-centric culture. Develop a multichannel strategy, and redefine structures, operations, goals and metrics to ensure execution. (See sidebar, page 5.) Make appropriate choices to ensure successful channel integration and employ advanced analytics to make meaning from data distilled from customer behavior. (See Prescriptions for Successful Multichannel Integration section, page 6.) Use the foundation of channel integration and analytics to inform and then elevate customer experience; apply these learnings to also drive operational efficiency to new

cognizant reports

heights. (See Prescriptions for Enhancing Customer Experience section, page 7.) Find and adjust revenue enhancement and cost reduction levers to drive profitability (See Prescriptions to Drive Profitability section, page 7.)

Consumers are also becoming increasingly reliant on multiple channels. According to Tiffani Montez, a principal analyst at Forrester Research, Inc., multichannel customers currently account for 88% of todays customer base, and that is expected to grow as more people move to mobileand tablet-based banking.4 Amid this shift to digital channels, the behavioral patterns of the millennial consumer segment are of particular significance to banks. This demographic is the most tech-savvy segment, and it expects banks to be equally tech-savvy, too. These consumers are 15% more likely to be influenced by bank Web sites and online communities and 29% more likely to test new tech tools.5 This represents an untapped customer base for banks.6 Despite their penchant for technology-aided services, millennial customers are also keen to visit branches, with an average of 2.5 branch visits per month.7 This apparent contradiction can be attributed to their need for guidance on establishing a financial foothold.8 Even as they embrace digital channels and exhibit generational differences in their channel preferences, all consumer segments seem to agree on three critical needs: customer service, lower rates and fees, and superior protection against identity fraud9 (see sidebar and Prescriptions for Enhancing Customer Experience, pages 5 and 7). According to research from Fifth Third Bank,10 mobile-wielding consumers are most likely to be multichannel users.11 As this tribe grows, banks will

Rise of Digital Channels

U.S. consumers have been quick to adopt digital banking channels to fulfill their routine transactions. Branch use is gradually declining, accompanied by marked growth in mobile and online channels (see Figure 1). According to a recent survey by Cisco Systems, Inc., a majority of customers prefer the branch to address activities that require personal attention and advice (83% of survey respondents). Moreover, 26% of respondents said they would leave their bank if it removed advisory services from the branch. Another interesting finding is the willingness of customers to accept virtual delivery of advice in the branch in lieu of the traditional person-to-person model, provided it is offered in a way that doesnt undermine personalization.1 The convenience of digital channels appeals to wealthy consumers as well, a segment that was traditionally considered a high-touch category that preferred intensive face-to-face contact.2 The mass affluent consumer group wants the convenience of both virtual and physical worlds to meet its needs. Increasingly, it seems that the preferential treatment and high level of care that this category expects can be met without physical interaction.3

Digital Rises, Face-to-Face Declines

Consumers are increasingly choosing digital delivery channels. 40,000 (Transaction volumes, in millions) 30,000 20,000 10,000 0

2011 Online Branch

2012 Mobile

2013 (projected) Contact Center

2014 (estimated)

2015 (estimated)

Source: Rethinking Multichannel Strategy, April 2013, CEB TowerGroup Retail Banking. Figure 1

cognizant reports

Bank channel integration initiatives must also factor in consumers accelerating use of mobile devices and social media.

be compelled to enable multichannel access through successful channel integration efforts. Bank channel integration initiatives must also factor in consumers accelerating use of mobile devices and social media. While the always-on, anywhere-anytime availability of mobile devices offers exciting opportunities, mobility also exposes the need for enhanced security to safeguard consumer information. Similarly, banks must respond to the growing use of social media and its influence on consumers banking decisions by integrating channels to enable more effective and consistent communication. Channel integration ensures availability of customer information from all sources. Armed with these insights, banks will be better equipped to resolve issues before they escalate. Banks can also convey a more technologically advanced brand image a critical factor in gaining the confidence of all demographic segments. Banks also need to be aware of emerging regulations surrounding their use of social media. Guidelines from The Federal Financial Institutions Examination Council (FFIEC) highlight the legal, privacy, reputational and operational risks involved in banks use of social media.12 Challenging Operating Environment In addition to helping banks adapt to changing consumer behavior, channel integration fulfills a

necessary precondition for using various levers that can increase revenues, reduce costs and boost the bottom line. Regulations have constrained fee-based income generation avenues and are compelling banks to rethink their business models.13 The impact is being felt on profitability the industrys return on equity (RoE) stood at roughly 10% in 2012 compared with 15% earned during 1993-2007 (see Figure 2). Against this backdrop, measures such as channel and fulfillment integration promise greater customer satisfaction and loyalty, as well as increased efficiency and opportunities to boost profitability. Channel Integration In addition to Remains Elusive for Many Even as consumers rely helping banks more on technology and use adapt to changing multiple channels, channel integration still eludes many consumer behavior, banks. Forrester notes that channel integration cross-channel measurefulfills a necessary ment is a distant reality, and channel silos continue to be precondition for the multichannel albatross using various levers and attributes this to decenthat can increase tralized decision-making.14 The lack of an enterprise revenues, reduce strategy prevents banks costs and boost from delivering a seamless, the bottom line. integrated channel experience to customers. Independent silos require banks to develop the same products and services separately for each channel or unique device,

Profitability Dip at U.S. Banks

20% 15% RoE % 10% 5% 0% -5% -10% Jan. 1, 1984 May 1, Sept. 1, Jan. 1, 1986 1988 1991 May 1, Sept. 1, Jan. 1, 1993 1995 1998 May 1, Sept. 1, Jan. 1, 2000 2002 2005 May 1, Sept. 1, Jan. 1, 2007 2009 2012

Source: Federal Reserve Bank of St. Louis Figure 2

cognizant reports

Quick Take
Prescriptions to Overcome the Challenges
Banks channel integration endeavors must be accompanied by efforts to overcome the three key challenges of strategy, legacy systems and security. Such efforts are critical to removing the roadblocks to multichannel transformation. Rethink the Strategy On the business model and strategy fronts, banks digital transformation efforts are impeded by the lack of an enterprise strategy to meet the technological and process demands of the multichannel era. A Forrester survey15 found that fewer than one-third of respondents had crafted a multichannel strategy that was well-coordinated across business lines, as well as a dedicated team. Multichannel integration needs to go beyond providing a seamless customer experience. Each investment in multichannel integration must address one or more of the following objectives: improve customer loyalty, increase revenue and reduce costs. Managing change can be a daunting task, given that entering the multichannel era involves reorienting banks organizational structures, performance metrics, processes and systems. Multichannel success requires a channel-agnostic and customer-centric approach. Given the scale of change, channel integration efforts should:

Involve top leadership and embrace a customer-centric culture that permeates from the top and
extends throughout the organization. Encourage changes to the organizational structure that collectively foster a customer-centric culture focused on dismantling channel siloes. We believe an effective way to do this is to organize channels as a shared service used by all business lines, led by a channel czar. Identify areas where channel conflicts exist and replace them with an operating model that rewards customer-focused behavior that is in line with multichannel goals. Establish enterprise multichannel goals, operating models and metrics to ensure an effective transition. Banks should avoid the traps associated with the legacy of earlier branch-centric models. They can leverage cross-channel customer data to measure customer contributions to profit against the cost of service. Doing so also enables them to appropriately price products and services based on insights derived from each customers unique data.16

We believe an effective way to do this is to organize channels as a shared service used by all business lines, led by a channel czar.

Address Legacy Systems Issues On the technology front, legacy systems appear to be obstructing most banks multichannel initiatives. It can become too costly to replace legacy systems such as core banking solutions because of the capital investment required, as well as fear of conversion risk and customer impact. These systems address various components, such as lines of business, geographies and front-, middle- and back-offices. Banks can use middleware to connect core systems with multiple channels to deliver services consistently across all touchpoints. Confront Security Challenges On the security front, the proliferation of channels has begun to impact banks in at least two ways. First, it has increased the vulnerability of individual channels to fraud. Second, consumers are subjected to multiple identification and authentication routines, requiring them to use different passwords and PINs. Banks can address these issues by adopting a channel-agnostic, multifactor authentication process that employs biometrics, in addition to other security measures.17 They can employ any two of the three factors from the FFIEC recommendations:18

cognizant reports

1. Something the user knows (e.g., password, PIN). 2. Something the user has (e.g., ATM card, phone). 3. Something the user is (e.g., biometric, fingerprint). While consumers are rapidly adopting mobile banking, they remain wary of its security implications. A survey19 we conducted with Monitise found that 70% of respondents considered security a major concern; 68% prefer biometric features, and 35% are inclined to pay for such protection. (For more detail, read our white paper, Segment-Based Strategies for Mobile Banking.) Banks embarking on a channel integration initiative should consider tightening their security measures to reinforce the safeguards offered by a unified cross-channel banking experience.

thereby hurting efficiency, time-to-market and the bottom line.

Prescriptions for Successful Multichannel Integration

To fulfill consumer needs while providing a seamless experience across channels, banks should focus on ensuring cross-channel consistency and creating a set of predictable outcomes. This is predicated on integrating channels, devices, products and functions across all touchpoints. Banks can choose to either integrate all channels on a single platform or use a common set of services on each platform to Banks can choose perform similar functions, supplemented by additional to either integrate services that are unique to all channels on a a channel.

single platform or use a common set of services on each platform to perform similar functions, supplemented by additional services that are unique to a channel.

Successful channel integration will provide banks with unprecedented data and insights to understand the full spectrum of customer behavior. Armed with these insights, banks can structure products and services aligned with such behavior. A study by Thomas H. Davenport, author and the President's Distinguished Professor of IT and Management at Babson College, and Jill Dych, Vice President of Best Practices at SAS, observes that some major banks are now using structured and semi-structured data to monitor customer movements across channels such as Web sites, call centers, tellers and branch staff. By doing so, they are learning how such paths influence purchases and attrition.20 To ensure successful integration, we recommend that banks:

Align operations, business and IT. Without this alignment, it will be impossible to deliver a consistent customer experience. While IT integration is a major challenge in itself, the critical success factor for successful channel integration lies in successfully aligning operations with channel solutions. This alignment must take place in both the design of IT solutions that enable ease of operations and the successful training of operations personnel who can use technology tools at their disposal. Consider integrating sales and service across the five key delivery channels: branch, contact center, online, ATM and mobile. Banks can accomplish this by ensuring the convergence of processes focused on customer interaction and back-office fulfillment. This needs to be supplemented by levels of support appropriate to each channel, such as click to chat and context-sensitive help. Provide operational enablers to equip the front-office staff (such as the branch and call center) with information from multiple disparate back-end systems. Such systems include CRM and all product systems of record. Use a service-oriented architecture (SOA).21 By doing so, banks can reap three major advantages: improvement in time to market, data consistency (which is critical to ensuring a seamless customer experience through cross-channel consistency and enhanced regulatory compliance) and overcoming limitations imposed by legacy systems.22 Reengineer core business processes by developing a set of standard services and back-office processes. Doing so enables transactions such as opening an account, balance inquiries and bill payments to execute effectively over multiple channels. Such transactions can go a long way in supporting banks channel integration endeavors. For banks whose operating departments rely on manual processes, increased volumes and different

cognizant reports

sources of information proliferate. Such banks can make use of workflow engines and business rules to ensure consistency regardless of the channel from which transactions originate. Leverage advanced analytics. Understanding customer behavior and preferences and using them effectively lies at the core of multichannel transformation. When channel integration is combined with analytics, it can enhance customer experience and efficiencies, in addition to revealing revenue growth opportunities. This also marks a shift from the era of studying a sample to studying the individual consumer, empowering banks to personalize products and services. Banks can track and analyze all of a customers multichannel interactions with the bank and use that data to inform appropriate service and marketing interventions. Leverage social media. Banks ability to listen to their customers voices on social media sites and respond can be strengthened by integrating their social media approaches with their contact centers.23 Armed with consistent customer data across channels, banks can engage with their customers effectively on social media sites.

Prescriptions for Enhancing Customer Experience

Channel integration is a valuable means of enhancing customer experience a necessary condition for satisfying increasingly tech-savvy consumers and keeping disruptive nonbank competitors at bay. Yet, while consumer technologies have taken convenience to new heights, banks are still struggling to keep pace. Given its phenomenal growth, the online channel is the main entryway to shaping customer experience.24 When consumers enter through this door to open accounts, they are often required to e-mail the application or are directed to other non-electronic channels. Add to this the absence of integrated fulfillment processes, and the result will not meet customer expectations, given how accustomed consumers are to real-time processing and fulfillment of nonbanking transactions. Therefore, we recommend that banks:

product applications with available customer data to reduce customer effort as much as possible.25 Optimize devices for attitudes. Customers attitudes can vary from quick, to casual, to focused, to physical.26 Multichannel experiences can delight customers when banks focus on customer attitudes first and then on devices. While consumer Smartphones may be technologies best suited for those with a quick attitude, tablets have taken for casual customers, convenience to new and personal interaction heights, banks are for physical customers.27 Banks can achieve this by still struggling to optimizing mobile apps keep pace. and Web sites for different attitudes. Also critical is the need to link apps related to different channels to enable the flow of information across channels. This ability is key to providing a seamless journey, a goal of multichannel banking.28 Enhance usability through consistency. Usability is a key component of customer engagement and experience. To provide a seamless experience, banks should aim to create a consistent look and feel on user interface screens across channels online, mobile and ATM.29

Prescriptions to Drive Profitability

The potential gains of channel integration are so significant that continuing the status quo is an unacceptable option. Failure to adapt jeopardizes customer experience and can lead to a loss of market share to aggressive competitors. However, banks channel integration endeavors are sustainable only if they simultaneously contribute to the banks profitability, either by growing revenues or by reducing costs. By integrating channels and fulfillment processes, banks will have laid the foundation necessary to improving the customer experience. Enhanced experience can arrest customer attrition and improve the prospect of cross-selling. Also, social media-savvy consumers can potentially become the banks brand ambassadors, helping them grow market share. When channel integration is coupled with automation and efficiency improvement initiatives, banks can yield a material reduction in costs.

Make available a 360-degree view of customer data and activity, to leverage cross-channel data while upselling and crossselling to customers. Banks can auto-fill

cognizant reports

The consumer shift to digital channels for routine banking transactions has been accompanied by a significant increase in the number of transactions, as well (see Figure 3).

We recommend three sets of levers that enhance revenues, reduce costs or achieve both revenue growth and cost reduction.

While transactions completed on digital channels cost much less than high-touch transactions, they are not free (see Figure 4, next page). Moreover, banks have yet to recognize the true total costs of servicing the growing volume of digital transactions and passing on those costs to consumers. The inability to charge consumers for convenience necessitates that banks consider targeting their channel integration efforts at driving profitability in every way possible. We recommend three sets of levers, consisting of drivers that enhance revenues, reduce costs or achieve both revenue growth and cost reduction. Revenue Levers Combine channel data with other client information to understand customers purchasing habits. This includes channels where customers previously purchased or inquired about new products, as these insights can be used to maximize the effectiveness of marketing efforts. Use customer data modeling with segmentation and real-time profiling. Such

capabilities can enable banks to offer targeted products and services specific to each customer, delivered through customers preferred channels. By taking a strategic approach to segmentation, banks can equip frontline staff with insights to facilitate effective channel management, marketing and sales efforts to drive revenue growth. (To learn more about segmentation, see our white paper, The New Banking Consumer: 5 Core Segments and How to Reach Them.) Leverage multichannel capabilities. Doing so enables banks to derive insights from customer data and preferences gathered across channels, lines of business and the front-, middle- and back-office, as well as bring new and personalized offers to market much faster. Cross-sell using cross-channel customer data. Sales channels can leverage customer data, insights about their activity and usage patterns to cross-sell products relevant to each customer.30 Cost Reduction Levers Drive channel optimization: Steer transactions to the channel best-suited to that transaction to provide better customer service and reduce costs. Costs associated with providing services through digital channels are significantly lower than traditional channels (see Figure 4, next page). Periodically analyze call center usage to identify high-volume and low-value transactions that can be directed to digital channels. Banks may also consider new account

Growth of U.S. Banking Transactions by Channel

All channels Mobile Online ATM Call center Branch -10% 0% 10% 20% 30% CAGR 40% 50% 60%

Note: CAGR computed using underlying data derived from Bofi Holdings, Inc. presentation on the SEC site, http://www.sec.gov/Archives/edgar/data/1299709/000129970913000026/bofiholdingincinvestorpr.htm. Source: Cognizant Research Center Figure 3

cognizant reports

pricing structures for low-value clients to encourage them to migrate to lower cost channels or opt out of the bank. Provide high-touch interactions such as video chat through non-branch channels. Doing so can yield savings while satisfying customer need for personal interactions. Facilitate consistent cross-channel messaging and functionality through SOA. This enables banks to use the same services across all channels, optimizing costs. Adopt common engines for similar tasks across all channels and product silos. For instance, putting all consumer loans on a single application platform will help to minimize costs. Use business process management (BPM) solutions. Such solutions can help banks automatically integrate supporting customer information with a sales or service request, determine the support group to which the request should be routed, generate any forms or correspondence required, and receive inbound materials from the customer or support group. These solutions can reduce turnaround time, improve customer profitability and reduce operating expenses. Improve operational efficiency by bridging automation gaps. Additionally, banks should standardize based on best-in-class practices across different channels and product lines. Improve the product development process. When each channel is managed separately on different platforms, every new product or service the bank wants to deliver across multiple channels must be redesigned to meet

the requirements of each silo. The costs and time to market associated with such silos can be improved when banks integrate channels. Levers that Increase Customer Retention Rates A multichannel strategy can also increase customer retention and eventually boost the bottom line. For example, by arresting attrition, revenue can be better protected. Also precious capital can be preserved by avoiding the high costs of attracting new customers. Satisfied customers also The inability to make good prospects for charge consumers cross-selling and act as the banks best brand ambassa- for convenience dors, with acquaintances in necessitates that both the physical and virtual banks consider worlds, contributing to proftargeting their itable revenue growth.

Use multichannel inteefforts at driving gration capabilities to improve customer ser- profitability in every vice. A more consistent way possible. user experience and enhanced functionality in both self-service and assisted interaction can help improve customer retention rates. Additionally, consistent service delivery through a channel-agnostic back-office can minimize errors and enable faster resolution of customer issues. Such actions can lead to increased positive interactions that can have a long-term impact on customer retention.

channel integration

Digital Channel Costs: Lower But Not Free

$4 Cost per transaction $3 $2 $1.34 $1 $0.29 $0 Branch Teller Call Center Agent IT costs ATM Call Center IVR Mobile Banking $1.65 $0.60 $0.16 $0.16 $0.13 $0.14 $0.10 $0.09 $0.04 Online Banking $3.75

(U.S. banks, 2010) Total costs

Source: Tower Group

Figure 4

cognizant reports

Leverage multichannel integration to share information, services and functionality across channels. Channel integration allows customers the flexibility of using multiple channels to complete a task. Similarly, focusing on customer convenience and simplified delivery of products and services can result in increased customer retention rates.

Capture and analyze channel data with predictive analytics to meet and exceed customer expectations and establish lasting customer relationships. Record customers refusal of offers and their preferences for receiving new offers or information. Customers rejection of an offer, as well as their marked preferences, can

Quick Take
Making Multichannel Meaningful
Heres how we are helping a major U.S. banking client deliver a consistent customer experience across all touchpoints. The Challenge The bank headquartered in the midwest region of the U.S. provides investment management, retail and commercial banking, consumer finance and investment banking products and services to individuals and companies throughout the country. It wanted to embrace a relationship banking model to enable more effective cross-selling and up-selling across various lines of business (consumer, commercial and private banking). To do this, it needed to identify and develop enhanced capabilities to support insightdriven selling and enable better collaboration across its consumer, private and small business segments. The Approach To meet these goals, the bank wanted to enable cross-channel integration, aimed at improving customer experience by providing end-to-end service request visibility to all bank employees. Our consulting unit provided enterprise business transformation planning that included: A complete understanding of the banks processes and the design of a business-IT strategy blueprint and roadmap for multiple functions, such as marketing, sales, servicing and origination. An operational data assessment across all business segments and channels. Additionally, we deployed our proprietary business-IT reengineering methodology and conducted workshops with key business stakeholders to elicit and achieve consensus on business requirements. Our team also modeled and documented the banks business requirements. We identified the various gaps and challenges for a complete multichannel business transformation, and followed up by conducting joint requirement sessions to refine the solution model and gather nonfunctional requirements. Finally, we conducted synergy meetings to cross-pollinate best practices in the sales function across different lines of business. Program Benefits The initiative helped streamline the sales process and increase revenue generation by: Improving client insights that enable better identification of sales opportunities. Improving customer acquisition and retention by better understanding customer needs. Improving productivity by providing easy access to customer data and better collaboration tools. Additionally, the program increased customer satisfaction and customer retention attained through enhanced end-to-end service request handling.

cognizant reports

10

be shared across all channels, thus improving customer satisfaction.

networks and introducing high-touch interactions on digital channels. Success in the emerging consumer-centric, digital banking era is heavily predicated on successfully completing two key steps: Effectively integrating channels and fulfillment processes; and leveraging the foundation laid by integration to improve the customer experience, while pursuing the need to reduce costs and grow revenues.

Road to Digital Banking

Channel integration does not lend itself to onesize-fits-all solutions. Banks must assess their current state and resource constraints to find the approach to integration that is right for them. They can finance a portion of the investment needed for integration by optimizing branch

Footnotes
1

Jrgen Ericsson, Philip Farah, Alain Vermeiren and Lauren Buckalew, Winning Strategies for Omnichannel Banking, Cisco Internet Business Solutions Group, 2012, http://www.cisco.com/web/ about/ac79/docs/Cisco-IBSG-Omnichannel-Study.pdf. Catherine Palmieri, To an Analog Banker in a Digital World, Strategy+Business, Aug. 27, 2013, http://www.strategy-business.com/article/00206?pg=0.

Ibid. CBA/Forrester Survey: Retail Banks Planning For the Age of the Multichannel Customer, Forrester Research, Inc., Apil 2, 2013, http://www.forrester.com/CBA+Forrester+Survey+Retail+Banks+Planning +For+The+Age+Of+The+Multichannel+Customer/-/E-PRE4844.

Introducing the Millennial, Credit Union Magazine, Feb. 13, 2013, http://www.creditunionmagazine. com/articles/38267-introducing-the-millennial. Technology Key to Bridging the Gap Between Millennials and Baby Boomers Banking Needs, Reports Microsoft Study, PRNewswire, Nov. 3, 2013, http://www.prnewswire.com/news-releases/ technology-key-to-bridging-the-gap-between-millennials-and-baby-boomers-banking-needs-reportsmicrosoft-study-68842472.html.

Introducing the Millennial, Credit Union Magazine, Feb. 13, 2013, http://www.creditunionmagazine. com/articles/38267-introducing-the-millennial. Mary Wisniewski, Why Some Millennials Still Come to the Branch, American Banker, Jan. 22, 2013, http://www.americanbanker.com/issues/178_15/why-some-millennials-still-come-to-thebranch-1056038-1.html.

Technology Key to Bridging the Gap Between Millennials and Baby Boomers Banking Needs, Reports Microsoft Study, PRNewswire, Nov. 3, 2013, http://www.prnewswire.com/news-releases/ technology-key-to-bridging-the-gap-between-millennials-and-baby-boomers-banking-needs-reportsmicrosoft-study-68842472.html. A U.S. regional banking corporation, headquartered in Cincinnati, Ohio.

10

11

Bryan Yurcan, Life Without Channels: How to Provide a Seamless Customer Experience, Bank Systems & Technology, June 11, 2012, http://www.banktech.com/channels/life-without-channels-howto-provide-a-s/240001637?pgno=1. Regulatory Shocker on Social Media in Banking Coming Soon, The Financial Brand, Jan. 23, 2013, http://thefinancialbrand.com/27250/ffiec-social-media-policy-guidelines-for-banks-credit-unions/.

12

cognizant reports

11

13

Daniela Yu and John H. Fleming, How Customers Interact with their Banks, Gallup Business Journal, May 7, 2013, http://businessjournal.gallup.com/content/162107/customers-interact-banks. aspx?version=print. Tiffani Montez, The State Of North American Digital and Multichannel Banking 2013, Forrester Research, Inc., April 2, 2013, http://www.forrester.com/The+State+Of+North+American+Digital+And+ Multichannel+Banking+2013/fulltext/-/E-RES93502.

14

15

Ibid. Catherine Palmieri, To an Analog Banker in a Digital World, Strategy+Business, Aug. 27, 2013, http://www.strategy-business.com/article/00206?pg=0.

16

17

Andre Delaforge, Biometric Authentication in a Multi-Channel Environment, Banking Strategies, Nov. 19, 2012, http://www.bai.org/bankingstrategies/risk-management-and-fraud/security-and-fraud/ biometric-authentication-in-a-multi-channel-environment. Courts Ruling Against Banks Not Compliant with FFIEC Regulations, TrustID, Nov. 14, 2012, https:// www.trustid.com/blog/2012/11/14/courts-ruling-against-banks-not-compliant-with-ffiec-regulations/.

18

19

Segment-Based Strategies for Mobile Banking, Cognizant Technology Solutions, June 2013, http://www.cognizant.com/InsightsWhitepapers/Segment-Based-Strategies-for-Mobile-Banking.pdf. Tom Davenport and Jill Dych Big Data in Big Companies, SAS Institute, Inc., http://www.sas.com/ reg/gen/corp/2266746.

20

21

Service-oriented architecture (SOA) is a software design and software architecture design pattern based on discrete pieces of software providing application functionality as services to other applications. This is known as service-orientation. It is independent of any vendor, product or technology. For more information: http://en.wikipedia.org/wiki/Service-oriented_architecture. Michael Tevebaugh, The New Banking Paradigm: Channel Integration in a Customer-Centric World, CapTech, April 25, 2013, http://blogs.captechconsulting.com/blog/michael-tevebaugh/the-new-banking-paradigm-channel-integration-customer-centric-world.

22

23

Bryan Yurcan, Life Without Channels: How to Provide a Seamless Customer Experience, Bank Systems & Technology, June 11, 2012, http://www.banktech.com/channels/life-without-channels-howto-provide-a-s/240001637?pgno=1. Catherine Palmieri, To an Analog Banker in a Digital World, Strategy+Business, Aug. 27, 2013, http://www.strategy-business.com/article/00206?pg=0. Ibid.

24

25

26

Jelmer de Jong, The Multichannel Banking Challenge, BankNXT, July 2012, http://banknxt.com/603/ the-multi-channel-banking-challenge/.

27

Ibid. Ibid.

28

29

Michael Tevebaugh, The New Banking Paradigm: Channel Integration in a Customer-Centric World, CapTech, April 25, 2013, http://blogs.captechconsulting.com/blog/michael-tevebaugh/the-newbanking-paradigm-channel-integration-customer-centric-world. Catherine Palmieri, To an Analog Banker in a Digital World, Strategy+Business, Aug. 27, 2013, http://www.strategy-business.com/article/00206?pg=0.

30

cognizant reports

12

Credits Author and Analyst

Rajeshwer Chigullapalli, Cognizant Research Center

Subject Matter Experts

Craig Zander, Director Consulting, Cognizant Banking & Financial Services Anirvan Saha, Director Consulting, Cognizant Banking & Financial Services

Design
Harleen Bhatia, Design Team Lead Suresh Chedarada, Designer

About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services, dedicated to helping the worlds leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50 delivery centers worldwide and approximately 166,400 employees as of September 30, 2013, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.

World Headquarters
500 Frank W. Burr Blvd. Teaneck, NJ 07666 USA Phone: +1 201 801 0233 Fax: +1 201 801 0243 Toll Free: +1 888 937 3277 Email: inquiry@cognizant.com

European Headquarters
1 Kingdom Street Paddington Central London W2 6BD Phone: +44 (0) 207 297 7600 Fax: +44 (0) 207 121 0102 Email: infouk@cognizant.com

India Operations Headquarters

#5/535, Old Mahabalipuram Road Okkiyam Pettai, Thoraipakkam Chennai, 600 096 India Phone: +91 (0) 44 4209 6000 Fax: +91 (0) 44 4209 6060 Email: inquiryindia@cognizant.com

Copyright 2013, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.