1. Adaptive Processes for
Adaptive Times
Using the web to its full in the
banking sector
Haydn Shaughnessy

2. Some drivers
THE INTERNET IS SO BIG AND
PERVASIVE
and SO embedded in our behaviour IT
CHALLENGES US TO
CHANGE THE WAY WE THINK OF OTHER
PERVASIVE INFLUENCES.... LIKE THE
BANK

3. agenda
Disruption factors
The Changing Business Ecosystem
Mastering the Internet
Bringing the Internet into the Organization

4. Haydn Shaughnessy
Research and consult on:
Global trends
Data structuring and improving intelligence
Transitioning the enterprise
Write at
HBR.org,
Wikinomics.com
GigaOm
Innovation Management

5. Disruptive innovation and new platforms
DISRUPTION
Mobile Internet
Customer empowerment
Better data

6. Disruptive innovation and new platforms
Smartphone penetration
Anticipated penetration 50% by end 2011
2014 anticipate 5 billion devices globally
connected to the web Sources, ComScore and CISCO

7. Disruptive innovation in mobile
People using smart Smart phones
phones use social accelerate
and
networks more than broaden
regular Internet users online
social
31% interaction
The customer ecosystem
Source: ComScore

8. A DECADE OF CUSTOMER EMPOWERMENT
Time in social networks is
time spent building
customer-to-customer
relationships in ecosystems and
time not spent with brands
The customer ecosystem

9. So more companies choose to be in the customer ecosystem
Other
From To
destination participation
Joining the customer ecosystem

10. ECOSYSTEM behaviour
EVERYDAY IN THE
ENGLISH LANGUAGE:
500,000 BLOG POSTS
50 MILLION TWEETS
INNUMERABLE
SOCIAL NETWORK
POSTS
An unprecedented source of intelligence

11. THE INFORMATION OPPORTUNITY IS GROWING
Global mobile data increase 39-
fold increase from 2009 to
2014, at a compound annual
growth rate (CAGR) of 108
percent, much of it generated by
social web activity.
Source: CISCO

12. THE OPPORTUNITY IS GROWING INTERNALLY TOO
Enterprise Data
Compound annual growth,
transactional data
21%
Compound annual growth,
unstructured data 67%
Source: IDC

13. The problem of structured data
US financial institutions'
customer
data deteriorates at the rate
of at least
3.5% per month
Source: Insight Ecosystems

14. UPSIDE
MORE OPPORTUNITIES TO
CONNECT WITH AN EVER
WIDER RANGE OF PEOPLE
MORE OBJECTIVE DATA,
UNTAPPED BY COMPETITORS

15. CONSEQUENCES
THE GROWING QUANTITY OF
UNSTRUCTURED DATA ONLINE AND
INTERNALLY THREATENS DECISION
MAKING BECAUSE OF ITS COMPLEXITY
Data deteriorates quickly so needs
to be circulated quickly if it is to
have value
EMPLOYEES NEED MORE
SUPPORT
IN DEALING WITH COMPLEXITY

16. Adaptive process for adaptive times
the
ecosystem

17. The Ecosystem
The porous organization or the
open enterprise
Open innovation
Innovation takes place organically
across companies and
communities

18. Growth of ecosystem conversations
Source: Haydn Shaughnessy, Bearing Consulting, Global Attitudes Project April 2010

19. DEALING WITH COMPLEXITY
New ways to
Collaborate
Communicate
Innovate

20. A partial view of the mobile ecosystem or
'distributed' enterprise
h/ware-
OS Tools
s/ware
interface
developers developers Apps
developers
Function
developers
Ecosystem brands
Supply Mobile
Nokia advertising
chain
Services revenues End-user
communities
Ovi
Apple
Apps Geodata/AR
store
Location Content
AR
Google Search
Maps based developers
Operators content
services
Solutions
ecosystem
Home
Embedded
Device device
device
sales markets
markets
20 |

21. The broader financial ecosystem
Though banks tend not to think in terms of ecosystems, the ecosystem exists
Distributed Green
Regulatory enterprises ecosystem
Corporate
ecosystem
Policy Disruptive
Municipal
receipts data Carbon
Open data
Exchange
Bank Receivables
ecosystem
ecosystem
Subscription
Attitudes
economy
Trusted
services
Property
market
Equity analyst
Transaction ecosystem
2.0 Customer
ecosystems
Risk impacts Social
payments

22. Growth of customer ecosystems in general
Customers have shown themselves
over a decade to want to contribute
to their own and each other's
experiences through ecosystems

23. Growth of customer ecosystems in general
OVER
2/3rds
of
Netflix video
rentals
come thru
the recommendation system
Netflix prize offered $1 million for a 10% improvement in it

24. Social media
200 banks globally
now blog. Only one
seems to realise that
banks, to customers,
are rather boring.... The customer ecosystem
but cricket is not.

25. Growth of personal finance ecosystems

26. BENEFITS
CUSTOMER ECOSYSTEMS allow
you to connect with customers where
they are doing things they like.
Allow you to observe behaviour AND
build great data to give staff more
confidence in their work.
Correlate that data with customer
acquisition and life-cycle
management models

27. Some words
on HOW
27 |

28. Enabling and supporting people through what we know
What we can know -
about customers,
competitors, markets
is changing

29. PEOPLE and the role of good data
Hierarchy of Knowledge Needs
Accessible and
Timely available immediately
Channelled to the
right people for the Appropriate
right task
Contextualised Coupled to
other data of relevance
Information is from
known sources Trustworthy
Research shows when data delivers to all 4 of an employees
needs it can have a 40+% impact on the quality of decisions

30. LETS LOOKS AT THAT IN
THE EXTERNAL WORLD –
OUT ON THE WEB

31. THE DATA PROBLEM AND OPPORTUNITY
10S OF MILLIONS OF DATA
UNITS INTERNALLY AND
EXTERNALLY
HOW TO structure
CONTEXTUALISE AND
CHANNEL IT

32. ECOSYSTEM: Structured knowledge
PERSPECTIVES
THEMES
CONCEPTS
TOPICS Why bother?
Structure is easy to comprehend,
add to and use
End-users have needs and desires that
market research does not tap in to and
you cannot imagine
Analysts use out of date material

33. ECOSYSTEM: Structured knowledge
HEAT MAP OF OFFICIAL BANK BLOG THEMES GLOBALLY
Source, Bearing Banking KPIs project
Note the
absence
of 'customers'

34. ECOSYSTEM: ANOTHER VIEW OF EXTERNAL DATA
STRUCTURING EXTERNAL DATA AROUND PERSPECTIVES, THEMES AND
CONCEPTS related to banking
local
loans
community
government
service
Count
business Likelihood
Percent
customers
industry
assets
stock
0 10 20 30 40 50 60 70
TOP TEN EMERGING CONCEPTS DICUSSED BY
BANKS AND CREDIT UNIONS
SOURCE: BEARING KPI STUDY
'Likelihood' % is the relevant concept = how likely they
are to co-occur with the term 'bank' taking into account
their relative presence in the text, i.e. a small number
of terms can still be very likely to co-occur.

35. ECOSYSTEM: ANOTHER VIEW OF EXTERNAL DATA
STRUCTURING EXTERNAL DATA AROUND PERSPECTIVES, THEMES
AND CONCEPTS related to banking
TOP 10 CONCERNS IN CUSTOMER CENTRIC TOP TEN EMERGING CONCEPTS DICUSSED
CONVERSATIONS ABOUT BANKING BY BANKS AND CREDIT UNIONS
SOURCE: BEARING BANK KPI STUDY SOURCE: BEARING KPI STUDY
change local
free loans
fees community
business government
credit service
Count Count
online Likelihood business Likelihood
Percent Percent
overdraft customers
service industry
products assets
experience stock
0 10 20 30 40 50 60 70 80 0 10 20 30 40 50 60 70

36. ECOSYSTEM
An initial knowledge map of banking from 1200 websites
Source: Bearing Banking KPI
Project

37. EXTERNAL DATA STRUCTURING
TOP RIGHT IS THE EMERGING SPACE
SOCIAL
MOBILE
FEES
MANAGE
MENT
Source: Bearing Banking KPI
Project

38. ECOSYSTEMS
Knowing
markets and
competitors

39. Perception management
Online references to Android and
IPhone October 2008, Jan 2009
The growth of the Android operating system's sales reflects the growth in online
references from 1/12 of iPhone to 1/3rd. By March 2010 Android was catching up
in market share too.

40. ECOSYSTEMS
IDENTIFYING AND
MANAGING
PARTNERSHIPS
FOR INNOVATION

41. Scaled partnerships – THE API SPACE
Media Retail Auto Mobile Banking
New York Zappos NG Connect Apple Paypal
Times
Guardian Tesco Autoline Nokia Ovi Apple iPhone
payments
Comcast Netflix Lemon Tree Orange
Windows Etsy BMW Samsung
Media
A-V Networks Cafe press Audi Android
Reuters Shopping.com General Droid
Motors
MTV Fiat Blackberry
Networks
Skype Ford Handango
USA Today VW Horizon
(sport and
books)
Verizon

42. Disruptive innovation
Paypal apps program - future of
money threatens banks with new
business models, already evident in
transaction systems

43. THE INTERNAL ECOSYTEM
Bringing the web into the
bank

44. Generating unstructured data
Growth of internal networks
(Intranets, communities, wikis,
content, word files, planning
documents PDFs, PPTs), call centre
records, customer interactions,
email
CREATES A WEB-LIKE PROBLEM

45. Internal processes
UNSTRUCTURED DATA CREATES
UNCERTAINTY AND DRIVES POOR DECISION
MAKING, CREATING AT LEAST A 40% LOSS IN
REVENUE IN TRADING ENVIRONMENTS;
structured data is lost quickly without
being used
Timely
Knowledge needs
these attributes Appropriate
Contextualised
Trustworthy

46. Solutions to information discovery issues
From structure
To text indexing
Simultaneously text search is becoming far
better at structuring results

47. A solution lies in data flow
Give people enough
opportunities for
discovery and sharing,
means finding exactly
what is needed occurs
more often
diagram:usabilitynews.usernomics.com
Good data exploration and usage
become content and
communications issues

48. PUTTING INSIDE AND OUTSIDE TOGETHER
AN EXAMPLE

49. EXPERIMENT WITH SOME CLASS OF CUSTOMER
What can we know from the Web?
Trusted
services
SaaS
Loans IT
Small to Medium
Sized Business SME
Fiscal
benefits Bank
Green Pension tech
issues
FP7
What they talk about at
Grants
any level of granularity
Etc

50. EXPERIMENT WITH SOME CLASS OF CUSTOMER
What can we know from the Web? Facebook LinkedIn
Sport
Small to Medium Social
networks IT
Sized Business Travel
sites
Trade
Tech. press
Places they congregate and Bulletin
board
opportunities for engagement EU
Cordis retail
sites

51. EXPERIMENT WITH SOME CLASS OF CUSTOMER
bought
associated
products
Credit
scores
What can we know from internal
Aggregate
loan sources ?
performance
SME
Loans
Reasons for
Non- Sector Manufacturing
performance Email profiles
themes
Geography
Retail
Local
IT
Regional

52. EXPERIMENT WITH SOME CLASS OF CUSTOMER
What can we know from internal
sources ?
EVEN SME needs
will be diverse

53. Enterprise social network as an incubator of the SME loan
project
An
additional
data loop
Design web pages
responsive to
DIVERSE Evidence based
product and
needs – marketing
Develop new try multiple versions strategy
loan
product options
Participation Participatory
strategy Experiment and collateral
management collate data development

54. The wider payoff
What about
innovation?

55. Identifying unmet custodial or transactional needs
Staff
also spot SMEs
A taking on SaaS
U in place of IT loans
T
O
Subscriptions replace leases
Employees observe need for
new trusted services Trusted
services
Be ready to be surprised
Bank offers automated global
contract validation and custody
service
Online contract
validation

56. Adaptive process for adaptive times
CONCLUSIONS

57. Conclusions
You cannot imagine what customers want because
their ecosystems are fast evolving – technology and new
wants drive them to innovate in their behaviour
You must acquire advantage from knowing more and
through participation: the web is a
participatory medium
Progress through scaling partnerships freeing yourselves
to strategise new opportunities

58. Conclusions
Embrace the ecosystem
Map the surrounding world
Take a proactive approach to
what you can know
Be ready for real innovation

59. The END
Haydn Shaughnessy haydn@cogenuity.com