Forrester Research: Forrester Retail Insights Financial Services First Look: Research & Event Highlights From Forrester

 24 March 2005
The Best Structure For IT?
The greatest problem that large IT shops face is balancing the needs of the enterprise against the needs of business units. Our latest research, which includes a case study of a large insurance company, illustrates best practices for structuring large IT organizations.


Hot New Research
What Online Ad Formats Work? by Jim Nail
European Financial Services IT Spending Profile by Manuel Ángel Méndez
The Enterprise Content Management Dilemma: Point Solution Or Suite? by Connie Moore
Build The Right Business Case For CRM by William Band
What Is Possible From Offshore? by Robert McNeill


Finance Forum: June 9 & 10
This year's Finance Forum, on boosting your cross-sell success through great client experiences, will be at the Sheraton in midtown New York City on June 9 and 10. Be there or be square!


How Can We Help?
Here are some of the areas where we've recently been able to help financial services firms:

Benchmark online activity. We can compare metrics of your firm's online efforts with other banks and credit unions in North America.
Customer experience reviews. We can evaluate the usability of your Web sites, emails, and phone apps -- and make recommendations for improvements.
Web functionality assessments. We can compare the features on your site with competitors' in four areas: researching, applying, transacting, and servicing.
Market research. We can provide you with insights on consumers from our existing Technographics data or through customized research.
Fraud avoidance. We can help develop strategies for protecting your firm and your customers against phishing attacks.
IT org assessments. We can examine the structure of your IT organization and recommend changes to improve its performance.


Advisors Rely On Mutual Fund Sites
Forrester surveyed 300+ advisors and brokers. More than half of them look up performance data at least once a week, and nearly half download forms or look up client accounts every week. Twenty-four percent of advisors say that they are more likely to buy a firm's mutual funds based on the quality of its Web site.


Advisor Sites Impact Sales
Advisor Sites Impact Sales

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Get Your Customer Experience "ACT" Together

After surveying execs from large North American companies about their customer experience efforts, we took a closer look at responses from financial services firms. Nearly three-quarters of respondents view improving customer experience as a critical objective. When evaluating specific interactions, most financial services firms feel that call center reps and retail outlets almost always meet customer needs, but the approval rate drops off dramatically for other interaction channels like email and the Web.


Financial Services Firms Assess The Effectiveness Of Their Interaction Channels What stands in the way of making improvements? The top two obstacles selected were trying to change employee behavior and getting alignment across organizations.

Given the importance of customer experience and the current obstacles that companies face, we recommend that you take a look at (and hopefully embrace) the following three concepts:

  • Advocacy. Customer satisfaction and loyalty are highly correlated with customer advocacy -- the perception that a firm does what's right for its customers, and not just the firm's bottom line. Given the combination of recent scandals and investors' widespread mistrust, it is particularly important for advisory firms like Edward Jones to focus on customer advocacy. How? Among our recommendations: Renounce hidden revenue deals and use Web sites to make rates and fees crystal clear.
  • Customer-centricity. How can firms consistently deliver great experiences? By mastering The Customer Experience Value Chain -- the organizational culture and process for consistently delivering superior customer experiences. The cornerstone of this new idea is customer-centric DNA -- the combination of customer familiarity and organizational engagement. To see how your firm stacks up, take our customer-centric DNA self-test.
  • Trust. Consumers are losing trust in the Internet as a channel for doing business as computer attacks on consumers and companies mount. So financial services firms must respond by addressing security in a way that aligns with consumer concerns, providing four types of protection: identity assurance, usage assurance, service assurance, and privacy assurance. Also, make sure that you are -- at a minimum -- evaluating plans to follow E*Trade's lead with strong authentication.

Best Practices For Designing Experiences
As you get your "ACT" together, make sure that you design interactions to meet the needs of your customers. Looking back on the data from over 300 evaluations of Web sites, phone self-service, kiosks, email, and cross-channel transitions, we found that experiences regularly fail many of our criteria. Here's some new research on best practices that should help:

You May Have Noticed Some Changes
After a long and accomplished stint as the Research Director for Financial Services, Bill Doyle has decided to return to his analyst roots and become our lead wealth management and brokerage analyst. Bill has been an icon in the RD role at Forrester; I'm sure he'll achieve the same status in the world of retail investing.

For those of you who don't know me, I've been at Forrester for six years, in a number of different areas -- most recently as the Research Director for Customer Experience. Prior to Forrester, I ran development and product marketing groups for a number of companies, including Fidelity Investments. In the mid '90s, I co-founded a company that built one of the first Internet-based retail brokerage systems. Interestingly enough, the second report that I wrote at Forrester was about online insurance. So I am very excited about leading Forrester's financial services practice -- and finding ways to deliver even more value to you, our clients.

Got Feedback?
As I get going in this new role, I'd really like to hear about topics you'd like to see us cover, data you need, or technologies that you want assessed. Drop me a line at brucetemkin@forrester.com so we can connect.


Bruce Temkin
Vice President & Practice Director, Financial Services


Research Referenced In This Issue

Best And Worst Of Email Customer Service, 2005 (36313)
Best And Worst Of Site Design, 2005 (36074)
Build The Right Business Case For CRM (36558)
Companies Deliver Subpar Customer Experiences (36208)
Customer Experience In Financial Services (36496)
Customer Experience Spending Expands (36300)
Design Email Message Headers To Promote Trust (36547)
Do Advisor Web Sites Improve Mutual Fund Sales? (35869)
E*TRADE Battles Online Fraud With Strong Authentication (36541)
Earning The Loyalty Of Banking Customers (34613)   
European Financial Services IT Spending Profile (36611)
How Customer-Centric Are Firms? (36553)
Lessons From Edward Jones' Mutual Fund Debacle (36346)
Rebuilding Consumers' Trust In The Internet (35612)
The Customer Experience Value Chain (36551)
The Enterprise Content Management Dilemma: Point Solution Or Suite? (36226)
The Structure Of IT: Large Shop Case Studies (36471)
What Is Possible From Offshore? (36552)
What Online Ad Formats Work? (35747)


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