2006 Trends To Watch In Retail Financial Services

We took a look at our consumer research as well as feedback from financial services firms and software and services vendors (Note: Thank you to everyone who took our survey in the previous First Look!). We think that the industry is ripe for change. Here's why:

Firms are pushing for growth. We asked 60 large North American financial services firms about their 2006 priorities. The top goals: retaining customers and acquiring new customers. At the bottom of the list: cutting costs.

Baby boomers need retirement help. The biggest demographic story is aging baby boomers, who are nearing retirement age. The wave of boomers is also creating a large segment of mass-affluent consumers -- a group that needs financial advice but can't be economically served by today's full-service brokers or private bankers.

Consumers continue to shift channels. Firms told us that they expect to see a large increase in the volume of online and cross-channel interactions. But these growing channels aren't meeting the needs of customers.

Given this environment, here are some trends that we expect to see this year:

• A battle for retirement assets. Life insurers, banks, and brokerages will all push their products as the answer to baby boomers' intensifying retirement needs.

• More proactive marketing. Firms will develop marketing campaigns triggered by specific customer interactions, such as Scotiabank's "significant deposit" effort that pushes leads to its branch reps.

• Branch transformations. Branches will get an infusion of IT investments and new retail practices like product merchandising, localized branch formats, in-store displays, and targeted cross-selling.

• New interactive products. We'll see more new products like ING Direct's Orange Savings Account and ETRADE's Mileage Maximizer credit card that incorporate online interactions into the core design of the product.

• Enhanced online capabilities. Banks will beef up online sales; insurers will improve usability; and full-service investment firms will try to catch up with the online demands of affluent consumers. Institutions will also make significant investments in online verification and risk management.

• Multichannel platforms. Maturing service-oriented architectures (SOAs) and business process management (BPM) technologies will be used to re-engineer sales processes across channels.

• Customer experience reviews. We can evaluate the usability of your Web sites, emails, and phone apps.

• Web site assessments. We can compare the features on your site with those of your competitors' sites.

• Market research. We can provide insights on consumers from our existing Consumer Technographics® data or through customized research.

• Online activity benchmarking. Compare your firm's online efforts with that of other banks and credit unions. We are also kicking off a multiclient research project on organizational models and staffing levels.

Research Referenced In This Issue Bank Web Sites Impact Customer Relationships (38525) Canadian Bank Public Web Site Rankings (38253) Case Studies In Event-Triggered Marketing (37467) Credit Cards: The Path To Online Applications (35397) E*TRADE Upsets The Credit Card Applecart With Mileage Maximizer (38435) FFIEC Tells Banks To Formally Assess Fraud Risk (38112) Financial Services Firms Need To Design For Trust (38838) Got Legacy? Four Fates Await Your Applications (38097) Hot Application Infrastructure Areas In European Financial Services (38322) Integrated HSAs: A Road Map For Health Plans (37410) Overview: The Affluent And Mass Affluent (38188) RSA Broadens Positioning With Cyota Acquisition (38814) Segmenting Financial Consumers (38165) Selecting And Implementing P&C Claims Systems (38852) The Affluent Are The Most Active Online Investors (37837) The Forrester Wave™ 2005 (36769) The Forrester Wave™: Enterprise Marketing Platforms, Q1 2006 (37151) The Forrester Wave™: User Account Provisioning, Q1 2006 (37159) The Forrester Wave™: Web Analytics, Q1 2006 (36675) Trends 2006: Retail Financial Services (38704) Why The Mass Affluent Matter (37118)

EMAIL: Email this issue to a colleague.

PRINT: View a printer-friendly version of this issue.

VIEW ARCHIVE: View past issues of First Look.

TECHNICAL SUPPORT: Call the Client Resource Center
1 866/FORRESTER (1 866/367-7378) or +1 617/613-5730.

EMAIL SUBSCRIPTIONS: If you'd like to subscribe or unsubscribe to First Look, please go to your Email Subscriptions page.