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

 15 April 2003
Be There Or Be Square
Financial services consumers are becoming more skeptical, self-interested, and hands-on. Find out how to win their trust at the 2003 Forrester Finance Forum, May 5-7 in New York. Speakers include three chairmen of billion-dollar companies, a Nobel Prize winner, two CEOs, an insurer, bankers, brokers -- plus Forrester analysts Katia Walsh on the evolving consumer, Jaime Punishill on their advisors, John Dalton on the new customer experience, Catherine Graeber on eCommerce teams, and John McCarthy on going offshore. See the full agenda, or call +1 888/343-6786.


The Unvarnished Truth
Fewer than one in 10 online consumers has given up paper for electronic statements. But four in 10 say they're likely to. The best prospects? Online bankers and bill payers and Gen X/Yers.
Almost two-thirds of online Canadians are ready to give up paper statements for the right incentive like free check reorders or a one-time bonus.
One in five Europeans already banks online. By 2007, the number of online bankers will double, with Germany and the UK leading the way.


Where Else You'll Find Us
June 9-10 in San Francisco: Catherine Graeber co-chairs The American Banker Conference on electronic billing, payment, presentment, and invoices.


Cross-Sell Potential
To determine which banks have the best chances for cross-sell success, we computed a score for each bank by multiplying the percent of its customers who: 1) will consider the bank for their next purchase, and 2) are interested in buying multiple products from one provider. Here's how the banks rate on a 100-point scale:


Cross-Sell Potential
Cross-Sell Potential

Search
Search Forrester's Web site.

 

Improve Your Chances For Cross-Sell Success
Embedded in the research we churned out last month is this gem: Firms that are perceived to offer what's best for the customer -- as opposed to what's best for the firm's bottom line -- have a much better chance of cross-sell success.

At banks with the highest cross-sell potential, 41% of primary customers on average rated their bank high on customer advocacy, compared with 32% of the customers at the lowest-scoring banks. H.L. Mencken had it right when he said:

"Doing good has come to be, like patriotism, a favorite device of persons with something to sell."

In addition to advocacy, Principal Analyst Ron Shevlin identified some other characteristics of banks with the highest potential for cross-sell success. Among them: Web site usage. Sixty percent of the customers who use a bank's Web site will consider that bank for their next financial services purchase -- double the rate of customers who don't use the bank's site.

What channels will consumers use to buy and manage financial products in the future?

Channel Momentum To determine how channel use is likely to evolve, Senior Analyst Katia Walsh created an index we call "channel momentum," which factors consumers' likelihood to use a channel in the future against their current use of the channel. The Web shows strong momentum for financial product research. But the call center is the hands-down momentum leader for all activities, including buying a new product.

Why? Because the call center combines the two top reasons consumers choose to use a channel to buy or research products: 1) They want to speak with a person, and 2) they use what's most convenient.

Aggregation won't help you cross-sell

Financial services firms pin high cross-sell hopes on account data aggregation. But as we've predicted for years, consumer adoption of aggregation remains negligible. The problem is simple: mass-market consumers don't need it.

But investors do want aggregation, and advisors need it. Senior Analyst Jaime Punishill believes that the right application of data aggregation for the next three years is in supporting planning apps and advisor tools. We evaluated the top aggregation vendors and found that ByAllAccounts offers the best data for wealth management applications. Adhesion Technologies, CashEdge, and Yodlee are in the hunt.

What else would you like to see?

Are there other topics you'd like to see us address? Drop me a line anytime at billdoyle@forrester.com.


Bill Doyle
Financial Services Research Director

P.S. Please pass this email on to coworkers and colleagues who you think would find it valuable.

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

UNSUBSCRIBE: We hope you like First Look. But if you want to unsubscribe, please go to our email subscriptions page.


Entire contents © 1997-2003, Forrester Research, Inc. All rights reserved. Forrester, Forrester Oval Program, Forrester Wave, WholeView, Technographics, TechStrategy, and TechRankings are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. Forrester clients may make one attributed copy or slide of each figure contained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usage information, go to www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.