WEBINAR Digital Transformation: Lessons From Financial Services Leaders

2. WEBINARDigital Transformation: Lessons From Financial Services Leaders Oliwia Berdak, Senior Analyst Aurélie L’Hostis, Analyst January 18, 2018. Call in at 10:55 a.m. Eastern time

4. The four rules of digital business Digital experience Deliver experiences that are easy, effective, and emotional. Digital operations Reconceive products and capabilities to deliver better outcomes. Digital innovation Continuously improve and break through at the digital frontier. Digital ecosystems Build platforms and partnerships to accelerate and scale.

5. Learning from financial services leaders

6. Case study: Intesa Sanpaolo

7. Case study: Intesa Sanpaolo drivesa customer-obsessed digital transformation • With 11 million customers, over 3,900 branches, and total assets of €725 billion, the Intesa Sanpaolo Group is the second largest bank in Italy by assets. Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report

8. Situation: Intesa Sanpaolo wanted todrive an outside-in transformation • Embrace digital business transformation to unleash a number of opportunities: • Meet the needs of increasingly digitally savvy customers. • Engage mass-market customers with personalized digital services. • Compete with direct banks for younger customers. Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report

9. Vision: Intesa set clear goals for digital transformation Increase adoption and use of digital banking. Generate revenue. Win more customers. Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report

10. Digital transformation has gonethrough three phases Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report

11. Intesa Sanpaolo established an aligned leadership team to accelerate its transformation Source: Intesa Sanpaolo and upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report

12. “The evolution in the organizational set-up is coherent with the goal of better serving clients.” Carlo Messina, CEO of Intesa Sanpaolo SpA.

13. The bank launched new digitalbanking services to deepen customer engagement Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report

14. Best practice: Intesa Sanpaolo adopteda user-centered design process Source: Fjord and upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report

15. Best practice: The bank adopted auser-centered development process Source: Fjord and upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report

16. Intesa Sanpaolo is digitizing itsbusiness strategy to boost its transformation • Used customer journeys to guide its digital banking execution • Improved its data infrastructure and developed new analytical capabilities • Established a digital factory to accelerate technology change Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report

17. Results: It’s early days, but there aresome positive outcomes • Higher usage of digital touchpoints • Increased digital sales • Increased contact center sales • Higher customer satisfaction • Higher engagement Source: Upcoming “Case Study: Intesa Sanpaolo Drives A Customer-Obsessed Digital Transformation” Forrester report

18. Case study: Lloyds Banking Group

19. Case study: How Lloyds Banking Group transformed through 10 customer journeys • Lloyds Banking Group (LBG), which includes Lloyds Bank, Bank of Scotland, Halifax, and Scottish Widows, is a UK-focused retail and commercial bank with over 30 million customers. Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report

20. Situation: Lloyds wanted to go beyond optimizing digital channels • Digital to support a new business strategy focused on creating the best customer experience, becoming simpler and more efficient, and delivering sustainable growth Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report

21. “This is a strategy adapting to the new world. We want to create a high-performing organisation . . . to be quicker than others to have a competitive advantage.” António Horta-Osório

22. Vision for the transformation Transform 10 customer journeys end-to-end. Establish a new operating model to deliver quality at speed. Deliver savings and revenue growth. Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report

23. Lloyds set out to overhaul 10 customer journeys Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report

24. Cross-functional teams are tackling 10 customer journeys Scaling team Lab team Product owner CX design lead Digital technologist Feature team + Business architect Compliance Legal Business roll-in team Ops Branch Call center Model office team Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report

25. Product owner and design and delivery partners head the labs Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report

26. Results: Lloyds Banking Group improved customer experience Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report

27. Results: Lloyds Banking Group became much faster • It now takes the LGB four to five months to bring something from just an idea to a live product or service — down from 12 to 18 months in the past. • Faster software development and delivery cycles mean that an idea can become a prototype (presentation layer) in just five days — from 90 days previously. Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report

28. Results: Transformation didn’t cost a penny . . . • Simplified processes and digital tools have delivered savings and revenue increases to the tune of £500 million. • For example, better tools and processes for online personal loan applications have seen the overall credit acceptance and path to purchase increase by 40%, with the average loan amounts up by £700 at Halifax and Lloyds Bank. Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report

29. Lessons learned

30. 1. It doesn’t matter where you start Allied Irish Banks embraced digital as a “return to economic viability.” Source: Case Study: AIB Puts Its Customers At The Heart Of Digital Transformation Forrester report

31. 2. It’s a journey, not a destination New developments in existing journeys New sets of journeys New enablers Source: Case Study: Lloyds Banking Group’s Journey-Focused Digital Transformation Forrester report

32. 3. Break down the transformation into manageable chunks BZWBK uses customer journeys to prioritize initiatives and prove the ongoing value of transformation. Source: Use Customer Journeys To Guide Your Digital Banking Strategy Forrester report

33. 4. Adopt a customer-centric lens Source: Forrester Research

34. 5. Combine the ‘what’ with the ‘how’ Source: Allianz/Forrester Research

35. 6. Unite business, design, and delivery Neighbours Friends Family Source: Scotiabank/Forrester Research

36. 7. Adapt organizational structure as needed Source: ING Netherlands and Organize For Digital Banking Success Forrester report

37. 8. Calculate and measure the results Source: Case Study: How Emirates NBD Bank Connected Execution To Strategy Forrester report

38. How Forrester can help How well do I currently serve my customers? How good are my digital capabilities? How ready am I for the digital transformation? • Functionality and usability benchmarks • Digital business (banking/insurance) assessment • Digital maturity model

39. Aurélie L’Hostis alhostis@forrester.com Oliwia Berdak oberdak@forrester.com

40. Lessons from the leaders • It doesn’t matter where you start. • Digital transformation is a journey, not a destination. • Break down the transformation into manageable chunks. • Adopt a customer-centric lens. • Combine the ‘what’ with the ‘how.’ • Unite business, design, and delivery. • Adapt organizational structure as needed. • Calculate and measure the results.