Traditional Banks Are Catching Up To Third-Party Payment Platforms In China

Xiaofeng Wang

This is the second year that Forrester has evaluated the mobile banking services in China, and we’ve just published the results in our 2016 China Mobile Banking Functionality Benchmark report. Compared with last year, we found that incumbent banks are close on the heels of top performer Alipay. Mobile banking teams can use these findings to benchmark their own mobile banking capabilities and identify areas for improvement.

To help mobile banking teams benchmark their mobile banking capabilities, identify critical mobile features, and plan for the future, we used our updated Mobile Banking Functionality Benchmark methodology to evaluate the mobile banking services of six of the largest retail banks in China, including five traditional banks — Agricultural Bank of China (ABC), Bank of China (BOC), China Construction Bank (CCB), China Merchants Bank (CMB), and Industrial and Commercial Bank of China (ICBC) — and one nontraditional bank: Alipay.

The Chinese mobile banking services we reviewed achieved an average score of 59 out of 100, an improvement over last year's 55. Leading traditional banks like CMB and ICBC have made many improvements over the past year and narrowed the gap with leader Alipay. Overall, we found that:

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Architect Process Agility With BPM Platforms For Digital Business

Charlie Dai

Some CIOs and enterprise architecture (EA) pros believe that business process management (BPM) is on the opposite side of agility — but they don’t realize that BPM technology itself is also evolving. Agility-oriented BPM platforms are the foundation of a digital business. I’ve recently published a report that discusses the four key areas that EA pros must focus on to accelerate digital transformation with BPM. Some of the key takeaways:

  • Modern BPM is critical for digital business. Process agility is critical to giving businesses the agility that powers digital business. BPM adoption is gaining momentum in China; EA pros must drive the use of modernized BPM platforms and methods to accelerate digital transformation. 49% of budget decision-makers in China from both the technology and business sides will increase their spending on enterprise process applications, which is higher than their global peers.
  • An outside-in approach is key to digital transformation. EA pros must understand key BPM platform capabilities and unique local demands. For the Chinese market, this means data-intensive user interfaces with integration and security needs, complex organizational hierarchies and ad hoc decision-making approval processes, and a unique social environment for cross-region collaboration. EA pros should then use these requirements to align the architecture for agility-oriented process platforms. Forrester has introduced a reference architecture for agility-oriented process platforms that consists of four layers: enablement, foundation, engagement, and management.
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Cisco buys Cloud Security Gateway vendor CloudLock for $293M

Andras Cser

Given Symantec's recent acquisiton of BlueCoat (and with it BlueCoat's earlier acquired Elastica and Perspecsys cloud security gateway (CSG) assets), and IBM's organic buildout of its Cloud Security Enforcer CSG solution it comes hardly as a surprise that Cisco today announced its intent to acquire CloudLock for US$293M (in Forrester's estimation this purchase price represents at least 10-15x of CloudLock's current revenues).  Considering that CloudLock's DNA and pedigree  is mainly in cloud data governance and data leak prevention using API based connectivity to SaaS (and lately IaaS) apps without an own gateway solution, Forrester expects that Cisco will do the following with CloudLock:

1) Integrate CloudLock's CSG offering with its own Ironport Secure Web Gateway (SWG) offering for interception of on-prem to cloud traffic,

2) invest in improving machine learning and behavioral analytics (already there in CloudLock's CSG solution),

3) improve data protection and cloud encryption in the solution, 

4) use its distribution channels to penetrate the lucrative and fast-growing (Forrester's estimate: 20%-25% y/y global growth) CSG market,

5) start an acquisition of wave in which other large SWG vendors will follow suit and acquire smaller CSG vendors.

Let's go back to the future--it is time to start planning now for customer service in 2021

Ian Jacobs

This a guest post by Meredith Cain, a Research Associate on the Application Development & Delivery (AD&D) team.

Let’s take trip back to 1989. One of the big movies of that year was  “Back to the Future: Part II.” One of the great things about that movie was its view of the future—or, because so much has time has passed since the film was released, its view of what our present should be like. In the film, Marty McFly and Doc Brown time traveled to October 21, 2015 and had the opportunity observe potential technologies and experiences of the future.  What they saw seems both supremely silly and surprisingly prescient: video conferencing, holograms, augmented reality (AR) and virtual reality (VR). Sure, we don’t all use AR and VR every day, but it is becoming clearer that we soon will.

In Forrester’s new report “Plan Now For Customer Service in 2021,” we assess and evaluate five developing customer service technologies according to their potential impact on the customer service experience in the year 2021. Rather than time traveling, we evaluated the technologies based on their newness, business complexity, and technological complexity so AD&D pros can adequately plan for the necessary amount of time to develop these five technologies and build the appropriate business cases for budgeting.

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How Are Airlines Embracing Mobile Moments?

Xiaofeng Wang

Mobile is changing travelers’ behaviors and expectations worldwide, making mobile moments the next battleground for airlines. My Brief: Airlines Must Embrace Mobile Moments To Differentiate tells B2C marketing professionals managing airline brands how to better address airline travelers in their most relevant mobile moments.

Nobody is more mobile than an airline traveler — from buying a ticket to managing the in-transit and on-board experience to sharing that experience, mobile is an active touchpoint throughout the entire customer life cycle. Have airlines mastered all of these mobile moments? The answer is often “No” — there are still mobile moments that key airlines seldom cover (see figure).

Specifically:

  • Most airlines focus on mastering mobile moments at the buy and use stages. Smart airlines strive to provide convenient, time-saving measures that are better than those of online travel agencies (OTAs) and other airlines, such as “upgrade at the boarding gate” feature in its mobile app.
  • Some airlines serve mobile customers well at the discover and ask stages. Smart airlines help prospects and customers discover promotions beyond air tickets and travel packages, such as cross-border shopping, through multiple mobile channels.
  • Few airlines master mobile moments at the explore and engage stages. Compared with OTAs, airlines put forth far less effort creating mobile moments at the explore stage, whereas product comparisons and customer reviews are common features for OTAs.
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What Drives Mobile Banking Engagement?

Peter Wannemacher

This blog post is a collaboration between Peter Wannemacher and Nicole Dvorak, who also collaborated on Forrester's brand-new report on this topic.

As former New York Mayor Michael Bloomberg once tweeted, “If you can’t measure it, you can’t manage it and you can’t fix it.” Digital executives at banks must understand and gauge the drivers of mobile banking in order to boost engagement. To help executives and their teams accomplish this, Forrester recently built a driver analysis model to identify which factors increase mobile banking app use (as measured by the number of days used and the average duration of a session). This model included two categories of potential drivers: perceptions and behaviors. The full results of this research are detailed in our new report here.

Here are three key takeaways from our research:

  • Feelings of accomplishment fuel mobile banking use. The degree to which a mobile banking app helps a customer feel positive and accomplished has the largest impact on how often that customer will use mobile banking. This is further evidence that architecting positive emotional experiences is crucial to maintaining an engaged mobile banking audience. At leading providers, digital business execs and their teams will accomplish this, in part, by focusing on bank customers' mobile moments.  
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With Brexit, A Customer-Focused Agenda Is More Important Than Ever

Laura Koetzle
Yesterday’s decision by UK citizens to leave the European Union (“Brexit”) brings about short-term uncertainties and unintended consequences that will make it harder for UK businesses to keep customers and attract talent. While times of high-market volatility can tempt firms to panic and cut spending on customer-focused initiatives, now is the time to drive innovation in order to win, serve, and retain customers. 
 
As decisions over the next several years are determined by legislators and driven by compliance, UK companies will be challenged to operate as customer-obsessed firms. Forrester believes that the UK’s decision will have five major implications, including:
 
  • Digital and customer-facing talent will migrate out of the UK. Concerns about immigration laws (i.e., who will have the right to stay) will both drive footloose talent to look for jobs abroad and dissuade others from coming. And CIOs will find it even more difficult to recruit already-scarce developers and engineers to build customer-facing systems. 
  • Product and delivery innovation will slow. Companies will now have to spend more time and effort to deliver products across borders and less time innovating on new customer-focused solutions. 
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Snaps for Snapchat

Jessica Liu

Bloomberg recently reported that Snapchat surpassed Twitter in daily active users. Kudos to Snapchat, which is only half as old as Twitter, but why do we keep comparing Snapchat to Twitter? Or to Instagram? The industry is desperate to neatly categorize Snapchat under social media, but I would argue that Snapchat is equal parts messaging app and social network, putting it in a class of its own.

Let's break it down:

  • Messaging apps are built on the premise of private conversation: 1 to 1 (yes, group chat exists, but it's contained). You send specific messages tailored to the individual recipient. See: WhatsApp, WeChat, Skype, Viber, LINE, Telegram, Kik. With the exception of Asia's sophisticated app hybrids, today's messaging apps are not intended for blanket broadcast messaging.
  • Traditional social networks are built on the premise of broadcasting: 1 to many. You build up a network of friends (and, in some cases, the general public) and you blanket spam them with your post. See: Facebook, Instagram, Twitter, LinkedIn, Pinterest. While they accommodate private conversation (Facebook Messenger is its own rightful messaging app, Instagram's and Twitter's Direct Message, LinkedIn InMail), it is not their primary foundation.
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Microsoft’s Acquisition Of LinkedIn Will Not Translate Into A Revolution Of Enterprise Social Networking

Dan Bieler

In a report, Forrester discussed arguments made by Microsoft regarding the potential benefits of the tie-up. There are some additional aspects that I also consider important when discussing the implications of the tie-up:

  • LinkedIn's status of trusted independent platform for professional information exchange could be undermined. Although the deal, should it go through, would help Microsoft to strengthen its social networking services and professional content, there will be LinkedIn users that are not keen to become sucked into the Microsoft ecosystem as part of their social collaboration activities and abandon LinkedIn as active users.
  • Microsoft must be much faster to decide on LinkedIn's strategy than it did with Skype. It took Microsoft several years to define its strategy for Skype, and Yammer for that matter. This slow response to sort out Skype's place in the Microsoft family slowed down Skype's momentum significantly. By the time the new Skype strategy was announced, most of the hardcore Skype users had migrated away towards other social collaboration platforms like WhatsApp, Facetime, or WeChat.
  • Microsoft must redouble its mobile efforts. A large part of LinkedIn users’ activities are mobile based. Microsoft's weak position in mobile ecosystems could dramatically undermine LinkedIn's longer-term opportunities. If Microsoft underestimates the mobile dimension for LinkedIn, the future for LinkedIn could be very questionable. Users are fickle and there is no loyalty to outdated social media platforms.
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Customer Experience Drives Revenue Growth, 2016

Harley Manning

In 2015, we explored whether customer experience really matters to business success or whether CX is just the latest hype. Our conclusion: superior CX drives superior revenue growth in industries where customers are free to switch business and competitors deliver a differentiated customer experience.

This year we repeated our study to see if the results held true across an additional year of data. To do that we compared five pairs of publicly traded companies where one company in each of the pairs had a significantly higher score than the other in Forrester’s Customer Experience Index during the period 2010 to 2015. Then we gathered financial data from company SEC filings like Forms 10-K and 10-Q.

The tough part was normalizing the results. We focused on isolating revenue that could be traced directly to consumer behavior; we also backed out revenue from mergers and acquisitions, revenue from sale of assets, and other windfalls.

Once we normalized the revenue data we used it to build models that calculated the compound annual growth rates (CAGR) for the ten companies from 2010 to 2015. We found that the CX leaders in all five pairs of companies outperformed their relative CX laggard counterparts.

In two industries, cable and retail, leaders outperformed laggards by 24 percentage and 26 percentage points, respectively. Even in the industry with the smallest spread, airlines, the CX leader enjoyed a healthy 5 percentage point advantage in global revenue.  And when we compared the total growth rate of all CX leaders to that of all CX laggards we saw that the leaders collectively had a 14 percentage point advantage.  

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