It’s Time To Accelerate
e-Bill Adoption

(My newest article in The Financial Brand)

Research shows a strong positive correlation between e-bill adoption and customer satisfaction, loyalty and profitability for both financial institutions and billers. Yet, despite a growing digital consumer lifestyle, growth of e-billing remains underdeveloped, especially when compared to rates of online bill pay.

By Matt Wilcox, Senior Vice President, Marketing Strategy and Innovation, Fiserv

Marketing consists of filling wants and needs at a profit. The safer, less costly way to do that is to find out what the market wants and outdo the competition in delivering it. The riskier, costlier way is to introduce an unknown product that fills an unknown need – as 3M did with Post-It® Notes – and set about convincing the market that they can no longer get along without it.

At the outset, with no track record on which to base predictions, e-bill adoption fell in the latter category. It wasn’t quite clear whether the idea of going paperless would turn out to be Post-It Note success … or an Edsel flop.

Now, just a few years after being introduced, we know there is [read the rest of the article by clicking here now]

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How to make your bank the envy of the Peppered Moth

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Ever sat down for a chat with a Peppered Moth?

Prior to the Industrial Revolution, the Peppered Moth flourished in the forests of England. Well, the light-colored ones did. They alit on tree trunks and blended in. Life wasn’t so easy for their dark-colored siblings. They struck such a contrast with the surrounding trees that they might as well have held up signs that said “PREYING BIRDS–DINNER IS SERVED.”

But then the Industrial Revolution came along, bringing with it smokestacks that blackened the trees. Before long, lighter moths became easy pickings while darker ones flourished in their place. A dark moth given to schadenfreude would have had a heyday.

The triumph of this well-known adaptation belies a sobering lesson. Creatures can adapt to environmental change only if they have the DNA for it. Most species that have lived on this planet didn’t, which is why 99 percent of them aren’t around anymore. The Peppered Moth was downright lucky that it had the DNA for producing the occasional dark-colored adult. Without it, it could well have fallen to extinction then and there.

Bankers, our environment is changing.

Going back to the days of green visors and sleeve garters, banking had always been a face-to-face business. As competition swelled, some—if not you, people you know—buried their heads in the sand of being in a “relationship business.” Our customers are our friends, went the reasoning, so no bird will pick them off.

If ever that was true, and you may have gathered that I have my doubts, it is no longer. Just as factories made light-colored tree trunks the exception, technology is making in-person financial transactions the exception. In this new, fast-changing environment, is adaptation within your financial institution’s DNA?

DNA is a set of coded instructions that guide an organism’s development  in terms of traits genes will express, when genes switch themselves on or off, when they work in concert, when they work at odds, and when they don’t work at all. These factors determine how an organism will fare in a given environment. I think it’s fair to say that a financial institution’s DNA is its management, rules, policies, guidelines, and culture. These account for the difference between a bank that is well suited, and one that is not so well suited, to adapt to and prosper as the landscape shifts.

Now, permit me to share a bit of news that is sure to make you the envy of even the most successful Peppered Moth. Your financial institution needn’t resign itself to metaphorical biological determinism. It can do something that no Peppered Moth could ever hope to do. Namely, it can look around, assess the environment, and change its own DNA to match.

There’s just one catch. The ability to look around, assess, and change must itself be written into your bank’s DNA. It must be a product of management, rules, policies, guidelines, and culture. Here is where the analogy breaks down. DNA is not subject to ego. Management, rules, policies, guidelines, and culture are.

Having trouble adapting in a timely manner? Maybe it’s time for a little gene splicing. If a moth can adapt by serendipity, surely a financial institution can do so on purpose.

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Big versus other data

If numbers can make you look smart, it should stand to reason that big numbers can make you look super smart.

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Big and small: each has its place.

But then, looks can deceive.

Don’t get me wrong. I hardly need enumerate the virtues of big data. It reveals behaviors, preferences, and predilections on a mass scale. All of which are useful.

But note the “mass” in “mass scale.” Then, recall that a strong brand is, by design, not for everyone. It is important to guard against letting big data homogenize at the expense of niche opportunities, and against letting it keep you from winning by zigging while the rest of the world zags. Unless yours is a financial institution like all others, do not let big data lull you into assuming that your clients are like all others.

While big data is useful for revealing how we behave, it is less so for predicting how, given the chance, we might behave. Big data did not predict, nor could it have, that consumers would willfully stand in line to overpay for coffee, text more than talk, or, for that matter, buy shoes—something that data revealed people had to buy in-person—online.

That is why wise marketers take care to round out big data with other, smaller, more specific data. And to test small before going big.

On the technical side, beware applying the same logic to big as to smaller data. Take, for instance, p-value, defined (loosely) as the probability that the null hypothesis is wrong. The bigger the data, the greater the danger of false positives. As Minitab’s Patrick Runkel explains, a too-large sample can appear to magnify numbers you would rightly ignore in a smaller sample. And as neurologist Steven Novella explains, “The p-value tells us the probability of the data given the null hypothesis, but what we really want to know is the probability of the hypothesis given the data. We can’t reverse the logic of p-values simply because we want to.”

Big data can offer an alluring but dangerous out for the lazy marketer. (Perish the thought that lazy marketers rank among this blog’s readers. I’m taking about, you know, those other marketers.) Embrace it. Stay current with it. Mine it for every gem. But don’t assume the thinking has been done.

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Canaries and the Patriot Act

It’s time for Section 215 of the Patriot Act to expire

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Let ’em live!

It was once common practice never to descend into a coal mine without a canary. Canaries are more sensitive than humans to methane and carbon monoxide, which are odorless, colorless, and deadly. If the canary expired, it meant you needed to hightail it out of the mine before you expired, too.

The practice ended early in the 20th century. But now, in passive-aggressive response to Section 215 of the Patriot Act, a namesake practice known as a “warrant canary” has arisen.

Section 215 lets the FBI make any person or entity fork over on demand pretty much anything—printed matter, computer files, data, online search histories, phone records, purchases, reading habits, underwear, you-name-it. The FBI can exercise this privilege without having to show grounds or probable cause.

Moreover, if you’re issued an order under Section 215, it is illegal for you to say so.

Still, it wasn’t long before a few astute, rebellious souls noticed that Section 215 neglected to make it illegal to say that you haven’t been issued an FBI order. Suddenly statements began appearing like this one, from Apple’s 2013 Transparency report:

“Apple has never received an order under Section 215 of the USA Patriot Act. We would expect to challenge such an order if served on us.”

That statement is a warrant canary. The idea is that if the statement changes or disappears, we might reasonably infer that the warrant canary has died—that is, that an order has been issued. That is why not a few people were concerned when one year later Apple changed the statement to this:

“To date, Apple has not received any orders for bulk data.”

The qualifier “bulk” may portend a deceased canary in the form of Apple’s having received orders for specific data.

The FBI, it seems, is not a fan of loopholes. Nor does having named the loophole in question after a sweet, colorful finch appear to have appeased them. As I write, the FBI is pursuing legal action to disallow warrant canaries. Not just Apple, but the likes of Twitter, Google, others, and of course the ACLU, are opposing the FBI on this one.

I bring it up at this time for two reasons. First is that the issue has been heating up of late. Second, Section 215 of the Patriot Act is due to expire on June 1 of this year.

I hope that our elected leaders will stay their hands and let Section 215 pass into oblivion. I am no lawyer, and call me a rebel if you must, but I think that Section 215 rather flies in the face of the spirit of the Fourth Amendment:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Or, to put it even more succinctly: Without cause and due process, government officials cannot barge into your personal place and dig around willy-nilly just to see what they find.

Watch for this issue to escalate as June 1 draws nearer. Until then, let’s hope that the ACLU, Apple, et al can continue to—I can’t resist saying it—give Section 215 the bird.

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Digital customers shouldn’t have to navigate an obstacle course before you help them

Help Dept

Last week, a friend of mine, also in marketing, posted this after fighting his way to live chat on Adobe’s website:

“Adobe live chat is immensely helpful—once you get there. First you must prove your worthiness. You must navigate a maze, undergo a colonoscopy, pass a written exam on String Theory, run a gauntlet (blindfolded), sacrifice an unblemished lamb (hard to find this time of year), balance a tree stump on your left index finger, don ceremonial garb, fight off seven angry gorillas (lowland), flawlessly execute 100 consecutive jumping jacks, roll in mud, swear so as to make Quentin Tarantino blush, prove you weren’t born in Kenya, and hold your breath until you expire. Only then will Adobe provide you the chat link.”

Not exactly the sort of PR any company needs. It illustrates a paradox: as more customers demand digital services, the more you’d better be prepared to back them with live, easy-to-reach humans.

Most companies get the part about “live” and “humans.” Some, however, seem to have trouble with the “easy-to-reach” part.

No one knows better than I that ones and zeros have advantages over live bodies. Ones and zeros don’t expect a paycheck, go home at 5, take weekends off, expect overtime, unionize, gossip, call in sick, take vacations, request family leave, whine, stretch 15-minute breaks to 45 minutes, take personal calls when they should be working, crack their knuckles when their neighbor is trying to concentrate, waste time, or show up for work hung over.

So at first blush it might appear cost-efficient to hire fewer live bodies and drive customers to the likes of FAQs and forums.

Might. 

Appear. 

In reality, if you make it too hard to reach a live body, you will create frustration. If you create enough frustration, you will lose customers. You needn’t lose too many customers before you find that hiring a few extra bodies would have cost you less.

While all companies are well advised to clear away obstacles between customers and live help, I venture to say that it is even more important for financial institutions, where questions and problems tend to be urgent and time-sensitive. 

The best practice is to offer live help, and offer it early. When a customer clicks around the same feature one too many times or pauses for too long, provide a popup that says something like, “Need help? Click here to chat with a live representative.”

DIY resources are all well and good, but customers shouldn’t have to navigate an obstacle course before being given a link to live assistance. It is best to allay frustration before it has a chance to arise, much less escalate.

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