The theme of National Bank of Canada’s personal and commercial banking investor day on 1 May 2015 was that the Montreal-based bank is focusing on expanding its retail presence not just in its home province of Quebec but in key regions across Canada.

"We expect total revenues coming from outside of Quebec to represent over 40% of our revenues this year in 2015," Louis Vachon, National Bank’s president and CEO, told investors.

"This is a new historic high for revenues generated from outside Quebec."

"We can meet the diverse needs of all our clients across Canada through multiple channels, branches, business centres, our mobile sales force, call centre and digital channels," said Diane Giard, National Bank’s executive vice president, Personal and Commercial Banking.

Growth in digital channels
Karen Leggett, National Bank’s executive vice president, Marketing and Corporate Strategy, said that, as a result of deploying a new mobile platform, National Bank has seen a 57% year-on-year increase in mobile banking transactions and a 32% increase in mobile active users in the last 12 months.

"Our new mobile infrastructure enables (software) reuse across all platforms, which will reduce our time to market," said David Furlong, National Bank’s senior vice president, Marketing, Experience Delivery and Transformation.

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Using its new mobile infrastructure, National Bank launched two iPad apps in January 2015: NBC mobile banking and MyIdea, which is intended to help customer plan short-, mid- and long-term projects such as home renovations, travel or retirement. Once a customer has used MyIdea to create a plan, they can request help from a National Bank expert.

"Our iPad (mobile banking) app is ranked the number one financial services app in Canada by Apple users, with 4.5 out of 5 stars," Furlong said.

On National Bank’s English-language site, traffic was up 55% year-on-year at the end of March 2015, while online credit card and personal loan applications were respectively up by 40% and 30%. "This implies that we not only continue to increase our reach, but are doing so geographically," Leggett said.

Technology investments
National Bank has made substantial investments in technology to enable its expansion plans. Its technology spending rose by a compound annual growth rate (CAGR) of 10.6% from C$145m ($114m) in 2005 to C$269m ($211m) in 2014, with a large share being devoted to personal and commercial banking.

In September 2008, National Bank announced its One Client, One Bank strategic vision, which focused on transforming the bank’s technology, processes and human resources to ensure a more customer-centric approach. According to Giard, One Client One Bank resulted in efficiency gains of 2-4% and a 7-8% CAGR in net income before tax between 2008 and 2014.

National Bank is building on the foundation of One Client, One Bank to take the bank further, Leggett said.

"Bank-wide, we grouped together all of our client experience, brands, marketing activities, campaigns and offers, all of our direct channels, including mobile, ATMs, online and the full suite of capabilities within digital and data," said Leggett. "This is a major next step in the evolution of our One Client, One Bank strategy to bring customers more directly into the boardroom, so to speak."

According to Leggett, other Canadian banks have a siloed approach to their delivery channels and marketing, whereas National Bank has a holistic, integrated approach. "When we designed our marketing and operating model, we spent quite some time analysing the friction points in our competitors’ models," she said. "(Other banks’ model is that) each product line independently decides on its own individual client strategy as well as on marketing strategy.

This creates an excessively siloed approach to the client and results in a tendency toward singular product push, rather than a holistic client-centric needs-based approach. In designing our new model, we eliminated those friction points through deliberate structuring of the marketing team.

The innovation in our client-centric model is in the actual structure itself at two levels. First, it’s an end-to-end integrated model that leads with a client strategy team at the forefront that is secondly underpinned by powerful data-driven analytical tools as well as talent to anticipate, intercept and respond to client needs."

"We’re on our way to put in place an integrated omnichannel model for marketing and channel delivery," Jean-François Cadieux, National Bank’s chief advisor, public affairs, told RBI.

National Bank is making substantial investments in its data capabilities and analytics so it can become more proactive in meeting its clients’ needs. "We are one of only two Canadian banks that have recently deployed a (big) data discovery platform," Leggett said.

"This platform will allow us to find new patterns in our client information and rapidly create models based on the combination of structured and unstructured data such as client demographic data, transactional data, their entire digital footprint data through all our platforms, all the call center data such as why clients call and when they call, all our fraud (data), all our collections data, all our behavioral data, client complaints data and purchased third-party data."

According to Furlong, the bank’s big data platform, which was implemented during its second quarter ending 30 April 2015, is able to model 50 million transactions against 2.2 million customers in two minutes to determine the next best offer for an individual customer.

Digital sales
National Bank has recently implemented intercept functionality to increase digital sales. This means that, when a client logs on to National Bank’s apps or its website, or carries out product research online, the bank presents them with relevant offers. Leggett said an example of how National Bank uses intercepts is enrolling customers for e-statements.

"We rolled out new e-statement functionality in January 2015," Leggett said. "With our traditional marketing activities, we were initially averaging about 1,000 new (e-statement) enrollments per day.

"Twice per week, we ran our intercept functionality and went from 1,000 new (e-statement) enrollments on each of those days to between 4,500 and 5,000 on each day when we ran the intercept functionality. So our savings have improved dramatically by just deploying that functionality during a two-day period each week. We plan to apply this functionality in a multichannel effort by capitalising on National Bank’s inbound and outbound customer interactions, which are growing quickly and are projected to respectively reach 300 million and 10 million by 2018."

In 2014, National Bank had 4 million outbound customer interactions.

Leggett said National Bank is investing heavily in its call centre capability to capitalise on its new intercept functionality. "Market-leading banks drive approximately 30% of new sale units out of their call centre," she said.

"National Bank is currently at 7%, but it’s growing rapidly month-over-month with the multiple deployments of (call centre) capability. We’ve also historically had a lower annual contact rate out to our clients than our competitors’ industry average, which is between 4 and 7% per year. We’ve been proactively growing this indicator over the last year through the rigorous application of our new marketing model."

Leggett said early campaigns have demonstrated exceedingly high conversion rates, with National Bank’s pre-approved line of credit campaign generating a 68% conversion rate and a credit card limit increase campaign generating 50% in retail and 40% in commercial.

Real-time optimisation
National Bank is moving to real-time optimisation in its digital campaigns. "We’re deploying a productivity-enhancing campaign automation platform that will dramatically increase our contact rate and efficiency," said Furlong. "Through process redesign, we’ve gone from about 12 campaigns a year to about 160, and this (campaign automation) platform will bring us to 300. Also, based on detailed analytics of client behaviour on our digital properties, the platform will allow us to dynamically optimise clients’ interactions live. The result is that we can better target our offers to clients and give them the offer they want when they need it."

In the near future, National Bank will begin integrating third-party digital data to improve its sales prospecting capabilities and to have a better knowledge of its customers. "By 2018, we will have created a single integrated data ecosystem with a complete view of our clients and potential clients," Furlong said. "So we’re going to get real-time segmentation and personalisation, in effect one-to-one marketing."

Furlong cited the example of one of National Bank’s customers who uses its mobile application, and who gave the bank permission to see where they are at any given time so it can improve its service levels. "We’ve just given that client a new mortgage," he said. "We can tell by using geolocation technology that they have walked into a furniture store. We also know they are nearing their credit card limit. So we can push a credit card limit increase through the mobile app. The client clicks ‘yes’ and walks out of the furniture store with a washer and dryer that they need."

By 2017, National Bank aims to have deployed a cross-channel suspend and resume functionality. "What that will allow clients to do is start transactions in one channel and finish in another," Furlong said. "For example, a new homebuyer has filled out a mortgage application online, but she needs to be advised on what’s the best rate for her: is it the five-year fixed or five-year variable? So, rather than lose all of the information she’s already put into the system, she saves it, calls our contact centre and get the mortgage specialist online and they simultaneously see the same application information to get the right advice for her and submit the application."

National Bank plans to deploy a single lead orchestration tool across all products and channels. "This means that our mobile sales force, our contact centre and our branches will have exactly the same profile information about a customer," Furlong said. "They will see all the offers the customer has historically been given and see the next best action for that customer."

"We’re going to integrate the leads orchestration tool’s videoconferencing and document-sharing capabilities and other collaboration tools," said Furlong.

"As an example, if National Bank has an Ontario-based agricultural lending specialist and a client in Saskatchewan with a very specific need, the Saskatchewan-based commercial account manager will start a videoconference, share all the client documentation, and integrate the client and the specialist into a single conversation."

Furlong said National Bank plans to improve (sales) close rates by leveraging its cross-channel architecture to deliver personalised experiences in a multichannel environment.

"At ATMs, we need to be able turn all our incoming transactions into a sales opportunity," he said. "We’re going to expand our ATM network and expand our sales reach. In 2016, we will rebuild our entire ATM fleet, moving to touchscreens, imaging, and new interfaces."

Straight-through processing
Jacques Chamberland, National Bank’s vice president, Business Strategy and Efficiency, Personal and Commercial Banking, said that, like its peers, the bank is digitising its forms and processes.

"We’re also driving a superior customer experience by using straight-through processing in our top 20 processes such as account payments and retail lending services," he said.

"Today, if you were to open a (National Bank) account, you would have to walk into a branch, fill in some forms and photocopy your driver’s licence as a proof of identity," Chamberland said. "This package would then be sent to our processing centre, and processed manually with our IT systems.

With straight-through processing, the client using a mobile app within the comfort of his own home will be able to complete an application form online, take a picture of himself and his driver’s licence, and with simple OCR (optical character recognition) technology, our system will process the information within seconds, and the account will be open without further human interaction."

By using straight-through processing and automating processes, National Bank will add C$30m ($24m) to its bottom line by 2018 and improve the "wow factor" for its customers, Chamberland said.