Barclaycard needed to build a flexible and scalable digital capability to enable its diversification strategy into areas like mobile payments.
Barclaycard needed to boost its digital capability for a number of reasons:
- Barclaycard has no retail presence and limited brand awareness in the US, so it needed a digital capability that would allow it to attract and retain customers in a very competitive market
- Strong competition and heavy emphasis by other banks meant Barclaycard needed greater investment for the online, email, and mobile channels; year on year, Barclaycard US was seeing 4% growth of digital customers compared to 10% for its competitors
- Given the relative immaturity of digital across the business, Barclaycard was unable to effectively leverage digital to increase revenue, reduce costs, or improve loyalty
- Examples of gaps include an outdated website, lack of a mobile app/ website, sub-optimal email capability, and limited web analytics/insights.
Barclaycard asked BearingPoint, working with West Monroe Partners, to develop a digital strategy with a five-year business case horizon. Investment for the first three years was US$15-20MM, with an expected cumulative profit before tax of US$80-100MM over five years. It had three phases:
A 3-year roadmap that balances customer needs & expectations with Barclaycard’s commercial priorities, including:
- Ideal customer experience
- Required digital capabilities and organization
- Impact on marketing, operations and IT
- A business case with OpEx reduction and revenue drivers
- Prioritized 3-year roadmap case for change and shared vision for the executive leadership team
Detailed planning and definition of 10 high-impact projects for year 1 of the roadmap, including:
- The comprehensive business requirements
- Delivery and dependency planning
- Immediate support for quick-win opportunities identified during phase one
- Key vendor selections and internal staffing processes in order to enable a quick start
Interim program planning and implementation support by BearingPoint and West Monroe Partners while building up internal digital team, including:
- Setting up digital program planning & management function
- Managing interdependencies of the digital program with other bank-wide initiatives
- Selecting digital partners required for long term support
- Supporting the build up and knowledge transfer to Barclaycard’s digital team
Following the implementation of the strategy, Barclaycard has seen a marked improvement in several key business areas:
- OpEx Reduction: Barclaycard has seen significant savings on operating expenses primarily through increasing self service and offloading customer requests from the contact center to digital channels. For instance, a 15% increase in online customers signing up for paperless statements and 11% of customers using mobile for self service.
- Revenue Enhancement: The bank has significantly increased its opportunities for cross-sell and up-sell through digital channels. For instance, using smart ad servicing strategies to increase speed of penetration of customers eligible for offers, and a 15% increase in opens and clicks on email marketing campaigns.
- Increased brand awareness and customer retention: The new online experience has improved the application conversion rate by 6% and increased digital customers by 5%.
The project has helped the bank establish a cross-functional team which is powering digital forward within the business. This has dramatically increased Barclaycard US’ capacity to deliver change and innovation swiftly to its customers and partners.
One great example of this faster-to-market capability is the bank’s mobile service app for the iPhone, which went live within just six months because of the new overarching digital strategy and expertise of the multi-skilled, dedicated team.
In fact, BearingPoint and West Monroe’s work with Barclays, both in the US and the UK identified several digital opportunities and improvements across the business. Barclays is now replicating the digital business model which worked so successfully for Barclaycard US in other business units worldwide.