Presented by: Kevin ChettyCommercial Director

MULTI-CHANNEL APPROACH FOR MULTI-CHANNEL APPROACH FOR FINANCIAL INSTITUTIONSFINANCIAL INSTITUTIONS

‘ Strength lies in Differences NOT Similarities’ – Stephen Covey

‘The achievement of an organisation are the results of the combined effort – Vincent Lombardi

INTRODUCTION

Topic Presenter Delegates Workshop Ground Rules Workshop Expectations & Objectives

4

AGENDA

Day 1 Session 1: Customers, Landscape, Strategy

Case Study & Exercise

Session 2: Mobile Strategy (Mobile Sales Strategy & M – Commerce)

Case Study & Exercise

Session 3: Branch StrategyCase Study & Exercise

Session 4: Alternative StrategyCase Study & Exercise

6

SESSION 1: Customers, Landscape, Strategy

The Alchemist – Paulo Coelho

“It’s the possibility of having a dream come true that makes life interesting”

9

RETAIL BANKING A REALITY

The traditional retail bank is at an inflection point. The needs and expectations of customers are changing as quickly as the competition. Customers are demanding seamless, multi-channel sales and service experiences. Simultaneously, other financial institutions and non-traditional players are looking for opportunities to invade this space or to redefine it through disruptive innovation.

The result is forcing banks to examine a more balanced, integrated approach to customer experience and growth

1. Background

10

AN EVOLUTION FIND YOUR SPACE

1. Background

Global banking more competitive

The IT revolution

Information explosion

Rationalisation of branches in 1990’s

Banks are trying to become one-stop financial supermarkets

THE CHANGING FACE OF BANKING

In view of several developments in the 1990’s, the banking industry is changing …

How did banks respond?o Distribute financial services through other ways and channels

…o … proliferation of non-traditional banking channelso Growth in usage of MOBILE selling agents

1. Background

Key macro econ trends

Macro economic environment outlook is moderate

Customers

Use a wide range of financial products

Proliferation of distribution alternatives

Regulation

Tier 2/3 legislation

National Credit Act

Competition Commission

Lower commission earnings

Market landscape

Competitors becoming increasingly aggressive

Alliances and joint ventures

Banking environment

A COMPETITIVE LANDSCAPE eg SOUTH AFRICA

1. Background

13

WHAT DO CUSTOMERS WANT? NOT WHAT BANKS……

Booz Allen’s consumer research reveals that despite the development of alternative channels, customers still prefer to purchase in the branch. However, the importance of the branch is in decline, and the mass affluent form the group leading the march away from branches, and towards mobile banking, mobile sales force and the Internet. When it comes to alternative channels, customers prefer online to telephone transactions, particularly when the product and the transaction itself are relatively simple. One area in need of significant development is the mobile sales force, which at present is limited or nonexistent in all but a few countries.

Source: Reference Booz/Allen/Hamilton - Striving for Growth, Best Practices in Retail Banking Sales and Service Channels

1. Background

14

RAISING THE GAME IN RETAIL BANKING

Booz Allen’s research shows there are clear opportunities to enhance revenue in retail banking. Going forward retail banks need to:

o Provide dedicated channels (website, call centre, mobile sales forces and specialist areas in branches) for affluent customers.

o Reduce waiting times in branches through the use of welcome desks (concierge concept) and the option of making appointments in advance.

o Efficient call centre menus and staffing that enable customers to quickly reach people who can resolve their queries.

o Enable customers to tailor websites, supported by strong security measures (e.g. random number generators).

o Offer mobile sales advisers who can complete transactions at the meeting, for selected customer groups.

Source: Reference Booz/Allen/Hamilton - Striving for Growth, Best Practices in Retail Banking Sales and Service Channels

1. Background

THE CURRENT BANKING LANDSCAPE

• It has been almost 3 years since the Global Financial Crisis

• The current banking environment is a lot different to a decade ago

• Branches have been rationalized

• There is consolidation

• Current focus is on Capital Adequacy & stringent Central Bank requirements

• Growth is immanent (Organic vs. Inorganic growth)

• Greater demand from customers

• Development of various channels

• BUT it will be about RISK, COSTS, EFFECIENCY, LEVERAGE, JV’s, M&A’s

1. Background

CHANNEL STRATEGY• For businesses to survive Growth is imperative

• A Channel Strategy is amongst the most enduring decisions a company will make

• Why companies adopt or embrace a channel strategy is often related to their growth prospects, need for new customers and an increasing competitive landscape

• The world in which we practice, trade or market our products have considerably changed

• The economic woes in the last few months’ have been catastrophic to say the least

• The global financial meltdown has restricted and impacted growth in many countries and companies alike, including Africa

• However, we are beginning to witness a turn for the better in the economic cycle

• Whilst this is positive news, BANKS must select a channel carefully when considering to distribute products or services

• A correct channel strategy comes through a correct Segmentation Strategy

• The appropriate channel should be assigned to each customer segment. The challenge for companies that opt for a ‘multi-channel’ approach is knowing how to orient each customer towards the channel that best fits its profile. It is equally important to analyse each channels costs and profitability, as it is to analyse the cost and profitability of each customer in each channel.

• The growth of new channels such as the internet or mobile phones has redefined or changed the game in many sectors.

1. Background

KEY BENEFITS IN DEFINING A CHANNEL STRATEGY

• Increase in sales

• A targeted market coverage

• Minimize sales expenses as the strategy and channels are defined

• Capture EXISTING markets and acquire NEW markets

• Keeping abreast of the competition

• Increase to the existing client data base

1. Background

KEY CAPABILITIES

• Create new alternative channel programs

• Improve competence and commitment of direct and in-direct channels

• Sales force sizing based on each channel

• Driver for committed and competent partners

• Hybrid channels

• Direct vs. In-direct distribution channels

• Indentifying and recruiting the best channel partners

• Managing channel conflict

• Compensation (incentives, commissions) and channel finance

• Measuring the channels success

1. Background

DEFINE

DIRECT CHANNEL:

Those channels where there is direct control

1. Background

IN-DIRECT CHANNEL:

Those channels where there is NO direct control over the channels

DIRECT vs. IN-DIRECT CHANNELS

1. Background

Direct Channel

Type Channel

Description Strengths Weaknesses

Electronic Internet Company internet site. Most channels can be linked to the internet, depending on the PUSH/PULL strategy. Internet must have access point for prospective clients. This must be linked to a central email address, finally to a central data base.

Most consumers have access to PC/internet zone. Cheaper channel as most traffic is via the consumer/client. Clients have access to wider information

If the internet is NOT user friendly, navigation can become tedious to frustrating. Hence ease of access is crucial

Direct email to Sending direct mailers to a prospective/identified customer base. This involves a BTL campaign message. Data base that has accurate information is KEY.

Most businesses have access to email. It is more cost effective. There is NO delay in the release and receiving of information. Campaign messages can be tailor made and using multi-media (e.g. Saleslink)

Dependant on the reliability of email address provided. Consumers can become overloaded with so called junk mail.

Direct email from

Receiving an email from a prospective customer. Linkage to a central email address and data base

It is cost effective via a client. Furthermore, increases the success of closure

Not responding on time (with 24/48 hours)

Telephony Telemarketers Outbound and Inbound. Using defined CRM/IT platform for all sales and information sharing. In addition, low key desktop call centre can be set up.

Competitive advantage through a centralized approach, company controls value chain. Hence, reduce other operational costs/infrastructure

Can become very costly if implemented incorrectly. Clients are inundated with calls thus increasing caller frustration. Poorly trained Telemarketers can damage reputation. Furthermore the conversion ratio is low

Telephone Automated

Automated recording of a message Cost effective Can become frustrating to a customer, if the message is NOT responded to.

SMS Must be linked to a dedicated call centre, so that the response is immediate. This will improve the customer service image

Cost effective and can be used effectively in customer follow-ups, e.g. birthdays, thank you etc

Can become costly to manage if implemented incorrectly. Message contents has to be small

IVR Interactive Voice Recorders. Automated interactive system with a caller. Both inbound and outbound

Reduced overhead costs associated with staff. Helps improve sales and information gathering

Can become very costly for a company. Can prove to frustrating for a consumer

Post Direct Mailers Campaigns in most retail segments driven through direct mailers. These are tailored messages for the intended recipient

If the campaign is well packaged, the conversion/response rate is higher

Can become costly and ineffective due to post delays

Magazine Stuffers

Campaigns and information on a company/product is placed in certain magazine/s

Stuffers are placed in strategic magazines with a direct focus on a target market

Can become costly if the response is very low to NIL

DIRECT vs. IN-DIRECT CHANNELS

1. Background

Face 2 Face

Walk-in and Referrals

Customers that simply walk-in or referred by a client. This is dependent on the PUSH/PULL marketing strategy

The company has an active person to engage with and sell a product

This is dependent on the marketing strategy and the brand equity. IOW the product is TOP on mind

Direct Sales Agents employed by company

Employing agents to fulfill sales Direct activities are most effective in a high volume industry type

Niche industries DSA’s become more difficult. Can be very costly. If NOT effectively trained can damage a brand. RISKs such as fraud

Media BTL Campaigns

These are much targeted campaigns on a specific data base/segment. These include Print, TV, and Radio. The campaign message must be segmented and implement over a defined 12 month campaign period. Including breakfast and conferences.

They have proven to be more successful due to the focused strategy. Planning is done in advance so as to ensure costs are curtailed or maintained. This gives companies the competitive advantage and increase in organic growth

They are costly if planned incorrectly

Other Fax Fax to email is the most appropriate process

For companies that have NO email or are responding to a campaign

Quality of information

Interactive Media Kiosks

Kiosks that are designed for a company and have an interactive link to a company/website/email

Reduce people, infrastructure costs. Embracing innovative technology gives you the competitive advantage. Place at strategic points, e.g. SME Banks

Can become very costly

Interactive TV Using TV as an interactive medium. Used in game shows etc

Reduce people, infrastructure costs. Embracing innovative technology gives you the competitive advantage

Can become very costly

Social Media Twitter, Facebook. These have become leading interaction sites for business people.

Cost effective. Used by a wider audience, hence captive audience. Can create blogs and interactive linkages for your company. Hence, groups of people will apply

?

DIRECT vs. IN-DIRECT CHANNELS

1. Background

IN-Direct Channel

Type Channel Description Strengths Weaknesses

Electronic 3rd Internet Sites Information is flagged on 3rd party sites. Usually 3rd party sites have close similarity to a company or engage in business with a company

Increase marketing exposure

Linkage to company site must be agreed upon. Reliability of 3rd party site

Telephony Outsourced Telemarketing

The entire outbound and inbound call centre is outsourced

Reduced infrastructure and resource investment. Most effective if a RISK vs. REWARD model is used

Can become very costly. May NOT receive dedicated support as the outsourced partner may have other clients

Post Knock n Drop Outsource the drop off of flyers or leaflets or newsletters

Capture a wider target market. Limit the use of internal resources

Company personal may NOT drop off all the flyers or leaflets. Conversion is very low

Regional Surveys Have door to door surveys. In the form of a questionnaire

Control and monitor responses

Interviewer biasness

Face to Face

3rd Party Direct Sales Agents

Outsourcing the sales and marketing function. This is one of the biggest emerging trends world-wide. Commission driven

Works well if a risk vs. reward model is used. Reduced labour associate costs. Increased speed to roll-out

Reputational risk

Partners/Associate Companies

Establishing a network of deal makers regional or country-wide. This can be individuals and companies. Commission or % of driven

Increase geographical reach and access to NEW customers

Reputational risk

Media Trade Shows through 3rd Parties

Coordinated by an external field marketing company. Gathering of information or data. This will be used for prospecting. Important for ATL Brand Equity

Can undertake more trade shows in a given month, quarter, year.

Quality of leads or information gathered. Costs can be high

ATL Campaigns Includes Print, TV, and Radio. A very important constituent for Brand building or Brand Equity creation

Results can be very positive long term. However, this is linked to defined campaigns. Great for the PUSH strategy

Costly and time consuming

Other Joint Ventures Forming an alliance with a company that has similar philosophy or capability to fulfill a sales channel function

Increase organic growth very quickly. Increase geographical footprint. Very effective for Retailers.

Can fail if the objectives and vision is NOT shared

CHANNEL COST EFFECIENCY vs. VALUE ANALYSIS

1. Background

Low Medium High

High

Medium

Low

Value to the User

AVOID IT

AVOID IT

TRADE OFF

TRADE OFF

DO ITDO IT

Website for information

Face to Face interaction

State of art Call Centre

The success for most channels centres on a company’s ability to achieve balance between the variable or fixed costs drivers, and the value the end user gains in using the respective channel. Hence, the above model is a good schematic view of the Cost Efficiency vs. Value to an end user. It can be applied when making respective channel decisions. In addition, it highlights three critical decision paths:

Avoid IT: this is attributed to low cost efficiency and low end user value, e.g. interactive TV

TRADE OFF: has medium cost efficiency and medium value to a client, e.g. direct sales agents. Business must take a strategic decision

DO IT: has high value and high cost efficiency drivers, e.g. company website

COST BREAKDOWN PER CHANNEL

1. Background

Direct Channel

Type Channel

Description of Cost Drivers Cost per Driver Total Cost

Electronic Internet Service provider monthly cost Line rental cost

Direct email to

Direct email from

Telephony Telemarketers

Telephone Automated

SMS

IVR

Post Direct Mailers

Magazine Stuffers

Face 2 Face

Walk-in and Referrals

Direct Sales Agents employed by company

CHANNEL CAPACITY

1. Background

Direct Channel

Type Channel

Mgr/ Sup

No. Staff

PC Laptop Printer Scanner Fax Tel

Electronic Internet

Direct email to

Direct email from

Telephony Telemarketers

Telephone Automated

SMS

IVR

Post Direct Mailers

Magazine Stuffers

Face 2 Face

Walk-in and Referrals

Direct Sales Agents employed by company

CHANNEL PRODUCTIVITY

1. Background

IN-Direct Channel

Type Channel Productivity Measurements Conversion Ratio %

Electronic 3rd Internet Sites No of hits/responses

Telephony Outsourced Telemarketing

Measured against Prospects vs. called vs. converted appointment. Call centre will keep a tracking sheet.

Post Knock n Drop No of responses via a selected channel. Prompt customer to use email/call centre

Regional Surveys Measure number of applications filled in an area. Info is captured onto a data base.

Face to Face 3rd Party Direct Sales Agents

Measured against target vs. achieved. In addition measure achieved vs. comms paid out.

Partners/Associate Companies

Measured against set targets per month or quarter. Pick this up on the comms paid

Media Trade Shows through 3rd Parties

No of people that visited stand, from details filled on customer visit form. This info is captured onto data base. Use Call centre to follow-up

ATL Campaigns Depending on the medium measure against info sent vs. customer’s response. Prompt customer to use email/call centre

Other Joint Ventures Depending on the agreement i.e. partnership

COMPARITIVE INCOME

1. Background

D & ID Electronic Telephony Post Face 2 Face

Media Other

Sales:

Operating Expenses:

Nett Effect

CHANNEL SELECTION MATRIX FROM A CASE STUDY

1. Background

PROCESS MAPPING/MANAGEMENT

1. Background

Generate Customer

Lead

Import Customer Lead Data

Create Marketing Campaign

Initiate Customer Appointment

Customer Enters the

Branch to Start a Potential Business

Relationship

Capture the Individual’s

Demographic Details

Capture the Individual’s

Financial Profile

The system calculates Individual’s

Segment and Sub-Segment

The System Calculates Credit and Risk Score

Analyse and Guide the

Customer to Determine their Banking Needs

Close Sale with the Customer

Select Current and Future Banking

Needs

Discuss and Capture Credit

Application Limits

Request Customers KYC

& Credit Documents

Receive & Scan the Customer KYC & Credit Documents

Create KYC & Credit

Document Reminder Activities

Initiate the Credit Product

Application Process

The CRM System Approves, Refers

or Decline the Customer’s Credit

Application

Initiate Country Credit Officer Verification

Process

HQ Confirms Customer’s Scoring

& Affordability Calculation

Electronically

Request 3rd Party Security

Valuation if Applicable

Scan Supplier Valuation /

Security Report

Electronic HQ Credit

Application Approval or

Decline

Notify Customer with the Credit

Application Outcome

Facilitate Customer

Application Review

Initiate the Credit Product Take-up

Process or Cancel the Application

Explain the Product Terms

and Conditions to the Customer

Scan the Customers

Product Terms and Conditions

Create Customer’s CIF

and Account Details in FCC

Scan Customer’s

Signing Mandate Form

Create the New Customer Concept Activities

Fulfill Customer’s

Product Welcome Pack

Walk Customer To the Branch

Exit Door & Greet

Disperse Funds

Take Customer’s Webcam Image

Create Customer’s

Relationships in CRM

IMPLEMENTATION STRATEGY BASED ON MY EXPERIENCE

1. Background

THE 6 DYNAMICS CUSTOMER FOCUSIn the EVOLUTION of retail banking channels, the 6 dynamics are critical to developing effective CUSTOMER FOCUSED strategies:

• Branch generated revenue growth is becoming more challenging

• Transaction processing and customer services are becoming increasingly independent of the branch channel

• Customer demographics are shifting

• New technologies are gaining widespread adoption, allowing customer relationship management to become channel independent

• Changes in the regulatory environment are altering the playing fields

• Banks must prepared for overlapping competition (Non-Banking Entities)

1. Background

SESSION 2: Mobile Strategy

OVERVIEW

MOBILE SALES CHANNELS

1. Background

MOBILE E-COMMERCE

MOBILE SALES CHANNELS

1. Background

35

MARKET OVERVIEW: DEMOGRAPHICS CASE STUDYDiverse distribution and concentration of Target Market population

Provinces National Total (000's) R0-R2,999 (ELB) (000's)R3k-R24,999 (CMM)

(000's)R25k-R39,999 (RA)

(000's)  Occupation National Total (000's)

Eastern Cape 4,616 14.8% 3,913 17.3% 641 9.6% 6 3.6%

 

Occupation, Administrative & Managerial

673 2.2%

Free State 2,000 6.4% 1,571 7.0% 298 4.4% 6 3.4%   Occupation, Agriculture 1,101 3.5%

Gauteng 6,402 20.6% 3,677 16.3% 2,029 30.2% 102 58.8% 

Occupation,Artisans & Related 1,047 3.4%

Kwazulu Natal 6,363 20.5% 4,725 20.9% 1,348 20.1% 26 15.0% 

Occupation,Clerical & Sales 2,743 8.8%

Limpopo 3,347 10.8% 2,659 11.8% 388 5.8% 8 4.5%   Occupation, Not Active 18,531 59.6%

Mpumalanga 2,315 7.4% 1,730 7.7% 471 7.0% 10 5.8% 

Occupation,Production & Mining 2,061 6.6%

North-West 2,222 7.1% 1,707 7.6% 419 6.2% 2 1.1% 

Occupation,Professional & Technical

1,551 5.0%

Northern Cape 770 2.5% 622 2.8% 120 1.8% 3 1.5% 

Occupation, Service 2,579 8.3%

Western Cape 3,071 9.9% 1,970 8.7% 996 14.8% 11 6.2% 

Occupation,Transport & Communication

709 2.3%

Totals 31,106 100% 22,574 100% 6,710 100% 174 100%   Occupation, - Other 113 0.4%

                  Totals 31,108 100%

           

           

59,6% Not Economically Active

Source AMPS2007B

Provinces with the highest distribution ALL segments:

• Gauteng

• KwaZulu Natal

• Western Cape

36

MARKET OVERVIEW: ECONOMICS

Growth slow down and upward Inflationary pressuresReal GDP growth

0

1

2

3

4

5

6

2000 2001 2002 2003 2004 2005 2006 2007 2008

%

CPIX Inflation and Interest Rates

2

4

6

8

10

12

14

16

18

2000 2001 2002 2003 2004 2005 2006 2007 2008

%

CPIX inflation rate Prime interest rate

Overview of 2007

Prospects for 2008 Economic growth is expected to slow down further in 2008 on the back

of rising interest rates, infrastructure (electricity) constraints, and a struggling household sector.

A slowing US economy and the impact this will have on world growth, will also cause lower real GDP growth in South Africa, projected at 3,4% in 2008.

Inflation is forecast to be under strong upward pressure for most of the first half of the year as a result of movements in oil and food prices, and the rand exchange rate.

Interest rates are projected to rise another 50 bps in June, remaining stable in the rest of 2008 in an attempt to keep inflation and inflation expectations under control.

In 2007 the economy continued to perform strongly with real GDP growth coming at 5,1% after the 2006 growth rate was revised upward to 5,4%.

The services sector, in particular the financial, real-estate and business services sector made the strongest contribution to growth towards the end of the year as banks’ balance sheets and revenues continued to grow at a rapid pace.

After remaining stable in the first half of the year, interest rates were hiked further in the second half of the year on the back of rising inflation.

Interest rates were raised by a total of 200 basis points between June and December, and together with the implementation of the National Credit Act (NCA), caused demand for credit to gradually taper off towards year-end.

37

ABSA FOOTPRINT IN SA GEO-SPATIAL MAPPING

38

External Sales & External Sales & OperationsOperations

Direct Sales Direct Sales and Serviceand Service

Channel for the nicheChannel for the nichemarkets,markets,

WPB BusinessWPB BusinessDevelopmentDevelopment

The purpose of WPB Business Development is to aggressively grow the number of schemes, active portfolio growth and B2B relationship management

The purpose of Direct Sales and Service is to optimise the use of a dedicated call centre foracquisition, cross-sell and support to the external sales team. A CRM approach willbe adopted, with an out-sourced or in-house approach

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The purpose of Ext Sales & Operations is provide an external sales force for niche markets at the worksite, at home place of convenience or distribution channels (ESP)

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CVP/Commercial CVP/Commercial Management Management

Development of compelling value propositions for the WPB externalDevelopment of compelling value propositions for the WPB externalsales teams focusing on worksites, niche markets and aggressive sales teams focusing on worksites, niche markets and aggressive acquisitionacquisition

In house or out sourcedIn house or out sourced

PurposePurpose: To grow the access of sales & service within NICHE markets, through dedicated external sales teams at the worksite, at place of convenience or on the phone………

FinanceFinance

MarketingMarketing

Human ResourceHuman Resource

Delivery Solutions Delivery Solutions & Innovation& Innovation

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END TO END CAPABILITY with DEDICATED focus END TO END CAPABILITY with DEDICATED focus NICHE marketsNICHE markets

MOBILE SALES FORCE BUSINESS MODEL

LEAD GENERATOR SEGMENTED APPROACH

GRCB Lead Generator Conference, London, 18 &

19 May 200839

MOBILE FORCE SEGMENTATION MODEL

Segment specific focus MS force spread over 10 Provinces

LG DesignationMarket

SegmentProduct Focus

Total Comp.

FTE (ABSA)

Contract(Outs – 3rd

Party)

MS: Acquisition BankerRetail Affluent

Investment ProductsRetail Affluent Transactional ProductsUnsecured Lending Products

100 100 0

MS: Islamic BankerIslamic Shariah compliant Transactional and

investment ProductsShariah compliant Vehicle Finance

85 85 0

MS: Core Middle Market Focus

Core Middle Market

Transactional ProductsUnsecuredLending ProductsInvestment ProductsValue Add, e.g. Telephonic Banking

296 139 157

LG: Entry Level Banking Focus – (1) External Sales Points (linked to Branches)(2) Mobile Sales Unit (Unbanked Focus)

Entry Level Banking

Transactional ProductsUnsecured Lending ProductsInvestment ProductsBasic Insurance ProductsValue Add, e.g. Telephonic Banking

ESP: 450

Mobile Units: 54 0 504

TOTAL MS 985 324 661

GRCB Lead Generator Conference, London, 18 &

19 May 200840

Prof’s63 400

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Entry-level banking

SeniorsCore Middle Market

Students

Retail Affluent

New to bank customers

Fina

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New to bank customers

Unbanked

Staff

R36 000 pa

R120 000 pa

R300 000 pa

Micro Lending

CMM3.6m

ELB3.79m

Students105 000

Youth490 000

RA290 969

Absa retail acc customer base2

Note: 1 Source: Primary Bank Relationships – Amps ‘07 2 Source: Absa Internal reflecting all relationships: Dec 2007

R650 000 pa

Staff49 629

Seniors1.32 m

Private BankR15m NIA

Wealth

Black diamonds

CUSTOMER SEGMENTATION MODEL

Entry Level Banking up to Retail Affluent Segment

41

Order confirmation

Resource pool management

Interview

Request CM / ED / Ref Checks

Conventional sourcing methodsUnconventional sourcing methods

• Within Absa Bank• External Sources

• Leveraging brands ADCORP

Sourcing Labour Broker

CV

Walk-In / Telephone

Adcorp alliances

First-line screening

Assessments (SHL, Hrsmart)

Competency based interview

Voice recognition assessment

Credit Checks

Cultural match interview

Request red list Client interview Induction

Quest trainingFAIS

accreditation

Workplace preparedness

incubatorPlacement

OUTSOURCED RECRUITMENT MODEL

42

TRAINING

Mobile Sales Force Academy : Lean Curriculum- 5 day Programme

Days 2 and 3Business Simulation

encompassing Sales, Service, Products and Process

Days 4 and 5Regulatory Training

(NQF 4 and 30 Credits)

Day 1 Absa Socialisation (high level)Absa Compliance and testing

According to Financial Services Board the regulatory pre-requisite for this role is the NQF 4 and 30 credits. Money laundering and Sanctions are compulsory prior to contact with the client.

43

MOBILE SALES CAPABILITIES & DEPLOYMENT

Segmented Distribution Channel focus providing multiple options of delivery

Entry LevelBankingExternal Sales Points(ESP’s)Focus: Branch Hot Spots

Entry LevelBankingMobile Sales Units(MSU’s)Focus: Townships

Workplace Banking KiosksFocus: WorksitesCore Middle Market

Banks on Wheels (BOW’s)Focus: ELB and CMM at Events, Worksites, Branch Support

Comprises:•Gazebo•Digital pens (2)•POS device•Tables (2)•Chairs (7)•Marketing materials•Promotional materials•Card and Pin Mailers•3 DSA’s per team•Team Based Targets and Incentives

Comprises: •Mercedes Sprinter•Gazebo•Generator•Combination TV and Video (CET)•Remote opening kits (2)•Digital pens (2)•POS device•Tables (2) and Chairs (7)•Marketing materials•Promotional materials•Training ATM•6 DSA’s per team

Comprises:•Large Kiosk•Generator•Remote opening kits (2)•Digital pens (2)•POS device•3G printer/Fax/Scanner•Marketing materials•Promotional materials

Comprises:•VW Crafter•Generator•Combination TV and Video (CET)•PA System•FBSS Workstations (2)•Fully functional ATM•Marketing materials•Promotional materials•4 FTE’s per BOW•Chairs and Umbrella’s

Functionality:•Account opening•Basic Enquiries•Mini Statements (future)•Prepaid purchases (future)

Functionality:•Account opening•Basic Enquiries•Mini Statements (future)•Prepaid purchases (future)

Functionality:•Account opening•Basic Enquiries•Mini Statements•Prepaid purchases

Functionality:•Account opening•Basic Enquiries•Mini Statements•Prepaid purchases

44

ABSA MOBILE CHANNELS

45

COMPETITORS MOBILE CAPABILITIES

46

MOBILE BANK ON WHEELS (BOW)

47

TAKING BANKING TO THE PEOPLE

DAVEYTON

48

SALES FULFILLMENT PROCESS

High level sales fulfillment process

LG forwards all of the documents through to the Sales Support clerk at the Sales Support Hub/branch

Sales Support clerk (SS) receives the documentation and records deal in register/DSAS

SS screens customers against CASA and opens account on FBSS

SS checks quality and compliance adherence of all documentation

SS captures the Record of Advice online and executes all other administrative duties

SS calls the LG / customer and informs them that the account has been opened. Account no provided.

LG makes contact with or sets up an appointment with customer

LG meets or interacts with customer and prompts the customer to disclose financial request/need

LG interviews customer for sale: Connect, Needs analysis, present solutions handle objections and cross sell

Customer accepts the proposal/s and completes the application forms, Record of Advice and obtains all supporting documentation. Customer signs all the required documents (Close the deal).*If available - issue card and pin mailer

START

Customer encouraged to activate accountUpdate records in register / DSAS

LG monitors progress of account activation and updates commission claim form once account is activated

LG sends original documentation to Hub/branch

Activated account verified & Commission paid to LG

49

Fixed Salary

LG (ELB)

R 3000 / £194

Commission per Prod Team based targets

Other Commission None

Products sold Transactional Unsecured Lending

Investments Basic Insurance

Commission payable per LG Team

100% to target (195 NET products per team), R3000

per LG

Quarterly Bonus None

Quarterly Incentive (stretched target)

110% to target ( 216 NET products per team), R3000 per LG

125% to target ( 243 NET products per team), R9000 per LG

OTE Monthly Ave Salary R7000/ £467

Fixed vs. Variable remuneration split

43%

COMPENSATION STRUCTURE

OTE: Opportunity to EarnOTE: Opportunity to Earn

50

Fixed Salary

LG (WPB, Core Middle Market)

R3000/ £194

Ave Commission per prod R122 / £ 8

Other Commission R1000 / £ 65 for Value %

Achievement 100% to 124%

Products sold Transactional Savings & Investments

Unsecured-lending Value Adds

Commission payable 100% to target (60 NET products pm), R8000 for

Volume and R1000 for value

Quarterly Bonus R8000/ £517 VOL (125% to target)

R4500/ £291 VAL (125 to target)

R11000/ £712 VOL (150% to target)

R9000/ £582 VAL (150% to target)

Quarterly Incentive (stretched target)

None

OTE Monthly Ave Salary R 10 320/ £ 688

Fixed vs. Variable remuneration split

29%

COMPENSATION STRUCTURE

COMPENSATION PHILSOPHY

COMPENSATION PROGRESSION CHART

0

5000

10000

15000

20000

25000

30000

LG (ELB) LG (WPB) LG (ACQUISITIONBANKERS)

LG SEGMENTS

CO

MM

S R

AN

D V

AL

UE

RAND

• Allows for progression from ELB segment to Retail Affluent segment

• Succession planning for MS

• OTE: Opportunity to Earn as MS performs

GRCB Lead Generator Conference, London, 18 &

19 May 200852

PRODUCTION VOLUME - QUARTER 1 PERFORMANCE

Overall substantial increase in Performance – Cumulatively 112% to Target

111,395

124,431

1,10556,00344,6821,03337,42448,15980317,96831,590Total

77,47596,12580438,05233,90374926,05938,09254013,36524,130ELB

6,4974,332702,8172,393632,461902611,2191,037IB

10,9717,9421015,5652,4091013,8972,734891,5092,799AB

16,45216,0321309,5695,9771205,0086,4311131,8753,624WPB

TargetActualActiveSalesStaff

TargetActualActiveSalesStaff

TargetActualActive SalesStaff

TargetActual

YTD - Q1MarchFebJan

111,395

124,431

1,10556,00344,6821,03337,42448,15980317,96831,590Total

77,47596,12580438,05233,90374926,05938,09254013,36524,130ELB

6,4974,332702,8172,393632,461902611,2191,037IB

10,9717,9421015,5652,4091013,8972,734891,5092,799AB

16,45216,0321309,5695,9771205,0086,4311131,8753,624WPB

TargetActualActiveSalesStaff

TargetActualActiveSalesStaff

TargetActualActive SalesStaff

TargetActual

YTD - Q1MarchFebJan

Keys:

• WPB – Workplace Banking

• AB – Acquisition Bankers

• IB – Islamic Bankers

• ELB – Entry Level Banking

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000

WPB

AB

IB

ELB

TOTAL

Actual Target

NB: Productivity Includes Value Added products

GRCB Lead Generator Conference, London, 18 &

19 May 200853

PRODUCTIVITY RATIOS - QUARTER 1 PERFORMANCE

  Jan-08 Feb-08 Mar-08YTDAVE

Average Volumes sold per day per MS (WPB) 1.5 2.6 2.4 2.1

Average Volumes sold per day per MS (Acquisition Banker) 1.4 1.3 1.3 1.3

Average Volumes sold per day per MS (Islamic Banking) 0.8 0.7 1.8 1.1

Average Volumes sold per day per MS (ELB) 2.0 2.4 2.2 2.2

Average Product Volume Trends Positive – sound monthly product volumes per MS

Total Ave Product numbers sold p.m. per MS PERSON

     

Acquisition Bankers 26  

     

Islamic Bankers 22  

     

WPB Consultants 42  

     

ELB Lead Generators 44  

     

PRODUCTIVITY RATIOS

0

0.5

1

1.5

2

2.5

3

JAN FEB MAR

MONTHS

AV

ER

AG

E P

RO

DU

CT

ION

LG (WPB)

LG (AB)

LG (IB)

LG (ELB)

TECHNOLOGY & ENABLEMENT

Optimal technological enablement solution per segment

Technology Solution Targeted Areas Medium Term View

Laptop Kits

• Core Middle Market• Retail Affluent• Islamic Banking• Mobile Sales Units• Bank on Wheels

• LAUNCHED

• Introduce alternative devices

Digital Pens

• LAUNCHED • Implement nationally

Other Devices

Card and Pin Mailer

• All NBS sales environments

• Full implementation

Status

• Entry Level Banking• ESPs• WPB Kiosks

• Implement nationally

• LAUNCHED

• Entry Level Banking • IT LITE SOLN LAUNCHED

Fulfilment Portal

• All NBS sales environments

• INTEGRATION • Implement ED

ENABLEMENT PLATFORM

Technological Integration ensure a seamless end to end Sales fulfilment process

InfoPath Client

InfoPath Client 2003

Web Browser

InfoPath Designer 2003

Consultant

Scan

Print

Backend

Systems

Fax

Mobile Sales Portal

NonBranchSales

Support

AbsaContactCentre/

AGO

Telemarketing

Appointment Booking

Calendar Service

Calendar synchronization

Forms Repository

Retrieval of application and

support documents

3rd Party Vendors

E-mail

CompCorpSybase

Fax2E-mail

Employee Portal

SalesConsultantDatabase

ManagementInformation

Form Repository

Note: Integrated Service – accessed by AGO, NBS Support hubs, other SBU’s and ES & WPB Sales Consultants

KEY LEARNINGS

Solid progress despite challenges experienced

– Volume production– Variable compensation– Segmented sales force– “First Job Application” employees and

productivity– Delivery channel positioning, e.g.,

External Sales Points– Bank on Wheels highly successful in

Student Market and event based interventions

– Positive productivity and performance trends

– Contribution towards “New to Bank” core customer growth

– Poor performance in Value targets– Developing an accurate MI system to

track commissions and daily production– Attaining volume in certain targeted

product lines– Bedding down technology enablement– Investment Consultants with limited

transactional products to sell in targeted market

– Lag in addressing poor performance due to bedding down of overall DSA model approach

Positive Experiences Learning Curves

57

LG BUSINESS SIMULATION PROGRAMME

Action Planning

& Execution

Pre-work (Product

Knowledge Tool)

Do

Reflect

Apply

Plan for action

Simulation

Analyze/present

Feedback/coaching

Application

3 Simulated cycles

Description:LG manage the performance of a Sales team through 3 cycles by following a 6 step process:• Step 1: Teams receive goals per product and campaign• Step 2: Teams come up with actions and ideas on how to create opportunity i.e. prospecting, networking as well as looking at events in certain areas which might offer opportunities• Step 3: Teams react to events and make service choices which will influence the amount of potential sales going into their sales funnel• Step 4: Teams analyse customer profiles and put together a Value Proposition which is presented and rated. The ‘client sales interaction’ determines the number of products in the sales funnel (cross-selling opportunities)• Step 5: All team members fill out documentation and indicate compliance requirements per product for those products they managed to sell in step 4. Faulty applications leads to lost sales• Step 6: Teams receive final actual revenue and compare it to targets. Action plans are put in place for the next round

Workshop

58

SALES PERFORMANCE MEASUREMENT PROCESS

Sales consultant complete application with customer

Sales consultant submits application to respective Sales Support Hub for processing.

Sales support Clerk receives application, conducts quality check and then proceeds to captures application on FBSS. Sales support clerk then captures details and status of application on DSAS.

DSAS system generates productivity reports based on what has been captured at the Sales Support Hubs.

•Productivity by sales consultant•Productivity by Sales Support•Productivity by Region•National Productivity.• Number of Sales per Sub-Product

The following status of the application can be captured on DSAS.• Approved• Pending• Declined

Ma

nu

el S

ub

mis

sio

n

Te

chn

olo

gy

:

• D

igit

al

Pe

ns

• L

ap

to

p K

it

59

Sales consultant to complete application with customer and send application through to sale support hub for processing on FBSS and capturing on DSAS.

Detail report of all applications processed and approved is extracted from the DSAS system by the regional manager for the respective region and validated for accuracy by the second working day of the month.

Regional manager to send validated report to national sales manager by the 3rd

working day of month.

National sales manager to collate all validated regional reports into one spreadsheet, verify for correctness and submit to Business Analytics department by the 4th working day of the month.

Business Analyst from Business analytics department to use spreadsheet received from National sales manager to verify against the Absa data warehouse for activated status of transactional, unsecured lending, insurance, savings and investment products. Only valued added

products will not be verified for activated status.

Commission will then be calculated for all verified activated sales (in the case of value added products – only applications captured as approved on DSAS - will commissions be calculated for).

Once the business analyst has completed the commission calculation, business analyst to send commission claims to General Manager (External Sales and Operations) for validation and sign-off by the 7thth working of the

month.

General Manager (External Sales and Operations) to sign-off commission claim and send through to Quest for payment of commissions to direct sales agents by the 8th

working day of the month.

SALES COMMISSION PROCESS

1. Background

MOBILE E-COMMERCE

OVERVIEW M-COMMERCE• Internet banking has received the most coverage over the last decade

• Movement towards greater mobility as mobile phones become more sophisticated

• These phones can know handles more advanced applications & services

• Banking via mobile phones appeals to consumers on multiple fronts

• Mobile phones also serve as an efficient vehicle for making contactless payments, P2P transfers, providing greater security protocols and storing in-depth preference information

• Various software platforms for mobile phones and other devices will allow the consumers to use the web

• Over the next decade the movement towards Mobile Banking will rapidly increase

• Other technology developments will affect retail banking and these include:• Growing broadband at lower costs• Webcams via Web 2.0 will reach consumers at home• VoIP • Instant message systems• Social Network (face-book, twitter, etc)• Thin client capabilities makes remote access easier

• Level of security protocols and applications is constantly improving

• Technology is allowing banks to be more cost effective and efficient

1. Background

MOBILE TRENDS 2011

• Year of the smart phone even for the ‘dumb’ user

• Apps vs. mobile content internet will continue

• Mobile marketing spend will grow significantly (USA to exceed the 1 billion mark)

• Mobile will increasingly prompt customers to interact with their physical environment

• Companies will invest first in convenient services for customers, acquisition will come second

• Casual gaming will continue to lead the mobile change for content

• Term mobile will mean a lot more than mobile phones (I-Pad)

1. Background

BEST PRACTICE FOR SUCCESSFUL M-BANKING STRATEGY

• Implement SMS based M-Banking capabilities that focus on the most relevant and actionable alerts for customer today

• Plan for the future

• Anticipate the increased need to intelligently reach out to customers across multiple communication channels (SMS, email, voice, and instant messaging)

• Select a service provider that enables and implements a cost-effective delivery of SMS capability & function

1. Background

MOBILE GROWTH DRIVERS

1. Background

SOCIAL NETWORKS

1. Background

MAIN FEATURES OF MOBILE COMMERCE

• Ubiquity – anywhere

• Immediacy – anytime

• Localisation – GPS specific to a location

• Instant Connectivity – General Pocket Radio Service (GPRS), means mobile service are online and always on

• Pro-Active Functionality – tailor making to suit the needs of a user, IOW, a user can choose what he wants to view or receive on his mobile

• Simple Authentification Procedure – electronic chip found in mobile devices call Subscriber Identity Module (SIM) using a PIN

1. Background

SERVICES IN MOBILE BANKING

1. Background

Account Operations Account Administrations

Money Transfers Changing accounts

Bill payments Blocking lost cards

Money Transfers Cheque book requests

Subscribing insurance policies Administration

Account Information Product Information

Balance enquiries Product Information

Statement requests Product Pricing

Threshold alerts Interest rates

Branch/ATM locations FOREX rates

Helpline

Credit card info

MOBILE BANKING AND CORE TARGET GROUPS

a) The Youngsters:• The segment of the 14-18 years old• Technology savvy and willing to experiment with innovative products/services• On the move, demand ubiquitous, anytime service• Represent future prospects• Hence marketing must be used to cultivate this group

b) The Young Adults• Technology & innovation friendly• Financially not very strong• They also will need to be cultivated through marketing• Students to beginning of a career

c) The Business People• Age group 26-50 years • Important segment to mobile banking• Well educated & economically well-off• On the move, hence carry mobile devices• They demand financial services and products

1. Background

MEASURING EFFECIENCIES OF MOBILE BANKING

1. Background

TRENDS IN USERS (2007, EUROPEON UNION BANKS)

1. Background

SMS BANKING• Using mobile phone via TEXT to conduct banking functions:

• Balances• Mini-statements• Transfers (M-Pesa)

• Different to telephone banking

• Helps users keep track of banking activities anytime, anywhere, any place

• Some do not charge for SMS banking (South Africa – cross-sell/retention)

• Most to all phones are capable in using SMS banking

• SMS alerts, keeping you informed on daily transactions

• Costly, complex when looking at future growth, developments

• A comprehensive mobile messaging solution must be able to abstract, send, and receive messages from multiple channels, including mobile devices, landlines, & IVR systems

• The capability implies the need for a MULTI-MODAL messaging architecture

• Multimodal architectures help banks cost effectively deploy SMS messaging services without upgrading existing IT infrastructure or adding support personal

• This allows users/customer to perform simple transactions (balances, statements, transfers…etc)

• Current focus is on SMS functionality, over WAP & app type solutions

1. Background

CONSUMER PREFERENCES FOR SMS BANKING (2007, US)

1. Background

MULTIMODAL MESSAGING ARCHITECTURE• Enables a single messaging strategy• The platform uses application programming interface to abstract, track, transmit and receive messages from

multiple channels• Customer profiles determines where/which messages go• Routes messages via multiple networks• Switches between communication channels until customer receives the message

1. Background

SESSION 3: Branch Strategy

WHAT DO CUSTOMERS WANT??????

Most customers prefer to purchase in the branch

There are groups that are moving away from branches, and towards alternative channels, mobile sales force, cell-phone banking, internet

Excellent service

Convenience and accessibility

Feedback

Customers want products that are understandable and easy to transact with

Convenience&

Understanding the needs

Customer Centric View

OBJECTIVES

Launch a differentiated retail branch

A multi-channel approach to support the accessibility and convenience for customers

To ensure that channels are profitable and sustainable

To ensure that our channels offer superior customer service

Keep our approach simple

Doing things right the first time

77

SWOT ANALYSIS

Strengths

New Bank that has the flexibility to innovate and re-invent the market place

NO legacy issues

New, innovative and strong retail management team

Cross border roll-out, implementation and execution

Achieve critical mass, representation

Weaknesses

IT and Ops infrastructure

Speed to execution

Recruitment of appropriate skills

Not an established brand

Opportunity

Creating a well differentiated bank in a concentrated bank

Creating a NEW and leading brand

Product innovation and leadership

Critical Mass

Offer convenience, accessibility

Diversification on the income streams

Threats

Global Economy

NOT well diversified

Budget constraints

Operational support at HQ

Lack of buy-in, change management

78

KEY DIFFERENTIATORSBranch design 24 hours zone concept incorporating enquiries, statement printing, ATM banking, internet bankingZone concept (transaction managed in zones, teller combined with enquiries) Queue management system (QMS)Meeter greeter Innovation in the area of enquiries

Customer relationship managementEvery customer has a relationship manager (the size of the portfolio depends on the customer segment)One person responsible for customer cross sell and up sell activitiesPortfolio targets connected to performance management systemIntroduction of standardized CRM programs for a) new customers, b) customer life cycle tree and c) product activation, usage and balance build.

Service quality managementSLA´s for branches and call center introduced and measured from the beginning

Documentation & Data workflow managementUsage of electronic documentation and data workflow system for all customer products application, contracts, filing system (no paper, minimize operation risk)

PartnershipsIncreasing BancABC market share, profitability and critical mass

QMSCR2

CRMMIS

WFM

DistributionProduct

79

ATM

KIOSKHUB N SPOKE MODEL

3rd

PARTYPOS

BancABC

@WORK

SUITESDSA

Bank on

Wheels

MessagingCall

Centre

CELLPHONE

BANKING

INTERNET

Branch

Flag branches provide the brand equityVarious Channels offer convenience and accessibilityThis helps achieve critical massEducating clients on various channelsIncreasing usage and transaction

80

COMPETITORS BANKS –DIAMOND BANK

81

COMPETITORS BANKS –DIAMOND BANK

82

COMPETITORS BANKS –DIAMOND BANK

83

COMPETITORS BANKS –DIAMOND BANK

84

INTERNATIONAL BANKS

85

INTERNATIONAL BANKS

86

INTERNATIONAL BANKS

87

INTERNATIONAL BANKS

88

INTERNATIONAL BANKS

89

INTERNATIONAL BANKS

90

INNOVATIVE BRANCH DESIGN

91

1. 24 hour zone2. Meeter Greeter3. Merchandising zone4. Cash zone5. Consultation6. Customer zone7. Back office & Cash management (Safes)8. Staff area

CUSTOMER JOURNEY THROUGH A BRANCH

92

BRANCH CATEGORISATION & TYPES

Branch Categorisation: Category 1 (Universal, 500 -800 sq/m) Category 2 (Retail Branch, 300-499 sq/m) Category 3 (Retail Outlet, 150-299 sq/m) Niche Branches, below 149 sq/m, Mortgage centre, SME, Private Suite,

Islamic Banking Suite,etc Outlet Types:

Mortgage centre SME centre Universal Branch Retail Branch Retail Outlet Niche Branches Kiosk (large, medium, small) Bank on Wheels Bank in a Box

93

DETAILS OF THE OUTLETS

LINK.....

94

BRANCH SERVICESType of branch Cash in Cash out Account opening

in the systemCheque collection

Statements

Enquiries Forex BC DC

Kiosk On-line

Mini branch

Retail outlet

Retail branch

Universal branch

SME Center

Mortgage Center

95

PORTFOLIO MANAGEMENT

Each customer assigned RM RM linked to segment portfolio:

Top Mass/Mass Combined Retail Affluent SME

Size of the individual portfolio depends on the Sub segment the customer belongs to.

The number of the relationship officers per branch will be reviewed and planned on yearly basis and will be based on target market potential/number of NEW customers (acquisition), branch targets portfolio size

Obtain competitive information on what the top 3 competitors are doing on the portfolio size and allocations

96

Sub segment Portfolio size per 1 RM

Catchments area /target potential Reporting line Other comments

Mass 800 – 1.000 Based on Sales Activity PlanGrowth per year

Branch manger (disciplinary and functionally)

Segment Mass & Top Mass will be covered by Senior RM Mass until the critical mass is reached

Top Mass 400 – 600 Based on Sales Activity Plan Growth per year

Branch manger (disciplinary and functionally)

Affluent 250 – 400 Based on Sales Activity Plan Growth per year

Branch manger (disciplinary and functionally)

For launch we will have standalone RM for affluent

SME 400 – 600 Based on Sales Activity Plan Growth per year

Branch manger (disciplinary and functionally)

If the target segment is not sufficiently big the branch manager will substitute the role until the portfolio reaches 80 customers.

Professionals (if stand alone position)

250 – 400 Based on Sales Activity PlanGrowth per year

Branch manger (disciplinary and functionally)

If target segment is not sufficiently big the SME RM will substitute the role until the portfolio reaches 100 customers.

Corporate (in a universal branch)

TBC TBC TBC

Corporate (serviced from country HQ)

TBC TBC TBC

PORTFOLIO MANAGEMENT

97

BRANCH STRUCTURES

Universal Branch (15-35)Following org chart shows all possible position covered in a Universal branch. In year 2009 following position will be merged:Segment Professionals will be covered by RM SMESegment Mass & Top Mass will be covered by Senior RM Mass until the critical mass is reached

98

…BRANCH STRUCTURES

Retail Branch (15-25)Following org chart shows all possible position covered in a retail branch. In year 2009 following position will be merged:Segment Professionals will be covered by RM SMESegment Mass & Top Mass will be covered by Senior RM Mass until the critical mass is reachedBulk cash will be installed only if required for servicing Corporate customer.

SESSION 4: Alternative Banking Strategy

100

ALTERNATIVE DISTRIBUTION

“Segmented AD Channel focus providing multiple options of delivery”

101

ALTERNATIVE DISTRIBUTIONType Design Number

of StaffFunctionality Fulfilment Segment Location

Kiosk Large

Rectangular or 2 options as supplied by vendorMerchandisingPoint of SaleLCD screen2 X workstations(hardware, printer, scanner, fax, camera)2 staff chairs4 customer bar stools/tablesATM-smallPOS device

2-4 DSA’s Account openingBasic EnquiriesATMMini statementLeads ManagementCheque collection

On-line Desk topPDAScannerPrinterBio-metric readerPin readerCamera

Personal Bank segments

Large corporate offices or Government departmentsOr where there is high traffic volume.

Kiosk Small

Rectangular, Square, Oval, or 2 options as supplied by vendorMerchandisingPoint of Sale1 X workstations(hardware, printer, scanner, fax, camera)1 staff chairs2 customer chairs/tablesATM-smallPOS device

2 DSA’s Account openingBasic EnquiriesATMMini statementLeads ManagementCheque collection

On-lineDesk topPDAScannerPrinterBio-metric readerPin readerCamera

Can be segmented based on identified cooperative, alliance, etc

Shopping centresRetail outlets, via cooperativesCorporate officesWhere there is high volume traffic in defined segments

Bank on Wheels

Vehicle that caters for security, transport and flexibilityMerchandisingPoint of Sale2 X workstations(hardware, printer, scanner, fax, camera)3 staff chairs4 customer chairs/tablesATM-small, rampPOS deviceLCD, DVD comboBullet proof glassGazeboGeneratorSatellite linkPA, sound system

3DSA’s, 1 Driver

Account openingBasic EnquiriesCash depositWithdrawalsMini statementLeads ManagementConsumer Education

On-lineDesk-topsScannerPrinterBio-metric readerPin readerCamera

ALL segments based on deployment strategy

All dedicated sites which caters for security and customer experience

102

ALTERNATIVE DISTRIBUTIONMobile Sales Units

1X Vehicle1X GazeboMerchandisingPromotional materialLaptop, Copier, scanner, camera1X Gazebo2 tables2 staff chairs4 customer bar stoolsConsumer EducationLCD, DVDPA, sound system

8-10 DSA’s, 1 driver

Account openingBasic EnquiriesMini statementLeads ManagementConsumer EducationAcquisition strategy

Off-lineLap-topsPDACopierScannerCamera

Events ONLY

External Sales Points

1X GazeboMerchandisingPromotional materialCopier, scanner2 tables2 staff chairs4 customer bar stoolsPA, sound system

2 DSA’s Account openingBasic EnquiriesMini statementLeads ManagementConsumer EducationAcquisition strategy

Off-lineLaptopsPDACopierScannerCamera

Events ONLY

Bank in a BOX

40ft or 20 ft Container1X large ATMServer RoomSatellite (GPRS) linkRectangular or options as supplied by vendorMerchandisingPoint of SaleLCD screen2 X Sales workstations(hardware, printer, scanner, fax, camera)2 X Teller workstations(hardware, printer, scanner, fax, camera)1X safe2 staff chairs (sales)2 staff chairs (tellers)2 X customer bar stools (teller)1X GeneratorAir-con unitMunicipal requirements, and contractor to lay concrete foundation

1X Supervisor2 X Tellers2 X relationship Managers2 X DSA’s

Account openingBasic EnquiriesATMMini statementLeads ManagementCheque collection

On-line Desk topPDAScannerPrinterBio-metric readerPin readerCamera

Personal Bank segmentsOrSpecific segment, e.g.SME, Mortgage, etc

Before branch opens in a designated area/region.Rural areasWhere sourcing locations becomes challenging

Other As recommended by vendor

103

LARGE KIOSKS

104

SMALL KIOSKS

105

BANK IN A BOX

106

BANK IN A BOX

107

The purpose of the CC is to optimise use of telephony to acquire new, cross sell existing customers and to support external sales staff

The purpose of Direct Sales is to acquire business outside of the traditional branch

network and provide customers with additional and often non traditional channels to do

business with ABC

The purpose of BancABC@Work banking is to provide

convenient unique value propositions for the employees

in the workplace

Direct SalesCall Centre

Direct Sales “Bank conveniently

at home/community”BancABC@work–

“Bank convenientlyat work”

DS

A:

To

p M

ass

/ Mas

s

DS

A:

Wo

rk P

lace

Ban

kin

g /

AD

Ou

tbo

un

d S

ales

Tea

ms

Inb

ou

nd

Sal

es T

eam

s

Lea

ds

Man

agem

ent

DS

A:

Ret

ail A

fflu

ent

Leads Management“Managing daily

activity”

DS

A:

SM

E

Development of compelling and competitive value propositions for workplace and direct salesProviding qualified leads to the DSA teams

MOBILE SALES/MARKETING FORCE“Segmented Sales Force to support Retail Branches”

108

MOBILE SALES FORCE KPA’S

Key focus areas Worksites – BancABC propositions for the employer and employee Group Schemes – Homogenous groups with common interests Urban communities - mobile sales and service Support for new branches – before and after outlet opening Staffing of non traditional outlets – kiosks/containers/forecourts Direct sales opportunities –

Investments/transactional/insurance/personal loans/Credit Cards/Debit Cards

Support for Events Optimise the use of Contact Centres for sales Optimise leads and referrals for all segments, products

109

MSF TARGET MARKETS

Target Market: Leads: Cross and up-sell

Existing individual corporate customers across segments Smaller employees that do not warrant on-site workplace banking

solutions Direct Selling Activities: New Business

Potential new individual customers across all segments Employees of corporate and small businesses Niche groups e.g. Youth, Students, Seniors, Medical Graduates,

Retail Affluent, etc. Support for new branch openings and events Community events Professional bodies

110

BANK@WORKProvision of banking services to company employees at their place of work. The work place banking

channel must be a online banking operation catering for types of branch transactions and services. Cash handling in terms of over the counter deposits and withdrawals is not available through the work place

banking channel (ONLY via ATM).

111

BANK@WORK....ADVANTAGES

Employers:

• Improving and extending existing benefits/packages

• Little or no extra cost for the employer

• Relief of the employer administration

• Employers participation offers employees a convenient way to bank

• Assists with worker productivity

• Could be used as a benefit to lock-in the worker

Financial Services Provider:

• Access to a larger potential regular earning customer base

• Partner with key employers to provide bulk services to lower cost and improve customer experience

• Can offer concessions and lower costs to customers on basis of lower delivery cost

• Access to payroll deductions• Cross-selling opportunities• Grow with the customers

Employees:

• Employees can access financial services products and services on a beneficial basis

• Convenience for employees• Advice on more complex

financial service offerings• Usually provides access to a

larger range of products• Packages can be customised• Financial literacy training on

site enables employees to make informed choices

112

Banking SolutionsBanking Solutions

Transactional Solutions Lending & Credit Solutions

Savings & Investment Solutions Risk Protection Solutions

Value Added ServicesValue Added ServicesFinancial EducationFinancial Education

Dire

ct S

ales

& S

ervi

ce D

eliv

ery

Dire

ct S

ales

Age

nts

and

Alte

rnati

ve

Poin

ts o

f Pre

senc

e

E-Channels

Internet, Telephone, Cellphone and ATM

Banking SolutionsContact Centre/Telephony

BANK@WORK

113

SALES ACTIVITY PLANNING PROCESS

What is the market Potential, per

segment

Activities plannedto penetrate

the target marketATL, BTL

Planned campaigns

KPI”S

Leads Management Process

Completed 3-4 months advance

END

IN M

IND

END

IN M

IND

114

SALES MANAGEMENT PROCESS

PLANNING

Planning:

• Collecting market and portfolio information

• Analyzing information to prioritize target markets and customers

• Deciding on goals• Identifying resources• Identifying and scheduling

appropriate marketing actions• Forecasting expected results• Tools:

SWOT Analysis Prioritization of target markets Branch marketing calendar Planning specific marketing actions Sales Campaign Plan

115

ACTIVITIES

Activities:

• Setting appropriate individual goals in terms of activities and goals

• Coaching and developing people• Preparing scorecards• Evaluating specific marketing

actions• Providing and using information

on Performance standards• Tools

o Referralso Sales pipe-lineo Sales boardo Evaluating specific marketing actions

SALES MANAGEMENT PROCESS

116

PORTFOLIO

Portfolio:

Using a range of measures to track performance and these include

• Portfolio size and portfolio growth

• Customer portfolio• Quality indicators• Profit and loss• Other MIS• Analyzing these measures to

develop effective action plans for the future

SALES MANAGEMENT PROCESS

117

SALES

Sales

• Setting appropriate individual goals in terms of activities and goals

• Coaching and developing people• Preparing scorecards• Evaluating specific marketing

actions• Providing and using information

on Performance standards• Tools

o Referralso Sales pipe-lineo Scorecard plannerso Sales boardo Evaluating specific marketing actions

SALES MANAGEMENT PROCESS

118

SALES MAP

ACTIONX

FREQUENCY=

RESULTS

PLANNING ACTIVITIES

PORTFOLIO SALES

119

PLANNING ATTRACTING CLOSURE

Where do we get the business, target market, propensity

for business

What campaigns to attract the target market

ATLBTL

Needs analysis to closure

ENTIRE SALES MANAGEMENT PROCESS

SESSION 5: E-Channel Strategy

121

E-CHANNELS – WHERE DO THEY FITC

us

tom

er

Customer Data & Insights

Customer Segments

Customer value propositions

Blue Gold SMEPrivateSilver Corporate

Dis

trib

uti

on

C

ha

nn

els

Customer Service

Branch POSWebsite Cellphone CCCInternet BankingATM

Sales and Channel Management

ASD

Messaging

Pro

du

ct Personal

• deposits, savings• Transactional• Consumer finance• Cards• etc

SME• deposits, savings• Transactional• Consumer finance• Cards• etc

Corporate• deposits, savings• Cash management• Transactional• Forex• etc

122

INTEGRATED CHANNEL MANAGEMENT DELIVERED BY CR 2

123

GUIDING PRINCIPLES (SET 1/3)

1. Activation of e-channel access is part of the initial customer on-boarding process

2. ATM placement will form an integral part in the approach to physical distribution planning (hub & spoke model)

• Routine transactions will be migrated from the branch to maintain high branch

productivity levels

3. Our own customers can transact on our own ATMs (Us-on-Us transactions) and on competitor ATMs (Us-on-Them transactions)

4. Our objective is to provide sufficient capacity and distribution to meet the requirements of our own customers (match our ATM capacity to our own customer transactions (Us-on-Us+Us-on-Them)) at an acceptable cost-to-income ratio (target 50%?)

5. To cover the transaction distribution continuum, thus increasing coverage and convenience for customers, we will provide cost effective solutions to cover the range

124

6. Other banks’ customers’ transactions on our ATMs are viewed as a bonus because we have no control over them

7. Each branch, kiosk and bank on wheels will have at least one ATM model8. Our target average transactions per device per month are as follows:

• Cash-back at POS device : 800 -1 500• Cash dispensing ATM – low volume : 1 500 – 3 500• Cash dispensing ATM – medium volume : 3 500 - 5 500 • Full-function ATM : 5 500 and aboveThis will maintain our cost-to-income ratio at 50%?We want our customers to do banking on our own ATMs

9. If the average number of transactions per device per month exceeds the target because of growth in our own customer transactions (Us-on-Us+Us-on-Them) transactions, we will increase capacity to match the growth

GUIDING PRINCIPLES (SET 2/3)

125

10. ATM functionality is divided into 2 categories; • Short transactions (cash and others) will be restricted to cash dispensing ATM. This is

our cash-and-dash proposition• Long transactions and other non-cash transactions will be available on the statement

printer machines11. The priority in ATM placement is as follows:

• Servicing our customers• Supporting customer acquisition

12. Outsourcing the ownership of ATMs is not recommended because It is less profitable than the Bank owning and running its own ATM service

13. Customers will have a holistic view of their relationship (products and services) with BancABC14. All leads, new product sales and transaction revenues earned will be credited to the domicile

branch

GUIDING PRINCIPLES (SET 3/3)

126

OBJECTIVES - A BALANCED SCORECARD APPROACH1. Deliver cost effective growth in ATM transactions aligned to customer

growth – target cost-to-income ratio of 50%?2. Complement the branch by lowering cost of operations (reduce cost-to-

income ratio)

Increase Non- Interest Income

FN1

Fin

an

cia

l

Control Operating Costs

FN4

1. Customer aligned ATM distribution/coverageLocation of ATMsAccessibility/visibility of sites

2. Deliver customer-friendly ATM interface and functionality resulting in less than 1% system failed transactions

3. Deliver innovative, value-added services on ATM 4. Deliver 98% ATM service availability

Innovative Tailor Made Solutuons

CT2

Excellent Customer

ServiceCT1

Cu

sto

mer

Inte

rnal P

rocess

Continuous Customer Feedback

IP1(b)

Intimate Knowledge our

CustomersIP1(c)

Increase IT UptimeIP3(d)

Develop Products that meet

Customers needsIP2(b)

1. Deliver customer-friendly ATM interface and functionality resulting in less than 1% system failed transactions

2. Deliver one-view of customer, one-view of back (holistic relationship of customer with XYC)

3. Conduct customer feedback sessions every month and act on the feedback 4. Deliver 98% ATM service availability

127

ATM DISTRIBUTION PLANNING PRINCIPLES All branches will have at least one cash dispensing ATM, statement printer and an

Internet terminal All kiosks will have a cash dispensing ATM Remote/Off-site ATM placement is guided by:

Bank card penetration Customer transaction behaviour aligned to:

Retail activity: shopping malls, regional shopping centres, suburban centres, goods markets etc

Transport nodes like airports, train stations, taxi ranks Convenience locations – service stations, casinos, selected convenience stores Schools and hospitals

Competitor activity (transactions “lost” to competitor acquirers) Queue lengths at existing ATM sites Bank@work requirements (Corporate banking propositions)

128

ATM BUDGET PLANNING PROCESS

The customer growth estimates is the sole motivation for growing ATM numbers

Other factors to consider in the budgeting process are: Performance of the ATMs already in the network Amount of money paid away as interchange fees (BancABC customers transacting on

other-bank ATMs) Branch and kiosk rollout plans

Bulk ATM orders are preferred for economies of scale purposes and minimising lead-time to delivery from vendor(s)

129

OFF-SITE ATM DEPLOYMENT PROCESS

Site identification Validate

Secure

-Field analysis

-Retail activity

-Branch network

-Foot flow

-Competitor activity

-Security (building, cash servicing etc)

-Accessibility

-Visibility

-Power and communications

-Rentals

Prepare

Install ATM

-Site plans

-Construction

-Communication

-System entries

-Service providers

Commission

ATM

130

ATM OPS REQUIREMENTS Key operational requirements

Key requirements are:

ATM Installation and commissioning (signage

ATM service availability (system working) / ATM service monitoring

Cash loading (no cash-out situations)

Hardware / software updates/error rectification

Patch updates and ATM campaign downloads

House-keeping

Payment clearing and settlement

Payment query resolution (payment tracing etc)

Cash balancing on a regular basis

131

ATM MONTHLY TRANSACTION DISTRIBUTION CONTINIUM

0

200

400

600

800

1 000

1 200

1 400

500 800 1000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10000

11000

12000

> 13000No of potential transactions / site / month

No

of

po

ten

tial

sit

esN

o o

f p

ote

nti

al s

ites

132

MARKET STATS – VISA TRANSACTIONS

133

MARKET STATS – NO OF VISA ATMS

245

382

99

111

217

284

415

180

172

238

0 50 100 150 200 250 300 350 400 450

BOTSWANA

MOZAMBIQUE

TANZANIA

ZAMBIA

ZIMBABWE

YE 2007 Q2 YE 2008 Q2

134

MARKET STATS- NO OF VISA ATMs

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%

BOTSWANA MOZAMBIQUE TANZANIA ZAMBIA ZIMBABWE

$0

$50,000

$100,000

$150,000

$200,000

$250,000

Interchange revenue Share of BancABC ATMs -end 2009

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%

BOTSWANA MOZAMBIQUE TANZANIA ZAMBIA ZIMBABWE

$0

$50,000

$100,000

$150,000

$200,000

$250,000

Interchange revenue Share of BancABC ATMs -end 2009

135

POINT OF SALE REQUIREMENTS

Merchant and end-customer service convenience

Key requirements are:

Long-term merchant relationships

Secure IT systems

Financial needs analysis/guide to financial solution

Quick turn-around times (product application, queries etc)

Payment tracing

Payment clearing and settlement (interbank payments)

136

Informational objectives

• Cost-efficiently supports the overall E-Channels strategy

• 24-hour, convenient provision of relevant information to all BancABC stakeholder groups

• Provides a platform for sales and customer lead generation

WEBSITE OBJECTIVES

137

INTERNET BANKING

Transactional, cross-sell

Aligns to the E-Channels mandate through the provision of remotely accessible (through the internet), secure, 24-hour, convenient, cost-efficient non cash-based daily banking services to the Bank customers, optimising channel usage and facilitating the sale of new accounts as well as lead generation Key requirements are:

Secure IT systems

Financial needs analysis/guide to financial solution

Quick turn-around times (product application, queries etc)

Peace of mind

Payment tracing

Payment clearing and settlement (interbank payments)

138

CELLPHONE BANKING

Informational, transactional, leads generation

Aligns to the E-Channel mandate through the provision of remotely accessible (through any cellphone handset device),

Secure, 24-hour, convenient, cost-efficient non cash-based daily banking services to the bank customers

Optimising channel usage and facilitating the sale of new accounts as well as lead generation

139

END OF DAY 1

HAVE BANKS COMPLICATED WHAT

CUSTOMER SIMPLY WANT

Day 2 Session 1: Segmentation

Case Study & Exercise

Session 2: CRM & Process ManagementCase Study & Exercise

Session 3: Performance MatrixCase Study & Exercise

Session 4: Fraud & Security MethodsCase Study & Exercise

Session 5: Branding, Social Media

140

SESSION 1: Segmentation

142

OVERVIEW CHICKEN or THE EGG… Chicken or the Egg scenario, which comes first Strategy or Segmentation?

Customer segmentation is the practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing, such as age, gender, interests, spending habits, and so on. Using segmentation allows banks to target groups effectively, and allocate marketing resources to best effect

Traditional segmentation focuses on identifying customer groups based on demographics and attributes such as attitude and psychological profiles

Value-based segmentation, on the other hand, looks at groups of customers in terms of the revenue they generate and the costs of establishing and maintaining relationships with them

Customer segmentation procedures include: deciding what data will be collected and how it will be gathered; collecting data and integrating data from various sources; developing methods of data analysis for segmentation; establishing effective communication among relevant business units (such as marketing and customer service) about

the segmentation; and implementing applications to effectively deal with the data and respond to the information it provides

143

SEGMENTATION GROUPS

DowngradingPreferredGrowthPattern(Upgrading)

144

SEGMENTATION GROUPS - CORPORATE

PreferredGrowthPattern(Upgrading)

Downgrading

145

SEGMENTATION METHODS

Geographic variables

Demographic variables

Psychographic variables

Behavioral variables

146

SEGMENTATION CRITERIA - INDIVIDUALS

Geographic Variables

Will ABC use them?

DemographicVariables

Will ABC use them?

Psychographic Variables

Will ABC use them?

Behavioral Variables

Will a bank use them?

Region Yes Age/DOB Yes Personality ?? Product use Yes

Country Yes Gender Yes Lifestyle ?? Benefit sought Yes

Density/Suburb Yes Income Yes Value ?? Loyalty Yes

City/Town Yes Education Yes Social class ?? Credit use Yes

Postal code Yes Family size Yes Interests Yes

Occupation/Profession

Yes Account bal. Yes

Nationality Yes Memberships Yes

Religion Yes Risk profile Yes

Language Yes

Marital Status Yes

Race Yes

Residential status Yes

147

SEGMENTATION CRITERIA - CORPORATES

Criteria Will ABC use the criteria?

Number of employees Yes

Industry Yes

Location Yes

Loan size (Use of credit facilities) Yes

Balance sheet size Yes

Company type (CC,Pvt) Yes

Profitability ??

Turn over ??

148

SEGMENTATION CODES/IDENTIFIERS

Segment Primary segment Code Sub segment codes

HNI/Affluent 100 101+

Rising Affluent 200 201+

Middle Class 300 301+

Large Corporates 400 401+

Small to Medium Enterprises 500 501+

Small Enterprises/SelfEmployed Professionals

600 601+

149

STEP 1

Define the full potential of the market

STEP 2

Assess the value of each customer

STEP 4

Assess which group of customers to target based on potential size, potential revenue (Life Time Value) and share of voice

STEP 3

Stratify or group customers based on their potential mix of usage

STEP 5

Assess per group of customers the unique attitude or behavioral variables of customers

STEP 6

Create segments of customers with the same needs values and wants

Assess the relative importance of each customer in terms of either the number of customers or usage•through sales visits / Market Data•What is the market we serve & who are all the customers who may benefit from our product?Are we missing anycustomers (I.e. those traditionally served by our competitors)?

•From where are the new customers coming? (I.e. what is the referral pattern / who refers? Based on what? •Identify in each stratus the new Life Time Value of the customer •Which competitors are targeting these same customers?

•Define the characteristics of each segment (e.g. average size/potential, key purchasing factors, ways to influence decision making)•what is the size of each segment?•Is it homogenous?•How do salespeople interact with customers in the market and what are the key market drivers?

•Ego driven, $ driven, convenience driven, service driven, scientific driven, etc...

Select the segmentation which most effectively groups customers with the same needs Your segmentation should offer each :

•Measurability - the size & purchasing power of the segments must be measurable

•Accessibility - it must be possible to reach & serve the segment

•Substantiality - the segments must be large & profitable

What questions do I need to answer and what do I need

to do?

How many customers are there in the defined market (validate source)

CUSTOMER SEGMENTATION PROCESS

150

CUSTOMER SEGMENTATION PROCESS

What questions do I need to answer and what do I need

to do?

STEP 11

Develop for each customer in targeted segments a plan with an objective , tactics and action plans.

STEP 7

Validate the selected segmentation approach

STEP 8

Target the most attractive segments based on potential size and potential revenue

STEP 9

Which product / brand is being used by each customer in target segments (validate sources)

STEP 10

Decide on productpositioning for each of the targeted segments

•How easy will it be to convert customer in each segment segment to our products?•How responsive is the segment to marketing actions?•What would be the cost of serving the segment?•How are the competitors targeting these customers?•Evaluate attractiveness of each segment

· Check whether needs are being addressed

How to overcome the hurdles for using our products ?

• Assess cost for each action plan and decide whether it is feasible, to target the segment

•Review regularly whether the needs and wants are satisfied profitably

•Review regularly the size of the segments, the needs and wants of each customer.

Consider supporting evidence for your segmentation

Does the market really work the way you have segmented?

•Are the most successful competitors taking a different segmentation approach?

•What market data do you need to confirm current segmentation?

151

MANDATORY FIELDS - INDIVs

Personal details Title Surname Middle names First name Gender Date of birth Residential status Home address Home telephone number Period at this address Postal address Country of residence Nationality Business Telephone Cellphone number

152

MANDATORY FIELDS - INDIVs

Personal details cont,

E mail address ID number Passport number Expiry date Driver’s licence number Marital status Number of dependents Spouse’s name Spouse’s employer and address Preferred method of communication

153

MANDATORY FIELDS - INDIV

Employment details Current employer and address Type of employment Occupation/Profession Occupation Title Length at current employer Monthly income Method of payment Banking details

154

MANDATORY FIELDS

Previous employment details Name of previous employer Address of previous employer Occupation title

Next of kin Address of next of kin Relationship Declaration Signature and date

155

OPTIONAL FIELDS - INDIVs

Level of education Family size Religion Home language Race Social memberships Interests/hobbies How did you come to know of ABC? Consent for ABC and associate companies to market other products

156

MANDATORY FIELDS - CORPORATE

Company Name Company address Postal address Telephone numbers Nature of business Contact person Contact details (e mail,telephone,cell phone) Designation of contact person Company registration number VAT registration number Directors

157

SEGMENTATION MONITORING TOLLS

Assessment

Observation

Statistics

158

SEGMENTATION MATRIX

Retail BankingBusiness line Corporate Banking

SegmentPersonal Banking

Profes-sionals

SMEBanking

Privatebanking

Companies Non Gov.OrgGovernment

OrgFinancial

institutions

Sub Segment

Blue(Mass)

Gold(Affluent)

Maincustomer

Silver(Top Mass)

FamilyCluster

DoctorDentistPharmacistVets

LawyerNotaryOther

GeologistsArchitectsEngineers

Sports-PersonsJournalists

Micro enterprises

AccountantsAuditorsBus.& Fin.Consultants

Small enterprises

Medium corporate

Large corporate

Medium size enterprises

Multinationals

Local BanksForeign Banks

LeasingInsuranceMicroFinance

Pension FundsAsset Mgrs

ChurchesEmbassiesTrusts

Donor OrgPvt SchoolsPvt Hospitals

Pvt UniversitiesMBA Schools

ProvincesRegionsTowns

Cities

Gvt HospitalsGvt Schools

BuildingSocietiesInvestment BanksOther FIs.

Charitable OrgCivic BodiesOther NGOs

Gvt UniversitiesOther Gvt Orgs

Business line Retail BankingBusiness line Corporate BankingRetail BankingBusiness line

159

CATEGORIES

Group Definition

Child 0-12 years

Youth 13-18 years

Student 19-28 years

Employees Any applicant who has an employment contract.

Housewives Non working spouse

Unemployed Unemployed (not self employed)

Self employed Any applicant who generates their own income for survival

XYZ employees Anyone employed by ABC

Associated Company employees Employees of ABC sister companies

Pensioners Former ABC employees who have retired

Gvt employees Any persons employed by Government (Civil servants)

Executives COOs, CEOs, CFOs, MDs, Executive Directors, GMs, FDs,

MBA/MBL/DBL Any MBA/MBL/DBL graduate

Professionals See list of professionals

Politicians Any persons holding a position of authority within a Political Party (Full time)

Pensioners Any person who has retired from formal employment and receives a pension.

Civil Leaders Civil Society Leaders, e.g. Mayors, Councillors, Judges, Magistrates,

Other

160

INDUSTRIES & SEGMENTS

Real state Developers Estate Agents Prop.Mgrs Construction Prop.Inv.Cos

NGOs Donors Churches Embassies Civic Groups

Education Universities Colleges Schools Kindergartens MBA Schools Libraries

Fin.Services Local Banks Foreign Banks BuildingSocieties

Insurance Leasing Asset Managers

Traders Food Clothing Building Materials

Drugs Supermarkets Households

Agriculture Crop Farming Livestockfarming

ForestryAnd Logging

Horticulture Grains andOils seeds

Fertilizercompanies

Mining Precious stones

Quarry Mining Natural gas

Media Publishing Houses

Media houses Advertising Broadcasters

Transport Car Dealerships

Fleet owners Car plants StorageAnd Transport

Car hire ContainerLeasing

Tourism Hotels Lodges Airlines Travel agents Restaurants Safari Camps

161

SEGMENTATION CRITERIA – SME & CORP

Segment Sub segment

Loan sizeNo of

employees TurnoverSector if

applicablefrom up to from up to from up to

SME

Micro enterprises $0 $10 000 0 10 $0 $40 000

Small enterprises $10 001 $100 000 11 25 $40 001 $400 000

Medium sizeenterprises $100 001 $250 000 26 100 $400 001 $1 000 000

Corporate

Medium corporations $250 001 $500 000 101 250 $1 000 001 $2 000 000

Large corporations $500 001 $1 000 000 251 500 $2 000 001 $4 000 000

Multinationals $1 000 001 501 $4 000 001

162

SEGMENTATION CRITERIA – PERSONAL & PVT

Segment Sub segment

Income Liabilities Assets

Group if applicablefrom up to from up to from up to

Personal banking

Blue $0 $1 500 $0 $10 000 $0 $20 000

Silver $1 501 $5 000 $10 001 $20 000 $20 001 $50 000

Gold $5 001 $20 000 $20 001 $100 000 $50 001 $200 000

Private banking

Platinum $20 001 $40 000 $100 001 $500 000 $200 001 $1 000 000

Super Rich $40 001 $500 001 $1 000 001

SESSION 2: Integrated Approach

164

OVERVIEW

An INTEGRATED APPROACH will demand:

Long-term view Overcoming the SILO effect Establishing a WFM approach Using technology to ones advantage Refining processes Change management (LINK....) Refining product Team work A sense of urgency/culture of innovation An incubation phase for NEW PRODUCTs Modular approach (build on your success....CAPITEC BANK IN SA) Centralised DATA base and management

ARE THE CUSTOMERS HAPPY

165

INTEGRATED APPROACH SILO EFFECT

PRODUCT DIVISION 1

PRODUCT DIVISION 2

PRODUCT DIVISION 4

PRODUCT DIVISION 3

LARGE RETAIL BANK

BRICK n MORTAR BRANCH

CALL CENTRE

E-CHANNELS & M-COMMERCE

VIEW OF CLIENT

VIEW OF CLIENT

VIEW OF CLIENT

VIEW OF CLIENT

NOT INTEGRATEDNOT INTEGRATED

INTEGRATED CRM APPROACH

• Process and workflow management will enable a consistent customer experience.

• It will ensure faster turnaround times for account application and fulfillment.

• There will be fewer mistakes due to the standardized and automated processes

• Accurate customer reporting and real time tracking.

• Excellent service management with issue tracking and escalation.

• Personalised relationship management to all customers due to availability of customer information and relevant sales and interaction prompts.

• A comprehensive “single view of the customer” so that our employees can engage effectively and credibly with customers.

• A single system interface that makes user adoption and training much easier and more effective.

• More productive sales and opportunity management due to customer portfolio allocation and rigorous sales management.

• Predefined sales campaigns and CRM programs to increase cross sell and up sell as well as closed loop marketing i.e. we will be able to accurately measure the success of our initiatives.

• Improved collections and back office effectiveness due to allocation and tracking of tasks.

• Document management which will minimise the use of paper as well as reduce the storage and archiving costs.

CHANNEL IMPACT VIA A CRM SYSTEM

Manage Manage CampaignsCampaigns

Retain & Retain & GrowGrow

Customers Customers via a channel via a channel

Effective operationalEffective operational& channel & channel

managementmanagement

ManageManagechannelchannel

riskriskManage Manage

New New BusinessBusiness

Manage Credit Manage Credit Application & Application &

FulfillmentFulfillment

Building Customer Building Customer LoyaltyLoyalty

Monitor SLAsMonitor SLAs

Manage staffManage staffproductivity productivity

Manage service Manage service requestsrequests

Document Document management & management &

workflowworkflow

Manage & Manage & store KYCstore KYC

Manage Manage Verification and Verification and

Security Security PerfectionPerfection

Segregation of Tasks & Segregation of Tasks & Role Based Access + Role Based Access +

audit trailaudit trail

Enhanced Enhanced Knowledge of Knowledge of

CustomerCustomer

Customer

INTEGRATED CHANNEL VIEW/ARCHITECTURE EUPHORIA

Data warehouse

Mobile

Email / Internet

Retention & Acquisition Units

Web servers

Core bankingsystems

DataIntegration

Customer Central Data Store

CRMMart

Application servers

CR2

Flexi cube core banking

system

Staging 1

Staging 2

Staging 3

Extract Transform

Load

Customer Segmentation

Snap shots & History

Analytical Engine's

Exploration

StatisticalModeling

Other

Lead Generation

by State

Change, Events

Triggers or other

Techniques

PredictiveModeling

Business Rules

Optimization

Marketing

BalanceTouch Point

Delivery

Relationship

Maximize LongTerm

Value &Interest

Opportunity

Best OfferRight timePreferred Channel

CustomerTouchPoint

TouchPoint

Integration

Communication

Campaign Management

Contact &Interaction

Management

MarketingData Mart

FiltersExclusions

Application Servers

Web Server

Mail & SMS Server

Messaging

Customer BI and Reporting CRM Strategy

Direct

Control

OLAPBI Tools Reports

Group Single view

Holistic - 360 Customer View

Single Point of Truth for Customer Information

Single source Extract

Auditable

Traceable

Meta Data

Inte

gra

tio

n

Response Feedback - Closed Loop

Explorationwarehouse

Flat - Unstructured

Flexible

Call centre

Snail mail

Branch

CRM

CreditMart

Internetbanking

Blackberry

3rd party sites

Card management

SINGLE VIEW OF CUSTOMER

FINANCIAL PROFILE

KYC

Interaction monitor

The “Learning Relationship” – Ongoing service excellence

Save me time

Customer tells you what he wants

You tailor your product, service, or elements

associated with it

FEEDBACK

The more effort the customer invests, the greaterThe more effort the customer invests, the greatertheir stake in making the relationship work.their stake in making the relationship work.

Now the customer finds it more convenient to remain loyal, rather than Now the customer finds it more convenient to remain loyal, rather than re-teach a competitorre-teach a competitor

WORKFLOW COMPONENTS

[SRWF010] SR Queue Assignment Workflow- Notifies Customer- Assigns Unresolved SRs to Queues based on data captured

[SRWF300] SR SLA Monitor Workflow- Monitors SR End to End- Alerts/Escalates if SLA not met

[SRWF020] SR Queue Monitor Workflow- Monitors SR in Queues yet to Be Assigned an Owner- Alert/Escalates if SLA not met

[SRWF100] SR Resolution Workflow- Generates Specific Activities Based on Business Rules- Manage the Sequential Completion of Activities

[SRWF110] SR Resolution Monitor Workflow- Monitors SRs Assigned to an Owner not yet Solved- Alerts/Escalates if SLA not met

[SRWF200] SR Closing Workflow- Task Original User to Resolve SR; or- Auto-resolve the SR

Standard SR SLA Monitor

Alert

Custom SR SLA Monitor

Alert

Standard SR Customer

Notification

Custom SR Customer

Notification

Standard SR Queue

Assignment

Custom SR Queue

Assignment

Logged Ready to be Queued

Queued AssignedWaiting for

3d PartyOther

Statuses...Solved Resolved

Standard SR Q.Monitor

Alert

Custom SR Q.Monitor

Alert

Standard SR Q.Monitor Escalation

Custom SR Q.MonitorEscalation

Standard SR SLA Monitor Escalation

Custom SR SLA Monitor Escalation

Standard SR SLA Monitor Time Tracker

Custom SR SLA Monitor Time Tracker

Standard SR Activity

Manager

Custom SR Activity

Manager

Standard SR R.Monitor

Alert

Custom SR R.Monitor

Alert

Standard SR R.MonitorEscalation

Custom SR R.MonitorEscalation

Standard SRClosing

Workflow

Custom SR Closing

Workflow

SESSION 3: Performance Matrix

176

OVERVIEW MEASURE WHAT IS IMPT

CHANNELS SUCCESS will lie in the ABILITY to: ATTRACT/ACQUIRE RETAIN CUSTOMERS CROSS-SELL UP-SELL IMPROVE ON SERVICE UNDERSTAND WHAT IS NEEDED?????? MEASURE PEOPLES PERFORMANCE DETERMINE EFFECIENCIES (SLA’S) & EFFECTIVENESS (PROFIT) CUSTOMER COMPLAINTS

Are we making PROFIT

SESSION 4: Fraud & Security Methods

178

OVERVIEW SHOW ME THE MONEY... Fraud, theft....have one thing in common.....PEOPLE/STAFF/BUSINESS PARTNERS Systems, process, checks & balances are important themes in building an effective

fraud management & monitoring system Fraud is dynamic and migrates across channels Integrated, multi-layered solutions better protect banks and customers assets Fraud prevention must be customer friendly ZERO tolerance culture (e.g. Nedbank in SA) Buildings alerts for the bank, and customers Risk management & Compliance Lack of integration increases FRAUD & RISK to a bank Technology (SMS alerts, SMS Pin) Getting sophisticated, & syndicated Flaws in manual fraud detection

179

PREVENTION IS BETTER THAN CURE DONT CATCH A COLD!! Staff education – they are the front line

ZERO tolerance culture (e.g. Nedbank)

Continually improve on the policies & processes

Perform regular audits

Leadership – visibility

Investing in proper technology, cameras, etc

Creating a hotline (staff/customers)

Improving on authentication (layered approach – relate to PIN authentication SA)

Invest in proper fraud solutions

Creating a hierarchal approach on manual checks, balances and approvals (relate to case study when I set up 5 Ops centres to manage 2000 Mobile staff, low fraud)

Detection models when parameters have changed in a process, system, value etc

Improve on resourcing

Customer education (phishing & ATM Fraud)

SESSION 5: Branding

181

OVERVIEW Overall brand equity

ATL & BTL

Campaign Management

Branding in a multi-Channel approach

Branding & segmentation

Costs vs. ROI

Customer experience vs. The Brand

Various mediums including social networks

Simple messaging (Capitec SA)

182

IN SUMMARY

SS - - STRATEGYSTRATEGYII - - IMPLEMENTATIONIMPLEMENTATIONMM - - MONITORINGMONITORINGP -P - PEOPLEPEOPLEL - L - LEARNING FROM YOUR MISTAKESLEARNING FROM YOUR MISTAKESE -E - EVALUATINGEVALUATING