Download - Leveraging brand and an omnichannel platform to face the fintech challenge on retail banking
Leveraging brand and an
omnichannel platform to
face the fintech challenge in
retail bankingDaniel FerrettiCMO & Online Channels - Sicredi
Quick overview: Brazil at a glance
• 8th largest economy in the world ($ 1.9 tri GDP / $ 3,6 tri PPP);
• Largest economy in Latin America;
• Total population 204 million (112 labor force);
• 108 million people have bank accounts (60% -US 71%);
• Amidst economic downturn ( 2,97% fcst GDP in 2015);
• Political crisis due to corruption charges (approval is 9%).
Estaiada bridge in São Paulo Beach in Rio de Janeiro Agribusiness in the Midwest
Quick overview: Banks and Credit Unions in Brazil
• 4 major banks accountable for 60% of total assets ($ 1,8 tri)
• 2 are government banks (1st Bancodo Brasiland 3rd Caixa)
• BancoItaúnet profit in 2014 was over $ 5 billion
• High spending in advertising and technology
• High merger and acquisition activity in the last 10 years
• Primary objective is profit for a small group of shareholders
• 1.200 credit unions covering 100% of territory
• Serving 7 million members
• Accountable for 3% market share on assets
• 5th largest branch network combined (18% of total 5.300)
• 2 large systems account for 78% (Sicrediand Sicoob)
• Primary objective is customer satisfaction
BANKS
CREDIT
UNIONS
“People who cooperate grow“Administrative and operations office in Porto Alegre, RS
Quick overview: Sicredi
• 96 credit unions operating under a single brand
• 3 million members
• 1.370 branches in 11 states
• 18.000 employees
• US$ 18 bi in assets
• Centralized data center, operations and products
Inside Guaravera BranchJaniópolis Branch São Mateus do Sul Branch
1.300
Branches
(UAs)
4 Centrais (Regional Offices)• Porto Alegre, RS
• Curitiba, PR
• Goiás, GO
• Cuiabá, MT
Centro Administrativo (CAS)Porto Alegre, RS
Cooperative Bank
Cards Issuer
Insurance Broker
Consortium Administration
IT
Risk
Finance
Marketing
96 Credit Unions• 11 states
Members
(“owners”)
Business Model: member owned credit unions with centralized service sharing
Marketing structure, volume and support network
Marketing
CENTRAL
MT/PA/RO
CENTRAL
BRC
CENTRAL
PR/SP/RJ
CENTRAL
SUL
P&S
FOUND.
BIZ
UNITS
CREDIT
CEO
HR
PRESS
COOPS
EMPLOYEE
MEMBERS
COORD.
NÚCLEO
FULL
AGENCY
COOP
HOUSE
ENDO
BTL
DIGITAL
PR
VP
P&S
672
514
211
172
1.569
377
187
146
28
72
266
4.571
# VOLUME MATERIALS
BRIEF SOURCE
TARGET AUDIENCE
AGENCY
8 MANAGERS
26 FTE
• 26 FTEs
• 8 Managers (1 CMO, 2 senior)
• 1 Full Ad Agency
• 1 PR Agency
• 1 BTL & Direct Marketing Agency
• 1 Digital Agency
• 1 Internal Communications Agency
• 8.785 promo materials / month
• 48 large campaigns / year
• Total expenditure R$ 100 MM / year
Brand performance 2013 to 2015
• Highest growth of brand
awareness among all financial
institutions (89%)
• 3rd ranked in inducted brand
recall
• 4th ranked in spontaneous in
brand recall
• Expenditure is 1/12 compared
to top 3 players average
Offer strategy according to member life cycle
RELATIONSHIP
ACTIVATION
ACCOUNT OPPENING
PROSPECTING
RECOVERY
RETENTION
MEMBERS
UP SELL
CROSS SELL
DEEP SELL
REASON
EMOTION
BRAND
PRODUCT
Gen Y Life cycle: the snooze generation
Infant & Children
0 -5 y.o.
Adolescence
6 -12 y.o.
Teenagers
13 -19 y.o.Young Adults
20 -30 y.o.
Adulthood
31 -60 y.o.Maturity
61+ y.o.
GENERATION Y15 35
SCHOOLHIGH
SCHOOLCOLLEGE MBA
MARRIEDLIVING WITH FAMILY
WORK RETIRED
HOUSECAR
EDUCATION OCCUPATION SOCIAL LIFEASSETS
Technology, alongside with market changes, transformed media in a profound way
1950 to1980 – “Broadcast Era” 1980 to2000 – “Clutter Era” 2000 to ... –“Network Era”
Gen Y Media Habits: Always on, but switching focus on what́ s relevant
OPEN / CABLE TV
INTERNET PC
MOBILE
ON DEMAND
GAMES / OCN*
86%
81%
42%
38%
37%
Daily usage % Favorite Channel / Content
1. Movies (72%)
2. Soap Opera (44%)
3. Series (36%)
4. News (26%)
1. Social Networking (74%)
2. Browse Internet (12%)
3. Games (6%)
4. E-mails (3%)
1. Social Networking (71%)
2. Games (8%)
3. Research (5%)
4. E-mails (4%)
1. Action Games (42%)
2. Sports Games (33%)
3. Sim Games (21%)
4. Others (4%)
1. YouTube (89%)
2. Netflix (41%)
3. Apple TV (14%)
4. Others (31%)
Perception of Advertisement
Dislike 47%
Like 52%
Dislike 63%
Like 37%
Dislike 56%
Like 44%
Dislike 72%
Like 28%
Dislike 67%
Like 33%
Overall Perception
• Leaves TV on while doing
something else
• Seeks entertainment, even
on the commercial breaks
• Constant use
• SMS or “unwanted”
advertising seems to invade
privacy
• Uses it mostly to work /
study
• Don´t like banner ads
• Likes retargeting
• 39% plays online
• Is open to advertising, but it
must be “clever”
• Since it´s a payed service,
won’t stand advertising
• 67% skip YouTube intro
advertisement
Media
The way companies market their products changed to adapt to a new economy
COMPANY A
COMPANY B
COMPANY C
COMPANY D
COMPANY
E
1950 to1980 – “Broadcast Era”
COMPANY A
COMPANY BCOMPANY C
COMPANY D
COMPANY
E
COMPANY
F
COMPANY
H
COMP. E
COMP. E
COMP. G
1980 to2000 – “Clutter Era”
COMPANY B
COMPANY C
COMPANY D
COMPANY
E
COMPANY
F
COMPANY
H
COMP. E
COMP. E
COMP. G
COMPANY A
COMP.
J
COMPANY J
2000 to ... –“Network Era”
SIZE EXPERTISE VALUES
TO BE KNOWN TO BE RECOGNIZED TO BE RELEVANT
MARKET ENVIRONMENT
Very synergic to credit union
value proposition
New ways to promote brands and products defy the advertising status quo
PRODUCT PLACEMENT BRANDED CONTENT PARODY CAUSE LED
Cast AwayFEDexand Wilson
The bready insideIntel and Dell
Introducing the Book BookIkea Catalog
#LikeAGirlAlways
• Product or brand as part of context
• Emotional bond through content
• Celebrity endorsement
• Low control of the message
• Content is king (production quality)
• Product / Brand cross content
• Low visibility sometimes
• Depend on wide and massive impact
• Humorous approach
• Often created by customers directly
• No control of message
• Could risk product / brand image
• Emotional approach
• Activation is needed
• Story “doing”
• Bound to brand value proposition
0%
MEMBERSHIP
X-SELL
DEPOSITSLOANS
% OF ATL INSTITUTIONAL EXPOSURE BY
PRODUCT FAMILY (KNOWN BRAND) CRITERIA FOR DEPOSIT AND INVESTMENTS
100Performance
Solid / Trustworthy
Operational quality
perception
Competitive pricing
Market analysis and
forecasting
Advisory
80
50
47
43
41
BRAND
IMAGE
100% 50%
CRITERIA FOR FINANCIAL
INSTITUTION SELECTION
1. BRANCH LOCATION
2. NUMBER OF BRANCHES
3. PAYMENTS
4. SOLID / TRUSTWORTHY
CRITERIA FOR LOAN
APPLICATION
1. COMPETITIVE APR
2. FAIR CREDIT LIMIT
3. AGILITY
4. MAIN BANK
CRITERIA FOR OTHER P&S
PURCHASE
• INSURANCE: SOLID /
TRUSTWORTHY
• CARDS: APR / REWARDS
PROGRAM
% ATL INSTITUTIONAL
% BTL / Promo / MD
Marketing mix: ATL / BTL and primary focus on deposits
Achieving a standardized in branch experience: brand to commercial model
Business
Who am I?
Operations
Advertising
What do I have to
offer?Value Proposition
How do I deliver
my promise?Commercial Model
How do I become
efficient in doing
that?Operational Model
BRAND
PORTFOLIO
STAFF
BACK OFFICE
INTERNET
BANKING
MOBILE
BANKING
PHONE
BANKINGATMs CORBAN
OMBUDSMAN
SOCIAL MEDIA
ORACLE
SIEBEL
CRM
BRANCHES
SIEBEL
MARKETING
TECBAN
SAQUE PAGUE
PAGFOR KONI REDEBANKSNPS SEEKR
L E G A C Y S Y S T E M S
O M N I C H A N N E L M I D D L E W A R E
SERVICE COMPONENTS
MIS
BI
DASHBOARD
TRADITIONAL
ALT. HOURS
TELLER LESS
BUSINESS
ITINERARY
100% 100%
TELEMKT
100% 25% 25% 50%
100%
0%
%
Integration
Level
COMPLEMENTARY
LAYER
FEATURES
CROSSCHANNEL
LAYER
Sicredi omnichannel platform architecture: 24/7 online, 13 billion transactions / year
Channels with partial or full CRM and Campaign Management integration
Brickand Mortar Internet Banking Mobile Banking
% Transactional Vol.
6%% Transactional Vol.
18%% Transactional Vol.
36%
Evolution of technology for online channels
Internet of
Everything
Omnichannel
Multichannel
Integration
E-Banking
Cu
sto
mer
dri
ven
in
no
vati
on
Digital Bank 1.0
Digital Bank 2.0
Digital Bank 3.0
Digital Bank 4.0
1998 - 2002 2003 - 2008 2009 - 2014 2015 - …..
• Dial-up experience
• E-mail Contact Center
• Online Brochure
• Database & CRM
• Web-based account
origination
• Online Calculators and
Bill payment
• Web Chat & Call
• DW & KYC
• Seamless experience
• Full-function
smartphone apps
• Internal & hybrid cloud
• Click-to-Video
• Big Data & Analytics
• 360º customer view
• Digital Bank & Digital
Branches
• Rich cross-channel
collaboration & advice
• Omnichannel analytics
(structured &
unstructured data)
• “Market of One”
customer centricity
• InterCloud
• Social Networks
Sicredi Brazil US EU
* Source: T
he Financial B
rand
• Online customer onboarding
• Document scanning and biometric Id
• Social network linked
• Customizable look&feel
• PFM engine (Personal Finance Management)
• Campaign trigger offers and services
• Peer to peer interaction and transaction
• Easy to access (less security keys)
• No fees
• Integrated with e-payment tools
As brick and mortar branches become more rare, digital banking is growing in relevance due to enhanced customer experience, self-serving characteristic and low cost.
Credit Unions should be prepared to upgrade their online experience and face a new competitor: fintech startup companies
FinTech and Digital Banking 4.0
Young Adults and the Sharing Economy as Banking disruptors
• 53% say they can’t spot any difference among banks
• 71% would rather go to the dentist than listen to banks
• 4 of the leading US banks are among least loved brands
Banks will have to learn from Silicon Valley disruptive companies to pitch offers
Powerful autocomplete and indexed search
Product / Service details (in deph)
Bigdatasmart Cross-sell engine
Referral engine and behavior feedback Scalable browsing and device responsive
Ad retargeting technology
Lean process checkout / purchase / underwrite
Powerful collaboration features: reviews
1
2
3
4
5
6
7
8
Wrap up
• Sicredi is truly glo-cal: A national brand and standardized operations model with local presence;
• Despite branding efforts a solid campaign management engine is core to push for growth;
• Banks have been taking advantage of regulatory boundaries in place;
• Threat from FinTech startup and disruptive models pressure banks to move quicker;
• Young Adults don’t like banks, and they hope something disruptive will take place;
• Don’t listen to your COO: build a Digital Bank for your customer, not for your bank;
• Banks will need to be more transparent (no more hidden check boxes) and learn Big Data;
• Credit Unions have the advantage of beign 100% member centered. That will pay off in the future.