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Enhancing profitability Enhancing profitability through customer through customer

intelligenceintelligence

DEXIA BIL Private BankingDEXIA BIL Private Banking

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! DEXIA Group ! Private Banking � Key Business Challenges! DEXIA Private Banking - Strategy ! Applying Customer Intelligence! Conclusions

DEXIA Group & DEXIA Private Banking

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Flagship of business

InvestmentManagement

Services

Retail Financial Services & Bank

Insurance

Public & Project Finance

Pan-European

Geographical Scope of Franchise

DexiaCrédit Local

Paris

DexiaBank

Brussels

DexiaBIL

Luxembourg

Global Domestic

� Executive Management� Group Strategy� Central functions� Treasury Activities

Brussels - Paris

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DEXIA Private Banking - geographical breakdown

Jersey

France

U.K.Luxemburg

Belgium

Spain

Monaco

Singapore

Denmark

Switzerland:

Netherlands

Total Asset Under Mgt34 bn �

Private Banking in general � Business Challenges

The « Relationship Manager » - Challenges

FinancialMarkets Cycles

FinancialMarkets Cycles

Product Proliferation

Product Proliferation

Customer�s Increased Demand for More �Value�

Customer�s Increased Demand for More �Value�

ProductComplexity

ProductComplexity

Regulation/ DeregulationRegulation/

DeregulationInternal

OrganizationInternal

Organization

GlobalizationGlobalization

SophisticatedCustomer

Needs

SophisticatedCustomer

Needs

ComplianceCompliance

CompetitionCompetition

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Private Banking - CRM Strategy and Challenges

Totalcustomer

understanding

ProfessionalInvestment

Services

Focuson clients /

markets

Pro-activeorganisation

Customerknowledge

Investmentadvice

Focuson products

Opportunisticreferrals

From ToRisk profilingRelationship ManagementCRM supportedPatrimonial ApproachNon-discretionary / Advisory ServicesDiscretionary Asset ManagementNew ProductsCustomer added valueBank profitabilityIncrease of AUMSystematic customer acquisitionMulti channel strategy

Cultural changes needed

Desired Sales CultureTypical Sales Culture

� Collaborative/Team Selling� Sharing Information� Listening� Understanding Customer Needs� Customized Solutions� Learning Organization� Build the Relationship� Gain Commitment� Use of Technology Based Tools� Loyal Customer

� Fiercely Individual� Magic & Mystery of Sales� Guarding the �secrets�� Show & Tell� One Size Fits All� Competitive Organization� Make the Sale� Paper Customer Files� Telephone� Satisfied Customer

DEXIA Private Banking - Strategy

Towards Trusted Advisors and high recurring profits

Degree ofTrust with Client « Traditional

RM »« TrustedAdvisor »

Time

« Client Advisor »

Many Products, Improved margin

Solution-driven, high and

recurring profits

Buyer / Seller Cooperative Strategic Alliance

Single Products, low margin

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Private Banking Today � Three « revenue pillars »

STRUCTURAL STRUCTURAL ADVICEADVICE

STRUCTURAL STRUCTURAL ADVICEADVICE

LIQUIDITY LIQUIDITY ADVICEADVICE

LIQUIDITY LIQUIDITY ADVICEADVICE

FinancialPlanning and

CorporateEngineering

FinancialPlanning and

CorporateEngineering

INVESTMENTINVESTMENTADVICEADVICE

INVESTMENTINVESTMENTADVICEADVICE

InvestmentStrategies and

FinancialProducts

InvestmentStrategies and

FinancialProducts

Credit andLiquidity mgmt.

Credit andLiquidity mgmt.

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TIC is a « must have » solution

!Customer !R

elatio

nshi

p m

anag

er

!Management

EDM Product & markets

CRM

!Portal

Operations

MIS

Applying Customer Intelligence

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Current market situation Financial innovation Competition and cost reduction

Why Customer Intelligence in Private Banking? � a Profitable Must

Segmentation

Cross / up Selling Campaign Mgt

CHURNManagement

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HNWI

Personalbanking

Retailbanking

�The Four Rights�

RIGHTCustomer

RIGHTTime

RIGHTProduct/Service

RIGHTChannel

(Where) Investigation Scope - HNWI and Personal Banking

Tailor made

Segmentation

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(How) Customers segmentation based on Asset Alloc.

Customer / Business relateddatabases

Homogeneous clusterbased on asset allocation

SegmentationDatamining

Strategy

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(How) Define Strategy by segment

Relationship Manager

Top

Mgmt

CustomersS (AUM; ROA)

Strategy (Prod; Fiscal; Commercial)

S (AÛM; RÔA)

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(How) implement and support strategy every day!

Products Committee�Synthesis�Product Strategy�Validation & planification

� Information feedback fromcampaign analysis

Targetting / extract

ProductDevelopmentProduct def.

DWH

Campaign analysis�Transformation rate�Reasons of won lost�ROI

Stra

tegy

prop

ositi

on

Cust. Intelligencethrough

Data Mining

Market Spearhead

BRAINSTORMING

Analysis

�Products�Sales pitch�Target�Pricing�ROI

CommitteeStrategy

Campaign ManagementCommunicationCOMMERCIAL ACTION PLAN

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Results: Better ROA through Customer and Business Knowledge

!AUM�s!Segmentation

!Customer

Profitability

!Ratio Bonds / AUM�s

!Ratio SICAV/ AUM�s

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CONCLUSION

! Private Bankers are facing tremendous challenges :! KYC : quality and performance of service/products! AUM! Profitability! low cost

! Data Mining integrated in a CRM approach allows Private Bankers to better figure out Clients requirements and offers them in a more industrialway suitable products

! Keep in mind that one part of clients� psychology will remainunpredictable " Data Mining is an helpfull solution to better match clients� needs but is not a plug and play solution

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Enhancing profitability through customer intelligence @ DEXIA BIL Private Banking

Current market situation Financial innovation Competition and cost reduction

Cross / up Selling Campaign Mgt

CHURNManagement

Segmentation