lafferty west africa presentation (1)
TRANSCRIPT
Managing the banking distribution mix so it is fit for purpose
Presented by Sandeep DeobhaktaSub-Group Head,Chief Operating OfficerRetail Banking Sub-Group
May 4th, 2010
Lafferty Retail FinanceConvention West Africa 2010
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Key themes for today
# 1 We are witnessing a fundamental shift in customer behavior –The customer buying processThe way customers use banks
# 2 The Branch is important…….but, it is an expensive channelManaging cost is critical…..but not at the expense of the customer experienceUsing technology and an “assisted” customer experience
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Background – Shinsei Bank
Shinsei Bank was formed in March 2000 when the Long Term Credit Bank (LTCB) wasprivatized.
The Old LTCB Individual Banking was a funding engine for the corporate loan business
The retail business was launched in 2001. Currently, the business has:
2.5 Million customers
Footings in excess of JPY 6.5 Trillion [USD 70 Billion]
Investment and Foreign currency AUMs of JPY 900 Billion [USD 10 Billion]
Mortgage loans of JPY 800 Billion [USD 9 Billion]
41 branches nationwide
Strong retail brand
Growing, profitable retail business
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The CEO’s vision for the new retail bank in 2001
Yashiro-san believed it was better standards of service, and innovation in services,
that would ultimately attract customers to the bank.
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ATM Withdrawal Fee¥ 0
Shinsei Bank ATMs, Seven Bank ATMs<Available 24 hours>
Partner ATM fees will be refunded
ATM Withdrawal Fee¥ 0
Shinsei Bank ATMs, Seven Bank ATMs<Available 24 hours>
Partner ATM fees will be refunded
A unique customer proposition – free access, 24 x 7, global ATM card
International Cash Card
Withdraw your money in local currency at overseas ATMs
International Cash Card
Withdraw your money in local currency at overseas ATMs
PowerSmart Home Mortgage
Guarantee fee ¥ 0 Auto-early repayment fee ¥ 0
Group life insurance premium ¥ 0
PowerSmart Home Mortgage
Guarantee fee ¥ 0 Auto-early repayment fee ¥ 0
Group life insurance premium ¥ 0
ATM /Call Center /Internet /Mobile24 h × 365 day
Banking Anytime, Anywhere
ATM /Call Center /Internet /Mobile24 h × 365 day
Banking Anytime, Anywhere
Internet Domestic Fund Transfer Fee ¥ 0
1, 5 or 10 times per month based on customer stage
Internet Domestic Fund Transfer Fee ¥ 0
1, 5 or 10 times per month based on customer stage
Branches are open Until 5 p.m. on weekdays
and on weekendsWe do not close at 3 p.m. as others do
Branches are open Until 5 p.m. on weekdays
and on weekendsWe do not close at 3 p.m. as others do
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Get connected with theWorld Market real time
Live FX rates
Get connected with theWorld Market real time
Live FX rates
All-Inclusive AccountYen / Foreign currency deposits,
Structured deposits, Mutual funds, Stocks / Foreign bonds,
Annuity, Medical Insurance
All-Inclusive AccountYen / Foreign currency deposits,
Structured deposits, Mutual funds, Stocks / Foreign bonds,
Annuity, Medical Insurance
32 Color Cash CardCarry your favorite color in your wallet
32 Color Cash CardCarry your favorite color in your wallet
Full functionality -Internet Banking
24 hours “Anytime, Anywhere”
Full functionality -Internet Banking
24 hours “Anytime, Anywhere”
Security Measures Power Yokin
Transfer your funds via phone, Internet or mobile phone,
and withdraw at ATMs
Security Measures Power Yokin
Transfer your funds via phone, Internet or mobile phone,
and withdraw at ATMs
Alert e-mail to Mobile phoneExchange Rate
& Mutual Fund Net Asset Value
For timely transaction
Alert e-mail to Mobile phoneExchange Rate
& Mutual Fund Net Asset Value
For timely transaction
……and highly differentiated products and services
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That have been acknowledged by customers and the industry.
Consistently ranked in the top tier in the Nikkei’s Annual customer satisfaction survey in Japan since 2004
Won the Asian Banker Award for the best retail bank in Japan for 4 out of the 6 years since 2004. Always ranked in the top 3
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The customer buying process – financial services
COMPARISON SITES11%
ONLINECOMMUNITIES
14%
OTHERS21%
COMPANY WEBSITE23%
TV / NEWSPAPER /POINT OF SALE
31%
Online media accounts for 48% of the customer information gathering process.Online communities and comparison sites account for 25%. This number is growing rapidly.
Source: Nomura Research Institute – New Trend of Innovation in the web 2.0 Era
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In a First, Web Advertising Outpaces TV in U.K.Internet Now Commands 24% of Ad Spending to TV's 22%Posted by Matthew Creamer on 09.29.09 @ 05:37 PM
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MEDIA SPEND - 2004-5
29%
60%
10% 1%
TV NEWSPAPER WEB OTHERS
As the customer buying process changes, we have changed our media allocation The role of newspaper advertising is no longer to “sell” but to create interest so prospects “explore” us through digital media
MEDIA SPEND - 2009-10
43%
14%
42%
1%
NEWSPAPER WEB LISTINGWEB SEARCH OTHERS
Shinsei Bank – Mortgage [refinance] marketing media mix
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SOURCE - LEAD GENERATION
46%
16%
18%
20%
SEARCH / COMPARISION SITESWEB ADSSHINSEI WEBSITEOTHERS
Acquisition - mortgage
APPLICATION BY CHANNEL
83%
8% 9%
INTERNET BRANCH CALL CENTER
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Example – “Search” engine marketing
Attention / Interest
Other banks’ AD
TV /Newspaper /
Web banner Ads
Search
Search engine( Yahoo / Google )
Action
Shinseibank.com
Starter Kit Request
Shinsei Bank’s Newspaper Advertising
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Keyword : mortgage
Search engine directs to comparison shopping siteShinsei Bank site
We want to cover the top 3 - 4 search engine results with comparison sites and our own ads.
Example – “Search” engine marketing [contd.]
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Online channel usage at Shinsei Bank
55% of all new accounts are acquired online
75% of all deposit sales are non branch. Online alone is 45%
83% of loans originated online
72% of our new branch customers sign up for e-statements
Over 50% of mutual fund transactions are booked online
Our focus….keep improving the customer experience, especially online
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A large ATM and Branch network is important to Japanese customers
WHAT DID YOU CONSIDER IN CHOOSING YOUR MAIN BANK?
0 20 40 60 80 100 120 140 160
LARGE ATM NETWORK
NUMBER OF BRANCHES
SAFETY & CREDIBILITY
QUALITY OF INTERNET SERVICES
CUSTOMER ATTITUDE
INTEREST RATES
Source: Nikkei Veritas, June 2009
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In a recent article for BAI, Dave Kerstein, explores the role and the future of branches
You don’t need as many iconic free standing branches. You need more, smaller facilities that serve tighter, more
compact trade areas. These facilities need to be built and managed differently.
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3 ideas for downsizing the branch
1. Make it easy for customers to do business…
2. Reuse Internet functionality in the branch
3. Eliminate cash handling and processing in the branch
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Q. Can customers do everything on the web, mobile and phone?Our approach is to ensure that we have full functionality across channels for all products and services
Q. Can we retain and use historical transaction data to make it easier for the customer?
For overseas funds transfers, customers can send additional funds to certain payees simply by calling, validating the payee and indicating the amount of transfer.
Q. Does it require additional paperwork / forms?The Shinsei PowerFlex Account structure is designed to provide full functionality for FX and investments - every customer has access to 10 currencies, Mutual fund and FX buy / sell
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Internet functionality [remote A/c opening]
Customer uses Internet a/c opening module
Starter Kit
PIN mailer
Card embossing
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Internet functionality is reused in the branch with a modified workflow. Additional hardware installed for card embossing or card mailed to the customer.Eliminates the need for paper forms, data entry and maker / checker. Customer is the checker and signs the system generated a/c opening form.
Reuse Internet functionality in the branch [ Branch a/c opening workflow]
Card embossing
Customer uses Internet a/c opening module in-branch
Receives card and selects PIN
Documents are scanned
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Some thoughts on self-service…
When you think of self-service, do you think of it as a cost savings or as customer service?
Cost savings is a primary benefit of self-service. That is a fact.
Conversely, if your idea of self-service is taken from the viewpoint of making customers’ lives easier – with faster and simpler transaction processing and customer service – then you’ve shown customers that they are important to you and that you’re thinking of them, not just the bank
Source: BAI - The Conundrum of Self-Service: Cost Savings or Customer Service? By NICOLE STURGILL
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Airlines - before
When self check-in kiosks were first introduced, customers found them confusing and lamented the loss of the counter agent…..
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Airlines - now
….fast forward to today when airlines have agents stationed in the kiosk area to answer questions and guide customers through the process
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Customer experience
“Indeed, the bank’s services were entirely self-completed; the staff was present only to provide assistance as needed. Transactions took place online, at Internet portals in the branch.”David M. Upton & Virginia A. Fuller, Information Technology and Innovation at Shinsei Bank, Harvard Business School Case
STAFF COMPLETEDSELF COMPLETED WITH ASSISTANCE
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Reuse Internet modules for all investment product sales [under development]
This will eliminate paper forms, order booking data entry and checks and will ensure version control, audit trails and improved compliance with customer protection.
Staff uses Internet Investment product module
with modified workflow
Order placement done exactly as per Internet process
Order confirmation handed over
Prospectus / solicitation documents throughprint on demand for version control & audit trails
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Cashless tellers
“Tellers were cashless. If a customer wanted to deposit or withdraw money, the teller would walk over to an ATM with the customer and execute the transaction with the customer’s participation.”David M. Upton and Bradley R. Staats, Radically Simple IT, Harvard Business Review - March 2008
STAFF ASSISTED
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Eliminate processing in the branch
The branch receives the customer request, completes the verification and sends the work to a remote processing center.The branch also educates the customer that this can be done remote, captures the email address and signs up e-statement delivery.
Customer hands over transaction request Branch verifies the
Request and scans the form
Branch Remote processing center
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3 additional ideas:
1. Sales process automation – is it as automated as the “best in class”collections process?
2. Video consulting – an opportunity to create staffing flexibility and reduction in branch headcount.
3. Record all branch sales interactions [audio / video] – compliance checks can be done remote.
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RELATIONSHIPMANAGER
RELATIONSHIPMANAGER
Empowering people to succeed –Wealth Management CRM process at Shinsei Bank
CUSTOMERCUSTOMER
Customer managementBased on customer profitability and potential. Matched with RM – skill based assignmentPrioritization and coverageActivity tracking and conversion performance
Customer managementBased on customer profitability and potential. Matched with RM – skill based assignmentPrioritization and coverageActivity tracking and conversion performance
Sales & Marketing effectivenessSales activity & effectiveness dashboardsCustomized views for managementEffectiveness of marketing campaignsImmediate feedback for all functional areas
Sales & Marketing effectivenessSales activity & effectiveness dashboardsCustomized views for managementEffectiveness of marketing campaignsImmediate feedback for all functional areas
Sales contact and service request management toolCustomer contact data, preferences & history Sales opportunities developed centrallyAutomated prompts for follow ups & opportunitiesCross channel view of service requestsRM has full view of service history and resolutionstatus
Sales contact and service request management toolCustomer contact data, preferences & history Sales opportunities developed centrallyAutomated prompts for follow ups & opportunitiesCross channel view of service requestsRM has full view of service history and resolutionstatus
Customer profile, product balances and historyFull view of customer product holding [inc. 3rd party]Customer profile, goals, risk profile and experienceis recorded and product performance is reviewedHistory is captured – shows advise and actions takenHousehold linkages can be viewedReferrals are recorded and tracked
Customer profile, product balances and historyFull view of customer product holding [inc. 3rd party]Customer profile, goals, risk profile and experienceis recorded and product performance is reviewedHistory is captured – shows advise and actions takenHousehold linkages can be viewedReferrals are recorded and tracked
Product performance, research and advisoryProduct performance data available [various views]Portfolio review tools and analytics can help theRM to guide the advisory processMarket outlook, investment manager commentsand research reports available for consultative sales
Product performance, research and advisoryProduct performance data available [various views]Portfolio review tools and analytics can help theRM to guide the advisory processMarket outlook, investment manager commentsand research reports available for consultative sales
Compliance and privacy protectionAudit trails of customer interaction – audio / video recordingsReview process to ensure that customers protectionmeasures are effectively implementedException reviews of customer profile vs. product features
Compliance and privacy protectionAudit trails of customer interaction – audio / video recordingsReview process to ensure that customers protectionmeasures are effectively implementedException reviews of customer profile vs. product features
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The Consulting Spot is a “sales only” mini branch
We are expanding our branch network with this model: 4-5 staff 75-100 sq. metersHub and spoke model 75 - 85% lower CAPEX & OPEX than a “hub” branchProactive sales model that targets:
1. Relationship growth with existing customers2. Acquisition of new customers
“Cashless” [ATMs only], “Paperless” [imaging], “Sales &service only” [minimal branch operations & centralized processing]
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The Consulting Spot financial model
Payback for Branch
Launch24-36 months
Payback point for Consulting Spot
1month
Pre-launch
Sales and marketing
< 6 months
Cost reduction
75 - 85%
Cost reduction
75 - 85%