next gen banking by ch&cie
TRANSCRIPT
Tomorrow’s banking transforma1on, supported by CH&Cie
Patrick BUCQUET -‐ Chief Inspira7on Officer – Head of the CH&Cie FinLab pbucquet@chappuishalder -‐ @pbucquet -‐ +1 347 419 7709 December 2014
The Banking industry is going through major changes, and banks are more and more challenged by new entrants
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Finance is a “more-business” on large audience
… Next Gen Banking
Banking is an experience and
not a service
Regulation is no longer a barrier for new entrants
UX is key to provide a service focusing on one use, providing a powerful UX
Authori7es favor financial inclusion, suppor7ng new entrants in the industry
The actual barrier is now the audience, the success is to be able to manage a large volume of users to make banking a sustainable business
800 million users (e-commerce)
8,5 million users, 40% of Kenyan
adults
1% of Whole Foods transactions after 1
month (US)
Disruption in Banking is lead by new comers, which are taking full advantage of technology enablers arriving to maturity
§ Differentiate web and mobile, leverage on smartphone capabilities
§ Integrate innovative services (NFC payment, PFM management, etc.)
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Next Gen banking services
Basic Digital Banking
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Improved Digital
Banking
§ Standard offering: copy-paste branch services on digital, either web and mobile
§ Value proposition is matching a clear user’s expectation or solving a user’s problem
§ New entrants benefits from a low or unclear regulation
§ They propose a new business model, challenging the traditional commission-based banking business model
Breaking points: • Digital standards transforming the User
Experience (lead by other industries) • New technology capabilities (mobile, social
media, NFC, etc.) arriving to mass deployment • New business models possible using the large
amount of data
Traditional banking services
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User eXperience
New entrants attack all the part of the banking value chain, having in common to propose a new way to serve users, focusing on an the User eXperience
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UX is not limited to User Interface (UI). It is the way to engage, serve and connect user.
§ Authentication
§ Aggregation
§ Coaching, advice (including P2P) User Engagement
§ Payment
§ Investment Products & Services
Market Place (connecting users
and needs)
§ P2P Lending, Crowdfunding
§ FX
Illustra1ons
The Next Gen Bank will rely on an outstanding UX, with 8 main pillars to achieve success
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UX
Community & Social § Banking part of the online social
environment: access to P2P expertize, sharing with peers, etc.
§ P2P services
Always on & Real-Time
§ Omni-channel, multi-device § 24/7 access whatever the channel § Real-time updates, alerts
§ Users can provide feedbacks and ideas to improve the offer
Co-construction
Empowerment & Coaching
§ Tools to take decision § Nudge approach § Coaching, advice, access to expertize
Reward
§ Loyalty programs § Users want to be recognized for their
loyalty
Simple, Design, Useful
§ Match specific user’s needs § Simple use, no complexity § Useful information
Personal
§ No more “one size fits all” § Strong level of personalisation (UI, offers,
savings & budget management, etc.) § Personalized advice
§ Fair-cost pricing, transparency on fees and business models
§ Clear communication (on overdraft, scoring, etc.)
Transparency Fun & Emotion
§ Banking part of the day-to-day life, less boring, more fun
The Next Gen Banking business models will rely on user’s data instead of commissions on transactions
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§ In Europe, the EU is pushing down the interchange rate (0,2 – 0,3%)
§ Customers are more and more requesting transparency on prices
§ Banks are no longer seen as the only financial service providers
§ Digital companies have developed a media-like business model, valuing their audience with a deep profiling of their users
There is a strong pressure on commissions
Other industries have lead the path to new business models
§ Lead generation
§ Profiling / Scoring
§ X-sell / up-sell
New business models are based on data
When it comes to user’s data management, Banks are far away from the best-in-class
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1.3B
798M
600M
800M
Worldwide users
152,5M
60M
83M
Number of customers
Number of customers
799M
500M
435M
X 2 X 5
230M
As a data-specialist, Alibaba is now one of the biggest financial service providers in the world
300 million users of Alipay (online payment) – 80 million
transactions par day
190 million users of Alipay Wallet
Yu’e Bao is the biggest funds (125 million customers, $90 Mds
AUM)
Zhao Cai Bao finances SME, based on a P2P model
Chinese banking regulator allowed Alibaba to launch
MYBank, a privately owned bank
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In the long run, banks are coping with a critical choice about their future with 4 main options to be considered
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UX specialist
Golden Factory
Generalist Niche
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3
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1. Provide banking Back-Office for all products & services (including banking regulatory constraints). Ex.: Bancorp providing back-office services to Simple (US)
2. Provide underlying infrastructure to provide one specific service. Ex.: on payment, Ripple, Braintree or Chase Paymentech
3. Focus on one service (niche positioning) and develop an outstanding UX. Ex.: Paypal, Apple Pay, Stripe, Venmo
4. Focus on UX and leverage on user’s data to create value and propose all financial services (broker-like model). Ex.: Alibaba, Walmart, Mint
4 options to be considered for banks about their future
Today’s Banks
If they decide to compete on UX, banks would have to completely change their business model
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• Banks will manage and protect Identity
• Banks will take care of all the user’s data, controlling access by third parties
§ Banks will be part of user’s
community, organising exchanges
§ Banking will be a market place connecting people to their needs, and not only limited to finance
§ Banking will be a commodity, and as proven by Apple Pay, the service will not depend on the underlying product (same UX)
§ “Open Architecture” will be a standard, allowing each service provider to connect to any bank
§ Banks will become a trusted finance amplifier, part of the day-to-day life, with finance only a part of it
§ Banks will be able to advise users in their different moment of life … A Life
Coach … Bank-Agnostic
… The trusted
data manager
… A social enabler
The Next Gen
Bank will be…
In the short term, banks can still catch up with the market, focusing on UX and integrating underlying existing banking products
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PART OF THE INNOVATION IS NOT TO RE-INVENT THE PRODUCTS BUT TO PROVIDE A CONSISTENT UX
Credits
PFM
UX
Savings
Investments
Credits
PFM
Payments
Contacts
Banks need to change, innovation is a key component of the transformation, but requires a very specific approach
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Innovation comes first from one identified pain point • The starting point must be one issue to be solved, from the user’s point of view • The service will address one specific market segment, based first on use
Innovation is inspired by observation • Innovation starts with the acknowledgement of how users use the service or would
use it • Co-construction is a key part of the process to get users’ feedbacks to fine tune and
validate the concept, but based on a concrete service • Innovation is about conviction, and does not come with focus group
Communication about innovative offers is the same as the traditional ones • Innovation cannot be promoted, it has to be demoed
Right Wrong
Innovation can be managed like a standard project • Small team, short Time-to-Market, Outsourcing are the pillars of a new approach to
manage projects • Intrapreneurship mindset needs to be promoted internally
LESSONS LEARNED FROM LATEST SUCCESSES
Innovation is deeply changing the UX, and is not limited to the User Interface • There is not always a need to re-invent the products and services, but to provide a
useful and consistent UX
CH&Cie is supporting banks with pragmatic innovation capabilities to deliver the NEXT GEN BANKING
§ CH&Cie has set-up an international market watch to follow the latest trends and identify the new opportunities
§ CH&Cie is able to test on the field the latest innovations to be sure it is a good practice to get inspiration from
§ CH&Cie is in contact with key players leading the path to innovation, start-ups, though leaders, industry most advanced players
With an international footprint, CH&Cie
identifies new trends to generate new ideas
With hands-on consultants, CH&Cie
scopes and organizes the project to develop the
concept
CH&Cie partnered with eYeka to turn an idea into a
concept with a crowdsourcing approach
§ Based on the first idea selected by CH&Cie, eYeka is launching a contest to a community of worldwide contributors to challenge the idea and turn it into a concept to be developped
§ In 3 weeks, a pool of concepts is collected and filtered from a business point of view by CH&Cie, then shared with the bank
§ CH&Cie’s consultants have all operational and concrete experiences
§ CH&Cie can gather all the required expertises, from IT to regulatory compliance
§ CH&Cie has developed a pragmatic to scope a project in 4 workshops and to deliver a concrete action plan
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Ideas based on expertize /
convictions
Concept back-tested and adjusted through
collaborative innovation
Action plans to quickly deliver a first
concept (MVP)
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CH&Cie has developped a new way to manage project, to quickly deliver innovative offers
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CRAZY PATCHWORK OF IN-HOUSE AND
OUTSOURCED CAPABILITIES
GET INTO ACTION QUICKLY, TO DELIVER A PROOF OF CONCEPT,
AND NOT SLIDES
ONE CONCEPT & A CORE TEAM
PROJECT QUICKLY LAUNCHED WITH
REASONNABLE LOSSES ACCEPTATION
CONCRETE ACTIONS
EXISTING CAPABILITIES
= + +
NEXT GEN PROJECT by CH&Cie the successful project is not the one which anticipates the future 18-24
month ahead, but the one who builds it NOW
Throughout solu+on development, CH&Cie support the ini+a+ve by playing the product owner role in Agile implementa+on.
§ Support the user experience design § Scope and design solu7ons and features § Act as the product owner in agile development. § Coordinate the development processes between all
stakeholders
User Experience Design
Our value proposition: catalyst innovation with a strong business sense
From concept to implementa+on, CLO func+on played many roles throughout the ini+a+ve including Project Management and Competence Integrator
§ Define the overall digital strategy and offerings § Setup and build up the digital organiza7on structure § Monitor budget & forecast status § Source and management external vendors § Plan and track progress
Chief Launch Office (CLO)
Map and create business / organiza+onal processes (front to back end) with a user-‐centric approach towards digital. Modeling, op+mizing and reengineering
§ Document customer journey § Model and analysis processes § Op7mize and improve processes § Leverage new technologies to reengineer processes
Business Process Management
Provide market insights to generate ideas, animate brainstorming sessions, challenge the offer design and improve the offer along the project
§ Latest trends § Market watch § Best prac7ces § New project approach § Concrete return of experiences (on field tests) § Contacts with thought leaders
Chief Inspira+on Officer (CIO)
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Use Case #1: CH&Cie and eYeka are supporting DBS to develop the next gen mobile banking in Asia
Mobile banking is a must-have in Asian countries, DBS wants to increase its footprint leveraging on mobile capabilities and penetration rate.
CH&Cie is currently advising and supporting DBS in the launching of a full mobile banking solution for India, China and Indonesia (countries where DBS presence is limited). CH&Cie quickly scope a first concept to be quickly developed based on agile methodology with an efficient on-boarding of the different stakeholders. eYeka’s community back-tested and fined tune the concept to finalize the offer design. About 50 people from eYeka’s community contributed to the project. 5-6 CH&Cie persons coordinate around 50 DBS persons and around 100 IT experts. The launch of the 1st live components of the application should occurs 12 months after the genesis of project.
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Use Case #2: CH&Cie’s proposition to AXA Bank in France leads to a disruptive and unique offer
A disruptive value proposition… § “mobile first” bank account with PFM tools and new services § Focus mainly on day-to-day customer expectations § Bringing concrete value to the user, with tools helping to take decision
… with a fair cost strategy § All the core services included § No frills offer § Ancillary products / services in option
Our business venture: SOON, one of the first banks in the world natively designed for smartphone
CH&Cie advised and supported AXA Bank to launch Soon in France From the opportunity study to the launch, CH&Cie has been deeply involved in the project, our moto "foster ideas, bring solutions" has never been so true
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Introduc1on to CH&Cie
December 2014
Chappuis Halder & Cie is a Financial Services consulting firm, delivering strategic projects across the globe
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Chappuis Halder & Cie is a consulting company specialising in Financial Services. We have expanded geographically from our origins in Geneva, now serving clients in all of the major financial centres across the globe. Our main focus is on 4 business areas: Insurance, Retail & Private Banking, Corporate & Investment Banking & Commodity Trading. CH&Cie expertise is anchored in the deep sector and functional knowledge of our consultants; all of us have a financial services background, and know the sector inside out. Because we do nothing else, and we operate across the globe, we are able to bring a rich seam of best practice ideas and benchmarking data to our clients.
§ New York § Montreal
§ Geneva § Paris § London § Luxembourg
§ Hong Kong § Singapore
CH&Cie FinLab is based in New York City, to GET direct connections to trend setters and to GET hands-on experience with innovations
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Support innova+ve start-‐ups to improve their business models, look for investors, select best-‐of-‐breed service providers to propose one-‐stop shopping offer to our clients
§ Brainstorm with selected start-‐ups to beber understand market trends, Promo7on of selected start-‐ups to our clients, Connect start-‐ups with investors
Build new plat-‐form to be proposed to our clients, build on one project to develop a mul+-‐client plat-‐form
GET involved into innova+on
Build direct contacts with innovators, to iden+fy and understand new trends, with start-‐ups, investors, regulators, incubators
§ New York § London § Singapore § Tel-‐Aviv
GET connected to the heart of innova+on
Keep track of the various developments in the sector: new ini+a+ves, new ideas, main trends, etc.
Assess the success of the different new ini+a+ves / technology with on-‐field tests, thanks to our interna+onal footprint
GET concrete feedbacks on innova+on
Produce content / studies / overview / panorama to fuel bank’s innova+on processes
Select ini+a+ves, Iden+fy poten+al benefits for banks, define the possible partnership in bank’s context
Realize benchmark studying best prac+ces and new way to manage projects
GET ideas for our clients
CH&Cie FinLab is supporting the hands-on expertize of CH&Cie’s consultants
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Latest CH&Cie Digital Club was in Paris with Holvi
CH&Cie is a regular speaker at major events CH&Cie frequently issues reports on hot topics
CH&Cie recently invested into innova+ve projects CH&Cie Digital Club gathers thought leaders
Demo at Finovate London 2014 – click here Presentation at the EFMA Banking in innovation in Barcelona, 2014 – click here Radio show – Breaking Bank – March 2014 – click here
innovation that works monipulse
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