Harnessing the potential of digital in financial services
This presentation is the property of its rightful owner.
Sponsored Links
1 / 28

Harnessing the Potential of Digital in Financial Services PowerPoint PPT Presentation


  • 75 Views
  • Uploaded on
  • Presentation posted in: General

Harnessing the Potential of Digital in Financial Services. Stephen Phillips September 23, 2013. Harnessing the potential of Digital in Financial Services. Context and perspective. Leading Digital practice. Organising for success. Consumers will be more connected with more devices.

Download Presentation

Harnessing the Potential of Digital in Financial Services

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Harnessing the potential of digital in financial services

Harnessing the Potential of Digital in Financial Services

Stephen Phillips

September 23, 2013


Harnessing the potential of digital in financial services1

Harnessing the potential of Digital in Financial Services

Context and perspective

Leading Digital practice

Organisingfor success


Consumers will be more connected with more devices

Consumers will be more connected with more devices

Consumers are increasingly connected…

…using more and more devices

Car

?

Domotics

E-book/ tablets

TV

Netbooks

Mobile Inter-net device

DVD players

Gaming console

Smartphones/ PDAs

PCs

2000

2005

2010

2015


The shift online is pronounced particularly time spent using social media

2_84

The shift “online” is pronounced, particularly time spent using social media

online will continue to take SHARE

Total time spent on social media has increased dramatically


Digitally active customers are more valuable

Digitally active customers are more valuable

DISGUISED MASS AFFLUENT SEGMENT EXAMPLE

Digitally active customers are more satisfied

Promoters generate more value…

…and refer more

On-line and Mobile Use**


Harnessing the potential of digital in financial services

Digitalisation lowers distribution costs by 10-30% for some customers… but not for high-frequency users

UK EXAMPLE

Resulting in “U curve” effect

HighLY digital customers have significantly higher usage


Financial services companies have much to think about in relation to our increasingly digital world

Financial Services companies have much to think about in relation to our increasingly digital world

Situation

complications

questions

  • Fundamental changes in consumer behaviour

  • Unprecedented regulatory pressure

  • Fast moving technology trends

  • Increasingly competitive landscape

  • Legacy environments are slow and expensive to upgrade

  • Not all technology & consumer trends are of equal importance

  • Must not divert attention from today’s business and regulatory commitments

  • Reduce opex/capex vs. increase digital investment

  • Where is current business model under most pressure?

  • Which are the digital trends to really get behind?

  • What is the scale of implied effort?

  • What are priorities if cash constrained?


Harnessing the potential of digital in financial services2

Harnessing the potential of Digital in Financial Services

Context and perspective

Leading Digital practice

Organisingfor success


Most banking transactions are already digital

Most banking transactions are already ‘digital’

RETAIL BANKING EXAMPLE


Example commonwealth bank of australia

Example: Commonwealth Bank of Australia

Technology delivery

CBA strategic focus

Customer:

Revitalised front-line customer interface

1

People

Technology

Strength

Productivity

Strategic Advantage:

Best-in-class online platforms

2

More customer needs met in core franchise “One CommBank”

Continued growth in business and institutional banking

Core:

Core Banking Modernisation (CBM)

3

Disciplined growth outside of Australia


Advancements in technology improved face to face interaction with customers

Advancements in technology improved face-to-face interaction with customers

1

Self-service

Flagship Branch layout

Commseereal-time

customer snapshot

  • Frontline customer interface used by bank teller staff/agents

  • Single view of customer

  • Integrated with Core Banking to provide real-time transaction details for all personal accounts

  • Interactive/self-serviceoptions for customers to undertake all transaction banking requirements

    • Customers become familiarised with technology options (iPads and iPod apps) thereby reducing the need for bank visits

    • Self service options reduce demand on tellers and waiting times

    • FX and coin counting machines available

  • Branch acts as a ‘one-stop-shop’ with a coffee shop, events and seminars for customers


Bank s technology allows for easier customer banking at any time of the day

Bank’s technology allows for easier customer banking at any time of the day

2

online

mobile

social

Point of sale

  • Pi - Albert:

    • Open platform POS payment method

    • Businesses can create own compatible apps

    • Secure merchant terminal

    • QR scan, card scan, chip, NFC payments

    • Customers can split bill

  • Pi – Leo:

    • Device plugged into iPhone/iTouch turning it into payment terminal

    • Similar payment functionality to Albert

  • NetBank (online banking):

    • Real-time account information

    • Tools accessible on-site

    • Google Chrome integration

  • CommSec(online brokerage):

    • Market leading platform

    • Easy access to information

    • Ability to trade instruments

  • FirstChoice and Commbiz

    • Portals for wealth and SME clients

  • CommBank app:

    • Real-time view of A/C

    • Trade stocks

    • FX calculator

    • Undertake bank transfers and B-pay

  • Kaching:

    • Pay 3rd parties using mobile number, email, Facebook or bump

    • Contactless payments

  • Property Guide app:

    • Reality view

    • Loan repayment calc.

  • Facebook:

    • 236k likes

    • Competitions, new products and offers announced via Facebook

    • Winner of Facebook’s Studio Live Awards for the smartest use of Facebook

  • YouTube:

    • ~1.3m views

    • ~1k subscribers

  • Twitter:

    • ~9.5k followers


Core banking modernisation has focused on improving processes to optimise front end

Core Banking Modernisation has focused on improving processes to optimise front-end

3

  • Real-time banking, 24x7

  • Instant account opening

  • Customised product offers

Enhanced customer experience

  • Straight through processing

  • Faster speed-to-market

  • Lower cost-to-income

Greater efficiency

  • Greater system reliability

  • Less manual re-work and errors

Improved risk management

  • “Bank of the Future”

  • Greater flexibility

Industrialisation

  • Separate distribution/manufacturing

  • Broader growth opportunities

Future proofing


It investment has paid off in the form of more efficient processes

IT investment has paid off in the form of more efficient processes

5 years Ago

Today

  • 50% of spend on infrastructure

  • 23 data centres

  • 70 severity 1 incidents

  • 1,200 changes into production monthly

  • 26% of spend on infrastructure

  • 2 data centres

  • 7 severity 1 incidents1

  • 3,000 changes into production monthly

  • 74% customer-focused content


Digitalisation strategy helped cba become the market leader

Digitalisation strategy helped CBA become the market leader

#1

Online banking

#1

In the youth segment

>40%

of all payment transactions

#1iTunes app

#1Social & Facebook

460k Kachingdownloads

1st

Real-time banking

#1

Contactless acceptance points

4.25mactive online customers

>2.0m customers on mobile

Main Financial Institution for1 in 3 Australians

#1 Contactless (7M PayPass enabled cards)


Harnessing the potential of digital in financial services3

Harnessing the potential of Digital in Financial Services

Context and perspective

Leading Digital practice

Organisingfor success


What does it take to launch impactful digitalisation initiatives

What does it take to launch impactful digitalisation initiatives?

1

2

Scope & focus

Ambition

  • Clear and unambiguous definitions of what is to be considered ‘digital’

  • Solid understanding of likely impacts of key marketplace and technology trends

  • Prioritised sense of the most important challenges and gaps

  • Translation of digital potential into business impact

  • Clarity on choices associated with differing levels of digital ambition and investment

  • Quantitative goals that will excite and engage the business

3

4

Governance & capability

Investment principles

  • Organisation model for digital efforts that ‘goes with the grain’

  • Clarity on who is accountable for what, and where the buck stops

  • Right competencies in right place to ensure successful execution

  • Know starting position on levels of current digitally related spend

  • Debate carefully ‘new toys’ versus driving adoption of existing

  • Create investment portfolio… from reinforced basic service delivery all way to latest mobile experiments


O rganisations have many different definitions of digital

1

Organisations have many different definitions of digital

1

CUSTOMER/CHANNEL/PRODUCT RELATED DIGITAL INNOVATIONS

Customer portal

Social media

Advisor portal and tablet interface

New digital products (e.g. Telematics)

Distributor management

Lead generation/prospect management


O rganisations have many different definitions of digital1

1

Organisations have many different definitions of digital

2

INCLUDE BROADER SET OF APPLICATIONS?

1

CUSTOMER/CHANNEL/PRODUCT RELATED DIGITAL INNOVATIONS

Customer portal

Social media

Advisor portal and tablet interface

New digital products (e.g. Telematics)

Distributor management

Lead generation/prospect management

Policy systems

Enterprise components

Data management

Business support solutions


O rganisations have many different definitions of digital2

1

Organisations have many different definitions of digital

3

INCLUDE IT INFRASTRUCTURE AND ENABLING TOOLS?

Hosting

Network

Workplace

2

INCLUDE BROADER SET OF APPLICATIONS?

1

CUSTOMER/CHANNEL/PRODUCT RELATED DIGITAL INNOVATIONS

Customer portal

Social media

Advisor portal and tablet interface

New digital products (e.g. Telematics)

Distributor management

Lead generation/prospect management

Policy systems

Enterprise components

Data management

Business support solutions

System management tools

IT development tools

Security and access management

Middleware


K ey to identify and align upon priority areas for digital transformation

1

95_84 99_84

Key to identify and align upon priority areas for digital transformation

ADVISED

GUIDED

ONLINE PORTAL

ILLUSTRATIVE

Insurance example

DISTRIBUTION

& CUSTOMER INTERFACE

Individual

Retirement

Corporate

SME

VERTICAL PROPOSITIONS

CUSTOMER

BUSINESS COLLABORATION

SHARED SERVICES

SHARED SERVICES

IT INFRASTRUCTURE & ORGANISATION

Significant digital capability gaps

Digital needs will impact all existing plans

Ratify existing plans


Digitalisation can make a significant contribution to companies ambitions

2

7_84

Digitalisation can make a significant contribution to companies’ ambitions

Digitalisation plays a fundamental role

Life Co example

Digitalisation plays a supporting role

Front-line

Enable customer self-service

Move customer contact to lower cost channels

Increase product cross-sales

Differentiate through online/ mobile

Eliminate critical system incidents

Best channel-partner interface

Enable growth initiatives

Best advisory tools/apps

Decrease infra-structure maintenance cost

Decrease process and re-work cost

Stronger customer relation-ships

Most effective pricing/ under-writing

Back-office

Increasedrevenues

Lowercost


G oals leading banks are establishing to move self service to the next level are extremely bold

2

Goals leading banks are establishing to move ‘self service’ to the next level are extremely bold

ILLUSTRATIVE

transactions with potential for self-service

STRIVE TO DECREASE

non-self-service transactions

BEYOND 2013

WHAT CAN BE DONE IN 2013

WHAT HAS BEEN DONE

Potential to

self-serve via:

Online/mobile

New functionalities being delivered

CDM only

ATM/CDM

Limited potential to self-serve


We see 5 approaches to managing digital initiatives

3

8_84

We see 5 approaches to managing digital initiatives

Level of central control

Insurance example

A

B

C

D

E

Inspiration from Global,

Local organisations deliver

Targeted standardised/ shared investment

Systematic, global standardisation and roll-out

Active facilitation of global best practice sharing

Central innovation team and seed capital

  • Initiation, funding and delivery resides with countries /regions

  • Full autonomyto use own local application solutions

  • Global formulates global vision, goals and global idea exchanges

  • Global structure and resources to support int’l alignment and best practice sharing

  • Global plays a role in establishing test pilots

  • Funding and delivery resides with local

  • Full autonomyto use own local applications

  • Global funds and manages a portfolio of innovation ideas

  • Central innovation team(s) to incubate ideas for broader local application, acts as catalyst for invention

  • Global actively supports shared investment priorities

  • Select areas governed by global architecture and compliance

  • Key systems platforms centrally owned and managed

  • Autonomy only for select local app.

  • Global strategy, architecture and compliance policies

  • One global systems platform

  • Global formulation and funding of initiatives

  • Process ownership roles installed locally


One of hottest digital ceo debates we observe is adoption of the old versus investment in the new

4

One of hottest digital CEO debates we observe is ‘adoption of the old’ versus ‘investment in the new’

RETAIL BANKING EXAMPLE

Self-service adoption targets

ADOPTION LEVERS

1

2

3

4

Promotion & communication

Staff training &

customer education

Incentives

Enforcement &

penalties

  • Staff-led discussions with customers using in-branch technology

  • Security and fraud awareness campaigns

  • Online splash screens

  • Leaflets& signage

  • Advertisingcampaigns

  • Financialrewards to switch to paperless billing

  • Higherinterest rates on accounts opened online

  • Higher service fees for assisted transactions

  • Restrictionson low-value assisted cash withdrawals

SUPPORTING CAPABILITIES

Technology and hardware

Technology and hardware

  • New ATM/CDM machines; Functionality across all channels

Management information

Technology and hardware

  • Goals and quantifiable metrics; Reporting and data gathering

Branch design and format

Technology and hardware

  • ATM/CDM positioning and signage; Tellers location


Harnessing the potential of digital in financial services

4

Part of digitalisation budgets must improve IT service quality basics to satisfy increasingly demanding clients

RETAIL INSURANCE EXAMPLE


Harnessing the potential of digital in financial services

4

4_84

Bold CEOs are stepping-up to a ‘digital investment bubble’ but holding divisional execs accountable for RoI

BU1 Budget

Key

BU1 to be approved

CASH NUMBERS

BU1 incremental

~XXM spend above approved current plan in Year 2, with additional XXM IT Strategy recommended spend

BU2 Budget

BU2 to be approved

BU2 incremental

Customer-facing; incremental

Shared incremental

IT incremental


Where are the digital execution challenges

Where are the Digital Execution Challenges?

Scope & focus

Scope & focus

Ambition

Ambition

  • Clear and unambiguous definitions of what is to be considered ‘digital’

  • Solid understanding of likely impacts of key marketplace and technology trends

  • Prioritised sense of the most important challenges and gaps

  • Translation of digital potential into business impact

  • Clarity on choices associated with differing levels of digital ambition and investment

  • Quantitative goals that will excite and engage the business

  • Are you working with clear and ambiguous definition(s) of what digital means?

  • Are SL’s digital efforts ‘go to market’ and distribution focused or do they extend to product and policy space?

  • Are infrastructural prerequisites such as IT architecture considered within scope?

  • Is there agreed linkage from SLs stated business ambitions through to the role that digital capabilities must play?

  • To what extent have these requirements been driven down into concrete KPIs?

  • How have any conflicts between competing ambitions been resolved?

Governance & capability

Governance & capability

Investment principles

Investment principles

  • Organisation model for digital efforts that ‘goes with the grain’

  • Clarity on who is accountable for what, and where the buck stops

  • Right competencies in right place to ensure successful execution

  • Know starting position on levels of current digitally related spend

  • Debate carefully ‘new toys’ versus driving adoption of existing

  • Create investment portfolio… from reinforced basic service delivery all way to latest mobile experiments

  • What are the role and associated decision accountabilities in different geographies?

  • To what extent are country and product groups aligned and engaged with digital efforts?

  • What, if any, have been resourcing and capability related ‘pinch points’?

  • Is there a clear point-of-departure factbase on current SL digital expenditure?

  • How are Divisional executives being held accountable RoI on their share of the transformation investment?

  • Will further waves of investment be required?


  • Login