CFC_Oh_What_a_Year_33

8/2/2019 CFC_Oh_What_a_Year_33

1/33

FINANCIAL SERVICES PRACTICE

COUNCIL ON FINANCIAL COMPETITION

Oh What a Year!

CFCs Observations on Consumer BankingInnovation and How It Is Reshaping Growth

15 December 2011


2/33

A FRAMEWORK FOR MEMBER CONVERSATIONS

The mission o the Corporate Executive Board is to create revolutionary economic advantage or leaders o the worlds great enterprises by enabling them to act with unparalleled

intelligence and confdence. We lit their perormance at key decision points and career moments by delivering insight drawn rom the most powerul global executive and proessional

network. When we bring leaders together, it is crucial that our discussions neither restrict competition nor improperly share inside inormation. All other conversations are welcomed and

encouraged. We look orward to the continued and robust sharing o insights by member executives and proessionals at Corporate Executive Board events.

COPIES AND COPYRIGHT

As always, members are welcome to an unlimited number o copies o the materials contained within this handout. Furthermore, members may copy any graphic herein or their own

internal purpose. The Corporate Executive Board Company requests only that members retain the copyright mark on all pages produced. Please contact your Member Support Center

at +1-866-913-6450 or any help we may provide.

The pages herein are the property o The Corporate Executive Board Company. Beyond the membership, no copyrighted materials o The Corporate Executive Board Company may

be reproduced without prior approval.

LEGAL CAVEAT

The Council on Financial Competition has worked to ensure the accuracy o the inormation it provides to its members. This report relies upon data obtained rom many sources, however,

and the Council on Financial Competition cannot guarantee the accuracy o the inormation or its analysis in all cases. Furthermore, the Council on Financial Competition is not engaged

in rendering legal, accounting, or other proessional services. Its reports should not be construed as proessional advice on any particular set o acts or circumstances. Members requiring

such services are advised to consult an appropriate proessional. Neither The Corporate Executive Board Company nor its programs are responsible or any claims or losses that may arise

rom a) any errors or omissions in their reports, whether caused by the Council on Financial Competition or its sources, or b) reliance upon any recommendation made by the Council

on Financial Competition.


3/33

3

From the COUNCIL ON FINANCIAL COMPETITION

o the FINANCIAL SERVICES PRACTICE

www.cc.executiveboard.com

2011 The Corporate Executive Board Company.

All Rights Reserved. CFCR2009211SYN

ROAD MAP FOR THE PRESENTATION

Six Industry

Growth Bets

The Innovation

Imperative

The Market

Intelligence and

Innovation Showcase


4/33






4

WHY ALL THE URGENCY?

Percentage of Consumer Financial Services Executives

Becoming a More Agile

and Innovative Consumer

Banking Group is the

top area of focus for

Consumer Financial

Service Executives

across 2012.

Sixty-three percent of

Executives indicate that

becoming more innovative is

a major focus over the next

year, while 52% of executives

say that developing

innovative and appropriate

products and services is top

of mind.

Becoming a More Agile and Innovative Consumer Banking Group

Delivering a Consistent Customer Experience Across All Channels

Implementing a segment-Focused Sales and Service Model

Developing Innovative and Appropriate Products and Services

Boosting Sales Productivity o Branch Sta

Executing a Compelling Value Proposition Through Non-Branch Channels

Deploying Next Generation Customer Satisaction and Loyalty Strategies

Growing the Wallet Share o the Mass Auent Consumer

Leveraging Social Media Capabilities

Reducing Costs in Sales and Customer Service

Redesigning the Branch Network to AccommodateChanges in Consumer Preerences

Simpliying the Consumer Product Set

Selling Products rom Outside o the Branch Channel

Implementing Cost-Eective Service Models or Core Customers

Generating Strong Returns rom the Small Business Segment

Implementing a Mobile Channel Strategy

Introducing More Flexible Branch Sta Rolesto Drive Improved Cost Eciency

Entering New Markets to Drive Growth

Reducing Branch Network Expense

Inuencing the Loyalty o the Gen X Consumer

Which o the Following Business Objectives Will Be a Major Focus or You and Your Team During the Next 6-12

Months? (Please Select All that Apply)

63%

61%

58%

52%

50%

49%

48%

45%

44%

40%

37%

37%

35%

35%

34%

33%

28%

28%

27%

20%


5/33






5

SO LONG TO ALL THAT

Euro Area: Consumer CreditAnnual Growth Rates at End of Period

Percentage

European and United

States economies face a

prolonged environment

of stagnant retail lending

growth.

Consumer credit growth

in the euro-zone shows

the same picture of at to

negative growth across the

past 24 months.

The synthetic growth in

retail lending linked to real

estate bubbles across many

developed economies will

require an extended period

of de-leveraging in orderto allow lending growth to

return to even modest levels.

(4.0)

(2.0)

0.0

2.0

4.0

6.0

8.0

10.0

August2005

August2006

August2007

August2008

August2009

August2010

August2011

Total Household Borrowing, United States, Quarterly

Billions of US Dollars

Q12005

Q22005

Q32005

Q42005

Q12006

Q22006

Q32006

Q42006

Q12007

Q22007

Q32007

Q42007

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

Q32009

Q42009

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

(600.0)

(400.0)

(200.0)

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

Source: European Central Bank, US Federal Reserve.


6/33






6

CHALLENGES ACROSS THE RETAIL FEE INCOME

SPECTRUM

Service Charges on Deposit Accounts, QuarterlyFDIC-Insured Institutions

Billions of Dollars

The fee income that

banks grew dependent

on over the last decade

is also under tremendous

pressure.

Most banks have not

introduced signicantly

new retail account

pricing architectures,

with requirements for

either signicantly higher

consolidated balances,

or substantial account

maintenance fees.

In other markets, shrinking

ratios of non-interest incomerepresent a tenuous position

for bank revenues.

Non-Interest Income as Share of Total Income

Australian Banks

Source: FDIC, Australian Prudential Regulation Authority.

10.53

10.8211.13

10.38

9.95

10.55

10.96

10.32

9.559.8

8.78

8.18

8.15

8.54

June2004

Oct.2004

Dec.2004

Mar.2005

June2005

Sept.2005

Dec.2005

Mar.2006

June2006

Sept.2006

Dec.2006

Mar.2007

June2007

Sept.2007

Dec.2007

Mar.2008

June2008

Sept.2008

Dec.2008

Mar.2009

June2009

Sept.2009

Dec.2009

Mar.2010

June2010

Sept.2010

Dec.2010

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

2008Q1 2009Q1 2010Q32008Q3 2010Q12009Q3 2011Q12008Q2 2009Q2 2010Q42008Q4 2010Q22009Q4 2011Q2


7/33






7

GLOBAL CRISIS OF CONFIDENCE

Condence in Financial Providers

Percentage of Global Consumers Ages 18 and Older Who Feel Condent/Uncondent in Financial Providers,

by Region, Q3 2011

Consumers globally

express a striking lack

of condence in nancial

institutions.

European and Latin

American consumers express

the lowest condence levels.

Although North Americans

personal nances may

be recovering slowly

from the nancial crisis,

these consumers express

somewhat higher condence

in nancial providers than do

consumers in other regions.

DevelopedMarkets

EmergingMarkets

Asia Europe Latin America Middle Eastand South

Arica

NorthAmerica

Confdent

Unconfdent(35) (31) (22) (45) (40) (25) (13)

11%

(46%)

14%

(45%)

16%

(38%)

8%

(53%)

10%

(50%)

17%

(42%)

20%

(33%)

46% 45%

38%

53%50%

42%

33%

Complete

or a Lot of

Condence

Little or No

Condence

Source: CEB Financial Services Practice, Consumer Financial Monitor, Q3 2011.


8/33






8

THE CUSTOMER HAS SPOKEN, AND HAS BEEN HEARD

Social Media Campaign for National

Bank Transfer Day

Campaign-Based Facebook Page

Social Media Campaign for Occupy

London

Campaign-Based Facebook Page

Source: Facebook, Bank Transer Day, http://www.acebook.com/Nov.Fith#!/Nov.Fith?sk=ino.

Source: Facebook, Occupy the London Stock Exchange,http://www.acebook.com/#!/occupylondon.

General Information:

Research your local

credit union options. Open an account with

the one that best suits

your needs. Cancel all automatic

withdrawals and

deposits. Transer your unds to

the new account. Follow your banks

procedures to close your

account on or beore 5November.

CFC View: Restarting the growth

engine will only happen if

innovation addresses real consumer

needs in more compelling and

eective ways.

Eorts to restore

growth must address an

increasingly energized

forcethe powerful voice

of the customer.

The rise of social media has

created an environment

where customers are gaining

veto power over changes

to the business model.

Hundreds of thousands of

Americans rallied in response

to Bank of Americas $5

debit card fee by signing a

petition through Change.org.

Occupy movements have

spread to dozens of cities

worldwide.

According to the Credit

Union National Association

(CUNA), 650,000 consumers

joined credit unions in

between Sept. 29 and the

rst week of November

many in reaction to thesocial media inspired Bank

Transfer Day.

Case in Point: New Fees Versus Social Media

Timeline of Events

30 September 2011

It is reported that the

largest US banks plan

to install monthly debit

card ees.

1 October 2011

Molly Katchpole, a

22-year-old college

graduate, launches an

online petition against

Bank o Americas

plan on Change.org

and gains 300,000

signatures.

4 October 2011

Bank Transer Day, a

consumer campaign

to transer accounts

rom large commercial

banks to credit unions,

launches on Facebook

and gains 55,000

supporters in three

weeks.

1 November 2011

It is reported that

several o Americas

largest banks retreat on

proposed monthly debit

card ees.


9/33

9







Six Industry

Growth Bets

The Innovation

Imperative

The Market

Intelligence and

Innovation Showcase


10/33






10

WHAT A DIFFERENCE FIVE YEARS MAKE

Comparison of Categories Proled in CFC Innovation Research Briefs

By Year

The landscape of

innovations has changed

dramatically over the

past several years, as

banks reinvent the

relationship between

products and deliverychannels.

Five years ago, the Councils

exploration of consumer

banking innovations focused

almost exclusively on credit

products and other core

oerings.

Today, driven by technology,

innovation is happeningrapidly across a range of

products, services, and

channels.

Financial Innovation Around the World

2006

Product Profle Categories

Card Products

Consumer Loan Products

Service Enhancements

Transaction, Savings, and Investment

Products

Oh What a Year! CFCs Observations on

Consumer Banking Innovation and How

It Is Reshaping Growth

2011

Innovation Categories

Mobile Applications and Payments

Online Banking

Branch Design

Social Media and Brand Awareness

Financial Education

Core Product

Disruptive Innovators


11/33






11

THE INNOVATION SPECTRUMCFC looked across sevencategories of innovations,

both for level of market

adoption and the degree

of change.

While core products show

renovation around pricing

and segmentation, the areas

of most rapid change and

greatest innovation are

social media and mobile

apps.

Empowered by low cost

delivery channels, disruptive

innovators are a growing

force around the peripheryof our industry.

Social Media

and Branding

Disruptive

Innovators

Mobile Apps

and Payments

Financial

Education

Branch

Design

Core Banking

Product

Online

Banking

Renovation Innovation

Degree of Change

Mature

Emerging

Market

Adoption


12/33






12

INDUSTRY GROWTH BETS

Observation

In an industry struggling

to nd sources of growth,

six key bets on growth

emerge from CFCs study

of innovation.

Technology-driven

innovations oer exciting

new possibilities for

creating relationships with

customers, building targeted

services and products, and

communicating the value of

what banks can do.

The growing role of

technology and social media

suggests two key outcomes:richer customer relationships

empowered by new ways

of engaging, and increasing

competition around

technology-driven customer

experience.

Representative Example

#1 Go Where the Customer Is(Re)engagement Starts byFitting into Customers Lives

#2 Get PaidServices For a Fee is the New Free

#3 Join Networks, Make FriendsNet Promoter and Reerrals

Have a Multiplier Eect on Advocacy

#4 Meet Segmentation ExpectationsCreate Products That

Better Align with Segment Behaviors and Needs

#5 Be SocialNew Media Levels the Playing Field or Brand

Identity

#6 Speak Consumer, Not BankerBrands Imitate the Language

o Retailers


13/33






13

GROWTH BET #1: GO WHERE THE CUSTOMER IS

Social Network Penetration in Europe

Europe and Select Countries, 2010

(Re)engagement starts

by tting into customers

lives.

As traditional face to face

relationships decline, the real

challenge is capturing timeshare within customers day-

to-day activities online.

To build relationships and

serve customers well, banks

have always sought to t

into customers lives. This

used to mean building a

branch between where they

live and where they work.

Now it means integratinginto their lives online.

While social media

penetration is reaching

a plateau, activity and

commercial engagement

through such platforms is

still growing rapidly. US Monthly Time Spend Online

Millions of Hours

84%

92%

91%

88%

87%

85%

85%

84%

81%

75%

906

407329

176

All o Europe

Turkey

Poland

United Kingdom

Finland

Portugal

Spain

Ireland

France

Austria

SocialNetworks

Games E-Mail Portals

Source: Nielsen.


14/33






14

GET IN THEIR WAY

Open Account Via Twitter, BNP Paribas

Capturing time share

means integrating into

the customers day to day

activities across the web.

Banking related activities

happen during scattered

moments of free time,

meaning the most eective

strategies will incorporate

the most frequently visited

areas of the internet.

By integrating normally

time-consuming activities

like opening an account

or switching banksinto

high trac areas of theweb, banks are providing

customers a new level of

convenience.

Prospective BNP Paribas clients

simply have to send a tweet andin response, a BNP Paribas team

will begin the account opening

procedurals with the support

and approval of that customer.

Users can click to be connected to a live banker.

Switch on Facebook, ASB

Source: BNP Paribas Twitter; ASB Bank Facebook.


15/33






15

KEEP THEM ENTERTAINEDAND ENGAGEDTime share is also wonby creating space for

rapt attentionthrough

gaming, information, and

interactivity.

First Direct in the UK created

a microsite where customers

can share and recommend

experiences from restaurants

to travel, with the goal of

providing a platform that

helps their customers make

informed decisions about

where they spend their time

and money.

AKBanks Chasing theRed Facebook game was

based on the Pacman

concept. Promotions for loan

campaigns and interest rates

were presented in between

levels.

Commonwealth Banks

Branded YouTube channels

feature an enhanced Google

Analytics service that

enables in-depth analysis

of what videos are popular

to which groups, and

even which segments of a

video are the most viewed,

rewound, or skipped to.

Little Black Book, First Direct

Chasing the Red Facebook Game, AK Bank

Source: Wells Fargo; Little Black Book, First Direct; AK Bank Facebook, Commonwealth Bank

First Direct uses Google Maps and users can

manipulate the geography they are interested in.

Turkish userschase needs on

dierent levels,

such as education,

vacation, and home

renovations.

Branded YouTube channels, which are available to

institutions that purchase a large amount of advertising via

Google and Twitter, provide richer customer experiences

than traditional television and print ads.

Branded YouTube Channels, Commonwealth Bank


16/33





All Rights Reserved.CFCR2009211SYN

16

GROWTH BET #2: GET PAID SERVICES FOR A FEE

IS THE NEW FREE

Basic Checking Account Fees1

Top 25 US Banks

Banks are increasingly

making the true value of

relationships explicit to

customers.

As regulation on fees

increases and pressure fallson new sources of revenue,

the eld is still unsettled

on exactly what a basic

transactional account is

worth.

In the United States, since

2009, the availability of

free non-interest checking

accounts has fallen by over

30%.

Percentage of Non-Interest Checking Accounts That Are Free of Maintenance Charges

By Year

$15

$12 $12$11

$10 $10$9 $9

$8$7 $7

$5 $5 $5 $5$4

$3

$0 $0 $0 $0 $0 $0 $0 $0

BankA

BankB

BankC

BankD

BankE

BankF

BankG

BankH

BankI

BankJ

BankK

BankL

BankM

BankN

BankO

BankP

BankQ

BankR

BankS

BankT

BankU

BankV

B

ankW

BankX

BankY

76%

65%

45%

2009 2010 2011

1 Pseudonym.

Source: BankRate.com.


17/33

17






COMPETING ON TRANSPARENCY OF PRICE AND VALUE TRANSPARENCY

UBanks Interest Rates on Term Deposits Ally Banks Checking Account Fees

Source: UBank, http://www.ubank.com.au/ub/web/term-deposits/term-deposits-compare-our-rates (13 December 2011). Source: Ally Bank, http://www.ally.com/bank/interest-checking-account/#tabs=ees (13 December 2011).


18/33






18

Net promoter and

referrals have a multiplier

eect that was almost

unimaginable just a few

years ago.

As they do with all retail

experiences, your customers

are talking about your bank

on social mediathe good

news is that most of what

they are saying is good.

While many fear the risk of

negative backlash through

social media, the vast

majority of customers report

making positive or neutralcomments, or saying nothing

at all.

More than half of active

social media users spoke

or wrote about their bank.

Which of the Following Statements Best Describes How You Have Spoken or Written to Friends, Family,

or Colleagues About the Bank?

Speaking or Writing About the Bank by Social Media Use

Percentage of Banking Product Customers

Non-User

Lurker

Contributor

40% 60%

57% 43%

61% 39%

Did Not Speak About the Bank

Spoke About the Bank

Spoke or Wrote Negatively About the Bank

Spoke or Wrote Neutrally About the Bank

Spoke or Wrote Positively About the Bank

Did Not Speak or Write About the Bank

6%

16%

13%

17%

15%

18%

17%

26%

30%

60%

43%

39%

n = 2,863.

GROWTH BET #3: JOIN NETWORKS, MAKE FRIENDS


19/33






19

EXPANDING YOUR REACH

Share Discover, Discover

Referrals are no longer

one to one, as social

media creates the

opportunity to incent

customers to broadcast

their brand advocacy.

Discovers Share Discover

promotion oers current

card holders a bonus for

recruiting friends to become

card members.

CIMBs Facebook app

encourages sharing and

advocacy in order to build

up CIMB store credits or

FUNds that can be used topurchase highly discounted

goods in a competitive,

auction-like atmosphere.

American Express spreads

its brand by gaining visibility

on its users homepages.

It also collects personal

information about its

customers through their

other likes and can tailor

products accordingly.

Participants share via Facebook, Twitter, or e-mail and

will be awarded either $50 in Cashback Bonus or

5,000 miles per successful card application.

FUNds are accumulated by sharing the application

and inviting others to join.

Like, Link, Love, American Express

CIMB Youth Facebook Page, CIMB

Source: Discover, CIMB Facebook Page, and American Express Facebook Page.


20/33






20

GROWTH BET #4: MEET SEGMENT EXPECTATIONS

Percentage of People Using the Internet, by Income, United States

2010

Create products that

better align with segment

behaviors and needs.

A clear segment of self-

service focused customers

is emerging. This group isa mix of younger segments

and customers with

signicant investable assets.

The emerging and

mass auent are more

inclined to incorporate

remote technology into

their banking, creating a

requirement for tech-based

products to serve thesegroups.

Customers Who Prefer to Research Financial Products Online, by Investable AssetsUS, Canada,

and Australia

2010

Less Than $20,000 $25,000 $100,000 $100,000+

Ages 18-34

Ages 35-54

Ages 55+

Source: 2010 CEB Financial Series Customer Experience Survey.

Less Than $30,000

per Year

$30,000$49,999 $49,999$74,999 $75,000+

Source: Pew Research Center.

63%

84%89%

95%

52%

36%

29%

48% 48%

34%

45%47%

39%


21/33






21

WHAT THEIR iPAD SAYS ABOUT THEM

iPad App, Citibank

Banks are making a

clear bet with tech

savvy consumers.

Citibank iPad app users

download the application

from iTunes to their device.Customers then manage

their personal nances

through the touch-screen

functionality of iPad.

Standard Chartered

customers download the

application from iTunes and

can use Breeze through their

iPhone, iPad, or online.

Source: Citibank and Standard Chartered.

Breeze, Standard Chartered

Aside from standard mobile app features,

Breeze to choose retail locations and

purchase items before entering the store.

Breeze also incorporates a living social

networking function.

Interactive

chats highlightcash ow,

balance

trends, overall

debt and

more.


22/33






22

AND HOW BANKS ARE USING THAT INFORMATION

TO SEGMENT

RFID Chips, Standard Chartered

Banks are developing

tech products and

services geared toward

a mass auent audience.

In Korea, Standard Chartered

distributes RFID chips toselect members of its top

three banking tiers. Upon

entering the branch, these

premier customers presence

alerts both the branch

manager and the on-duty

relationship manager.

Ixe oers customers

nancial analysis through

weekly podcasts that covertopics such as Market

Analysis, Economic Analysis,

and Portfolio Investment,

to improve consumers

investment decisions.

Ixe Vision, Ixe

Source: Standard Chartered and Ixe.


23/33






23

THE UNDERBANKED OPPORTUNITY

2010 Underbanked Market Size Estimate

Fees and Interest, $45 Billion (Total)

Customers also self-

segment by their lack

of product and services

usage.

On the other end of

the segment spectrum,customers that do not

have access to technology

or even simple forms of

products and services

the underbankedare an

important revenue segment.

It is estimated that in 2010,

nancial services providers

in the underbanked

marketplace received$45 billion in fees and

interest.

Within credit and payment

services, internet payday

services grew 35% between

2009 and 2010 and General

Purpose Reloadable (GPR)

prepaid cards grew 33%.Underbanked Market Revenue Growth 20092010

Categories Without Strong Historical Data Were Excluded

35%

33%25%

12%

6%2%

InternetPayday

Credit1 Payments2 Deposits3 Mortgage4

GPRPrepaid

PayrollCards

Walk-InBill Pay

Rent-to-Own

Merchandise

PawnShop

Lending

YoYGrowth

FeesandInterest($B)

Credit

Payments

27

8

1

9

Source: Core Innovation Capital and Center or Financial Services Innovation, Underbanked Market Data Report, 2011.

1 Credit includes: Overdrat, Rent-to-own merchandise fnancing, Payday lending, LMI credit card, Pawn shop lending, Internet payday, Auto title lending,Credit scoring, Reund anticipation loan.

2 Payments includes: Remittances, Walk-in bill pay, Check cashing, GPR prepaid, Payroll cards, Money orders.3 Deposits includes: Checking, Savings, CDs.4 Mortgage includes: LMI mortgage.

Who Makes Up the Underbanked Segment?

The FDIC defnes underbanked consumers

as individuals who have a checking or

savings account but also rely on alternative

fnancial services. These services include

products such as money orders, check

cashing, payday loans, rent-to-own

agreements, and pawnshops.


24/33






24

THE UNDERBANKED OPPORTUNITY IN DEVELOPED

MARKETS

Now Banking, Regions Bank

Rened understanding of

lower-income segments

is creating growth

opportunities in prepaid,

reloadable cards, check

cashing, and quick bill

pay.

Regions Now Banking

program is a suite of non-

traditional core products

designed with the

underbanked in mind.

Capital One introduced

the Cash Rewards for

Newcomers with the newly

naturalized citizen in mind.It features multilingual

nancial educational services

provided by MoneyWi$e

to teach cardholders the

meaning of US credit and

how to build it.

Cash Rewards for Newcomers, Capital One

Source: Regions Bank and Capital One.

Regions oers a General Purpose Reloadable (GPR)

Card that allows users to cash checks onto the plastic

with no need of a checking account and no possibility

of running into the red.

Includes easy step-up and standard rewards for

customers with little to no credit history.


25/33






25

BURGEONING NON-TRADITIONAL ACCESSDriven by mobiletechnology, prepaid

dominates the

global market for

the underbanked.

In emerging, markets,mobile technology is

rapidly changing traditional

concepts of nancial

distribution and access.

The widespread use of

mobile phones now allows

for prepaid remittance,

payment and savings

accounts to become the

main form of nancial accessin the developing world.

To support mobile

technology, banks also rely

on mini- or mobile-branches

to reach segments of the

population removed from

urban centers.

Source: Mas, Ignacio, The Economics o Branchless Banking, Innovations: Technology, Governance,Globalization, 2009, Vol.4, Issue 2, pp. 5775.

5. South Africa: Several mobile banking

projects launched, led by banks, mobile

service provider, and independent

providers6. Uganda: Operator MTN testing Mobile

Money

7. Kenya: Successul M-PESA service by

Saaricom

8. Tanzania: Vodacom introduced M-PESA

service; Z-PESA launched by Zantel

1. Senegal: Mobile operator VeriFone and

two transaction switching companies

deliver mobile money

2. Ghana: Txt-n-Pay service Zain pilotingmobile money

3. Nigeria: Moneybox Arica introduced

mobile money

4. DR Congo: Early Celpay mobile service

rom Celnet

Mobile operator Zain launching mobile

banking services as Zap Money in Kenya,

Tanzania, Uganda, and Madagascar.1. Russia: Operator Beeline and

Tavrichesky Bank rolling out mobile

banking platorm

2. Afghanistan: Mobile M-Paisa servicelaunched by Roshan

3. Mongolia: XAC Bank is launching

mobile banking service or rural

banking

4. Pakistan: Telenor/Tameer Bank rolling

out mobile and POSbased banking

service

5. Nepal: Bank o Kathmandu exploring

branchless banking solutions

6. Philippines: Two leading mobile

operators exploring mobile money models

7. Vietnam, Cambodia: Mobile banking

services underway rom WING

8. Bangladesh: Grameen Phone and two

banks have proposed mobile bankingservice, pending regulation

9. Sri Lanka: Dialog/NDB Bank launched

mobile banking service

10. India: ICICI and Vodaone

collaborating on mobile prepaid and

saving accounts

11. Maldives: Nationally interoperable

mobile banking system being driven

by central bank

Orange launched mobile banking services

in Ivory Coast; Senegal, Egypt, and Jordan

in process

1. Mexico: Mini-branches, branchless, andmobile banking platorms unolding

amid regulations

2. Colombia: Leading banks rolling out

POSbased agent networks, with

regulatory ocus on underserved areas

3. Peru: Leading banks rolling out POS

based agent networks

4. Bolivia: Branchless bankingexperimentation

5. Chile: POSbased agent networks

becoming widespread, with ocus on

basic accounts

6. Brazil: Widespread POSbased agent

networks

6

2

3

5

4

1

1

2

3

4 56

7

8

9

1011

1

23

4

5

67

8


26/33






26

GROWTH BET #5: BE SOCIALNEW MEDIA LEVELS

THE PLAYING FIELD FOR BRAND IDENTITY

Top 25 Financial Institutions on Facebook, by Number of Likes

Banks Below the Top-100 by Assets Globally Are Highlighted

Social media has

signicantly enhanced

the ability to capture

voice far beyond

marketshare.

As a medium that rewardsauthenticity over monetary

investment, social media

oers smaller banks the

chance to compete with

bigger rivals for brand

identity.

The list of the top 25 banks

by Facebook followers is

dominated by banks with

smaller footprints.

Of the top 25 social media

FIs, 12 institutions are not

part of the worlds top 100

banks by assets.

Rank Bank Name "Likes" on Facebook Rank Bank Name "Likes" on Facebook

1 Chase 2,900,200 14 Citigroup 197,400

2 American Express 2,428,100 15 USAA 193,400

3 Capital One 1,606,500 16 GTBank 189,800

4 Barclays 930,100 17 KBANK Live 182,000

5 RBS 627,000 18 Finansbank 158,800

6 CIMB 601,700 19 BNP Paribas Net 153,600

7 Akbank 542,200 20 Banco Popular (PR) 148,0008 Garanti 524,600 21 Santander (Spain) 137,100

9 Mitiempo 372,500 22 Giro Sucht 134,600

10 Visa 311,300 23 Mastercard 134,400

11 Bank of Georgia 296,000 24 Bank Constanta 130,200

12 JSC TBC Bank 279,600 25 Isbank 108,900

13 Interbank 201,100

Source: RBI and CFC Analysis.


27/33






27

AMPLIFYING THE PERSONAL VOICE

GT Bank Website Banner

Social media allows

banks to put an

authentic, personal

voice on communications

to a wide audience.

GT Bank in Nigeria createsdynamic Facebook, Youtube,

and web channels.

GTBanks CEO collects

questions from customers

and Facebook fans via

an online form and then

responds, personally and

in-depth, with 15-minute

YouTube video links placed

directly on each participantsFacebook wall.

The Banks Facebook wall

is interactive and updated

regularly with interesting

content. GT links information

about bank access to these

ads.

...And by all means remember that our electronic

channels are available for your use all weekend long.

GT Bank Branded YouTube Channel GT Bank Facebook Ad

Source: GT Bank Website, YouTube, and Facebook.


28/33






28

BUILD AN IDENTITYWITH EASE

Capture the Tag Campaign, O Bee Credit

Union

Technology and social

media allow small rms

to create an identity

for themselves and

for bigger players to

make themselves more

community-focused.

O Bee Credit Union ran a

promotion where customers

use their phones to scan

MS Tags placed around

the community at local

businesses.

Montana 1st Credit Unions

BoringIsSexy.com uses

innovative marketingconcepts (including URL-

only, teaser billboards)

to pull trac not toward

the companys website

but rather away from it

and onto a simpler but

comprehensive, engaging

but consistently on-point

microsite.

Umpqua Bank has launched

Facebook pages for each

of its branches, creating a

personal, neighborhood feel

to a large regional bank.

Source: O Bee Credit Union and Montana 1st Credit Union, Umpqua Bank.

Boring is Sexy.com, Montana 1st Credit Union

Website

Representative Examples of Locally Specic E-Strategies

Umpqua Bank


29/33






29

GROWTH BET #6: SPEAK CONSUMER, NOT BANKER

Bank P2P Payments Platforms

Banks are making

themselves more

consumer-friendly by

learning to imitate the

language of non-banks.

In introducing new productsand services, banks are

moving away from their

traditional image in favor of

new, specialized branding.

New products like payments

systems are receiving

specialized branding, making

the bank itself an external

entity.

Kaching users can make

transactions immediately,

or generate a unique

code for recipients which

allows them to access the

payment online at a later

time. Recipients dont have

to be Commonwealth Bank

customers to receive funds

via Facebook and e-mail.

ANZ chose to name their

P2P payments platform

goMoney instead of a more

formal or traditional banking

title.


30/33






30

BANKING PRODUCTS REPACKAGED AS RETAIL

Retail-styled Bank Product Oerings

Many banks are

beginning to package

their products less like

nancial services and

more like retail goods.

Marketing campaigns andonline account acquisition

are capitalizing on the

growing popularity of deal

of the day websites and

user-centric advertising.

These types of oers benet

both from the high-visibility

of deal of the day programs

(Groupon alone has 83

million subscribers), but alsospeak the language of the

technology-driven consumer.

CFC Predicts that an upcoming

major innovation in this vein will be

a shopping cart style interface

for online banking services, where

customers can clearly understand

the current and long-term value of

dierent products

ING Direct announced its annual Sale on

Money to coincide with the holiday retail

rush of Black Friday and Cyber Monday.

Webank partnered with Groupon, typically

an outlet for physical goods and experience

services, to oer an incentive to create an

account.

Source: ING Direct and Webank.


31/33

31







Six Industry

Growth Bets

The Innovation

Imperative

The Market

Intelligence and

Innovation Showcase


32/33






32

EXPLORE OUR ONLINE SHOWCASE

Snapshot of the Market Intelligence and Innovation Showcase

Our newly revamped

Market Intelligence and

Innovation Showcase

is regularly updated

with examples of global

product and service

innovation.

Search by product/service

or segment, or just browse

the current list of nearly 100

proles.

Categories include:

Online Banking Designs

and Services

Branch Designs and

Services

Mobile/Tablet Apps

Social Media Campaigns

and Services

Payments and Cards

Financial Management

Tools and Services

Transactional Accounts

Customer Support

.

.


33/33

FINANCIAL SERVICES PRACTICE

COUNCIL ON FINANCIAL COMPETITION



CFC_Oh_What_a_Year_33

Documents

Transcript of CFC_Oh_What_a_Year_33