The Technology Shift. Rise of The OMNI Channels · Asia/Pacific set to increase 2) Consumers More comfortable with BIG / STRONG institutions ... Payments 13% Australia US$10(3) Billion

Cyrus Daruwala, Managing Director@ Cisco Innovate

The Technology Shift.

Rise of The OMNI Channels

© IDC Financial Insights Page 2

What the 100 of Us Do WorldwideResearch & Advisory On Outsourcing / In sourcing Performance

Benchmarking IT Optimization Virtualization Software as A Service

New anti-crisis regulations Big Data & Analytics Information & Data Security G. R. C Enterprise Risk Management

Research & Advisory On Vendor Selection &

Management Enterprise Info

Management Solution Selection

Vendor Consolidation Human Capital

Development

On Boarding Innovation Customer Data

Integration Single Customer View Channel Management

Channel Business

Research & Advisory On Research & Advisory On

250 Banks

160 Insurers


The MarketScape for 2013 / 2015

1) Number of players in Asia/Pacific set to increase

2) Consumers More comfortable with BIG / STRONG institutions

The New Norm

3) The Rise of the Asian “Super Regional” Firms


Weaker Customer LoyaltyThe post – crisis “Smarter Customer”

4) Has a tendency to churn

5) Wants Multiple Touch Points & Consistency

6) Wants to be KNOWN


Emerging Technology Phenomena

7) Web 3.0

8) Cloud / Managed Services

9) Big Data & RT Analytics


Continued Emphasis on Risk & Compliance

10) Spending on risk & compliance continue to dominate IT budgets

11) Financial & Market risk (Solvency II) becomingincreasingly crucial

12) IT & Ops Risk come up Tops. Regulators now Run the Firms!


** All monetary units are in million USD

BFSI IT Spending Pool Pr

ojec

ted

CAG

R (5

yrs)

, 201

2-17

Overall IT Spending in US$ millions, 20110%

5%

10%

15%

20%

25%

0 2000 4000 6000 8000 10000 12000 14000 16000 18000

China

Australia

India

Korea

Indonesia

Thailand

Malaysia

Singapore

Hong Kong

Taiwan

New Zealand

ROAPPhilippines

Vietnam


How The (New) IT & Ops $$ Are Being Spent

Multi Channels & Distribution28%

Business Process Re-engineering12%Core /Legacy

Refreshment / Replacement28%

EnterpriseData Management14%

Administration &Reporting5%

Payments13%

AustraliaUS$10(3) Billion

Singapore (regional)

US$4(1) Billion

IndiaUS$5 (2) Billion

ChinaUS$16(4) Billion

Thailand, Indonesia, Malaysia are all in excess ofUS$2(1) Billion


IT optimization Virtualization Unified

Comms Pay Per Use Right Source

M Commerce Social

Business Mobile

Computing MERCHANTIZI

NG Biometrics P-2-P Pay

Core Business Exp

Shed Non Core Bus

Reaching for Others’ market share

M & A !

IT & OperationalSecurity

Compliance New G.R.C

Mandates PCI DSS

The Drivers behind the IT & Ops spend


Key ‘Operational Issues’ for CXOs

Human Capital Management (COO) 15%

Cost and Performance Management (COO) 12%

Prioritization and Management of IT projects (CIO) 17%

Governance, Risk & Compliance(CRO/CFO/ COO) 29%

Cards, Payments, Lending (CIO/COO) 10%

Innovation and Market responsiveness10%

Business Process Improvements (CIO) 7%


Banks will spend >US$74bn globally for GRC

Consequently, spending on risk mgt technologies, services & talent is outpacing overall technology spend & will surpass US$74bn worldwide in 2013

Globally, this will average 17% of overall IT budget in 2013 on >7.1% CAGR

For some tier 1s with large compliance obligations, YoY increment could spike to >30% vs. 2012 levels (double of forecast for last year)


THIS DIVIDES YOU INTO 2 POOLS;

1. KEEP THE LIGHTS ON = BAU, BETTER SERVICE, BETTER COST MANAGEMENT, BETTER G.R.C.

2. GROWTH !!! = NEW MARKETS, NEW PRODUCTS, NEW CHANNELS !!


“I will never let any organisation that I work for get locked into proprietary hardware or software again…

I'll never tell my teams in the business that it will be weeks before we can provide them what they want ! ”

Michael HarteCIO, Commonwealth Bank of Australia

Pool 1


Pool 2 - The Rise of Generation Y

“KIPPERS”

1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000


Pool 2 - The Rise of Generation Y

Googling

Quickly scanning PC

screens

Gaming

Non-linear text reading

Music

Collective WorkMulti-tasking


Branch 2.0It’s here to stay

Branch growth in Asia/Pacific is at a record-low of 1.8% YoY



BUTwe are seeing are new things



“Flagship” banking superstores

Customer-pulling Experience-centered

Supported by dispersed network of back-offices/datacenters

Fostering fewer, deeper relationships

Low-density client creation network

Product-pushing Speed- and turnaround-centered

Supported by central back-office and remote database

Capturing low-margin, undertapped mass markets through low servicing overheads



A branch is aboutoriginating accounts & relationships

not just servicing themrelationships

“Local” branding Crowdsourcing


“Really a lot more self-service!” New gadgets After-hours activitiesAre we getting more “collective” at the branches?


It’s not a Music Store…..Its a FRANK Store


22

Applications, applications, applicationsFor Screenagers

http://www.gearyi.com/fresh/wp-content/uploads/2007/05/facebook1.jpg


Mobility

Social

Network

Real-time

Intelligence

Mobile Banking, Mobile Payments, Mobile Wallet, ..…What Will Stick ??


Unfortunately, Most Banks Confuse this with M banking !

It’s the Whole Social Experience

It’s the Merchant, Mall, Retailer and Bank Pool

Its Secure, Converged and Data + Voice + Video Enabled

M-Commerce is the Omni Channel !


Some Such As ANZ, CBA, SCB – Broke Away !


What do they do differently ??

PAY MOBILE NO# PAY ANYONE HYPER PERSONILIZATION ON MOBILE


Photo check deposit

Writing checks

Mobile Augmented Reality

Other capabilitieswe are seeing

AR refers to a display in which digital imagery, graphics, or information is superimposed on a view of the surrounding environment


WHAT REALLY WORKS FOR BOTH POOLS ??

1. GREED !2. FEAR !!


(A) Evolving regulatory framework

(B) Revolutionize fee-based income model

(C) Plays into new technologies & banking preferences:

Locational intelligenceLoyalty at point-of-salePersonal financial managementSocial media

Rise of the Non-Bank ..Banks !

© IDC Financial Insights Page 30 30

Rise of the Non-Banks - Lenders

Principles of social banking / insuringCommunities Underwrite the RiskYou are the Agent & The RecipientsNo intermediary fees

P2P Lenders & Insurers

Money Managers

Principles of Physical Cash CollectionCollective Community PoolsNo regulations …yet


Conclusion – Everybody Has A Sweet-Spot !!

DeploymentCost

BusinessRisk

BusinessValue

ReasonableCost

OptimalRisk

GreatestBusiness

Value

None Modest Moderate Radical

Degree of ICT Changes

-+

-+

-

+


Soo….What Can you Start With Tomorrow ?

Future-proof your Channel -Parameterize LOB, Away from Core

2

Align your ICT Capability to your Businesses Agility. Create New KPIs!

1

All new initiatives ‘must have’ a Mobility & Social media angle3


Cyrus Daruwala

Managing Director,

IDC Financial Insights

Email: [email protected]

Tel: +65 6829 7718

Documents

The Technology Shift. Rise of The OMNI Channels · Asia/Pacific set to increase 2) Consumers More comfortable with BIG / STRONG institutions ... Payments 13% Australia US$10(3) Billion