The Transformation in Retail Banking

0 Copyright 2016 FUJITSU

Fujitsu Forum 2016

#FujitsuForum


The Transformation in Retail Banking

Miguel A. Feu Gallego

Managing Director

Grupo Santander Global Account


Digital Waves

Online consumer business Hyperconnected World A huge impact to every industry

1st Wave

The Internet Connected, online

2nd Wave

The Mobile Internet Real-time, anywhere

3rd Wave

The Internet of Things and Big Data - Convergence of physical & digital

4th Wave

AI and Robotics Knowledge & automation


Organisations need to cross the chasm…

Technology adoption model: adapted from “Crossing the Chasm” by Geoffrey A. Moore, 2014

Entrepreneurs Start-Ups

R&D Shadow IT

Mainstream organisations and ICT departments The disconnect

...and embrace Fast IT


Digital Challenges:Our Approach to Digital

Leadership & Talent

Security

Complexity

Adoption

Organizations face difficult challenges in shifting to digital

Fujitsu Edge

Portfolio of technologies and services, driving digital transformation


Retail Bank: Situation, Trends, Decisions

Situation

Address new generation of customers.

Offering a better customer experience through new products and channels.

Fundamental concept of a trusted institution .

Pace of change is increasing rapidly.

Need to deepen customer relationships.

Megatrends

Industry Priorities Developing a customer-centric business

model. Optimizing distribution. Simplifying business and operating

models. Obtaining an information advantage Enabling innovation, and the capabilities

required to foster it. Proactively managing risk, regulations

and capital. Challenges Customer expectations and behaviors

evolve FASTER than Banks evolution path Evolve their customer experience to be

more female-friendly. Cyber security is paramount to rebuilding

the trust.

Winning decisions

Every bank will be a direct bank.

Branch service officers and bank customers use the same platform.

Branch will take over new roles.

Banks will organize themselves around customers instead of products or channel.

Expanded ATMs’ will be in-store or in other well-trafficked sites, and as valuable as marketing, sales, transaction and cash-handling points – perhaps even with dedicated staff.

Leaders will rapidly improve their footprints, reducing branch size and costs, introducing new models and migrating low value transactions to low-touch digital channels.


Our Vision for Digital

Our vision is to leverage the power of technology

to enable people to build a safer, more prosperous

and sustainable society. We call it a Human Centric

Intelligent Society.

Fujitsu is committed to fulfilling this vision by

working with our customers and partners to

generate greater business and social value.

Human Centric Innovation Driving Digital Transformation


Developing a customer-centric business model Real customer-centric business model

Who are their target customers? What is their value proposition to

those customers? What competitive advantages will

distinguish them in the market- place? A bank does not need to be all things to all people.

Customers are redefining their expectations

Multichannel access. Product simplicity. Seamless integration of a convenience,

personalization, accessibility and ease of use.

Flavours: “ Feel like their bank is anticipating their needs”, “They want transparency and no surprises in terms of fees”

Better customer experience leads to greater loyalty, advocacy and revenues.

Focus Points

Enhancing customer data collection. Evaluating bank performance,

metrics and best practices from customer viewpoint.

Allowing for increased customer choice in configuring product features, including pricing.

Using social media to monitor customer preferences.

Offering a mix of self-directed and personal interaction channels to customers.

Creating a flexible and agile product portfolio adapted to customer segment.

The winners of 2020 will develop a much deeper, holistic understanding of their customers. They will need to acquire, integrate and analyse multiple sources of internal and external data. They will be able to understand their customers’ needs, and be present with a relevant solution at the time of need. They will simplify their product sets. And they will redesign their core processes from a customer point of view. (Pwc Report Retail Banking 2020)


Battle Card for the Retail Banking Transformation Challenge

Win the fee war.

Be every place , work with the community .

Surviving banks will be low-cost producers

Fix the bad, fast.

Help your story get told.

Go digital but improve your human touch.¡¡¡¡

Battle Card


Redefinition of the branch Each bank will find their own model

Do-it-yourself branch

Full service Branch

Specialized Branch

Flagship Branch

• Enables customer to perform medium to complex operations

• Automation follows bank strategy and regulation with broad opening time

• Self-service supervised by an employee

• Sharing interest and relevant information that allow personalized advice to the client

• Spaces dedicated to meet new customer

Knowing customer: • by segment or type, such

as private banking and corporate banking.

• rural segment • corporate

• Where the physical combination and digital responds to the aim of enhancing the brand image and values of the bank

• Branding • Finantial Institution DNA

Agile Branch

• Dedicated to operations that don’t require personal attention

• Agility and immediacy are the key values.


Customer’s point-of-view

• Cosy and modern environment

• A place to be listened

• Same experience in all channels

• Pos-sales and complains support

Bank’s point-of-view

• Shorter Time-to-market

• Customer centred

• Sales and consultancy driven

• Technology based

• All channels seamlessly integrated

Focus: enhance the relationship with the customer

The Self service channel …as a pillar to the new Retail Banking Model


The Self service channel …as a pillar to the new Retail Banking Model

Fujitsu is delivering intelligent solutions for smart branches

• Multifunctional and highly available ATMs • Intelligent Capture • Dynamic Marketing • Complete line of terminals: computer, tablet, touch screen • Innovation and consultancy

Different approaches • Branding • Lab for technology

testing • Pilot for network

branches

Same guidelines • Techie • Wireless • Face to face • Customer centred • “Shop” and cosy • Innovation • Sales and consultancy

oriented • Modern and mobile


Profitability of the self-service channel Reduction of the current TCO and increasing income

Modernization of the self-service channel According to business, technological, functional, safety and regulations requirements

Focus on the business Assuming the achievement of the operational excellence in a Self-service Channel focused on customer

Service excellence in the self-service channel Ensuring a high level of service

The Self service channel Main challenges

1

2

3

4


ATM Manufacturer & Supply

ATM Refurbishment & Restyling

ATM Environment Certification & Testing

ATM Application Development & Support

ATM Middleware Development & Support

ATM Environment Audits

ATM Installs, Moves, Adds & Changes

Programme Management & Initiative Fulfilment

Cash Replenishment (through Partner)

ATM Customisation ATM Design

Proactive Monitoring & Automated Responses

Triage & 1st Level Remote Support

Incident Tracking & Management

Study Desk & Problem Management

Service Management & Reporting

On Site Engineering & Support

Cash Forecasting & Optimisation

H/W

ATM-as-a-Service Utility Model

H/W &

S/W H/W

H/W H/W

S/W S/W

CHANGE

CHANGE

CHANGE CASH

CASH

SUPPORT SUPPORT SUPPORT SUPPORT SUPPORT SUPPORT

Our solutions tackle two of the basic challenges faced by banks:

• Improving customer service through better access to and availability of key services.

• Enhancing the value of the branch

through freeing staff from transactional activities to focus on higher revenue sales.

Benefits • Increased Switch In • Increased Customer Satisfaction • Improved Cost income ratio • More Upsell and Cross Sell of products • Reduced time to launch new products

Enhanced ATM Support Services

Self Services Banking Solutions

Transformation around Retail Banking


Transactions absorption of low added value by the self-service channel:

• Free employees to assume a more sales/consultative role;

• Optimizes investment in branch networks;

• Enhances Customer Experience

The channel ROI is based on the achieved Absorption Rate

100% 85%

70% 68%

38% 25%

Branch 30%

Self Service 70%

Customers make the choice: they will only use self-service if it is easier, practical and more useful

Easier to use ATMs with better functions immediately benefits absorption, leading to greater efficiency and sales productivity at the branch

Absorption is the % of transactions done at the ATM vs the branch, during branch opening hours.

It is our main efficiency KPI.

2003

47%

2009

65%

2013

72%

The Self service channel Is a pillar to the new Retail Banking Model


Euro

Branch 4

Call Center 3,75

ATM 0,85

Online 0,17

Mobile 0,08

• A same operation made in the ATM can cost up to one fifth of the cost when executed in the branch. • The increase in the absorption rate leads to a better use of the investment of the network. • Current ATM models with new functions can offer a broader range of services to customers.

The increment in the absorption rate has a direct impact over the

network profitability.

Saving ~3,5€

“ Migrating low-added transactions to ATM channel will enable the new branch model, with sales-focused staff, supporting the bank’s strategy and also providing costs saving. “

The key: absorption rate Migrating operations


Highlighting ATM channel value Safe, flexible and available

In the operation’s migration process, the self-service channel must be a comfortable and safe experience to customers, provided by a omnichannel solution: hardware, software and services

An attractive channel: Clean, available, modern, customized

Quick: Easy to use, operations done quickly, connected with mobile

Intuitive. Friendly interface designed to customers

Humanized: Improves customer relationship

A CONSISTENT AND RICH EXPERIENCE

High capillarity

Broader opening time

Safe environment


Mobility solutions for self-service channel A safe and mobile experience at the ATM

Design, service and network monitoring. A complete solution from one vendor, taking advantage of synergys from a global leading company in IT solutions.

100% Fujitsu solution

Fujitsu is innovating the self-service channel to build a more efficient, flexible, modern channel and adapt it to current market needs, while searching for the best user experience.

Extended desktop: allows to operate with the ATM taking the complete application to your mobile device.

Mobile payment: operation that you perform from the mobile phone and generates a code, which you can use on a atm to withdraw.

Alert in your mobile phone and SmartWatch warns when your card is being used in a ATM, allowing to block it temporaly.

Mobile solution for field technicians a QR code displayed on the operator screen, shows ATM status, error details and solution.


CaixaBank: free to focus on core business

0

2000

4000

6000

8000

10000

12000

Approximately 1 in every €4 in Spain withdrawn comes from CaixaBank ATM

CaixaBank – highest Self-Service Channel ROI due

75% Absorption rate :

■ Enhanced customer experience

■ Maximised ROI investment in branch

■ Staff focused on value-added operations a.e. proactive selling .

■ Increase efficiency due reduce cost per earning ratio

Absorption = Branch Transactions during branch opening hours via self-service channel

75

70

65

65

55

50

45

40

3.5

3

2.5

1

2

1.5

Reducing transaction unavailability:

■ Increases absorption

■ Focus in the customer experience

■ Requires more than smart engineering

■ Requires careful planning, and ongoing optimisation.

Absorbtion Non Availability

Non Availability (%) Absorbtion (%)

Source: RBR


Data Analytics to improve ATM Business

Quick answers to support business decisions:

■ Absorption rate

■ Device profitability

■ Transactions performed

■ Notes dispensing

■ Profiles of customers

■ Geolocation of transactions at ATMs

■ What if?
