Sanjoy Sen - Asia Financial Services Conference - Key Note Inaugural Presentation - Emerging Trends in Retail Banking - Feb 2013

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  • 1. Retail Banking in APAC:Emerging TrendsSanjoy SenManaging DirectorRetail Banking Asia Pacific
  • 2. AgendaGlobal Outlook in Retail BankingKey Trends in Asia PacificChanging Trends in Consumer BehaviorNew Retail Banking Order – The Winning Formula
  • 3. Developed world – downside potentialremains over the next 3-5 years….. Post theGlobal Financial CrisisImpact on banks postGFC•Deleveraging•Sovereign debt exposure•Social moodIn response…•Cautious lending•Selling off surplus assets•Consolidation•Re-orientation of growth
  • 4. Developing world and frontier markets…..will have healthier growth prospects• Higher forecasted growth rates (5-10%)• Healthy domestic demand• Increase in savings• Low levels of debt• Relatively tightly controlled financial sectors
  • 5. Key Trends in Asia PacificAgendaChanging Trends in Consumer BehaviorGlobal Outlook in Retail BankingNew Retail Banking Order – The Winning Formula
  • 6. Retail Banking Challenges in Asia PacificYourBankUncertainty operatingconditionsRegulatorycompliance burdenIncreasedcompetitionIncreasinglycautious customersTechnology as enabler& differentiatorRevenue erosionHow will Retail banks in Asia respond to these challenges?How will Retail banks in Asia respond to these challenges?
  • 7. The Asian CenturySource: Trends in Asia Pacific Banking Trends - BCGBy 2030, Asia will account for 50% of global GDP; and Asia’s privateconsumption will grow at 11% p.a..
  • 8. Asia Pacific is the biggest and most profitable banking market, withhigher returns in developing economiesSource: Trends in Asia Pacific Banking Trends - BCGThe outlook in Asia is relatively optimistic; asthe region has weathered the storm betterthan others
  • 9. No wonder today, 20 of the top 50 globalbanks are Asia PacificSource: Trends in Asia Pacific Banking Trends - BCG
  • 10. AgendaGlobal Outlook in Retail BankingKey Trends in Asia PacificChanging Trends in Consumer BehaviourNew Retail Banking Order – The Winning Formula
  • 11. 5 significant shifts in the Asia consumers’behaviour• Consumers are becoming less loyal to their financialinstitutions.• Consumers prefer to deal with a ‘local’ bank.• Consumers are more cautious about borrowing.• Consumers are going remote.• Consumers seek products they understand or can easilyacquire knowledge about.
  • 12. New Retail Banking Order – The Winning FormulaAgendaChanging Trends in Consumer BehaviorGlobal Outlook in Retail BankingKey Trends in Asia Pacific
  • 13. Relook at your customer segmentationi) Simplify to take out costsii) Customize your offeringsiii) Use multi-dimensional segmentation9 KeyStrategies9 key strategies to build for sustainableadvantage & strong financial performanceRedesign your channelsi) Omni-channel distributionii) Branch as a distribution channeliii) Digital interactionsRedefine customer centricityi) Build customer advocacyii) Customers and regulationsiii) Build a holistic loyalty system
  • 14. ComplexityEfficiencySimplify to take out costs – Get super efficientto serve low value customer segments in orderto fund differentiation for high value customersMany banks continue to spend more to serve its lowest value customers…theyneed to understand the “nuts and bolts” of “cost to serve”Many banks continue to spend more to serve its lowest value customers…theyneed to understand the “nuts and bolts” of “cost to serve”
  • 15. Customize your offerings – Craft differentiatedofferings and channels to serve high valuesegmentsAffluent customers need tailored offerings, specialized advice…..wrapped in aterrific customer experience…and they don’t think that they are getting itAffluent customers need tailored offerings, specialized advice…..wrapped in aterrific customer experience…and they don’t think that they are getting itPercentage of mass affluent customers in each region that demand customizedbanking solutionsSource: Datamonitor’s FSCI survey 2010
  • 16. Use multidimensional segmentation – targetyour customers by developing and maintaining adetailed understanding of needs, income,demographics, behavior and valuesLeave no customer segment unturnedMeaningful segmentation will provide banks with an understanding of the fitbetween the capabilities of the bank and the requirements of current& potential customersMeaningful segmentation will provide banks with an understanding of the fitbetween the capabilities of the bank and the requirements of current& potential customersSource: Cap Gemini Consulting Analysis
  • 17. Relook at your customer segmentationi) Simplify to take out costsii) Customize your offeringsiii) Use multi-dimensional segmentation9 KeyStrategies9 key strategies to build for sustainableadvantage & strong financial performanceRedesign your channelsi) Omni-channel distributionii) Branch as a distribution channeliii) Digital interactionsRedefine customer centricityi) Build customer advocacyii) Customers and regulationsiii) Build a holistic loyalty system
  • 18. Omni-channel distribution – Redesign from“multi channel” to “omni channel”…..forseamless customer experienceOmni channel distribution is seamlessly integrating the customer experienceacross disparate channels ….for better interactionOmni channel distribution is seamlessly integrating the customer experienceacross disparate channels ….for better interaction
  • 19. Branch as a distribution channel – Move tosmaller branches for new customers, advice andcomplex transactionsLeverage the power of branches and branch staffin relationship building.Leverage the power of branches and branch staffin relationship building.
  • 20. Digital interactions – Use mobile and digitalbanking as a powerful means to build loyaltyAs digital banking spreads, banks have new opportunities to create“wow” experiences to delight customersAs digital banking spreads, banks have new opportunities to create“wow” experiences to delight customersPortfolio view of investmentsCard spending analysisE-StatementsInternet Banking•View total portfolio in details and charts•Perform banking transactions & investment transactions•View investment risk profile•Access latest market news, information, rates, research, etcMobile Banking•Account enquiry•Location based services for merchant offers or branch locations•Financial news•Credit card payment barcode•Integrated BillMinder calendar•Voice search and augmented reality for searching merchantoffers•Interactive Lazy Susan game for dining offersAccount Enquiry Rate Calculator Lazy Susan gameAugmented reality BillMinder Credit Card Barcode payment
  • 21. Relook at your customer segmentationi) Simplify to take out costsii) Customize your offeringsiii) Use multi-dimensional segmentation9 KeyStrategies9 key strategies to build for sustainableadvantage & strong financial performanceRedesign your channelsi) Omni-channel distributionii) Branch as a distribution channeliii) Digital interactionsRedefine customer centricityi) Build customer advocacyii) Customers and regulationsiii) Build a holistic loyalty system
  • 22. Build customer advocacy – Shift marketingfrom “push” to “pull” and create an activecustomer advocacy communityThe secret to a winning advocacy strategy is to find the right people andget them talking about the right things in the right places.The secret to a winning advocacy strategy is to find the right people andget them talking about the right things in the right places.
  • 23. Customers and regulations – Use customerexcellence as an antidote to regulationsBanks who educate customers, advertise honestly and have fair pricing….will lead to cross-buying as opposed to cross- sellingBanks who educate customers, advertise honestly and have fair pricing….will lead to cross-buying as opposed to cross- selling
  • 24. Build a holistic loyalty system – Move fromcross-sell to relationship deepeningLoyal customers buy more banking products, stay longer and urgeothers to become customersLoyal customers buy more banking products, stay longer and urgeothers to become customersSource: Bain Analysis
  • 25. SUCCESSSUCCESSSimplifySEGMENTATIONSEGMENTATIONCUSTOMERCUSTOMERCHANNELSCHANNELSCustomizeMulti-dimensionalOmni-channelBranchDigitalAdvocacyExcellenceLoyaltyNew Retail Banking Order – Winning Formula
  • 26. The winning banks will be thoseThe winning banks will be thosewho seek to serve their customers,who seek to serve their customers,not just take their moneynot just take their money
  • 27. Thank you