Turkish Retail Banking

  • 1,388 views
Uploaded on

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
1,388
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
54
Comments
0
Likes
1

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Delivering on the Promise Benchmarking Turkish Banks Performance: EMEA Retail Banking Study 2005 Richard Lowrie Director Banking Strategy SAP AG December 15 th , 2005 Istanbul Trends in Retail Banking
  • 2. Agenda
    • Observations
    • Key Findings EFMA/SAP Retail Banking Study with focus on Turkey
    • A glimpse of 2010
    • Conclusion
  • 3. Observations - Turkish Bank websites:
    • “ The bank in your mind…at every step of the way”
    • “ Our technology, your freedom!”
  • 4. Business Drivers Today PRODUCTIVITY DIFFERENTIATION Sustainable competitive differentiation through process innovation Speed of innovation and time-to-market Increased productivity Regulatory requirements Outsourcing Customer retention
  • 5. Banking: From Differentiation to Productivity PRODUCTIVITY DIFFERENTIATION Courtesy to G. Moore’s “Living on the fault line” INNOVATION STANDARD- IZATION COMMODI- TIZATION INVENTION Mission- Critical Activities Enabling Activities IT Outsourcing Legacy-integrated, Core Banking, Back-Office systems Front End Marketing CORE CONTEXT
  • 6. The Seamless Customer-Centric Banking Lifecycle Sales & Offer Forecasting & Marketing Contract Closure Service & Reporting Customer- Centric Banking Reporting / Account Statements: Customer Helpdesk and Self Services Acquisition and Cross-Selling Customer Advisory and Contract Closure Forecasting & Analytics on Customer, Financial Products and Services Marketing and Campaign management 1 2 3 4 5 6 Customer Operations and Service
  • 7. Actual Situation in Many Banks: Blocked Loop Sales & Offer Forecasting & Marketing Contract Closure Service & Reporting Customer- Centric Banking Reporting / Account Statements: Customer Helpdesk and Self Services Acquisition and Cross-Selling Customer Advisory and Contract Closure Forecasting & Analytics on Customer, Financial Products and Services Marketing and Campaign management 1 2 3 4 5 6 Customer Operations and Service Sales & Offer Forecasting & Marketing Contract Closure Service & Reporting Customer- Centric Banking
  • 8. IT Challenges In Meeting Business Needs IT support Business strategy IT flexibility Investment protection (CIO) Implementation gap Growth and agility (CEO) Compliance (CFO) Vicious circle Cost pressure Quick fixes Complexity Increased TCO Little scope for innovation and investment in future-oriented IT architecture State-of-the-art IT systems are not focused towards business needs
  • 9. Research Objectives
    • There are many studies taking place in the banking marketplace but few, if any, focus on core banking capability within the context of Customer Management. The objectives of this ongoing research is to:
    • Conduct an assessment of the current state of the EMEA Banking industry in terms of Core Banking and Customer Relationship Management and provide a ‘state of the nation’ view.
    • Identify the strengths and gaps of EMEA banks in implementing state of the art "customer centric“ processes
  • 10. Agenda
    • Observations
    • Key Findings EFMA/SAP Retail Banking Study with focus on Turkey
    • A glimpse of 2010
    • Conclusion
  • 11. Participation by Top International Banks Austria (1) Belgium (4) Belarus (4) Croatia (1) France (2) Georgia (1) Germany (3) Hungary (2) India (3) Ireland (1) Italy (5) Kazakhstan (1) Malaysia (1) Netherlands (1) Nigeria (1) Poland (1) Romania (3) Russia (1) Serbia (4) Slovenia (2) South Africa (3) Spain (2) Sweden (2) Switzerland (1) Turkey (6) UK (5) Choice criteria: Large international Banks Source: EMEA Retail Banking Study 2005 N = 61
  • 12. Banking Assessment Topography Profile / Statistics: Q1-4 People & Organisation (27-30) Information Technology & Application Systems (Q31-33) Business Intelligence & Controlling (Q7-12) Strategy (Q5, 6) Acquisition (Q15-17) Advisory (Q18) Processing (Q19-24) Service (Q25, 26) Product & Service Development (Q13, 14) Multi-Channel Customer Management
  • 13. Current and Future Ranking The graph for the future ranking is getting flat largely i.e. the bank’s performance is expected to converge within the next three years. Overall score per Bank [%] Order of Banks (n=61) Current State Expected State (+3 Years) Source: EMEA Retail Banking Study 2005
  • 14. Efficiency Ratio Q2: What is the current cost income ratio of the bank? N = 59 Q2: What is the expected improve of cost income ratio? N = 59 Source: EMEA Retail Banking Study 2005 About one third of the surveyed banks in EMEA plan to improve their cost income ratio by 5 to 10% within the next three years.
  • 15. IT Investment Q4: What percentage of your overall Retail Banking costs do you spend on information technology (ongoing & investments)? Participating Turkish banks spent a higher percentage of their overall Retail banking costs for IT. Different from EMEA this trend is getting stronger. N = 6 Source: EMEA Retail Banking Study 2005 N = 55 Current State Expected State (+3 Years) EMEA
  • 16. Results per Section – Current & Future Expected State Participating Turkish banks are ahead of the EMEA group concerning the current state as well as the future expectations. Source: EMEA Retail Banking Study 2005 Current State Turkey Future State Turkey Current State EMEA Future Expected State EMEA
  • 17. Primary Business Strategy - EMEA Q5: What is your bank's primary business strategy? Growth strategy Cost cutting strategy N = 61 Source: EMEA Retail Banking Study 2005 Most banks in EMEA focus on a growth strategy - mainly achieved by cross selling to existing customers. EMEA
  • 18. Primary Business Strategy – Turkish Banks Q5: What is your bank's primary business strategy? Growth strategy Cost cutting strategy N = 6 Source: EMEA Retail Banking Study 2005 Participating Turkish banks focus on growth strategy too, but mainly achieved through “New customer acquisition”.
  • 19. Cross-selling Ratio in Retail Banking Participating Turkish banks intend to increase the cross-selling ratio by one product per customer within the next three years. Source: EMEA Retail Banking Study 2005 N = 6 Q3: Typically how many of your products do your customers use? N = 60 Current State Expected State (+3 Years) EMEA
  • 20. Strategic Value of IT Q6: What is the strategic value added by your current IT systems? N = 61 Participating Turkish banks feel more constraint by the current IT systems but plan stronger improvement in comparison to EMEA banks. N = 6 Source: EMEA Retail Banking Study 2005 Current State Expected State (+3 Years) EMEA
  • 21. Business Intelligence & Controlling EMEA Current State EMEA Future Expected State
  • 22. Customer Information Plan (CIP) Participating Turkish banks are ahead of the EMEA group and strongly commit to the implementation of a CIP N = 6 Q8: Do you have a comprehensive and accessible Customer Information Plan covering information value; acquisition priorities; information management and usage? N = 61 Current State Expected State (+3 Years) EMEA
  • 23. Customer Segment Planning Participating Turkish banks are slightly ahead of EMEA banks and plan to apply segment planning almost completely within the next three years Source: EMEA Retail Banking Study 2005 N = 6 Q7: Do you create plans that explicitly define strategies for the customer segments you wish to acquire, those you wish to retain and those you wish to develop based on their estimated value to the bank? N = 61 Current State Expected State (+3 Years) EMEA
  • 24. Transaction & Research Data Availability Improved availability of customer relevant data has a high relevance for all banks in EMEA as well as in Turkey Q9: Do you have easily accessible customer transaction data and attitude/satisfaction data? N = 6 N = 62 Current State Expected State (+3 Years) EMEA
  • 25. Customer Data Analysis Regular Data Mining will become a common instrument for customer data analysis in the whole EMEA region Source: EMEA Retail Banking Study 2005 N = 6 Q10: To what degree do you analyze or mine customer data? N = 62 Current State Expected State (+3 Years) EMEA
  • 26. Understanding Moments of Truth Participating Turkish banks intend to catch up with regard to understanding the moments of truth Q11: To what degree does your market research provide understanding of different customers' satisfaction at each moment of truth? N = 6 N = 62 Current State Expected State (+3 Years) EMEA
  • 27. REAP Measures A cascade of customer management relevant objectives into the organization is desired by the majority of the banks Source: EMEA Retail Banking Study 2005 Q12: Do you have a clear top-level set of measures that define Customer Management performance for your organization in terms Retention, Efficiency, Acquisition and Penetration (REAP) that cascade to form objectives for departments and individual employees N = 6 N = 61 Current State Expected State (+3 Years) EMEA
  • 28. Product & Service Development EMEA Current State EMEA Future Expected State
  • 29. Customer propositions There is a strong trend towards the creation of differentiated customer propositions based on validated customer needs. Source: EMEA Retail Banking Study 2005 N =6 Q13: To what degree are validated customer needs used to create differentiated propositions for each customer segment? N = 61 Current State Expected State (+3 Years) EMEA
  • 30. Banks Infrastructure Capability Participating Turkish banks seem slightly behind EMEA banks but they intend to catch up within the next three years. Q14: To what extent can the bank's infrastructure support the efficient creation of customer relevant product bundles? N = 6 N = 62 Current State Expected State (+3 Years) EMEA
  • 31. Acquisition EMEA Current State EMEA Future Expected State
  • 32. Targeting of Prospects Participating Turkish banks are about to develop the required capabilities and intend to get closer to the EMEA sample Source: EMEA Retail Banking Study 2005 Q15: What ability does your bank have to generate campaigns and target these at the customers you wish to acquire? N = 6 N = 62 Current State Expected State (+3 Years) EMEA
  • 33. Campaign development timescale Participating Turkish banks as well follow the trend to target a campaign development timescale of less than 4 weeks Source: EMEA Retail Banking Study 2005 Q16: How long does it take to deliver a major TIME CRITICAL direct marketing campaign? N = 6 N = 61 Current State Expected State (+3 Years) EMEA
  • 34. Leveraging IT on Inbound Contacts The expectation is to better exploit the sales potential of inbound contacts within the next three years in the whole EMEA region Source: EMEA Retail Banking Study 2005 Q17: To what extent do front line staff have Information Technology support to initiate appropriate sales opportunities versus simply responding to customer requests? N = 6 N = 61 Current State Expected State (+3 Years) EMEA
  • 35. Advisory EMEA Current State EMEA Future Expected State
  • 36. Product/Service Expertise Participating Turkish banks fully commit to automated support for front line employees as much as possible Q18: To what extent do your front line employees have the automated tools to provide personalized service or advice across all Retail Banking products? N = 6 N = 62 Current State Expected State (+3 Years) EMEA
  • 37. Processing EMEA Current State EMEA Future Expected State
  • 38. Timeliness in Delivering Account Products Real time account initiation will be the future standard for whole EMEA Source: EMEA Retail Banking Study 2005 Q19: What is your ability to deliver current & deposit or savings account products from the time of initial customer inquiry to account initiation? N = 6 N = 62 Current State Expected State (+3 Years) EMEA
  • 39. Timeliness in Delivering Mortgage Products Significant time to approval reductions aimed within the next three years in EMEA in general Source: EMEA Retail Banking Study 2005 Q20: What is your ability to deliver mortgage products from the time of initial customer inquiry to approval? N = 6 N = 62 Current State Expected State (+3 Years) EMEA
  • 40. Timeliness in delivering Credit Card products Participating Turkish banks do not intend to offer credit card products in real time, but almost a fifth of the EMEA banks plans to do Source: EMEA Retail Banking Study 2005 Q21: What is your ability to deliver Credit Card products from the time of initial customer enquiry to approval? N = 6 N = 61 Current State Expected State (+3 Years) EMEA
  • 41. Payment handling processes The results for participating Turkish banks are quite similar to the EMEA group Source: EMEA Retail Banking Study 2005 Q22: Does your organization have common processes for handling domestic & international payments? N = 6 N = 59 Current State Expected State (+3 Years) EMEA
  • 42. Exception Handling for Current Accounts Banks expect significant improvements in closing enquiries at first contact Source: EMEA Retail Banking Study 2005 Q23: How automated is the process for handling exceptions for Current Accounts? N = 6 N = 61 Current State Expected State (+3 Years) EMEA
  • 43. Exception Handling for Lines of Credit Half of the participating Turkish banks intend to consistently use fully automated support in comparison to only one third of the EMEA group Source: EMEA Retail Banking Study 2005 Q24: How automated is the process for handling exceptions for Lines of Credit? N = 6 N = 60 Current State Expected State (+3 Years) EMEA
  • 44. Service EMEA Current State EMEA Future Expected State
  • 45. Handling Customer Enquiries Participating Turkish banks mainly target at a closing rate between 50–80% while almost half of the EMEA banks plan a rate >80% Source: EMEA Retail Banking Study 2005 Q25: What proportion of customer enquiries, transactions and complaints do your call centre/banking help desk handle & close at first contact? N = 6 N = 61 Current State Expected State (+3 Years) EMEA
  • 46. Real Time Customer View Participating Turkish banks are ahead of the EMEA banks with regard to real time and channel independent information delivery Q26: To what degree can customers access a real time, channel independent view of their portfolio? N = 6 N = 62 Current State Expected State (+3 Years) EMEA
  • 47. People & Organisation EMEA Current State EMEA Future Expected State
  • 48. Operating Model Q27: What is the predominant organization model for your retail institution? Participating Turkish banks strongly commit to apply an organisation model based on customer segments within the next three years Source: EMEA Retail Banking Study 2005 N = 6 N = 62 Current State Expected State (+3 Years) EMEA
  • 49. Organisation Support for Customer Management The majority of banks in EMEA intend to support the Customer Management approach by cross functional middle management topic owner Source: EMEA Retail Banking Study 2005 Q28: To what degree does the organizational structure support the implementation of Customer Management strategy? N = 6 N = 60 Current State Expected State (+3 Years) EMEA
  • 50. Customer Management Competencies Participating Turkish banks have higher ambitions to close the gap between customer propositions and job competencies within three years Source: EMEA Retail Banking Study 2005 Q29: To what degree are job competencies consistent with delivering customer propositions? N = 6 N = 60 Current State Expected State (+3 Years) EMEA
  • 51. Customer Management Processes Participating Turkish banks do not plan regular measurements against SLAs, while a quarter of the EMEA group is planning that step Source: EMEA Retail Banking Study 2005 Q30: To what degree are customer based processes identified & managed? N = 6 N = 62 Current State Expected State (+3 Years) EMEA
  • 52. Information Technology & Application Systems EMEA Current State EMEA Future Expected State
  • 53. IT Landscape Q31: How would you characterize your current infrastructure for Core Banking? There is a clear trend towards standard software in EMEA which is significantly stronger for the participating Turkish banks Source: EMEA Retail Banking Study 2005 N = 6 N = 62 Current State Expected State (+3 Years) EMEA
  • 54. Customer Data Capture Participating Turkish banks are ahead of the EMEA group significantly and intend to improve their position to the maximum extent Source: EMEA Retail Banking Study 2005 Q32: How capable are your IT systems in the collection, storage and effective retrieval of customer data? N = 6 N = 62 Current State Expected State (+3 Years) EMEA
  • 55. Customer Information Updating Participating Turkish banks are ahead of the EMEA group and intend to strongly improve their position further Source: EMEA Retail Banking Study 2005 Q33: How promptly is customer data or information updated across all channels? N = 6 N = 62 Current State Expected State (+3 Years) EMEA
  • 56. Agenda
    • Observations
    • Key Findings EFMA/SAP Retail Banking Study with focus on Turkey
    • A glimpse of 2010
    • Conclusion
  • 57. The EIU-SAP Survey: Business 2010
    • Telephone and online survey, conducted in November-December 2004
    • 577 C-level executives (46%) and senior managers (54%)
    • 50% from Europe, 36% from APAC, 14% from the Americas
    • Mix of small/mid-size & large enterprises; 60% with >$350m in revenue
    • Part of a global survey of 4,018 executives in 20+ sectors
    • Survey complemented by interviews with selected executives
  • 58. The Industry’s View on Future Business Needs
    • Consolidation will force financial services providers to seek new ways to compete with larger rivals
    • The ability to adapt strategy and business models quickly will be a critical source of competitive advantage
    • Firms will focus increasingly on speed of innovation and customer retention to create long-term value
    • IT will be integral to firms’ ability to boost competitive advantage, not just cost efficiency
    In 2010:
  • 59. How the Role of IT will Change IT is viewed as central to organisations’ future ability to adapt business models, and increasingly as a source of competitive advantage
    • 84% of financial industry executives view IT as critical to firms’ ability to change how they operate over the next five years
    • 59% view IT as becoming more of a competitive tool than simply a driver of cost efficiency; a substantial majority of APAC and US executives (65% and 61%, respectively) hold this view, while European respondents are more equivocal (53%)
    Do you agree: “Technology will be critical to organisations’ ability to adapt business model and implement strategy?” Yes 84% Don't know 5% No 11%
  • 60. How the role of IT will Change – Delivering on the Customer Service Promise Within the financial services firm, IT’s role will be most critical in helping to improve customer knowledge and servicing The areas of business in which IT will be most critical in 2010 (Top three responses) 1. Getting me the right information at the right time (63%) 2. Ensuring access to information anywhere (22%) 3. Getting instant alerts on things going wrong (15%) What executives feel IT should improve upon most to help them make decisions 14% 14% 14% 17% 27% 28% 30% 40% 71% Corporate security Managing the workplace Partner & supplier relationships Team-based working Sales and marketing Distribution channels Finance New product/service development Customer relationships/ customer service
  • 61. Agenda
    • Observations
    • Key Findings EFMA/SAP Retail Banking Study with focus on Turkey
    • A glimpse of 2010
    • Conclusion
  • 62. Our Vision
  • 63. Contacts If you require further information please contact:   Kay Patzwald Senior Business Consultant SAP Business Consulting EMEA SAP Deutschland AG & Co. KG T +49-6227-7-47052 M +49-160-90822957 E [email_address]   Richard Lowrie Director Banking Strategy IBU Banking SAP AG T +44 208 917-6708 M +44 7966-975708 E [email_address]
  • 64.
    • No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice.
    • Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors.
    • Microsoft, Windows, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation.
    • IBM, DB2, DB2 Universal Database, OS/2, Parallel Sysplex, MVS/ESA, AIX, S/390, AS/400, OS/390, OS/400, iSeries, pSeries, xSeries, zSeries, z/OS, AFP, Intelligent Miner, WebSphere, Netfinity, Tivoli, and Informix are trademarks or registered trademarks of IBM Corporation in the United States and/or other countries.
    • Oracle is a registered trademark of Oracle Corporation.
    • UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group.
    • Citrix, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, and MultiWin are trademarks or registered trademarks of Citrix Systems, Inc.
    • HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C®, World Wide Web Consortium, Massachusetts Institute of Technology.
    • Java is a registered trademark of Sun Microsystems, Inc.
    • JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape.
    • MaxDB is a trademark of MySQL AB, Sweden.
    • SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary.
    • The information in this document is proprietary to SAP. No part of this document may be reproduced, copied, or transmitted in any form or for any purpose without the express prior written permission of SAP AG.
    • This document is a preliminary version and not subject to your license agreement or any other agreement with SAP. This document contains only intended strategies, developments, and functionalities of the SAP® product and is not intended to be binding upon SAP to any particular course of business, product strategy, and/or development. Please note that this document is subject to change and may be changed by SAP at any time without notice.
    • SAP assumes no responsibility for errors or omissions in this document. SAP does not warrant the accuracy or completeness of the information, text, graphics, links, or other items contained within this material. This document is provided without a warranty of any kind, either express or implied, including but not limited to the implied warranties of merchantability, fitness for a particular purpose, or non-infringement.
    • SAP shall have no liability for damages of any kind including without limitation direct, special, indirect, or consequential damages that may result from the use of these materials. This limitation shall not apply in cases of intent or gross negligence.
    • The statutory liability for personal injury and defective products is not affected. SAP has no control over the information that you may access through the use of hot links contained in these materials and does not endorse your use of third-party Web pages nor provide any warranty whatsoever relating to third-party Web pages
    Copyright 2005 SAP AG. All Rights Reserved