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Direct Banking Strategy Gerd Schenkel

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direct banking strategy
online banking
future of banking
ubank
national australia bank

Published in: Business, Economy & Finance

Direct Banking Strategy Gerd Schenkel

  1. 1. Direct Banking Strategy Gerd Schenkel March 2009 © Gerd Schenkel @gerdschenkel http://au.linkedin.com/in/gerdschenkel
  2. 2. Some remarks <ul><li>I’m a practitioner, not an “expert” </li></ul><ul><li>Questions are welcome </li></ul><ul><li>Some limitations due to confidentiality </li></ul>
  3. 3. Agenda <ul><li>The changing role of direct banking </li></ul><ul><li>Choices </li></ul><ul><li>NAB/ UBank </li></ul>
  4. 4. Direct banking now common place for information gathering Source: Council on Financial Competition, 2008
  5. 5. Direct banking expected to dominate purchase process in future Source: Council on Financial Competition, 2008
  6. 6. “It’ll be different this time” Banking Internet 1990s 1990s 2000s+ Internet Banking Books Music News Online sales of finance products “ Web 2.0” Collaboration User generated content Online application forms (Proper) direct banking
  7. 7. Agenda <ul><li>The changing role of direct banking </li></ul><ul><li>Choices </li></ul><ul><li>NAB/ UBank </li></ul>
  8. 8. Direct banking segment is “younger” and “wealthier”
  9. 9. Technology is not the barrier (anymore) Source: Council on Financial Competition, 2008 *
  10. 10. But the process remains a serious hurdle Source: Council on Financial Competition, 2007 * *
  11. 11. Source: Council on Financial Competition, 2008 Over a third of banks have made a choice
  12. 12. Different starting points… Association with traditional bank Integrated channel Division Standalone institution Same products & pricing as other channels Same products but different pricing Customised products & processes Customised products & processes Customised products & processes <ul><li>Negatives </li></ul><ul><li>Not compelling to direct segment </li></ul><ul><li>Internally controversial </li></ul><ul><li>(“cannibalisation”) </li></ul><ul><li>Harder to do </li></ul><ul><li>Hard to do </li></ul><ul><li>Need executive support </li></ul><ul><li>Usually less control over product and customer experience </li></ul><ul><li>Positives </li></ul><ul><li>Easy to do </li></ul><ul><li>More competitive with other “direct” offers </li></ul><ul><li>Can be quite compelling </li></ul><ul><li>Can be very compelling </li></ul><ul><li>Can create new brand position </li></ul><ul><li>Can shed the negative image of a “bank” </li></ul>
  13. 13. … define “direct” customer proposition Association with traditional bank Integrated channel Division Standalone institution Same products & pricing as other channels Same products but different pricing Customised products & processes Customised products & processes Customised products & processes Convenience Discount for “going direct” No need to go to branch Total focus on “direct” customers Bank alternative
  14. 14. The disadvantage of not controlling your product
  15. 15. The benefit of total “direct” focus
  16. 16. Agenda <ul><li>The changing role of direct banking </li></ul><ul><li>Possible choices </li></ul><ul><li>NAB/ UBank </li></ul>
  17. 17. Association with traditional bank Integrated channel Division Standalone institution Same products & pricing as other channels Same products but different pricing Customised products & processes Customised products & processes Customised products & processes NAB/ UBank
  18. 18. A distinct presence
  19. 19. The benefits of being (semi-) “independent”
  20. 20. Ability to “experiment”
  21. 21. Ability to “experiment”
  22. 22. Ability to “experiment”
  23. 23. In conclusion <ul><li>If you’re a “bank” </li></ul><ul><li>If you believe the internet will play an increasing role in customer acquisition… </li></ul><ul><li>If you don’t, … </li></ul><ul><li>If you’re not a “bank” </li></ul><ul><li>If you believe the internet will play an increasing role in customer acquisition… </li></ul><ul><li>If you don’t, … </li></ul>

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