This presentation encompasses the Channel Strategy pertinent to the Banking industry

1. MULTI-CHANNEL APPROACH FOR
FINANCIAL INSTITUTIONS
Presented by: Kevin Chetty
Commercial Director

2. ‘ Strength lies in Differences NOT Similarities’ – Stephen Covey
‘The achievement of an organisation are the results of the
combined effort – Vincent Lombardi

3. INTRODUCTION

4.  Topic
 Presenter
 Delegates
 Workshop Ground Rules
 Workshop Expectations & Objectives
4

5. AGENDA

6.  Day 1
 Session 1: Customers, Landscape, Strategy
Case Study & Exercise
 Session 2: Mobile Strategy (Mobile Sales Strategy & M – Commerce)
Case Study & Exercise
 Session 3: Branch Strategy
Case Study & Exercise
 Session 4: Alternative Strategy
Case Study & Exercise
6

7. SESSION 1: Customers, Landscape, Strategy

8. The Alchemist – Paulo Coelho
“It’s the possibility of having a dream come
true that makes life interesting”

9. 1. Background
RETAIL BANKING A REALITY
The traditional retail bank is at an inflection point. The needs
and expectations of customers are changing as quickly as the
competition. Customers are demanding seamless, multi-
channel sales and service experiences. Simultaneously, other
financial institutions and non-traditional players are looking
for opportunities to invade this space or to redefine it
through disruptive innovation.
The result is forcing banks to examine a more balanced,
integrated approach to customer experience and growth
9

10. 1. Background
AN EVOLUTION FIND YOUR SPACE
10

11. 1. Background
THE CHANGING FACE OF BANKING
In view of several developments in the 1990’s, the banking industry is changing
…
Global banking more competitive
The IT revolution
Information explosion
Rationalisation of branches in 1990’s
Banks are trying to become one-stop financial supermarkets
How did banks respond?
o Distribute financial services through other ways and channels
…
o … proliferation of non-traditional banking channels
o Growth in usage of MOBILE selling agents

12. 1. Background
A COMPETITIVE LANDSCAPE eg SOUTH AFRICA
Market landscape
Banking environment Key macro econ trends
Competitors becoming
Macro economic
increasingly aggressive
environment outlook is
Alliances and joint ventures
moderate
Customers
Use a wide range of Regulation
financial products Tier 2/3 legislation
Proliferation of National Credit Act
distribution Competition
alternatives Commission
Lower commission
earnings

13. 1. Background
WHAT DO CUSTOMERS WANT? NOT WHAT BANKS……
Booz Allen’s consumer research reveals that despite the development of
alternative channels, customers still prefer to purchase in the branch.
However, the importance of the branch is in decline, and the mass
affluent form the group leading the march away from branches, and
towards mobile banking, mobile sales force and the Internet. When it
comes to alternative channels, customers prefer online to telephone
transactions, particularly when the product and the transaction itself are
relatively simple. One area in need of significant development is the
mobile sales force, which at present is limited or nonexistent in all but a
few countries.
Source: Reference Booz/Allen/Hamilton - Striving for Growth, Best Practices
in Retail Banking Sales and Service Channels
13

14. 1. Background
RAISING THE GAME IN RETAIL BANKING
Booz Allen’s research shows there are clear opportunities to enhance revenue
in retail banking. Going forward retail banks need to:
o Provide dedicated channels (website, call centre, mobile sales forces and
specialist areas in branches) for affluent customers.
o Reduce waiting times in branches through the use of welcome desks
(concierge concept) and the option of making appointments in advance.
o Efficient call centre menus and staffing that enable customers to quickly
reach people who can resolve their queries.
o Enable customers to tailor websites, supported by strong security
measures (e.g. random number generators).
o Offer mobile sales advisers who can complete transactions at the meeting,
for selected customer groups.
Source: Reference Booz/Allen/Hamilton - Striving for Growth, Best Practices in
Retail Banking Sales and Service Channels
14

15. 1. Background
THE CURRENT BANKING LANDSCAPE
• It has been almost 3 years since the Global Financial Crisis
• The current banking environment is a lot different to a decade ago
• Branches have been rationalized
• There is consolidation
• Current focus is on Capital Adequacy & stringent Central Bank requirements
• Growth is immanent (Organic vs. Inorganic growth)
• Greater demand from customers
• Development of various channels
• BUT it will be about RISK, COSTS, EFFECIENCY, LEVERAGE, JV’s, M&A’s

16. 1. Background
CHANNEL STRATEGY
• For businesses to survive Growth is imperative
• A Channel Strategy is amongst the most enduring decisions a company will make
• Why companies adopt or embrace a channel strategy is often related to their
growth prospects, need for new customers and an increasing competitive landscape
• The world in which we practice, trade or market our products have considerably changed
• The economic woes in the last few months’ have been catastrophic to say the least
• The global financial meltdown has restricted and impacted growth in many countries and companies alike, including Africa
• However, we are beginning to witness a turn for the better in the economic cycle
• Whilst this is positive news, BANKS must select a channel carefully when considering to distribute products or services
• A correct channel strategy comes through a correct Segmentation Strategy
• The appropriate channel should be assigned to each customer segment. The challenge for companies that opt for a ‘multi-channel’
approach is knowing how to orient each customer towards the channel that best fits its profile. It is equally important to analyse
each channels costs and profitability, as it is to analyse the cost and profitability of each customer in each channel.
• The growth of new channels such as the internet or mobile phones has redefined or changed the game in many sectors.

17. 1. Background
KEY BENEFITS IN DEFINING A CHANNEL STRATEGY
• Increase in sales
• A targeted market coverage
• Minimize sales expenses as the strategy and channels are defined
• Capture EXISTING markets and acquire NEW markets
• Keeping abreast of the competition
• Increase to the existing client data base

18. 1. Background
KEY CAPABILITIES
• Create new alternative channel programs
• Improve competence and commitment of direct and in-direct channels
• Sales force sizing based on each channel
• Driver for committed and competent partners
• Hybrid channels
• Direct vs. In-direct distribution channels
• Indentifying and recruiting the best channel partners
• Managing channel conflict
• Compensation (incentives, commissions) and channel finance
• Measuring the channels success

19. 1. Background
DEFINE
DIRECT CHANNEL:
Those channels where there is direct control
IN-DIRECT CHANNEL:
Those channels where there is NO direct control over the channels

20. 1. Background
DIRECT vs. IN-DIRECT CHANNELS
Direct Type Description Strengths Weaknesses
Channel Channel
Electronic Internet Company internet site. Most Most consumers have access If the internet is NOT user
channels can be linked to the to PC/internet zone. Cheaper friendly, navigation can
internet, depending on the channel as most traffic is via become tedious to
PUSH/PULL strategy. Internet the consumer/client. Clients frustrating. Hence ease of
must have access point for have access to wider access is crucial
prospective clients. This must be information
linked to a central email address,
finally to a central data base.
Direct email to Sending direct mailers to a Most businesses have Dependant on the reliability
prospective/identified customer access to email. It is more of email address provided.
base. This involves a BTL cost effective. There is NO Consumers can become
campaign message. Data base delay in the release and overloaded with so called
that has accurate information is receiving of information. junk mail.
KEY. Campaign messages can be
tailor made and using multi-
media (e.g. Saleslink)
Direct email Receiving an email from a It is cost effective via a client. Not responding on time
from prospective customer. Linkage to a Furthermore, increases the (with 24/48 hours)
central email address and data success of closure
base
Telephony Telemarketers Outbound and Inbound. Using Competitive advantage Can become very costly if
defined CRM/IT platform for all through a centralized implemented incorrectly.
sales and information sharing. In approach, company controls Clients are inundated with
addition, low key desktop call value chain. Hence, reduce calls thus increasing caller
centre can be set up. other operational frustration. Poorly trained
costs/infrastructure Telemarketers can damage
reputation. Furthermore the
conversion ratio is low
Telephone Automated recording of a message Cost effective Can become frustrating to a
Automated customer, if the message is
NOT responded to.
SMS Must be linked to a dedicated call Cost effective and can be Can become costly to
centre, so that the response is used effectively in customer manage if implemented
immediate. This will improve the follow-ups, e.g. birthdays, incorrectly. Message
customer service image thank you etc contents has to be small
IVR Interactive Voice Recorders. Reduced overhead costs Can become very costly for
Automated interactive system with associated with staff. Helps a company. Can prove to
a caller. Both inbound and improve sales and frustrating for a consumer
outbound information gathering
Post Direct Mailers Campaigns in most retail segments If the campaign is well Can become costly and
driven through direct mailers. packaged, the ineffective due to post
These are tailored messages for conversion/response rate is delays
the intended recipient higher
Magazine Campaigns and information on a Stuffers are placed in Can become costly if the
Stuffers company/product is placed in strategic magazines with a response is very low to NIL
certain magazine/s direct focus on a target
market

21. 1. Background
DIRECT vs. IN-DIRECT CHANNELS
Face 2 Walk-in and Customers that simply walk-in or The company has an active This is dependent on the
Face Referrals referred by a client. This is person to engage with and marketing strategy and the
dependent on the PUSH/PULL sell a product brand equity. IOW the
marketing strategy product is TOP on mind
Direct Sales Employing agents to fulfill sales Direct activities are most Niche industries DSA’s
Agents effective in a high volume become more difficult. Can
employed by industry type be very costly. If NOT
company effectively trained can
damage a brand. RISKs
such as fraud
Media BTL These are much targeted They have proven to be more They are costly if planned
Campaigns campaigns on a specific data successful due to the incorrectly
base/segment. These include Print, focused strategy. Planning is
TV, and Radio. The campaign done in advance so as to
message must be segmented and ensure costs are curtailed or
implement over a defined 12 month maintained. This gives
campaign period. Including companies the competitive
breakfast and conferences. advantage and increase in
organic growth
Other Fax Fax to email is the most For companies that have NO Quality of information
appropriate process email or are responding to a
campaign
Interactive Kiosks that are designed for a Reduce people, Can become very costly
Media Kiosks company and have an interactive infrastructure costs.
link to a company/website/email Embracing innovative
technology gives you the
competitive advantage. Place
at strategic points, e.g. SME
Banks
Interactive TV Using TV as an interactive medium. Reduce people, Can become very costly
Used in game shows etc infrastructure costs.
Embracing innovative
technology gives you the
competitive advantage
Social Media Twitter, Facebook. These have Cost effective. Used by a ?
become leading interaction sites for wider audience, hence
business people. captive audience. Can create
blogs and interactive
linkages for your company.
Hence, groups of people will
apply

22. 1. Background
DIRECT vs. IN-DIRECT CHANNELS
IN-Direct Type Channel Description Strengths Weaknesses
Channel
Electronic 3rd Internet Sites Information is flagged on 3rd party Increase marketing Linkage to company site
rd
sites. Usually 3 party sites have exposure must be agreed upon.
close similarity to a company or Reliability of 3rd party site
engage in business with a
company
Telephony Outsourced The entire outbound and inbound Reduced infrastructure and Can become very costly.
Telemarketing call centre is outsourced resource investment. Most May NOT receive
effective if a RISK vs. dedicated support as the
REWARD model is used outsourced partner may
have other clients
Post Knock n Drop Outsource the drop off of flyers or Capture a wider target Company personal may
leaflets or newsletters market. Limit the use of NOT drop off all the flyers
internal resources or leaflets. Conversion is
very low
Regional Surveys Have door to door surveys. In the Control and monitor Interviewer biasness
form of a questionnaire responses
Face to 3rd Party Direct Outsourcing the sales and Works well if a risk vs. Reputational risk
Face Sales Agents marketing function. This is one of reward model is used.
the biggest emerging trends Reduced labour associate
world-wide. Commission driven costs. Increased speed to
roll-out
Partners/Associate Establishing a network of deal Increase geographical Reputational risk
Companies makers regional or country-wide. reach and access to NEW
This can be individuals and customers
companies. Commission or % of
driven
Media Trade Shows Coordinated by an external field Can undertake more trade Quality of leads or
through 3rd Parties marketing company. Gathering of shows in a given month, information gathered.
information or data. This will be quarter, year. Costs can be high
used for prospecting. Important
for ATL Brand Equity
ATL Campaigns Includes Print, TV, and Radio. A Results can be very positive Costly and time
very important constituent for long term. However, this is consuming
Brand building or Brand Equity linked to defined
creation campaigns. Great for the
PUSH strategy
Other Joint Ventures Forming an alliance with a Increase organic growth Can fail if the objectives
company that has similar very quickly. Increase and vision is NOT shared
philosophy or capability to fulfill a geographical footprint. Very
sales channel function effective for Retailers.

23. 1. Background
CHANNEL COST EFFECIENCY vs. VALUE ANALYSIS
Face to Face The success for most channels centres on a company’s ability
Website for interaction to achieve balance between the variable or fixed costs drivers,
High information and the value the end user gains in using the respective
channel. Hence, the above model is a good schematic view of
IT
the Cost Efficiency vs. Value to an end user. It can be applied
O
DO
when making respective channel decisions. In addition, it
highlights three critical decision paths:
F
OF
E
Avoid IT: this is attributed to low cost efficiency and low end user
AD
Med
value, e.g. interactive TV
TR
ium
TRADE OFF: has medium cost efficiency and medium value to
a client, e.g. direct sales agents. Business must take a strategic
decision
IT
State of art Call DO IT: has high value and high cost efficiency drivers, e.g.
D
OI
Low Centre company website
AV
Low Medium High
Value to the User

24. 1. Background
COST BREAKDOWN PER CHANNEL
Direct Type Description of Cost Drivers Cost per Driver Total Cost
Channel Channel
Electronic Internet • Service provider monthly cost
• Line rental cost
Direct email to
Direct email
from
Telephony Telemarketers
Telephone
Automated
SMS
IVR
Post Direct Mailers
Magazine
Stuffers
Face 2 Walk-in and
Face Referrals
Direct Sales
Agents
employed by
company

25. 1. Background
CHANNEL CAPACITY
Direct Type Mgr/ No. PC Laptop Printer Scanner Fax Tel
Channel Channel Sup Staff
Electronic Internet
Direct email to
Direct email
from
Telephony Telemarketers
Telephone
Automated
SMS
IVR
Post Direct Mailers
Magazine
Stuffers
Face 2 Walk-in and
Face Referrals
Direct Sales
Agents
employed by
company

26. 1. Background
CHANNEL PRODUCTIVITY
IN-Direct Type Channel Productivity Measurements Conversion Ratio %
Channel
Electronic 3rd Internet Sites No of hits/responses
Telephony Outsourced Measured against Prospects
Telemarketing vs. called vs. converted
appointment. Call centre will
keep a tracking sheet.
Post Knock n Drop No of responses via a
selected channel. Prompt
customer to use email/call
centre
Regional Surveys Measure number of
applications filled in an area.
Info is captured onto a data
base.
Face to Face 3rd Party Direct Sales Measured against target vs.
Agents achieved. In addition
measure achieved vs. comms
paid out.
Partners/Associate Measured against set targets
Companies per month or quarter. Pick
this up on the comms paid
Media Trade Shows through No of people that visited
3rd Parties stand, from details filled on
customer visit form. This info
is captured onto data base.
Use Call centre to follow-up
ATL Campaigns Depending on the medium
measure against info sent vs.
customer’s response. Prompt
customer to use email/call
centre
Other Joint Ventures Depending on the agreement
i.e. partnership

27. 1. Background
COMPARITIVE INCOME
D & ID Electronic Telephony Post Face 2 Media Other
Face
Sales:
Operating
Expenses:
Nett Effect

28. 1. Background
CHANNEL SELECTION MATRIX FROM A CASE STUDY

29. 1. Background
PROCESS MAPPING/MANAGEMENT

30. 1. Background
IMPLEMENTATION STRATEGY BASED ON MY
EXPERIENCE

31. 1. Background
THE 6 DYNAMICS CUSTOMER FOCUS
In the EVOLUTION of retail banking channels, the 6 dynamics are critical to developing
effective CUSTOMER FOCUSED strategies:
• Branch generated revenue growth is becoming more challenging
• Transaction processing and customer services are becoming increasingly
independent of the branch channel
• Customer demographics are shifting
• New technologies are gaining widespread adoption, allowing customer relationship
management to become channel independent
• Changes in the regulatory environment are altering the playing fields
• Banks must prepared for overlapping competition (Non-Banking Entities)

32. SESSION 2: Mobile Strategy

33. 1. Background
OVERVIEW
MOBILE SALES CHANNELS
MOBILE E-COMMERCE

34. 1. Background
MOBILE SALES CHANNELS

35. MARKET OVERVIEW: DEMOGRAPHICS CASE STUDY
Diverse distribution and concentration of Target Market population
R3k-R24,999 (CMM) R25k-R39,999 (RA)
Provinces National Total (000's) R0-R2,999 (ELB) (000's) Occupation National Total (000's)
(000's) (000's)
Eastern Cape 4,616 14.8% 3,913 17.3% 641 9.6% 6 3.6% Occupation, Administrative & 673 2.2%
Managerial
Free State 2,000 6.4% 1,571 7.0% 298 4.4% 6 3.4% Occupation, Agriculture 1,101 3.5%
Gauteng 6,402 20.6% 3,677 16.3% 2,029 30.2% 102 58.8% Occupation,Artisans & Related 1,047 3.4%
Kwazulu Natal 6,363 20.5% 4,725 20.9% 1,348 20.1% 26 15.0% Occupation,Clerical & Sales 2,743 8.8%
Limpopo 3,347 10.8% 2,659 11.8% 388 5.8% 8 4.5% Occupation, Not Active 18,531 59.6%
Mpumalanga 2,315 7.4% 1,730 7.7% 471 7.0% 10 5.8% Occupation,Production & Mining 2,061 6.6%
North-West 2,222 7.1% 1,707 7.6% 419 6.2% 2 1.1% Occupation,Professional & 1,551 5.0%
Technical
Northern Cape 770 2.5% 622 2.8% 120 1.8% 3 1.5% Occupation, Service 2,579 8.3%
Western Cape 3,071 9.9% 1,970 8.7% 996 14.8% 11 6.2% Occupation,Transport & 709 2.3%
Communication
Totals 31,106 100% 22,574 100% 6,710 100% 174 100% Occupation, - Other 113 0.4%
Totals 31,108 100%
Provinces with the highest
distribution ALL segments:
• Gauteng
• KwaZulu Natal 59,6% Not Economically Active
• Western Cape
Source AMPS2007B
35

36. MARKET OVERVIEW: ECONOMICS
Growth slow down and upward Inflationary pressures
Real GDP growth Overview of 2007
6
 In 2007 the economy continued to perform strongly with real GDP
growth coming at 5,1% after the 2006 growth rate was revised upward
5 to 5,4%.
4
 The services sector, in particular the financial, real-estate and business
services sector made the strongest contribution to growth towards the
%3 end of the year as banks’ balance sheets and revenues continued to
grow at a rapid pace.
2
 After remaining stable in the first half of the year, interest rates were
1 hiked further in the second half of the year on the back of rising
inflation.
0
2000 2001 2002 2003 2004 2005 2006 2007 2008  Interest rates were raised by a total of 200 basis points between June
and December, and together with the implementation of the National
CPIX Inflation and Interest Rates Credit Act (NCA), caused demand for credit to gradually taper off
18 towards year-end.
16 Prospects for 2008
14  Economic growth is expected to slow down further in 2008 on the back
12
of rising interest rates, infrastructure (electricity) constraints, and a
struggling household sector.
% 10
8  A slowing US economy and the impact this will have on world growth,
will also cause lower real GDP growth in South Africa, projected at
6
3,4% in 2008.
4
2
 Inflation is forecast to be under strong upward pressure for most of the
first half of the year as a result of movements in oil and food prices,
2000 2001 2002 2003 2004 2005 2006 2007 2008 and the rand exchange rate.
CPIX inflation rate Prime interest rate
 Interest rates are projected to rise another 50 bps in June, remaining
stable in the rest of 2008 in an attempt to keep 36
inflation and inflation
expectations under control.

37. ABSA FOOTPRINT IN SA GEO-SPATIAL MAPPING
37

38. Purpose: To grow the access of
Purpose
sales & service within NICHE
markets, through dedicated
external sales teams at the
MOBILE SALES FORCE BUSINESS MODEL
worksite, at place of
convenience or on the
phone………
In house or out sourced
Direct Sales
WPB Business External Sales & and Service
Development Operations Channel for the niche
Support markets, The purpose of WPB Business
Development is to aggressively
grow the number of schemes,
active portfolio growth and B2B
Key Account Relationship Teams B2B
other business units e.g. ELB via ML
To provide access to sales & service
Finance
Joint Ventures / New Opportunities
to increase the number of schemes
relationship management
LG: Retail Affluent & Investment
Appointment/Diary Management
through Points of Presence at
Sales & Operational Support
Customer Value Proposition/
LG: Islamic Consultants
LG: Core Middle Market
Marketing
Outbound Sales Teams
Inbound Sales Teams
The purpose of Ext Sales &
designated worksites
Management Team
Operations is provide an external
Human Resource sales force for niche markets at
Consultants
the worksite, at home place of
convenience or distribution
Delivery Solutions channels (ESP)
& Innovation The purpose of Direct Sales and
Service is to optimise the use
of a dedicated call centre for
acquisition, cross-sell and
support to the external sales
team. A CRM approach will
be adopted, with an out-sourced
or in-house approach
Development of compelling value propositions for the WPB external
CVP/Commercial LEAD GENERATOR
sales teams focusing on worksites, niche markets and aggressive SEGMENTED APPROACH
Management
acquisition
END TO END CAPABILITY with DEDICATED focus
NICHE markets
38

39. MOBILE FORCE SEGMENTATION MODEL
Segment specific focus MS force spread over 10 Provinces
Contract
Market Total FTE
LG Designation Product Focus (Outs – 3rd
Segment Comp. (ABSA)
Party)
Retail •Investment Products
MS: Acquisition Banker Affluent •Retail Affluent Transactional Products 100 100 0
•Unsecured Lending Products
Islamic •Shariah compliant Transactional and
MS: Islamic Banker investment Products 85 85 0
•Shariah compliant Vehicle Finance
Core Middle •Transactional Products
Market •Unsecured
MS: Core Middle •Lending Products 296 139 157
Market Focus •Investment Products
•Value Add, e.g. Telephonic Banking
LG: Entry Level Entry Level •Transactional Products ESP: 450
Banking Focus – Banking •Unsecured Lending Products
(1) External Sales •Investment Products Mobile
Points (linked to •Basic Insurance Products Units: 54 0 504
Branches) •Value Add, e.g. Telephonic Banking
(2) Mobile Sales Unit
(Unbanked Focus)
TOTAL MS 985 324 661
GRCB Lead Generator
Conference, London, 18 & 39
19 May 2008

40. CUSTOMER SEGMENTATION MODEL
Entry Level Banking up to Retail Affluent Segment
Wealth Absa retail acc
R15m NIA customer base2
Private Bank
R650 000 pa
Retail Affluent
RA
R300 000 pa
290 969
Prof’s
63 400
New to bank customers
Staff
49 629 R120 000 pa
CMM
3.6m
f
af
Se
St
M
th
n
LS
io
u
Core Middle
Yo
r s
n/
Market Seniors
io
1.32 m
at
Students R36 000 pa
Students
ti c
105 000
is
ph
Youth
so
490 000
al
Entry-level banking
i
nc
ELB
na
3.79m
Fi
New to bank customers
GRCB Lead Generator
Black diamonds
Unbanked
Conference, London, 18Lending
Micro & 40
Note: 1
Source: Primary Bank Relationships – Amps ‘07 19 May 2008
2
Source: Absa Internal reflecting all relationships: Dec 2007

41. OUTSOURCED RECRUITMENT MODEL
Conventional sourcing methods
Unconventional sourcing methods
• Within Absa Bank
• External Sources
• Leveraging brands ADCORP
CV
Order
confirmation
Sourcing
Walk-In / First-line
Labour
Telephone screening
Broker
Resource pool
management
Adcorp
alliances
Voice
Assessments Competency
Interview recognition Credit Checks
(SHL, Hrsmart) based interview
assessment
Request CM / Cultural match
Request red list Client interview Induction
ED / Ref Checks interview
Workplace
FAIS
Placement preparedness
accreditation
Quest training
incubator 41

42. TRAINING
Mobile Sales Force Academy : Lean Curriculum- 5 day Programme
Day 1 Days 2 and 3
Absa Socialisation (high level) Business Simulation
Absa Compliance and testing encompassing Sales, Service, Products
and Process
Days 4 and 5
Regulatory Training
(NQF 4 and 30 Credits)
According to Financial Services Board the regulatory pre-requisite for this role is the NQF 4 and
30 credits. Money laundering and Sanctions are compulsory prior to contact with the client.
42

43. MOBILE SALES CAPABILITIES & DEPLOYMENT
Segmented Distribution Channel focus providing multiple options of delivery
Entry Level Entry Level Workplace Banking Banks on Wheels
Banking Banking Kiosks (BOW’s)
External Sales Points Mobile Sales Units Focus: Worksites Focus: ELB and CMM
(ESP’s) (MSU’s) Core Middle Market at Events, Worksites,
Focus: Branch Hot Spots Focus: Townships Branch Support
Comprises: Comprises: Comprises: Comprises:
•Gazebo •Mercedes Sprinter •Large Kiosk •VW Crafter
•Digital pens (2) •Gazebo •Generator •Generator
•POS device •Generator •Remote opening kits (2) •Combination TV and Video (CET)
•Tables (2) •Combination TV and Video (CET) •Digital pens (2) •PA System
•Chairs (7) •Remote opening kits (2) •POS device •FBSS Workstations (2)
•Marketing materials •Digital pens (2) •3G printer/Fax/Scanner •Fully functional ATM
•Promotional materials •POS device •Marketing materials •Marketing materials
•Card and Pin Mailers •Tables (2) and Chairs (7) •Promotional materials •Promotional materials
•3 DSA’s per team •Marketing materials •4 FTE’s per BOW
•Team Based Targets and •Promotional materials •Chairs and Umbrella’s
Incentives •Training ATM
•6 DSA’s per team
Functionality: Functionality: Functionality: Functionality:
•Account opening •Account opening •Account opening •Account opening
•Basic Enquiries •Basic Enquiries •Basic Enquiries •Basic Enquiries
•Mini Statements (future) •Mini Statements (future) •Mini Statements 43
•Mini Statements
•Prepaid purchases (future) •Prepaid purchases (future) •Prepaid purchases •Prepaid purchases

44. ABSA MOBILE CHANNELS
44

45. COMPETITORS MOBILE CAPABILITIES
45

46. MOBILE BANK ON WHEELS (BOW)
46

47. TAKING BANKING TO THE PEOPLE
DAVEYTON
47

48. SALES FULFILLMENT PROCESS
High level sales fulfillment process
LG makes LG meets or LG interviews customer Customer accepts the proposal/s and
contact with or interacts with for sale: Connect, completes the application forms, Record
START sets up an customer and Needs analysis, of Advice and obtains all supporting
appointment prompts the present solutions documentation. Customer signs all the
with customer customer to handle objections and required documents (Close the deal).
disclose financial cross sell *If available - issue card and pin mailer
request/need
SS captures the SS screens SS checks quality Sales Support clerk LG forwards all of the
Record of Advice customers against and compliance (SS) receives the documents through to the
online and CASA and opens adherence of all documentation and Sales Support clerk at the
executes all other account on FBSS documentation records deal in Sales Support Hub/branch
administrative register/DSAS
duties
SS calls the LG / customer Customer LG monitors LG sends original
and informs them that the encouraged to progress of account documentation to
account has been opened. Activated
activate account activation and Hub/branch
Account no provided. account
Update records in updates verified &
register / DSAS commission claim Commission
form once account paid to LG
is activated
48

49. COMPENSATION STRUCTURE
Fixed Salary R 3000 / £194
LG (ELB)
Commission per Prod Team based targets
Other Commission None
Products sold Transactional Unsecured Lending
Investments Basic Insurance
Commission payable per LG 100% to target (195 NET
Team products per team), R3000
per LG
Quarterly Bonus None
Quarterly Incentive (stretched 110% to target ( 216 NET products per team), R3000 per LG
target) 125% to target ( 243 NET products per team), R9000 per LG
OTE Monthly Ave Salary R7000/ £467
Fixed vs. Variable 43%
remuneration split
49
OTE: Opportunity to Earn

50. COMPENSATION STRUCTURE
Fixed Salary R3000/ £194
LG (WPB, Core Middle Market)
Ave Commission per prod R122 / £ 8
Other Commission R1000 / £ 65 for Value %
Achievement 100% to 124%
Products sold Transactional Savings & Investments
Unsecured-lending Value Adds
Commission payable 100% to target (60 NET
products pm), R8000 for
Volume and R1000 for value
Quarterly Bonus R8000/ £517 VOL (125% to target)
R4500/ £291 VAL (125 to target)
R11000/ £712 VOL (150% to target)
R9000/ £582 VAL (150% to target)
Quarterly Incentive (stretched None
target)
OTE Monthly Ave Salary R 10 320/ £ 688
Fixed vs. Variable 29%
remuneration split
50

51. COMPENSATION PHILSOPHY
COMPENSATION PROGRESSION CHART
30000
COMMS RAND VALUE
25000
20000
15000 RAND
10000
5000
0
LG (ELB) LG (WPB) LG (ACQUISITION
BANKERS)
LG SEGMENTS
• Allows for progression from ELB
segment to Retail Affluent
segment
• Succession planning for MS
• OTE: Opportunity to Earn as MS
performs

52. PRODUCTION VOLUME - QUARTER 1 PERFORMANCE
Overall substantial increase in Performance – Cumulatively 112% to Target
Jan Feb March YTD - Q1
Active Active Active
Actual Target Sales Actual Target Sales Actual Target Sales Actual Target
Staff Staff Staff
WPB 3,624 1,875 113 6,431 5,008 120 5,977 9,569 130 16,032 16,452
AB 2,799 1,509 89 2,734 3,897 101 2,409 5,565 101 7,942 10,971
IB 1,037 1,219 61 902 2,461 63 2,393 2,817 70 4,332 6,497
ELB 24,130 13,365 540 38,092 26,059 749 33,903 38,052 804 96,125 77,475
124,43 111,39
Total 31,590 17,968 803 48,159 37,424 1,033 44,682 56,003 1,105
1 5
TOTAL
Keys:
ELB
• WPB – Workplace Banking
IB
• AB – Acquisition Bankers
• IB – Islamic Bankers AB
• ELB – Entry Level Banking WPB
NB: Productivity Includes 0 GRCB
20,000 Lead Generator
40,000 60,000 80,000 100,000 120,000 140,000
Value Added products Conference, London, 18 & 52
Actual
19 May 2008 Target

53. PRODUCTIVITY RATIOS - QUARTER 1 PERFORMANCE
Average Product Volume Trends Positive – sound monthly product volumes per MS
YTD
Jan-08 Feb-08 Mar-08
AVE
Average Volumes sold per day per MS (WPB) 1.5 2.6 2.4 2.1
Average Volumes sold per day per MS (Acquisition Banker) 1.4 1.3 1.3 1.3
Average Volumes sold per day per MS (Islamic Banking) 0.8 0.7 1.8 1.1
Average Volumes sold per day per MS (ELB) 2.0 2.4 2.2 2.2
Total Ave Product numbers sold p.m. per MS PERSON PRODUCTIVITY RATIOS
3
AVERAGE PRODUCTION
Acquisition Bankers 26
2.5
2 LG (WPB)
Islamic Bankers 22 LG (AB)
1.5
LG (IB)
1 LG (ELB)
WPB Consultants 42 0.5
0
GRCB Lead Generator
JAN FEB MAR
ELB Lead Generators 44 Conference, London, 18 & 53
19 May 2008 MONTHS

54. TECHNOLOGY & ENABLEMENT
Optimal technological enablement solution per segment
Technology Solution Targeted Areas Status Medium Term View
Digital • Entry Level Banking • LAUNCHED • Implement nationally
Pens • ESPs
• WPB Kiosks
Laptop • Core Middle Market • LAUNCHED • Implement nationally
Kits • Retail Affluent
• Islamic Banking
• Mobile Sales Units
• Bank on Wheels
Card and • All NBS sales • LAUNCHED • Full implementation
Pin environments
Mailer
Other • Entry Level Banking • IT LITE SOLN • Introduce alternative devices
Devices LAUNCHED
Fulfilment • All NBS sales • INTEGRATION • Implement ED
Portal environments

55. ENABLEMENT PLATFORM
Technological Integration ensure a seamless end to end Sales fulfilment process
Note: Integrated Service – accessed by AGO, NBS Support hubs, other SBU’s and
ES & WPB Sales Consultants

56. KEY LEARNINGS
Solid progress despite challenges experienced
Positive Experiences Learning Curves
– Volume production – Poor performance in Value targets
– Variable compensation – Developing an accurate MI system to
– Segmented sales force track commissions and daily production
– “First Job Application” employees and – Attaining volume in certain targeted
productivity product lines
– Delivery channel positioning, e.g., – Bedding down technology enablement
External Sales Points – Investment Consultants with limited
– Bank on Wheels highly successful in transactional products to sell in targeted
Student Market and event based market
interventions – Lag in addressing poor performance due
– Positive productivity and performance to bedding down of overall DSA model
trends approach
– Contribution towards “New to Bank” core
customer growth

57. LG BUSINESS SIMULATION PROGRAMME
Description:
LG manage the performance of a Sales team through 3 cycles by following a 6 step process:
• Step 1: Teams receive goals per product and campaign
• Step 2: Teams come up with actions and ideas on how to create opportunity i.e. prospecting, networking as well as looking
at events in certain areas which might offer opportunities
• Step 3: Teams react to events and make service choices which will influence the amount of potential sales going into their
sales funnel
• Step 4: Teams analyse customer profiles and put together a Value Proposition which is presented and rated. The ‘client
sales interaction’ determines the number of products in the sales funnel (cross-selling opportunities)
• Step 5: All team members fill out documentation and indicate compliance requirements per product for those products they
managed to sell in step 4. Faulty applications leads to lost sales
• Step 6: Teams receive final actual revenue and compare it to targets. Action plans are put in place for the next round
Reflect
Workshop
Plan for
Do Feedback/coaching action
Pre-work Action
(Product Planning
Knowledge &
Tool) Simulation
Apply Application Execution
3 Simulated Analyze/present
cycles 57

58. SALES PERFORMANCE MEASUREMENT PROCESS
Sales support Clerk
receives application,
Sales consultant Sales consultant submits conducts quality check
complete application application to respective and then proceeds to
with customer Sales Support Hub for captures application on
processing. FBSS. Sales support clerk
then captures details and
status of application on
Manuel Submission
DSAS.
• Digital Pens
Technology:
• Lap top Kit
•Productivity by sales
consultant The following status of the
•Productivity by Sales DSAS system generates application can be captured
Support productivity reports based on DSAS.
•Productivity by Region on what has been captured • Approved
•National Productivity. at the Sales Support Hubs. • Pending
• Number of Sales per Sub- • Declined
Product
58

59. SALES COMMISSION PROCESS
Detail report of all applications
Sales consultant to complete Regional manager to send
processed and approved is
application with customer and validated report to national
extracted from the DSAS system
send application through to sale sales manager by the 3rd
by the regional manager for the
support hub for processing on working day of month.
respective region and validated
FBSS and capturing on DSAS.
for accuracy by the second
working day of the month.
Business Analyst from Business analytics department to
use spreadsheet received from National sales manager to
National sales manager to collate all
verify against the Absa data warehouse for activated
validated regional reports into one
status of transactional, unsecured lending, insurance,
spreadsheet, verify for correctness and
savings and investment products. Only valued added
submit to Business Analytics department
products will not be verified for activated status. by the 4th working day of the month.
Once the business analyst has
Commission will then be calculated for completed the commission calculation,
all verified activated sales (in the case business analyst to send commission
of value added products – only claims to General Manager (External
applications captured as approved on Sales and Operations) for validation
DSAS - will commissions be calculated and sign-off by the 7thth working of the
for). month.
General Manager (External Sales and Operations) to sign-off
commission claim and send through to Quest for payment of
commissions to direct sales agents by the 8th
working day of the month.
59

60. 1. Background
MOBILE E-COMMERCE

61. 1. Background
OVERVIEW M-COMMERCE
• Internet banking has received the most coverage over the last decade
• Movement towards greater mobility as mobile phones become more sophisticated
• These phones can know handles more advanced applications & services
• Banking via mobile phones appeals to consumers on multiple fronts
• Mobile phones also serve as an efficient vehicle for making contactless payments, P2P transfers, providing greater
security protocols and storing in-depth preference information
• Various software platforms for mobile phones and other devices will allow the consumers to use the web
• Over the next decade the movement towards Mobile Banking will rapidly increase
• Other technology developments will affect retail banking and these include:
• Growing broadband at lower costs
• Webcams via Web 2.0 will reach consumers at home
• VoIP
• Instant message systems
• Social Network (face-book, twitter, etc)
• Thin client capabilities makes remote access easier
• Level of security protocols and applications is constantly improving
• Technology is allowing banks to be more cost effective and efficient

62. 1. Background
MOBILE TRENDS 2011
• Year of the smart phone even for the ‘dumb’ user
• Apps vs. mobile content internet will continue
• Mobile marketing spend will grow significantly (USA to exceed the 1 billion
mark)
• Mobile will increasingly prompt customers to interact with their physical
environment
• Companies will invest first in convenient services for customers, acquisition
will come second
• Casual gaming will continue to lead the mobile change for content
• Term mobile will mean a lot more than mobile phones (I-Pad)

63. 1. Background
BEST PRACTICE FOR SUCCESSFUL M-BANKING STRATEGY
• Implement SMS based M-Banking capabilities that focus on the
most relevant and actionable alerts for customer today
• Plan for the future
• Anticipate the increased need to intelligently reach out to
customers across multiple communication channels (SMS,
email, voice, and instant messaging)
• Select a service provider that enables and implements a cost-
effective delivery of SMS capability & function

64. 1. Background
MOBILE GROWTH DRIVERS

65. 1. Background
SOCIAL NETWORKS

66. 1. Background
MAIN FEATURES OF MOBILE COMMERCE
• Ubiquity – anywhere
• Immediacy – anytime
• Localisation – GPS specific to a location
• Instant Connectivity – General Pocket Radio Service (GPRS), means mobile
service are online and always on
• Pro-Active Functionality – tailor making to suit the needs of a user, IOW, a
user can choose what he wants to view or receive on his mobile
• Simple Authentification Procedure – electronic chip found in mobile devices
call Subscriber Identity Module (SIM) using a PIN

67. 1. Background
SERVICES IN MOBILE BANKING
Account Operations Account Administrations
Money Transfers Changing accounts
Bill payments Blocking lost cards
Money Transfers Cheque book requests
Subscribing insurance policies Administration
Account Information Product Information
Balance enquiries Product Information
Statement requests Product Pricing
Threshold alerts Interest rates
Branch/ATM locations FOREX rates
Helpline
Credit card info

68. 1. Background
MOBILE BANKING AND CORE TARGET GROUPS
a) The Youngsters:
• The segment of the 14-18 years old
• Technology savvy and willing to experiment with innovative products/services
• On the move, demand ubiquitous, anytime service
• Represent future prospects
• Hence marketing must be used to cultivate this group
a) The Young Adults
• Technology & innovation friendly
• Financially not very strong
• They also will need to be cultivated through marketing
• Students to beginning of a career
a) The Business People
• Age group 26-50 years
• Important segment to mobile banking
• Well educated & economically well-off
• On the move, hence carry mobile devices
• They demand financial services and products

69. 1. Background
MEASURING EFFECIENCIES OF MOBILE BANKING

70. 1. Background
TRENDS IN USERS (2007, EUROPEON UNION BANKS)

71. 1. Background
SMS BANKING
• Using mobile phone via TEXT to conduct banking functions:
• Balances
• Mini-statements
• Transfers (M-Pesa)
• Different to telephone banking
• Helps users keep track of banking activities anytime, anywhere, any place
• Some do not charge for SMS banking (South Africa – cross-sell/retention)
• Most to all phones are capable in using SMS banking
• SMS alerts, keeping you informed on daily transactions
• Costly, complex when looking at future growth, developments
• A comprehensive mobile messaging solution must be able to abstract, send, and receive messages from multiple channels,
including mobile devices, landlines, & IVR systems
• The capability implies the need for a MULTI-MODAL messaging architecture
• Multimodal architectures help banks cost effectively deploy SMS messaging services without upgrading existing IT
infrastructure or adding support personal
• This allows users/customer to perform simple transactions (balances, statements, transfers…etc)
• Current focus is on SMS functionality, over WAP & app type solutions

72. 1. Background
CONSUMER PREFERENCES FOR SMS BANKING (2007, US)

73. 1. Background
MULTIMODAL MESSAGING ARCHITECTURE
• Enables a single messaging strategy
• The platform uses application programming interface to abstract, track, transmit and receive messages from
multiple channels
• Customer profiles determines where/which messages go
• Routes messages via multiple networks
• Switches between communication channels until customer receives the message

74. SESSION 3: Branch Strategy

75. WHAT DO CUSTOMERS WANT??????
Customer
 Most customers prefer to purchase in the branch Centric View
 There are groups that are moving away from branches, and towards alternative
channels, mobile sales force, cell-phone banking, internet
 Excellent service
Convenience
 Convenience and accessibility &
Understanding the
needs
 Feedback
 Customers want products that are understandable and easy to transact with

76. OBJECTIVES
 Launch a differentiated retail branch
 A multi-channel approach to support the accessibility and convenience for
customers
 To ensure that channels are profitable and sustainable
 To ensure that our channels offer superior customer service
 Keep our approach simple
 Doing things right the first time

77. SWOT ANALYSIS
Strengths Weaknesses
 New Bank that has the flexibility to innovate and re-invent IT and Ops infrastructure
the market place
Speed to execution
 NO legacy issues
Recruitment of appropriate skills
 New, innovative and strong retail management team
Not an established brand
 Cross border roll-out, implementation and execution
 Achieve critical mass, representation
Opportunity Threats
Creating a well differentiated bank in a concentrated bank Global Economy
Creating a NEW and leading brand NOT well diversified
Product innovation and leadership Budget constraints
Critical Mass Operational support at HQ
Offer convenience, accessibility Lack of buy-in, change management
Diversification on the income streams
77