Chappuis Halder & Cie is a consulting firm that specializes in financial services. They propose a "Kick-Boost-Launch Approach" to help banks develop digital strategies. This involves workshops to understand opportunities, benchmarking best practices, and defining a multi-year roadmap. Their presentation outlines the major changes in banking driven by new technologies and customers' shifting expectations towards more personalized, convenient digital experiences. It also identifies areas banks can improve and innovate, such as operational efficiency, new business models, and targeting underserved customer segments through digital channels.

1. Chappuis Halder & Cie
Digital in Private Banking
3rd of April, 2014
Daniel Corrales dcorrales@chappuishalder.com
Patrick Bucquet pbucquet@chappuishalder.com
Stéphane Eyraud seyraud@chappuishalder.com

2. Introduction
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"The next big thing is digitalisation”
There are more wealthy people on Facebook, Google+, and other networks than anywhere, and what if they begin getting investment advice through those channels?
-- Jürg Zeltner
CEO, UBS Weatlh Management
September 16th 2013

3. Agenda
Paradigm shifts driven by the introduction of digital strategies
Leads to explore in Digital Private Banking
Our value proposition
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4. The Banking industry is going through major changes, and banks are more and more challenged by new entrants
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Data is the real value, not commission
…
Next Gen
Banking
Banking is a service, product- agnostic
Regulation is no longer a barrier
UX is key to provide a service focusing on one use, bank-agnostic
Governance bodies favor financial inclusion, easing new entrants into the industry
There is a strong pressure on commissions, banking business is now about customer data use
800 million users
(e-commerce)
8,5 million users, 40% of Kenyan adults
1% of Whole Foods transactions after 1 month (US)

5. Alibaba is now one of the biggest financial service providers in the world, and is ready to launch a real bank
300 million users of Alipay (online payment) – 80 million transactions par day
190 million users of Alipay Wallet
Yu’e Bao is the biggest funds (125 million customers, $90 Mds AUM)
Zhao Cai Bao finances SME, based on a P2P model
Chinese banking regulator allowed Alibaba to launch MYBank, a privately owned bank
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6. Customers are now surrounded by new technologies and new devices transforming the way to interact with each others
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Devices
Social media
Platforms

7. The web has now changed to become the “web of users”, users are much more trusting their peers than the brands
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The wealthy tend to be part of connected digital communities who share their ideas and opinions
2/3 of users are trusting their peers, 1/6 are trusting the brands

8. I want to be able to send feedback to my bank so it can improve my service
I am expecting personal interactions with representatives and a customized interface
I want my bank to be able to fit to my specific banking usage (personalized offers, “pay as you bank”, personal savings & budget management)
I want to get access to my personal information and my banking services whenever I want and wherever I am (multi- devices), with a real time update
I need to understand my bank to make my life simpler
I need a simplified interface that fits to the device I use
I want my bank to be present in my day to day online social environment
I want to benefit from my social network(expertise, recommendation, etc.)
I want to share banking services with my community
Digital Era
Digital UX
The digitalization of day-to-day life brings customer’s new expectations, which are much more user experience oriented than service based
Loyal
Smart
Co- construction
Always on
Personal
Simple & design
Social
Gamification
I want my bank to give me the tools to take my own decisions based on my analysis
I want to get access to the best expertise from my bank when needed
I want to get concrete benefits of my relationship with my bank (coupons, promotions, gift, etc.)
I want to use existing or new services with fun
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Different aspects of best-in-class attributes in digital banking

9. Agenda
Paradigm shifts driven by the introduction of digital strategies - examples
Leads to explore in Digital Private Banking
Our value proposition
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10. Rational:
>Being first-mover to create a competitive advantage
>Being different from competitors
>Start local then move to other market
New technologies open up incredible opportunity to build a new business model in private banking
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1
Private Banking
New generation
Basic digital offer
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3
Improved digital offer
New Business Model
>Standard offer
>e-banking, online presence
>Different web and mobile offer
>Focus on smartphone use
>M-banking
>Big Data: analytics clients and prospects
>Costumed digital offers
>Introduce now products and innovating services
>Refocus on UX (User eXperience): useful, intuitive, fun and easy
Split zone:
>New technologies reach mass market
>New digital standards, coming from other sectors, are deeply changing private banking and customer experience
>Banks are not anymore the only providers of banking services (P2P lending, etc.)
>Banks propose other services than banking services
Traditional banking services
Today’s challenge is to reinforce market position, be a first-mover and capture new markets

11. Level 1 : Product-Centric
Level 2: Service-Centric
Level 3 : Client-Centric
Online client servicing includes advices and support to financial planning
Sales team can rely on efficient tools (on tablet, etc.)
Personalized offers are pushed to the client (direct marketing) using all client’s data available (big data)
RM could be contacted by different means (IM, video, etc.)
Online client servicing is mainly focusing on reporting
Client have real time access (market data, alerts)
Pricers and simulators are available online and can be used by the client on his own
E-workflow / paperless processes
General information pushed to clients
Marketing documentation available onsite
- Digital Maturity of the Bank +
- Value Added Services +
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Trading platform is a Client tailor-made tool
Banks transferred services online (e-PB)
Client & Bank relations are integrated
The digitalization of Private Banking is on-going, moving from a product-centric approach to a client-centric approach, but without any major ruptures

12. Becoming Client-Centric is the final objective, but previous phases are mandatory to deploy Enablers
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Client Centricity must be limited to increase the number of touch points…
… Which means changes to be deployed on the different layers of the organization
Provide tools to RM to be able to face the customers with the same tools they have at home Review the role of the RM
Review IT to support e- processes, e-offer and e- customers
Design specific offer for digital channels, and do not add a channel for the same offers
CRM
IT
Offer
Adapt Front-to-Back processes to manage digital channels
Process

13. Technology is now a “brain-amplifier”, providing users with many
analytic tools, actually intermediating the banks
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The wealthy are more technology enabled than ever before

14. There is an ongoing polarization in Private Banking, and Digital could increase market segmentation
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HNWI segment is declining in favor of Mass Affluent and UHNWI…
… and Digital just adds another risk
UHNWI
Mass Affluent
FAMILY OFFICE
HNWI
≈13 MILLION CLIENTS
$30 MILLION
$1 M – $5 M
≈344 MILLION CLIENTS
≈167 000 CLIENTS
$0.5 M – $1 M
RETAIL BANKS
Digitalization along with an always more bounding regulation makes private banks less attractive to UHNWI. They will seek more customization by joining family offices
92% of HNWI considering internet and digital technology to be a major source of ongoing wealth generation and planning to increase their usage
With Digitalization “mass affluent” will not be willing to pay extra fees for services they can perform themself online. At the same time retail banks improve and customize their services to attract “mass affluent clients”
The “HNWI” market will get smaller and competition will increase and become always more international
Source: Horizons bancaires, 2009

15. 15
Digital enablers are now an opportunity for Private Banks not only to Improve but also to Innovate
Operational efficiency (e-process to reduce cost)
Anti-Fraud
Addressable market
UX segmentation
New business model
Improve
Innovate

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Digital enablers could support Improvement (operational efficiency)
Improve authentication
Simplify data collection (KYC)
Second factor authentication + Voice recognition + Behaviometrics (behavioral biometrics) monitoring
Collect data electronically every year, avoid to send paper to customers to streamline client profile update
Source: Behaviosec
Source: Jumio

17. Digital enablers could support Innovation
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Address new markets
Propose different UX
Develop new business model
Become a trusted market place, connecting people and service providers
Enlarge addressable markets thank to new digital channels: target mass affluent segment / liaise with future HNWI
Adapt services to expectations, get ready for Young HNWI expectations

18. Private Banking business model is changing, pushed by new entrants
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+ PRODUCTS
+ SERVICES
+ PEERS
+ CONTENT
Inspiring concept in Private Banking
A financial community helping people / corporate to get funded
A social network, where users can follow best practices / advice from others
An aggregation of data assessed based on quality and relevant to user’s objectives
CUSTOMER
A new approach to help people to achieve their financial needs, with an understandable approach, step-by-step

19. Becoming A PLACE TO BE, Private Banks could increase trust and security and provide A TRUSTED PLACE, built on 5 main blocks
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Private Banking = “Trusted Finance Amplifier”
(much more than mere finance)
Protection
Empowerment
Guiding & Education
Social
Intimacy

20. Using the UX as a corner stone, CH&Cie already identified potential innovations for Private Banking
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Reporting
Alerts
Aggregators
Financial Goals / Simulators
P2P comparison
Nudge Marketing / “levels” to guide and educate users
Automate
Improve
Innovate
Protection
Empowerment
Guiding & Education
Loyalty / Rewards
Social
Intimacy
Direct contact with RM on any medias
Information collection and analysis on customers
Services for entrepreneur “CFO in a pocket”
E-Trading
Access to experts and reports
Ranking of external advisors
Market trends
Consolidation of reports / data etc.
Alerts on market changes
E-Vault
Stronger authentication
E-Reputation management
Validation of comments and sharing between users
Concierge
Specific discounts based on customer habits
Partnership with top players : UBER, AirBnB for villas, etc.
Access to expertise online
Crowdfunding
Currency transfer between customers
P2P advisory
Collective intelligence

21. To benefit from the digital opportunities, Private Banks must change their way of working
Leverage on technology enablers to keep ahead of the game
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Borrow ideas across the world to trigger innovation
"The next big thing is digitalisation: there are more wealthy people on Facebook, Google+, and other networks than anywhere, and what if they begin getting investment advice through those channels."
-- Jürg Zeltner
Focus on uses, get into the life of the users
Don’t think only about Finance, user’s life is much bigger!

22. Agenda
Paradigm shifts driven by the introduction of digital strategies – examples
Leads to explore in Digital Private Banking
Our value proposition
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23. Framework for digital strategy thinking
Wealth presentation
Advisory
Smart push
Investments and financial services
Customized offer
Security and data protection
Full availability
Social Networks
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8
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Transaction services
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2
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A comprehensive digital offer has different functional blocks. They are customized to changes according to clients’ needs. Each of the following blocks should be carefully thought to build a consistent and suitable offer.
*Note: This is a non exhaustive list
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24. Kick-Boost-Launch Approach
Methodology
Deliverables
Define the approach
Transparency
Blueprint
Line up the different players
Realize Establish a roadmap
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2
3
KICK
BOOST
LAUNCH
Objective:
–Understand the commercial strategy
–Validate digital as a catalyst
Workshop/brainstorming for each block with CH&Cie experts
Bank context
Expertise
Market insights
Objective:
–Understanding of « best practices » and main features of digital banking
Stakeholders involved
Objective:
–Identify and structure an opportunity to kick of an realize the vision
–Formalize the roadmap for digital strategy
Project perimeter: proposed value, components of the offer, customer experience, etc.
Prerequisite and action plan
Common vision shared
Different level of maturity of stakeholders
Roadmap and key steps – 3 years
Description of main projects (1 slide per project + budget)
Define kept operational blocks
Different storyline with stakeholders in order to share / validate / improve
Small team
Top management
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25. Chappuis Halder & Cie is a Financial Services consulting firm, bringing ideas and delivering solutions across the globe
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Chappuis Halder & Cie is a consulting company specializing in Financial Services. We have expanded geographically from our origins in Geneva, now serving clients in all of the major financial centres across the globe. Our main focus is on 4 business areas: Retail & Private Banking, Corporate & Investment Banking, Insurance, and Commodity Trading. CH&Cie expertise is anchored in the deep sector and functional knowledge of our consultants; all of us have a financial services background, and know the sector inside out. Because we do nothing else, and we operate across the globe, we are able to bring a rich seam of best practice ideas and benchmarking data to our clients.
London
Hong Kong
Singapore
Genève
New York
Montreal
Paris