Interesting material about the market of financial consumer products. Margins, profitability, customer behavior, service models. What will matter and what will not.
1. A joint Eurofinas/Roland Berger
Survey
2nd edition
March 2019
Future of
European
Consumer
Finance
2. 2
Contents Page
A. Introduction to the survey 3
B. Survey participants 7
C. Main findings 12
1. Growth and margins 14
2. Market structure and competition 20
3. Market trends and challenges 28
4. Regulation 36
5. Digitization and customer journeys 44
6. New capabilities and key success factors 57
D. Conclusions 64
E. Glossary 66
4. 4Source: Eurofinas – Roland Berger
This survey provides top industry executives with an opportunity to
share and compare their views with peers across the market
Success in today's highly regulated consumer finance environment still requires
the ability to master traditional key success factors such as excellence
in face to face selling, impeccable dealer service, risk control, sophisticated
pricing, etc.
At the same time, consumer finance leaders need to reckon with trends that
are reshaping the way people make their purchasing decisions and
challenge the traditional business models: social networks and the
omnichannel customer, AI, online brokers/comparators, customer behavior,
sharing economy, among others.
This second Eurofinas/Roland Berger European Consumer Finance
Survey provides top industry executives with an opportunity to
compare their views with industry peers from different geographies
on market outlook, consumer trends, external challenges and
future requirements to succeed in this challenging environment.
A Introduction to the survey
5. 5Source: Eurofinas – Roland Berger
Top executives of European consumer finance providers were
surveyed
> Qualitative survey in the form of multiple choice
questionnaire and some open ended questions
> Opinion-based questions
> Questions comparing 2017/2018 actuals vs.
expectations for 2021
> Time to complete: ~30-45 minutes
> Survey took place between May and
September 2018
> Data analysis based on aggregated data
– By country, business model, etc.
– Comparison with 1st edition survey results
(2015)
MethodologyTargeted participants
Consumer finance specialists/ motor
and retail captives/ niche players/
divisions/ business units of retail
banks and credit brokers
Country level CEOs, local heads of
consumer finance division/ business
unit of retail banks
Specialized institutions whose main
business focus is mortgage lending
or leasing
Outofscope
Overview of targeted participants and applied methodology
A Introduction to the survey
6. 6Source: Eurofinas – Roland Berger
Consumer finance executives shared their 2018-2021 perspectives
on 6 macro areas
The future of consumer finance
Growth and
margins
> Growth and margin evolution
by product type and business
model
Market
structure and
competition
> Consolidation and roles of
different business models
> Business models most likely
to grow in market share
Market trends
and challenges
> Major trends and main
threats
> Technology
> Customer behavior
> Key success factors by type
of business and need for
improvement
> Major initiatives to be
launched
1 1| 2| 3|
4| 5| 6|
New capabilities
and key success
factors
> Digitization of operations
> Distribution channels and
customer journeys across
channels
Digitization
and customer
journeys
> Impact of regulation on
business
> Threats and opportunities
Regulation
Survey's key dimensions Clustering variables
> Type of business model
(Specialists, Captives,
Retail banks, Niche
players)
> Size
– New business volumes
– Outstandings
– Active customers
> Cost Income Ratio (CIR)
> Cost of risk (COR)
> Split of new business
A Introduction to the survey
8. 8Source: Eurofinas – Roland Berger
92 companies in 13 European countries took part in this edition of
the Future of European Consumer Finance Survey
European companies92
22
Iberia
Germany
France
7
14
Italy
11
Benelux
16
15
Rest of Europe
Nordics
7
Belgium Germany
France
United
Kingdom
Italy
Estonia
Nether-
lands
Norway
Poland
Sweden
Spain
Czech
Republik
B Typology of survey participants
Overview of participants by geography
of which Poland
11
9. 9Source: Eurofinas – Roland Berger
Participants account for over 1/4th of the European consumer
finance outstandings and represent four different business models
37%
25%
21%
17%
Captives
Specialists
Retail
banks
Niche
players
48%
27%
12%
5%
8%
< 1 bn
> 20 bn
10 - 20 bn
1 - 4.99 bn
5 - 9.99 bn
53%
23%
21%
2%> 10 m 1%
5 - 10 m
1 - 4.99 m
250,000 -
0.99 m
< 250,000
A wide range of business
models represented in the
survey
> Specialists: Finance
companies / banks or
divisions of banks whose
main business is consumer
finance
> Captives: Players dedicated
to captive business of OEMs
or retailers
> Retail banks: Consumer
finance businesses
integrated in broader retail
banking organizations
> Niche players: Brokers,
payment specialists,
specialists in micro-loans
and salary guaranteed loans
(Italy)
Key Points
Business
model1)
Outstandings
[EUR]
Active
customers [#]
New Business
Vol. [EUR]
17%
20%
29%
26%
9%
< 50 m
50 - 249.9 m
> 5 bn
1 - 5 bn
250 m -
0.9 bn
1) Certain types of business models have been aggregated: (1) "Niche players" include credit brokers; (2) "Captives" include both retail captives and motor captives
2) Percentages do not always add up to 100% due to rounding
Business model and size of participating companies2) [2017]
B Typology of survey participants
%ofrespondents
10. 10Source: Eurofinas – Roland Berger
New business volumes mix by product of participating companies [2017]
Participants generally offer a wide range of products, but their new
business volume is mostly driven by personal loans
All participants
57%
77%
57%
22%
43%
Percentage of respondents offering the following products…
14%
21%
33%
27%
30%
21%
17%
35%
44%
50%
11%
13%
20%
13%
10%
14%
12%
8%
5%
39%
37%
5%
13%
5%
2%
25%-49.99%<5% 50%-75%5%-24.99% >75%
…representing the following share in respondents' New Business
Volume mix
B Typology of survey participants
Revolving
credit
Other point of
sale financing
Personal loans
Motor loans
Others
11. 11Source: Eurofinas – Roland Berger
Sample covers companies with various cost income ratio (CIR) and
cost of risk ratio (COR) levels
B Sample description and key ratios by cluster
CIR and COR of participating companies [2017]
Cost income ratio (CIR) Cost of risk (COR)
14%
< 30% 30 -
34.9%
40 - 45%35 -
39.9%
10%
> 45%
13%
8%
55%
> 5%< 1% 2 - 3.9%
23%
41%
1 - 1.9% 4 - 5%
27%
4%
6%
> Overall, 37% of participants have
CIR under 40%, 63% have CIR
over 40%
> Italian participants have lower CIR
than average, Polish and Belgian
higher
> Specialists with physical
distribution channels tend to have
higher CIR than hybrid players
> The majority, 68%, of the sample
have COR under 2%
> Geography is the key factor
determining the COR level
Key Points
%ofrespondents
13. 13Source: Eurofinas – Roland Berger
Consumer finance executives shared their perspectives on six major
topics
Growth and
margins
1
Market
structure and
competition
2 > Market consolidation expected by the majority of participants (c. 70%), in line with 2015 report
> Consumer finance specialists expected to outperform other business models by 2021
> Significant market share gains expected for digital platforms, especially online brokers/ comparators;
opinions on P2P lending are less homogeneous and less positive
5 Digitization
and customer
journeys
> Pace of digitization slower than expected when comparing the level today with expectations stated in
2015, but the process is accelerating
> Remote customer journeys growing in importance but face-to-face and voice-to-voice interactions are
there to stay both in B2C and B2B2C
4 Regulation > Mixed views on GDPR – some rules are perceived as opportunities, although overall the impact is expected
to be burdensome
> Majority of respondents are positive about the impact of PSD2
New capabilities
and key success
factors
6 > New product capabilities will be required to succeed, including: integration with new payment systems,
account aggregation, instant payments
> Main success factors that require improvement are related to digital: big data, omnichannel journeys, CRM
> Time to yes / cash still an important success factor and a challenge especially in B2B2C (eCommerce)
Market trends
and challenges
3 > Digital transformation and big data expected to disrupt business models by >85% of respondents
> More than 70% believe that the time customers spend online and on social networks is the most important
socio-economic trend
> Sharing economy is seen as more important than in the 2015 survey, particularly by captives
> Positive growth outlook on volumes (95% of sample expect growth) – Most positive outlook for personal
loans
> Slight decrease of margins expected for all product types, with motor loans experiencing highest pressure
> Benelux is more optimistic about margins than the average, while Iberia and Germany more pessimistic
Summary of findings
15. 15Source: Eurofinas – Roland Berger
1
2
Section Summary
> 95% of respondents believe the consumer credit market will grow in
terms of volumes between 2017 and 2021
> Growth is expected to be stronger in Iberia and France compared to the
other countries
> Consumer finance specialists are relatively more optimistic with over
50% expecting growth rates of over 5% per year
> Personal loans are expected to grow most, while participants
expectations for revolving credit volume evolution are very
heterogeneous; Benelux and France expect a significant reduction in
revolving credit volumes (possibly linked to recent regulatory
developments)
> Over 70% of respondents expect margins to remain broadly stable
> Captives have more pessimistic outlook – 70% expect declining
financial margins
> Biggest pressure on financial margins is expected for motor loans and
other purpose loans, for which the majority expect a negative evolution
C.1 Growth and margins
Majority of participating firms expect
growth across all product categories
Views on margins vary significantly by
geography and business model / product,
with the vast majority expecting little
change
16. 16Source: Eurofinas – Roland Berger
Survey results suggest market growth expected but at the expense
of margins for some products
Expected growth of
new business volume
(CAGR 2017-20201)
Growth and margins
Market growth and financial margins
0%-5% >5%-5%-0%< -5%
Expected evolution of
financial margins
(change bps 2018-2021)
Personal loans
Car and motor
loans
Other purpose
loans
Revolving
credit
> The consumer finance market
is expected to grow in the
coming years, with the
greatest growth happening for
personal loans
> In the case of car finance and
other purpose loans, this
growth is expected to be at
the expense of margins
Key Points
C.1
17. 17Source: Eurofinas – Roland Berger
2%
50%
31%
14%
3%
Growth expectations are positive, with some differences by region
Per Region Per Business Model
All
participants
-10 to -5%< -10% 5 to 10 %-4.99 to 0% 0 to 4.99% > 10%
42%
63%
10% 9%
42%
31%
40%
64%
15%
6%
30%
9%
20% 18%
Nicheplayers
Captives
Specialists
Retailbanks
Growth and margins
> Almost all respondents (95%)
expect positive growth, with
45% expecting growth above
5%
> Big differences in growth
expectations across regions,
but are relatively
homogeneous between
different business models
> Growth expectations in
France, Portugal and Rest of
Europe higher than in other
countries/regions, while
respondents in Italy and
Germany are less optimistic
95%
≈
8%
17%
33%
71%
6%
50%
20%
62%
17%
33%
29%
71%
50%
60%
23%
33%
33% 18%
20%
8%
33%
6%
Benelux
Italy
France
Iberia
Restof
Europe
Germany
Nordics
Key Points
Market growth by geography and business model [2017 - 2021]
%ofrespondents
C.1
18. 18Source: Eurofinas – Roland Berger
Financial margins are expected to be relatively stable across all
regions and business models; but Nordics are more pessimistic
C.1 Growth and margins
Expectations of financial margins by geography and business model [2018-2021]
Per Region Per Business Model
All
participants
6%
6%
13%
2%
34%
40%
30%
60%
25%
17%
7%
33%
14%
70%
20%
38%
33%
7%
67%
14%
20%
25% 50%
50%
57%
13%
29%
14%
7%
Iberia
France
Benelux
Restof
Europe
Italy
Nordics
Germany
< -150 bp -150 bp to -50.01 bp +50bp to +150 bp0 bp to +49.99p-50 bp to -0.01 bp > +150 bp
10% 8%
10%
8%
33%
10%
33%
31%
11% 60%
38% 54%
33%
30%
5%
22%
5%
Specialists
Retailbanks
Captives
Nicheplayers
53%
≈
74%
47%
Optimists
Nosignificantchange
Pessimists
> Participants are almost
evenly split between
optimists and pessimists
with regard to future
margins
> All Nordics respondents
were pessimistic about
future margins, while
Benelux is the most
optimistic
> Expectations on financial
margins are relatively
homogeneous across the
business models, with
captives being slightly
more pessimistic
Key Points
%ofrespondents
19. 19Source: Eurofinas – Roland Berger
Benelux
Survey results point to moderate margin reduction across most
products, especially for motor and non-motor POS loans
Expected evolution of financial margin
C.1 Growth and margins
Expectations of financial margins by geography [2018-2021]
0-50 bps >50 bps-50-0 bps< -50 bps
Iberia
Nordics
Restof
Europe
Germany
France
Italy
> The financial margin
trend varies by country,
however there is a strong
consensus that motor
loans and other purpose
loans are likely to be
under more pressure
> France and Poland are
more optimistic on all
products but car finance,
while Iberia and Nordics
expect decreasing
financial margins in all
product lines
Key Points
Revolving
credit
Personal
loans
Car and
motor loans
Other
purpose
loans
21. 21Source: Eurofinas – Roland Berger
1
2
3
Section Summary
Competition is expected to increase for all
products
Most players see their own business
model as fit for future
> Countries with particularly high expectations for market consolidation
include Nordics, Italy and Poland
> Expectations for consolidation are homogeneous across different
business models
> The majority of respondents expect competition to increase most in
personal loans business compared to other product types
> Online brokers and comparators expected to gain a significant
market share especially in Benelux, Germany and Nordics
> P2P lending expected to remain marginal with notable exceptions for
Poland, Germany and Nordics
> Own business model seen as best by all types of players
> Specialists and brokers seen as positioned well by majority of players
across business models
> Retail banks perceived as least attractive model by majority of players
with exception of retail bank clusters
C.2 Market structure and competition
The majority of respondents expect
national markets to consolidate between
2018 and 2021
22. 22Source: Eurofinas – Roland Berger
The majority of respondents anticipate consolidation in their national
markets with Western Europe being an exception
Consolidation per
region
Consolidation per
business model
> Opinions on the likelihood of
market consolidation vary
strongly across countries
> In Poland and Nordics the
expectation of more
consolidation is unanimous
> Italy and Iberia also expect
further consolidation in the
majority of cases
> Opinions are divided in
Western Europe
> Expectations of more intense
consolidation are consistent
across business models
All
participants
28%
58%
12%
1%
Very likely Very unlikelyLikely Unlikely
7%
5%
33%
Italy
57%
43%
50% 67%
67%
45%
France
Benelux
43%
50%
Germany
83%
17%
Iberia
22%
11%
Nordics
38%
62%
Restof
Europe
Key Points
%ofrespondents
C.2 Market structure and competition
21%
25%
27%
38%
79%
75%
73%
62%
Retail banks
Captives
Niche players
Specialists
Likely/Very likely
Unlikely/Very unlikely
Consolidation expectations by geography [2018-2021]1)
1) Percentages do not always add up to 100% due to rounding
23. 23Source: Eurofinas – Roland Berger
Competition expected to increase across Europe and products with
the exception of Nordics and revolving credit
C.2 Market structure and competition
Key Points
> Revolving credit seen as
most stable product
category, personal loans
has a higher level of
competition expected
> Nordic firms see less
competitive threat than other
countries, with a slight
competition increase for
personal loans
> Growing competitive
pressure is expected to
have an impact on the
personal loans business in
Iberia
Increase Strong increaseNo changeDecrease
TOTAL
Germany
Restof
Europe
Benelux
Iberia
France
Italy
Nordics
Revolving
credit
Personal
loans
Car and
motor loans
Other
purpose
loans
Competition expectations by geography [2018-2021]
24. 24Source: Eurofinas – Roland Berger
The 'consumer finance specialist' business model is still expected to
perform best in the coming years
> The highest proportion of
votes for best performing
business model was for
the consumer finance
specialist model, which
also held top spot in the
2015 survey2)
> Expectations for credit
brokers and niche
players have risen
markedly since 2015
> Despite more retailers
entering the consumer
credit business, retail
captives maintain the
last position of the
ranking (same as in
2015)
Key Points
Consumer
Finance
specialist
1st
P2P platform
5th
2nd
Credit broker/
intermediary
Retail
banks
6th
Automotive
captive
4th
3rd
Niche player
C.2 Market structure and competition
7th
Retail captive
2015
Rank 1st
2015
Rank 5th
2015
Rank 4th
2015
Rank 2nd
NEW
2015
Rank 6th
2015
Rank 3rd
Ranking of business models' performance expectations [2018-2021] compared to 2015
survey results1)
1) Ranking based on a scoring system: # of votes for 1st – 8 pts; 2nd – 7 pts;…
2) The representativity of each business model in the sample should be taken into account
25. 25Source: Eurofinas – Roland Berger
25%
33%
8%
8%
25%
30%
17%
14%
11%
17%
9%
3%Retail captives
Specialists
P2P platforms
Credit broker /
intermediary
Retail banks
Niche players
Automotive
captives
Generally, respondents expect their own business model to outperform
competitors – Retail banks feel significantly threatened by brokers
Business models ranked most likely to outperform the market [2018-2021]1)
Average of first
choice
33%
30%
13%
3%
13%
7%
14%
21%
29%
21%
14%
29%
14%
36%
21%
Specialists Automotive
captives
Niche
Players
Retail
banks
C.2 Market structure and competition
Captives are the most
optimistic about
themselves
Retail banks have the
gloomiest outlook
about themselves and
are most positive
about platforms
1) Percentages do not add up to 100% due to rounding
Key
Points
%ofrespondents
26. 26Source: Eurofinas – Roland Berger
Significant market share expected for platforms in B2C business for
the future – Especially online brokers/comparators
C.2 Market structure and competition
<5% 5-9.99% 20-30%10-
19.99%
21%
>30%
27%
20%
16% 16%
>30%<5% 5-9.99%
Total
10-
19.99%
20-30%
8%
7%
19%
28%
38%
Online brokers/
comparators market share P2P market share
> Online brokers and
comparators expected to gain
a significant market share
> More than a third of firms
expect comparators and
online brokers to drive over
30% of personal loan sales by
2021
> Outlook is less optimistic for
P2P platforms, with 48% of
respondents anticipating less
than 10% of market share
going here
Key Points
Personal loans expected to be sold via platforms by 2021
%ofrespondents
Share of personal loans expected to be sold through
online brokers/comparators by 2021
Share of personal loans expected to be sold through
P2P platforms by 2021
27. 27Source: Eurofinas – Roland Berger
Personal loans expected to be sold via
online brokers/comparators by 2018
Personal loans expected to be sold via online
brokers/comparators by 2021
Key Points
> Expectations of sales via
online brokers/comparators
have significantly increased
between the 2015 and 2018
surveys
> Online brokers and
comparators expected to
have a significant market
share in Italy, Germany,
Nordics and the Rest of
Europe (esp. Poland)
– In Germany, around half of
firms expect comparators
and online brokers to
source more than 30% of
personal loans
– In the Nordics, all
respondents expect their
market share to reach 30%
Market shares for online brokers/comparators are expected to
increase going forward, with significant geographical differences
C.2 Market structure and competition
Benelux 8% 15% 15%23% 38%
France 0%
33%33%33%
27%Iberia 9%9% 9%
45%
13%25% 50%Italy 13%
32%Germany 16%
53%
Nordics
100%
9%
>30%20-30%<5% 10-19.99%
27%
5-9.99%
Rest of Europe 18% 45%
20-30%5-9.99%
19%
8%
<5% 10-19.99% >30%
7%
28%
38%
Personal loans expected to be sold via
online brokers/comparators by 2021
27%
>30%
10%
<5% 5-9.99% 10-19.99% 20-30%
12%
24% 27%
2015 survey Geographical split
2018 survey
Personal loans expected to be sold via online brokers/comparators
%ofrespondents
29. 29Source: Eurofinas – Roland Berger
Section Summary
Digitization and big data are considered
the most important technological trends by
almost all participants
> Digital signature and big data are expected to be important in
reshaping business by almost all participants
> Players with different business models asses the importance of
technological trends differently; specialists are relatively more
concerned, retail banks relatively less
> Over 70% of respondents indicated that the time spent online/ on
social networks is an important challenge to handle
> In Italy and Iberia nearly 70% of participants think that youth
unemployment is an important challenge
> c. 80% of niche players consider over-indebtedness as the most
important challenge
Socio-economic trends are expected to
have significantly different impact by
geography and business model
1
2
C.3 Market trends and challenges
30. 30Source: Eurofinas – Roland Berger
12%
13%
16%
21%
28%
29%
67%
88%
87%
84%
79%
72%
71%
33%
Digital signature and "big data" are regarded as the most important
technological trends for the coming years
Not important/Somewhat important Important/Very important
C.3 Market trends and challenges
Digital signature
Big data
Artificial
intelligence/machine
learning
API/open banking
Robotic process
automation
P2P lending
New identification
technologies
> The vast majority of
respondents (over 80%)
considered big data, digital
signature and new ID
technologies as important
> Only a third of participating
firms see P2P lending as an
important trend
Key Points
Respondents’ assessment of the impact of technological trends [2018-2021]
%ofrespondents
31. 31Source: Eurofinas – Roland Berger
Specialists are most likely to rate technological developments as
important
> Specialists are most
preoccupied with technological
change, in particular:
– technologies to speed up
KYC
– big data and AI to improve
credit and marketing
– API banking to access new
customer data
> Banks appear the least
preoccupied, although they
see big data as very important
> Captives are relatively more
focused on technologies to
speed up application
Not important/Somewhat important Important/Very important
C.3 Market trends and challenges
Retail
banks
Niche
players
CaptivesSpecialists
Digital signature
Big data
Artificial
intelligence/machine
learning
API/open banking
Robotic process
automation
P2P lending
New identification
technologies
Key Points
Assessment of the impact of technological trends by business model [2018-2021]
32. 32Source: Eurofinas – Roland Berger
P2P lending
69%
80%
31%
80%
100%
75%
67%
100%
83%
0%
83%
83%
67%
67%
71%
42%
77%
79%
71%
92%
77%
33%
100%
83%
100%
83%
83%
83%
92%
46%
92%
43%
77%
92%
69%
44%
100%
67%
100%
80%
56%
67%
85%
89%
25%
74%
79%
79%
90%
The perceived impact of technological trends varies significantly across
geographies
Benelux FRA Iberia ITA GER Nordics RoE
C.3 Market trends and challenges
Digital signature
Big data
Robotic process
automation
API/open banking
Artificial intelligence/
machine learning
New identification
technologies
Key Points
> The majority of
countries/regions sees
big data as key
technological trend for
the coming years
> P2P seen as the least
important technological
trend – Nordics do not
rate it at all
> France in particular has
its eye on AI
technologies, for Italy it’s
digital signature and for
Nordics it’s API
Respondents’ rating technological trend as important/very important [2018-2021]
33. 33Source: Eurofinas – Roland Berger
Factors impacting consumer behaviour in particular are considered
to be the most important socio-economic trends
All participants
72%
63%
56%
42%
32%
29%
19%
Time spent online/
on social networks
Shift from ownership
to usage
Ageing population
Immigration
Youth unemployment
Overindebtness
Urbanization
C.3 Market trends and challenges
> Online activities and shift
from ownership to usage
seen as key consumer
behaviour changes
impacting the business
> Most respondents saw
population aging as
important
> External economic factors
like immigration,
urbanization and
unemployment not viewed
as key factors
Key Points
Participants ranking factor as important/very important [2018-2021]
34. 34Source: Eurofinas – Roland Berger
71%
79%
53%
35%
6%
47%
6%
Emphasis on important socio-economic factors somewhat differ by
business model
Specia-
lists
Retail
banks
Niche
players
Captives
Shift from ownership
to usage
Ageing population
Over-indebtedness
Youth unemployment
Urbanization
Immigration
76%
66%
58%
31%
41%
26%
24%
87%
44%
59%
40%
31%
33%
21%
50%
54%
53%
79%
43%
8%
21%
C.3 Market trends and challenges
4
3
2
1
2
1 Retail banks more alerted
by social media (frauds,
reputational risk)
2 Specialists and captives
relatively more concerned
with the shift from ownership
to sharing/ rental (impact on
motor and purpose loans)
3 Niche players most
concerned with impact of
over-indebtedness
4 Urbanization seen as a risk
mainly by captives (direct
impact on car sales and
volumes)
Time spent online/
on social networks
Key Points
Participants ranking factor as important/very important by business model [2018-2021]
%ofrespondents
35. 35Source: Eurofinas – Roland Berger
7%
67%
20%
60%
31%
36%
6%
Expectations on the impact of socio-economic trends on the
consumer credit business vary significantly across geographies
Time spent online/
on social networks
Shift from ownership
to usage
Ageing population
Over-indebtedness
Youth unemployment
Urbanization
Immigration
Benelux FRA Iberia ITA GER Nordics RoE
33%
0%
100%
83%
67%
50%
33%
8%
85%
77%
77%
64%
62%
23%
78%
56%
0%
67%
70%
33%
38% 22%
18%
76%
63%
37%
12%
53%
40%
0%
60%
20%
20%
80%
0%
86%
62%
46%
69%
31%
38%
29%
C.3 Market trends and challenges
> The majority of countries
sees the time spent
online as key trend,
except for Nordics
> Population aging
concerns all countries,
while Benelux dwells less
on that
> Over-indebtedness is a
key challenge for Iberia,
Nordics and Poland
> Iberia and Italy are the
most concerned with
youth unemployment
Key Points
Participants ranking factor as important/very important by geography [2018-2021]
%ofrespondents
37. 37Source: Eurofinas – Roland Berger
Section Summary
> Over half of respondents believe that the opportunity to act as account
aggregator (AISP) and payment initiation service provider (PISP) can
have a positive impact on their business
> Nordics respondents are most optimistic (63% of respondents), most
Italian participants see the impact as neutral
> Captives are the cluster relatively less optimistic about the impact of
PSD2
1
2
Overall, respondents have mixed views
about the impact of GDPR on their
business
> Majority (58%) of respondents perceive implementation of GDPR as
having a negative impact on their business
> Slightly more optimism on the impact of GDPR in France, Italy and the
Nordics
> Increased customer trust thanks to the GDPR seen positively
Opinions on the impact of PSD2 and
payment regulations are generally more
positive
C.4 Regulation
38. 38Source: Eurofinas – Roland Berger
10%
4%
5%
16%
57%
66%
53%
45%
22%
18%
46%
35%
26%
19%
33%
46%
51%
25%
34%
56%
16%
4%
11%
7%
17%
49%
4%
7%
4%
7%
1%
3%
3%
1%
Overall, respondents have mixed views about the impact of GDPR
on their business
Very negative No changeNegative Positive Very positive
C.4 Regulation
Overall impact of GDPR
AspectsofGDPR
Restrictions on data
held and processed
Customer right to
increased transparency
Organisational
requirements
Right to be forgotten
Data portability
Ability to take advantage
of innovative tools
Increased trust of data
subjects
> Pessimists outnumber
optimists (58% vs 42%)
> Data collection and
processing restrictions, as
well as organisational
requirements, seen as
negatives
> Some aspects of GDPR
are seen as opportunities
by respondents, such as
use of innovative tools,
increased transparency
and trust
Key Points
Participants’ assessment of GDPR impact
%ofrespondents
39. 39Source: Eurofinas – Roland Berger
Specialists and niche players are overall more optimistic than other
business models about the GDPR impact
C.4 Regulation
Overall impact of GDPR
AspectsofGDPR
Restrictions on data held
and processed
Customer right to
increased transparency
Organisational
requirements
Right to be forgotten
Data portability
Ability to take advantage
of innovative tools
Increased trust of data
subjects
Specialists Retail banks Niche players Captives
> Specialists and niche
players are more likely to
rate factors like innovative
tools, trust and
transparency as positives
> Captives are the most
pessimistic, seeing
organisational
requirements as relatively
more burdensome
Key Points
Participants’ assessment of GDPR impact by business model
Very negative/negative No change Positive/very positive
40. 40Source: Eurofinas – Roland Berger
Overall opinions on GDPR are negative across countries, however
some geographical divergences on specific aspects
C.4 Regulation
Rest of
EuropeBenelux France GermanyIberia NordicsItaly
Overall impact of GDPR
AspectsofGDPR
Restrictions on data held
and processed
Ability to take advantage of
innovative tools
Increased trust of data
subjects
Customer right to
increased transparency
Right to be forgotten
Organizational
requirements
Data portability
Negative PositiveNeutral
Key Points
> All regions/countries have
negative expectations
about GDPR data
restrictions and
organisational
requirements
> Increased transparency
and trust are the most
appreciated across all
regions/countries
> Nordics relatively more
optimistic on impact of
data portability while Iberia
more muted on
advantages of innovative
tools
Participants’ assessment of GDPR impact by geography
41. 41Source: Eurofinas – Roland Berger
6%
8%
7%
6%
57%
38%
31%
41%
30%
41%
51%
36%
7%
13%
9%
16%
1%
1%
Overall impact of payment regulation expected to be positive, but
opinions about AISP, PISP and instant payment are quite diverse
C.4 Regulation
Participants’ assessment of payment regulation
Very negative PositiveNegative Very positiveNo change
Overall impact of PSD2
and payment regulation
Opportunity to
leverage instant
payments for loan
disbursement
Possibility to act
as Payment
Initiation Service
Provider (PISP)
Opportunity to act
as Account
Aggregator
(AISP) for your
customers
AspectsofPSD2and
paymentregulation
52%
54%
> 60% of respondents see
PSD2 as a positive
development
> Only 8% of participants
think PSD2 and payment
regulations will have a
negative impact on
consumer finance
> More than half believe
AISP and PISP will have a
positive impact on their
business
> Instant payment had a
slightly less positive
perception
Key Points
%ofrespondents
42. 42Source: Eurofinas – Roland Berger
On average, retail banks expect more benefits from providing
aggregation, specialists more from payment initiation
C.4 Regulation
Participants’ assessment of payment regulation impact by business model
Overall impact of PSD2
and payment regulation
Opportunity to leverage
instant payments for loan
disbursement
Possibility to act as
Payment Initiation Service
Provider (PISP)
Opportunity to act as
Account Aggregator
(AISP) for your customers
AspectsofPSD2and
paymentregulation
Specialists Retail banks Niche players Captives
Key Points
> A higher proportion of retail
banks expect positive
developments from PSD2
than other business
models
> On average, captives have
the most muted views
around PSD2
> Specialists are the most
likely to expect positive
developments from PISP
Very negative/negative No change Positive/very positive
43. 43Source: Eurofinas – Roland Berger
Overall impact of PSD2
and payment regulation
Opportunity to
leverage instant
payments for loan
disbursement
Possibility to act as
Payment Initiation
Service Provider (PISP)
Opportunity to act as
Account Aggregator
(AISP) for your
customers
AspectsofPSD2and
paymentregulation
Opinions on the impact of payment regulations vary significantly by
geography
C.4 Regulation
Participants’ assessment of payment regulation impact by geography
Rest of
EuropeBenelux France GermanyIberia NordicsItaly
Key Points
> Most regions/countries
expect positive
developments from PSD2,
with Italy and Poland
having more muted views
> Nordics are the most
optimistic about the
opportunities of PSD2 and
the only ones to see instant
payments in a positive light
> Benelux and Iberia
perceive AISP as having a
positive impact and are
more muted on PISP while
France and Germany feel
the opposite
Negative PositiveNeutral
45. 45Source: Eurofinas – Roland Berger
Section Summary
> Pace of digitization is accelerating: majority expects to have most of
their contracts fully digitized by 2021 (up from 24%)
> Expectations of target level of digitization for 2018 declared in 2015
have proven to be too optimistic
> Players in Nordics are significantly more digitized than their European
peers; least digitized countries expect to catch up
1 In the past 2 years, the pace of digitization has
been slower than expected, but it is still
expected to accelerate
> c. 25% of participants still expect to close majority of sales face-to-
face in 2021 (down from 33% today)
> The majority of respondents still expect >30% of motor loan and other
purpose loan contracts to be closed at dealer's POS
> Respondents anticipate that the online network will become slightly
more important than the physical network for personal loans by 2021
2 B2C customer journeys to be significantly more
remote but different models continue to co-exist
> Motor loans: Dealer's point of sales are expected to remain dominant,
experiencing just a slight decrease
> Other purpose loans: Respondents expect "entirely online" to grow to
the second most used customer journey by 2021
3 In B2B2C face-to-face remains dominant but
hybrid and e-journeys are expected to grow
exponentially
> Respondents do not expect significant changes in the use of ATM or other
models for cash advances, but use for e-commerce will grow rapidly
> Cash advance specialists trying to increase their transaction business
4 Revolving credit business models are
converging – online payments becoming more
and more important
C.5 Digitization and customer journeys
46. 46Source: Eurofinas – Roland Berger
Digitization of contracts proving to be more challenging
than expected 3 years ago, but still forecast to accelerate
2015 actual 2018 target 2018 actual 2021 target
Less than 20%
of contracts
fully digital
More than 40%
of contracts
fully digital
68%
26%
21%
59%
65%
24%
14%
20% - 40% of
contracts fully
digital
6% 21% 11% 22%
64%
2015 survey 2018 survey
C.5 Digitization and customer journeys
Key Points
Full digitization of contracts
%ofrespondents
>In 2015, 59% of
respondents expected
>40% of contracts to
be fully digital,
however in reality the
level from 2015 to
2018 remained stable
>Largest improvement
between 2015 and
2018 seen for the
bucket of 20%-40% of
contracts fully digital
>Majority of
respondents expect a
significant acceleration
in digital activity by
2021
47. 47Source: Eurofinas – Roland Berger
All geographies and business models expect strong growth in
contract digitization – "Laggards" expected to catch up
Key Points
Benelux FRA Iberia ITA GER Nordics RoE
> Nordics by far the most
advanced region in
digitalization and expected
to remain so
> Italy, Germany and Iberia
appear the least digitized
and most optimistic about
progress in this area by
2021
> Strongest growth in
digitization expected in
business models with the
current lowest level of
digitized contracts (i.e. retail
banks and captives) –
specialists expected to
become leaders
Geography
71%
29%
40%
14%19%
50%
14%
73%
50%
9%
45%
73% 71%
100%2.7x
2.5x
3.5x 5.0x
5.3x
1.4x
1.5x
2018 2021
C.5 Digitization and customer journeys
Business
model 57%
74%
26%
11%
61%
38%
56%
17%
2.8x
5.5x 1.5x 3.3x
Specialists Retail banks Captives
Niche
players
Participants with more than 40% of total contracts fully digitized
%ofrespondents
48. 48Source: Eurofinas – Roland Berger
Personal loans: Online and hybrid customer journeys increasing in
importance while face-to-face interaction decreases
> Use of the physical
channel for personal
loans has declined
dramatically by 2017
and expected to
continue falling
> Hybrid customer
journeys are expected
to gain more
importance
> Fully online customer
journeys are expected
to grow more than all
other types of journeys
1) Percentages do not always add up to 100% due to rounding
% of contracts:
Entirely through
physical network
First contact via phone, sale
closed in a branch, agent outlet
or broker agent
First contact by phone, sale
closed without any visit to
physical network
First contact via web, sale closed
on the phone, in a branch, agent
outlet or broker agent
Entirely online from first contact
to contract
Participants’ use of distribution channels [2017 vs. 2021]1)
2021
trendDistribution channels
2017
Personal loans Key Points
%ofrespondents
33%
58%
50%
38%
32%
15%
8%
12%
14%
28%
28%
44%
24%
47%
8%
32%
6%
10%5%
10%
<5% 5%-10% 10%-50% >50%
29%
44%
32%
16%
12%
12%
29%
11%
9%
37%
34%
39%
64%
49%
23%
9%
35%
10%
0%
7%
C.5 Digitization and customer journeys
49. 49Source: Eurofinas – Roland Berger
Personal loans: B2C customer journeys will be more remote but
different mixes will continue to co-exist
Proximity
centric
Integrated
mix
Remote
focus
Total
2017
Total 2021
38%
33%
29%
36% 38%26%
23% 6% 4%
26% 9%
25%4%
Key Points
Proximity centric
Majority of contracts are
finalized in a physical
outlet either originated
remotely or not
Integrated mix
Majority of contracts
finalized remotely but at
least 30% finalized in a
physical outlet
Remote focus
Majority of contracts
finalized remotely with
less than 30% finalized
in physical outlet
3%
100%
Becoming more proximity focusedMaintaining stable mix Becoming more remote focused
C.5 Digitization and customer journeys
Majority will maintain
the same journey mix
19% of respondents
plan to become more
remote
7% of respondents expect
to increase proximity
% of respondents
B2C customer journeys for specialists and retail banks [2017 vs. 2021]
2017
2021
50. 50Source: Eurofinas – Roland Berger
Personal loans: Players face specific challenges depending on their
customer journey mix
Integrated mix
Majority of contracts
finalized remotely but at least
30% finalized in a physical outlet
Remote focus
Majority of contracts
finalized remotely with less than
30% finalized in physical outlet
Proximity centric
Majority of contracts are
finalized in a physical outlet
either originated remotely or not
Transforming sales representatives
into omni-channel operators
Maintaining market share in era of
digitization – particularly for prime
and young customers
Managing complexity of customer
journey mix
"Humanizing" remote relationships
Continuing service for complex
decisions and non-digital customers
Excelling in real time lending
C.5 Digitization and customer journeys
Not important
ChallengesKey
Importance of key challenges for retail banks and specialists by customer journey
High Very highMediumLow
51. 51Source: Eurofinas – Roland Berger
18%
76%
87%
61%
2%
3%
80%
33%
10%
21%
3%
6%
18%
53%
67%
61%
9%
26%
73%
21%
26%
28%
7%
11%
Motor loans: Face-to-face sales at the dealer remain dominant, but
strong growth in omni-channel is expected
> Dealer POS expected to
remain most important
sales channel for motor
loans, although
continued declines
expected
> Incidence of first contact
via web only area to
have grown since 2014
> Use of e-commerce
expected to grow by
2021
> Biggest decline
happening in branch
contact
% of contracts: 2%-9.99% > 30%10%-30%
At dealer’s POS, from
request to contract
First contact via
web/mobile, contract
closed in POS
Entirely online via
e-commerce site/app
Branch/direct
2021
trendDistribution channels
2017
Motor loans Key Points
C.5 Digitization and customer journeys
Participants’ use of distribution channels [2017 vs. 2021]1)
%ofrespondents
1) Percentages do not always add up to 100% due to rounding.
52. 52Source: Eurofinas – Roland Berger
Motor loans: Captives and specialists in particular will move from
mainly physical to omni-channel journeys by 2021
> Captives began with a head
start in 2014 on the
digitization of customer
journeys
> Specialists have caught up to
captives between 2014 and
2017 in terms of online first
contacts
> Specialists expected to
exceed captives in online/
hybrid journeys by 202159%
26%
10%
28%
68%
50%
13%
5%
40%
20142) 2017 2021F
43%
24%
18%
36%
71%
64%
21%
6%
18%
20142) 2021F2017
Hybrid
journey
Offline
journey
>30% of 1st
contacts online
Up to 30% of 1st
contacts online
100% offline
from 1st contact
to contract
Specialists Automotive captives Key Points
C.5 Digitization and customer journeys
Advanced hybrid
Hybrid
Traditional
Customer journey by business model [2014 vs 2017 vs 2021]1)
1) Percentages do not always add up to 100% due to rounding; 2) Results from 2015 survey
%ofrespondents
53. 53Source: Eurofinas – Roland Berger
31%
50%
41%
66%
25%
56%
35%
34%
25%
13%
9%
15%
Other POS: Physical interactions decreasing, while online contact
will increase rapidly, particularly for e-commerce
23%
66%
68%
55%
69%
34%
24%
36%
9%
8%
9%
> Customer use of
physical dealers and
branches has declined
since 2014 and
expected to continue
decreasing
> First contact via web and
remainder in POS has
become more important
> While e-commerce has
not grown yet, it is
expected to do so by
2021
1) Percentages do not always add up to 100% due to rounding.
% of contracts: 2%-9.99% 10%-30% > 30%
At dealer's points of
sale, from request to
contract
First contact via
web/mobile, contract
closed in POS
Entirely online via
e-commerce site/app
Branch/direct
2021
trendDistribution channels
2017
Other POS Key Points
C.5 Digitization and customer journeys
Participants’ use of distribution channels [2017 vs. 2021]1)
%ofrespondents
54. 54Source: Eurofinas – Roland Berger
40% 100% 100%
60%
12% 12%
6%
35%
18%
6%
18%
18%
13%
6%
24%
5%
6% 6%
4%
6%
24%
6%
18%
0%
20172014 2021F
Other POS: More hybrid journeys will be offered and e-commerce
expected to grow significantly
37%
12%
41%
39%
47%
59%
24%
41%
0%
2014 2017 2021F
>30% of 1st
contacts online
Up to 30% of 1st
contacts online
100% offline
from 1st contact
to contract
Online vs offline customer 1st contact Participants’ use of e-commerce
% of
e-commerce
contracts
> 50%
30-50%
10-30%
5-10%
2-5%
< 2%
No e-commerce
C.5 Digitization and customer journeys
Hybrid
journey
Offline
journey
Advanced hybrid
Hybrid
Traditional
%ofrespondents
Customer journey and e-commerce use [2014 vs 2017, 2021]1)
1) Percentages do not always add up to 100% due to rounding
55. 55Source: Eurofinas – Roland Berger
56%
46%
17%
21%
28%
19%
27%
21%
16%
35%
57%
59%
Revolving credit: Online payments are expected to be the fastest
growing usage channel
55%
54%
23%
44%
24%
15%
21%
32%
70%
41%
14%
7%
> Respondents do not
expect significant
changes in the use of
ATM or other
channels for cash
advances
> The use of physical
POS payment is likely
to decrease by 2021,
while the importance
of online payments is
expected to grow into
the main channel
Cash advance via ATM
Cash advance – Other
channels (e.g. home
banking, phone…)
Physical POS payment
Online payment
% of contracts: 2%-9.99% 10%-30% > 30%
2021
trendDistribution channels
2017
Revolving credit
Key Points
C.5 Digitization and customer journeys
%ofrespondents
Participants’ use of distribution channels [2017 vs. 2021]1)
1) Percentages do not always add up to 100% due to rounding
56. 56Source: Eurofinas – Roland Berger
Revolving credit: Business models and strategies likely to converge
8%
17%
17%
33%
17%
33%
39%
22%
11%
3%
2017 2021
100% 100% > Cash advance model losing
importance as cards expected
to become more transactional,
while…
> …payment specialists expect
an increase in eCommerce
volumes…
> …and online specialists expect
an increase in physical volumes
> Boundaries are blurring
between
– installment loans and
revolving credit
– B2B2C and B2C
Mainly payments
(60% or more)
Mainly physical
Mainly cash advance
(60% or more)
Balanced cash advance
and payments
Mainly online
Hybrid
Key Points
C.5 Digitization and customer journeys
Predominant types of revolving volumes [2017-2021]
58. 58Source: Eurofinas – Roland Berger
Section Summary
1
2 > Similarly to the 2015 survey, B2B2C success factors that need most
improvement include credit application times (both e-commerce and
POS), omnichannel customer management and mobile front-end for
dealers
> Diversity of non-credit offerings or services remains the least important
factor as in 2015
> Big Data is regarded, as in 2015, the most important B2C success
factor that needs the most improvement efforts in the industry
> 100% self care and social networks as aftersales tool are perceived
less important than 3 years ago
> Diversity in non-credit services and excellence in physical network sales
have remained success factors for which participants see least
improvement need
Main success factors in both B2C and
B2B2C for the coming years are related to
digital trasformation
Significant product service upgrade is
expected in the next 3 years
> Majority of respondents expect that new services, in particular
integration with leading wallets, instant payments and account
aggregation will be very important in the coming years
> The perceived importance of building new services differs from region
to region
> Respondents from Sweden and Norway expect generally less impact
from efforts to improve these capabilities
C.6 New capabilities and key success factors
59. 59Source: Eurofinas – Roland Berger
Instant
payments
Auto/
motorcycle
rental
Account
aggregation
and
personal
financial
mngt
Offering
deposits/
saving
facilities
Current/
payment
accounts
Other
products
rental (e.g.
smart-
phones)
Integration
with
leading
wallets (e.g.
Apple Pay)
Selling P&C
insurance
standalone
Integration with instant payments and account aggregation are most
often listed by participants as key future capabilities
> Overall, important
new capabilities for
most respondents
are instant payments
and account
aggregation
> However, none of
these capabilities are
seen by the majority
of participants as key
to succeed for the
future offering
Key Points
C.6 New capabilities and key success factors
1st
5th
2nd
6th
4th
3rd
7th
8th
23% 21% 15% 11% 8% 6% 4% 1%
x% Proportion of respondents assessing the capacity as a key to succeed
Capabilities most frequently ranked as important/key to succeed [2018-2021]
60. 60Source: Eurofinas – Roland Berger
24%
18%
24%
12%
17%
6%
0%
0%
Perceived key areas to succeed differ by business model
> All business models rank
instant payments as
important, except for retail
banks
> In fact, retail banks see
less importance in the
listed capabilities in
general
> Niche players are more
focussed on PFM and
account aggregation
> Integration with leading
wallets also identified as
an area to pay attention to,
particularly for captives
Specia-
lists
Retail
banks
Niche
players Captives
Key Points
Integration with leading wallets (e.g.
ApplePay, SamsungPay, Android
Pay, other local wallets, etc.)
Account aggregation and Personal
Financial Management
Instant payments
Auto/motorcycle rental
Current/payment accounts
Other products rental (eg
smartphones)
Offering deposits/saving facilities
28%
17%
10%
14%
11%
4%
7%
3%
8%
15%
15%
8%
8%
0%
0%
0%
25%
38%
15%
8%
17%
0%
0%
0%Selling P&C insurance standalone
C.6 New capabilities and key success factors
Capabilities ranked as important/key to succeed by business model [2018-2021]
%ofrespondents
61. 61Source: Eurofinas – Roland Berger
Main differences across countries' perception of new
products/services that are key to succeed
> Instant payments are
seen as the most
important
product/service
innovation in Iberia,
Italy and Poland
> Germany recognizes
PFM and aggregators
as key to succeed
> More than any other
country, France
seems to put
auto/motorcycle rental
on top of its strategic
agenda
Key Points
Integration with leading wallets
(e.g. ApplePay, Android Pay,
other local wallets, etc.)
Account aggregation and
Personal Financial Management
Instant payments
Auto/motorcycle rental
Current/payment accounts
Other products rental (e.g.
smartphones)
Offering deposits/saving
facilities
Selling P&C insurance
standalone
C.6 New capabilities and key success factors
Rest of
Europe
Benelux France GermanyIberia NordicsItaly
15%
15%
8%
7%
8%
0%
0%
0%
17%
17%
17%
50%
33%
0%
0%
0%
40%
27%
27%
9%
9%
9%
0%
0%
29%
14%
14%
14%
0%
0%
0%
0%
18%
44%
22%
22%
11%
0%
0%
0%
17%
20%
0%
0%
0%
0%
0%
0%
27%
18%
18%
10%
0%
0%
0%
0%
Capabilities ranked as key to succeed by geography [2018-2021]
%ofrespondents
62. 62Source: Eurofinas – Roland Berger
60
40
10070
50
20
70
8030
60
40
80
50 90
10
100
90
20
30 Diversity of non-credit
services (e.g. banking
and insurance products)
Multi channel
direct marketing
excellence
(mail, email,
notifications,..)
Importance1)
Leveraging
"big data"
for targeted
client offers
Excellence
in call center
capabilities
Social networks
as after sales tool
Improve-
ment
needed2)
Social networks for
sales enhancement
Real time/ fast cycle
Customer Relationship
Management (CRM)
Omni channel customer
journey management
Competitive
time from
application
to approval
Pricing
segmentation
Excellence in physical network sales
100%
self care
In B2C, transformation efforts concentrate on digital – few players
see traditional success factors as critical or needing improvement
Key Points
1) Percentage of respondents indicating that a certain business capability will be (very) important in 2018-2021
2) Percentage of respondents indicating that a certain business capability will need (very) significant improvement in 2018-2021
> Time to approval
ranked as most
important element
> Big data is still seen as
the most important
factor requiring
improvement…
> …followed by other
digital factors (eCRM,
journey management)
> Excellence in
traditional factors (e.g.
sales force excellence,
range of products)
dismissed by most
participants
≈ No significant change
vs 2015 Survey
Change vs 2015
Survey
≈
≈ ≈
≈
≈
≈
C.6 New capabilities and key success factors
Improvement vs. importance for B2C business capabilities [2018-2021] with comparison
to 2015 survey results
63. 63Source: Eurofinas – Roland Berger
45 5540
30
7550 60
80
65 70 80 85 90 95 100
20
40
50
60
70
Pricing and commissioning
segmentation by end customer value
Competitive time
from application
to credit approval
in e-commerce
channel
Importance1)
Improve-
ment
needed2)
Competitive time
from application
to approval in the
point of sale
(POS) channel
Web/ mobile marketing
support to dealers/ partners
Omni channel customer
journey management
Diversity of non-credit client
offer (e.g. banking and
insurance products)
Diversity of non-credit dealer/retailer
services (e.g. banking and insurance products)
Mobile front end for dealer/retailers
Integration of credit with payment
(e.g. pay by installment)
Likewise, in B2B2C the main priorities are time-to-yes and best-in-
class journeys
> Time-to-yes at
physical point of sales
continues to be the
main success factor
> Factors related to e-
commerce and
omnichannel are
seen as key areas
requiring most
improvement
> Non-credit services
less likely to be
identified as important
1) percentage of respondents indicating a certain business capability will be (very) important in 2018-2021
2) percentage of respondents indicating a certain business capability will need (very) significant improvement in 2018-2021
≈ No significant change
vs 2015 Survey
Change vs 2015
Survey
new
new
≈
C.6 New capabilities and key success factors
Improvement vs. importance for B2B2C business capabilities [2018-2021] with
comparison to 2015 survey results
Key Points
65. 65Source: Eurofinas – Roland Berger
High
Transformation areas Specific challenges
Review value
proposition
Rethink B2C
“end customer"
journeys
Re-invent
partnership
model
Build new data
skills
Excellence via
digitization and
automation
Based on the survey we believe transformation priorities pose
different challenges by business model
D Conclusions
Specia-
lists
Retail
banks
Importance of
transformation efforts
Very highMediumLow
Switch from product to relationship
PSD2 offers to better serve, understand and retain customers
Products designed for usage economy
Transforming sales people into omni-channel advisors
Increasing presence in e- and m-commerce
Integration of new data in marketing, credit decisions,
customer services
Data and web talent
100% paperless
Advanced automation/cognitive AI
Mass personalization of journeys
Increasing share of non-interest linked revenues
Radical simplification of UX
From credit provider to omni-channel partner
Improve time-to-market
Captives
Niche
players
Roland Berger assessment of key areas for strategic transformation
I
II
III
IV
V
67. 67Source: Eurofinas – Roland Berger
Glossary (1/4)
CAGR Compound annual growth rate - the year-over-year growth rate of an investment over a specified period of time. The compound
annual growth rate is calculated by taking the nth root of the total percentage growth rate, where n is the number of years in the
period being considered.
Terms Definition
B2B2C Business-to-business-to-consumer - a marketing model which involves marketing through an intermediary, typically another
business that acts as a distributor to the ultimate consumer of a product
B2C Business-to-consumer - a marketing model which involves direct distribution from the distributor to the end-client
Captives One of the four consumer finance business model categories in the survey - refers to financial services arms of Automotive OEMs,
dedicated mainly to financing auto / motor sales or retailers offering consumer finance solutions to their clients, mainly purpose
loans and cards, through specialized entities
Cost income ratio (CIR) Operating expenses (administrative and fixed costs, such as salaries and property expenses, but not bad debts that have been
written off) divided by operating income. The ratio gives a clear view of how efficiently the firm is being run – the lower it is, the more
profitable the bank will be.
Comparators New intermediaries (typically websites), which increase product transparancy and customer education by aggregating product
information from different market players and making comparison of product features easier
Cost of risk ratio (COR) The cost of risk ratio measures the proportion of a financial institution's total loans that have been lost due to bad and non-
performing loans. It is calculated as the average of all companies' annualized loan loss provision as a percentage of average
interest generating loans over the period.
Customer Relationship
Management (CRM)
System for managing a company’s interactions with current and future customers.
68. 68Source: Eurofinas – Roland Berger
Glossary (2/4)
Digitization The integration of digital technologies into everyday life
Terms Definition
NBV See new business volumes
European cental bank The central bank for the Eurozone of the European Union and administrator of the monetary policy of the Eurozone
New business volumes The volume of new consumer finance credits over a defined time horizon, both from exising and new clients; also the difference in
outstanding volumes between the end and start of the defined time horizon
Niche players One of the four consumer finance business model categories in the survey - refers to players focused on specific client segments
(e.g. near prime) or channels (e.g. motor dealers, phone/ internet) or product (e.g. cards, salary guaranteed loans,..)
Non-performing loan
(NPL)
A loan that is in default or close to being in default. Many loans become non-performing after being in default for 90 days, but this
can depend on the contract terms
Optical character
recognition (OCR)
Is the process of recognizing printed/ written text characters by a computer. This process involves the scanning of the underlying
document, the analysis of the scanned-in image, and the translation of the character image into character codes commonly used in
data processing
69. 69Source: Eurofinas – Roland Berger
Glossary (3/4)
Terms Definition
Omnichannel Omnichannel is a distribution approach that has the objective to provide custumers with a seemless client journey across multiple
channels (brick, contact center, desktop, mobile…)
Other point of sale
financing
Consumer finance solutions offered at point of sales which are not car & motor loans, personal loans or revolving credit, for example
payment of consumer electronics in instalments
Physical channels Brick & mortar channels
Peer-to-peer Peer-to-peer (P2P) lending is a growing trend and describes a lending process where investors bypass intermediaries (such as
banks) and lend directly to borrowers, often through online (peer-to-peer )lending platforms.
Point of sale (POS) The point of sale is the time and place where a transaction is completed
Payment protection
insurance (PPI)
Insurance taken out by the borrower to ensure the repayment of the loan in the event that the borrower passes away or is unable to
earn an income due to illness or disability.
70. 70Source: Eurofinas – Roland Berger
Glossary (4/4)
Specialists One of the four consumer finance business model categories in the survey – refers to players offering wide range of Consumer
Finance solutions distributed via own branches and direct channels (call center, internet), [and/or] agents, brokers and dealers/
retailers
Terms Definition
Retail banks One of the four consumer finance business model categories in the survey - refers to players offering wide range of consumer
finance solutions distributed both via the group's bank channels and other channels including a mix of via own branches and direct
channels (call center, internet), agents, brokers and dealers/ retailers
Self-care Self care solutions refer to applications and functionalities enabling the customer to have a centralized access point to bank-wide
solutions in a simple, user-friendly set-up, empowering clients to trigger the execution of transactions or activation of functionalities
themselves.
Value chain elements Value chain elements are the activities which make up the value chain, which in itself is a representation of chronological (potentially
simultaneous) activities and processes required to produce a product/service
Property and casualty
insurance (P&C)
Represents insurances that protect against property losses to your business, home or car and/or against legal liability that may
result from injury or damage to the property of others