The digital revolution is transforming the banking industry by optimizing customer experience and business models. Banks now face challenges in providing permanent accessibility, simplifying offerings, and maintaining customer relationships across channels. This requires reconsidering distribution methods, streamlining production to find efficiencies, and exploiting customer data. Some banks have begun transforming by offering mobile banking, but full digital transformation requires separating distribution from production in IT systems, establishing omni-channel distribution, production centers, and big data analytics tools.

1. The open banking platform. For each business. Everywhere.
The Challenges of the banking distribution
DIGITAL TRANSFORMATION
October 2015By Olivier Cruanès, Marketing Manager

2. 2
AGENDA
1 The digital
revolution 2 The digital
transformation

3. The open banking platform. For each business. Everywhere.
5
Global
Overview
BUSINESS | TEAM | STRATEGY 1
The digital
revolution

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INTRODUCTION: THE DIGITAL REVOLUTION
At present there is talk of a new economic model where several human repetitive tasks are replaced by digital processes
and in which the amount of work, especially intermediation activities, would be in a harsh contraction.
• The internal procedures and communications with the customers are simplified through computer,
automation applications and connections to replace the role of collaborators.
• The Internet is becoming a substitute for the geographical allocation of production factors, enabling to
delocalize and desynchronize the production cycles.
• A number of studies suggest that around 40% of jobs might be lost within this technological development,
but of course other will emerge. “Uberization” of our economy: is the new logic that will address all jobs,
including regulated or monopolist.
The digital revolution or the 3rd
industrial revolution

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THE DIGITAL REVOLUTIONIZES THE BANKING
DISTRIBUTION MODEL
For the banking sector, the digital transformation of the distribution model is a major issue and relies on
information systems long been considered as strategic tools. This transformation requires a commitment to a
long and deep process of adaptation to new characteristics of the market.
The digital revolutionizes the banking distribution model
with customer experience optimization and transformation of relevant business model.
The current model of the distribution
based on the territorial networking by a
channel of general branches is no
longer viable
•for reasons of cost
•since it does not satisfactorily meet
customers expectations.
The consumer, permanently connected
via their mobile, using at least one
social network per day, expects
•further interactions
•continuity of service
•greater simplicity of access and use of
banking services.

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TWO DIFFERENT APPROACHES FOR THE SAME
REVOLUTION
First, banks regarded the digital as an evolution
vector of existing processes.
Then, they started looking for the advantages of
the digital in terms of short-term productivity
gains :
documents digitization,
Workflow setting,
processes optimization…
Fintechs approach is to handle a business
process and consider it vertically in full
according to a permanent interaction with the
end customer, as enabled by information
technologies.
It is no more a question of proving the ability to offer an
advanced technological service, but of showing how the
customer can be a player of the process.

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SOME BANKS HAVE ALREADY ANTICIPATED THE DIGITAL
REVOLUTION
Some banks have already anticipated the digital revolution, such as:
Boursorama Banque
by Société Générale
Hello Bank!
by BNP Paribas
Soon
by Axa Banque
+ Based on the milestones of
one of the first online brokers
Fimatex before relying on IS of
Caixabank, French former
subsidiary
+ A « classic » offer of mobile
daily banking service via a
dedicated front-office
++ A simplified approach for
mobile access to the account
++ Premium offer focused on
transaction flow capture
- A significant adaptation of
BNP P IS in order to process
transactions, with the
organization cumbersome
+ A slight adaptation of Axa
Banque IS

8. The open banking platform. For each business. Everywhere.
2
The digital
transformation

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THE CHALLENGES
TransformationTransformation
axesaxes
Permanent accessibility of services Simplification of offers1 2
Complying with the schedules of branches
opening, which are often incompatible with
the working hours, in order to carry out
transactions or access to a customized
information, is regarded as a constraint
inconceivable by the consumer.
Studies have repeatedly shown that the
simplicity, the banks and the insurances
came in last in marks considered as « simple
». They are regarded as « complex », and
even «not very transparent ».
The combination of these two axes, permanent access and simplicity, should
therefore lead the banks to rethink their distribution model according to the
customer experience concept.
One of the challenges facing the digital transformation of banks is the continuity of
customer relationship, regardless of the channel, place and schedule of use.

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In line with initiatives already taken in the sector of tourism, travel or taxis, the introduction of the digital
in the in the daily life of consumers has led to a significant disintermediation phenomenon.
The customer prefers to self-manage his current transactions with low added value via his computer,
smartphone or tablet.
The type of the relationship between the customer and the bank must be reconsidered also.
The banks are threatened by new entrants: telecom operators, computer or web giants (Google, Amazon,
Facebook, Apple…), and innovate Fintechs.
In order to react correctly, the banks shall provide to their customers customized guidance and service
with high added value, regardless of the channel in use.
To this aim, they must abandon their « product » approach and replace it by « customer centric »
approach to be adapted to the new standards of the usage of the digital.
Disintermediation movement1
New entrants2
THE CONSEQUENCES

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THE 3 MAJOR FIELDS FOR BANKS
Reconsider the distribution
method
Streamline the
production, find the
production profits
Exploit the wealth of
data managed by
the bank
The 3 major fields for banks within this digital
transformation
•cover the entire organization of establishments,
•require investments in innovations that may be
steered by productivity profits and distribution
channels diversity.

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WHICH STRATEGIES? WHICH TRAILS …
Reconsider the distribution method of financial services
Which trails
•Optimize the « commercial time » of the advisor to strength the commercial force
•Transform the branch into points of sale
•Increase the distribution channels
•Simplify and customize products
•Improve the accessibility and availability of distribution channels
Which trails
•Optimize and automate the business processes
•Pool the banking production with setting up a production center
•Outsource the processes with low added value
Streamline the production, find the production profits

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WHICH STRATEGIES? WHICH TRAILS …
Which trail
•Identify and analyze the managed « customers » data
•Enhance customer profiling with creation of communities
•Adapt and customize the offers in line with the constituted communities
•Digitize the marketing
•Manage the opportunities « at the right time »
Exploit the wealth of data managed by the bank

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THE GLOBAL APPROACH
How to implement ?
Some trails
•Establish a separation « Distribution / Production » in the
IS
•Optimize and automate the business processes
•Set up an omni-channel distribution
•Set up« Banking production centers » to manage different
distribution channel products
•Set up tools for predictive analysis of data(« Big data »)
•Use the digital innovations (marketing, coaching, etc…)
Distribution channels
Simplification and
automation of processes
Customer centric
Security