The document discusses the transformation of banking towards a customer-centric model, focusing on five key trends: digital decoupling, public cloud migration, data-driven business, the living services bank, and open banking. It identifies challenges such as legacy architecture and the need for innovation in order to improve customer experience and operational efficiency. The ultimate goal is to create a seamless, personalized digital experience for customers while maintaining competitive advantage in an evolving market.

1. THE LIVING
SERVICES BANK
Divyesh Vithlani
March 2018
Top 5 Trends That Are Redefining Banking

2. THE LAST FIVE YEARS…
It’s all about the customer, as bank CEOs have shifted focus
From
• Product Centric
• Closed/Legacy Systems and Architecture
• “All Things to All People”
To
• Customer Centric
• Open Systems – APIs and Ecosystem
Partners –and Open Architecture
• “The Right Thing to the Right Person”
The Ultimate Goal of Banking Today:
Deliver an end-to-end digital customer experience

3. Traditional Bank
Traditional KPIs are still in use, but new ones are appearing
JOURNEY TO THE LIVING SERVICES BANK
1. Compared to Top 5 Indonesian Banking
companies - 2016 Annual reports
+ +
Leading Banking
Industry Metrics
Leading Digital
Economy Metrics
2. Compared to Banking and Digital Exemplars – Qualitative Analysis
Leading Digital
Business Metrics
Digital Sales
Digital Acquisition
Data x-sell
Net Promoter Score
Digital Servicing
Digital Productivity
Index
ROE
ROA
NIM
Loan Growth
CI Ratio
NPL Ratio
Typically compared against banking competitors
Typically compared against banking
and non-banking digital exemplars
Typically compared against digital
platform players
3. Compared to Digital Platform Players – Qualitative Analysis
Share of Trust
Share of Mind
Data Assets Value
Digital Platform Value
Ecosystem Value
Innovation Value
Living Services
Bank
Digital Relationship
Bank

4. THE NEXT “S” GROWTH CURVE FOR BANKS
This creates a window of opportunity for retail and commercial banks in
most developed markets.

5. THE JOURNEY TO LIVING SERVICES BANK:
KEY CHALLENGES
1. Legacy architecture
2. Legacy mind-set of the front line
3. Lack of ability to unlock value of internal data
Three major challenges keep organizations from fully realizing
returns and delivering a truly customer-centric experience
1. Digital Decoupling
2. Move to the Public Cloud
3. A Data-powered Business
4. The Living Services Bank
5. The Open Banking Wild Card
Five key trends that are a result of Banks seeking to overcome
these challenges

6. Copyright © 2017 Accenture. All rights reserved. 6
TREND # 1: DIGITAL DECOUPLING
The foundation of an end-to-end digital experience
Successful decoupling is facilitated by move to public cloud…
DD is a direct response to:
• CEOs Demand Bold innovation and drastic
cost reduction, at speed
• Legacy IT with its Technical Debt and old-
style Operations are holding back change
• CEOs cannot wait 5 years nor is there
funding for large scale transformation
• A combination of existing and New IT
techniques allows business strategy to be
“decoupled” from legacy issues
• DD allows 2-Speed Transformation
• DD Road Map
• Move to Agile Business and IT,
DevOps and Cloud
• Decouple Legacy Core from Channels
With a Data Lake
• Evolve towards Exponential IT

7. TREND #2: MOVE TO THE PUBLIC CLOUD
Cloud is essential for data-driven business
• Banks will need to make decisions about their
business models
• No matter what options they choose, they will be most
likely to conduct business on the public cloud
• The benefits of scalability, agility and lower costs are
too compelling to resist
• Cloud migration is now “how and when” rather than “if
and why”
• And cloud supports the move to “data as a
business…”

8. TREND #3 DATA-POWERED BUSINESS
Unlocking the full value of internal and external date to transition to a
truly data-driven business
• Supports hyper-segmentation and a very
personalized customer experience
• Each customer treated based on unique
needs, with banking needs understood
through lifestyle and life stage analysis

9. Going Digital has helped banks level the playing field…
OUR CEO IS POISED FOR THE LEAP
1. Compared to Top 5 Indonesian Banking
companies - 2016 Annual reports
+ +
Leading Banking
Industry Metrics
Leading Digital
Economy Metrics
2. Compared to Banking and Digital Exemplars – Qualitative Analysis
Leading Digital
Business Metrics
Digital Sales
Digital Acquisition
Data x-sell
Net Promoter Score
Digital Servicing
Digital Productivity
Index
……
ROE
ROA
NIM
Loan Growth
CI Ratio
NPL Ratio
……..
Typically compared against banking
competitors
Typically compared against banking
and non-banking digital exemplars
Typically compared against digital
platform players
3. Compared to Digital Platform Players – Qualitative Analysis
Share of Trust
Share of Mind
Data Assets Value
Digital Platform Value
Ecosystem Value
Innovation Value
……

10. THE NEXT FIVE YEARS…
More Consolidation, More Marketplaces, More Normalization
• Mainstream banking won’t go away, but it will
continue to change rapidly
• Fintechs will accelerate the evolution of banks
• Large players may buy rather than build
• BBVA/Simple
• BNP/Compte-Nickel
• JPMC WePay
• Others will start their own brands
• JPMC/Finn
• GS/Marcus
• Incumbents will get more comfortable dealing
with small vendors

11. TREND #4 – THE LIVING SERVICES BANK
Pivoting to a ‘customer-first’, ecosystem-driven model
• Owns the customer, builds
solutions and products for
participants to interact, create, sell
and share value
• View its ecosystem as the engine
of growth, building a portfolio of
products around a set of core
financial services
• High efficiency in managing an
ecosystem of partners
• Core banking services champion
• Digitally powered phygital (physical +
digital) financial propositions
• Emphasis on personalization, real time,
contextualization and ability to tailor to
the individual customer needs
Living Services Bank
Digital Relationship
Bank

12. • Regulatory actions encourage competition from
digital newcomers
• Customer Interaction vs Product “Manufacturing”
• Artificial intelligence provide contextual advice that
is in the customers’ best interest
• The combination of these factors will lead to banks
having to make 3 promises in addition to providing
a seamless, convenient and engaging customer
experience
TREND #5: OPEN BANKING IS A WILD CARD
Being everything that the customer needs the Bank to be

13. Copyright © 2017 Accenture. All rights reserved. 13
SOME THINGS WILL NOT CHANGE
Banks will need to make (and keep) three promises to their customers
3. You will not be charged for “Business as Usual” services
1. If you borrow money from us, it will be at the
lowest possible cost
2. If you invest with us, you will get the highest
possible returns
• Realtime, Relevant, Customer Experience
• Transparent Eco-system where each player in the eco system (in addition to regulators) will keep each
other honest to act in the best interest of the customer that leads to:
• Three Promises…..

14. THE END