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© 2012 Maris   Strategies, ltd. All rights reserved.




          Rethinking Banking:
          Innovations from Emerging Markets




          Dublin
          February 28, 2012
We Must Learn to Think Differently
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                            3


               1                                       2               1                2


                                                            3
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                    Global Macroeconomic Trends
                    Reshaping the Banking Industry
Forecasting the Future
© 2012 Maris   Strategies, ltd. All rights reserved.




                         Projection Versus Prediction
What are the Trends that Influence our Macroeconomic Future?
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                                 Macroeconomic Future
     Today’s World
                                                       Economy          Policy          Demography
     Lower growth

     Higher risk aversion

     Increased regulation

     Higher capital requirements

     Lower recurring investment yield

     Inflation / deflation

     Higher economic volatility

                                                                    Scenarios
Four Macroeconomic Trends
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                CHANGE IN WORLD ECONOMIC ORDER
                                                    Has the Americanization of the World Ended?


                                                CHANGES IN ECONOMIC ACTIVITY
                                                    Will emerging economies surpass service economies?


                                                CHANGES IN NATIONAL POLICIES
                                                       Is free market capitalism an answer or a question?


                                                CHANGES IN AGGREGATE CONSUMER BEHAVIOR
                                                       Will global consumerism initiate a global
                                                       battle for natural resources?
The Financial Crisis in an Opportunity
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                       Chinese word for Crisis




                                                         Danger       Opportunity
Real GDP Growth Rates per Capita
© 2012 Maris   Strategies, ltd. All rights reserved.
Real GDP Growth Rates per Capita
© 2012 Maris   Strategies, ltd. All rights reserved.




          MEASURE: Annual average growth rates per capita
A Shift in Consumption
© 2012 Maris   Strategies, ltd. All rights reserved.
Changing Economic Order
© 2012 Maris   Strategies, ltd. All rights reserved.
China Focuses on Domestic Markets
© 2012 Maris   Strategies, ltd. All rights reserved.
The Changing New World Economic Order
© 2012 Maris   Strategies, ltd. All rights reserved.
Will Emerging Markets Continue to Outpace the Rest?
© 2012 Maris   Strategies, ltd. All rights reserved.


                             High Growth + Low Debt = Opportunities in Emerging Markets

        United States                              United Kingdom   Ireland          France           Japan
        Growth     2.8%                            Growth    1.7%   Growth 4.0%      Growth   1.6%    Growth   1.4%
        Gvt Debt 99.5%                             Gvt Debt 83.0%   Gvt Debt 96.0%   Gvt Debt 85.0%   Gvt Debt 229.1%
Emerging Markets Driving Global GDP Growth
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                                      Ireland
Emergence of Middle Class & Urbanization
© 2012 Maris   Strategies, ltd. All rights reserved.
The Rise of the Emerging Markets’ Middle Class
© 2012 Maris   Strategies, ltd. All rights reserved.
Increases in Trade with Africa 2000 - 2010
© 2012 Maris   Strategies, ltd. All rights reserved.
Transition in the Top 20 Financial Institutions by Market Cap.
© 2012 Maris   Strategies, ltd. All rights reserved.




                   1999                                2009
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                                      Socioeconomic Changes
Civil Unrest and Unemployment Rates
© 2012 Maris                     Strategies, ltd. All rights reserved.




                                                                                                                      Young populations, high
                                 40%                               Where is Ireland?                                  youth unemployment

                                 35%                                                                          Egypt
       Youth Unemployment Rate




                                                                           Ireland            Tunisia
                                 30%
                                                                                                        Saudi Arabia
                                 25%                                               Lebanon        Algeria   Jordan
                                                                                               Iran
                                 20%                                                              Libya       Syria           Yemen
                                                                                     Bahrain
                                                                                             Morocco     Oman
                                 15%                                       Qatar
                                 10%                            UAE                  Kuwait

                                   5%                                                            More mature populations lower unemployment
                                   0%
                                            25%

                                                            30%




                                                                                        45%

                                                                                                50%




                                                                                                                      65%

                                                                                                                            70%
                                                                         35%

                                                                                 40%




                                                                                                        55%

                                                                                                              60%
                                                                               % of Population under 24 Years Old
Euro Zone Youth Unemployment
© 2012 Maris   Strategies, ltd. All rights reserved.
Global Values and Domestic Concerns
© 2012 Maris   Strategies, ltd. All rights reserved.




     Survey of Egyptian Households
     November 28, 2011
     Source: Foreign Policy,
     December 13, 2011
Socioeconomic Forces: Expansion and Compression
© 2012 Maris   Strategies, ltd. All rights reserved.




         Number of direct
         ways to get there




                                      Globalization      Disintermediation



                     Number of
                     places to go
© 2012 Maris   Strategies, ltd. All rights reserved.




                          Redefinition of the Value Proposition
The Historical Value Proposition for Banking
© 2012 Maris   Strategies, ltd. All rights reserved.




                                             Safety

                      Interest Rates                             Customers

                                       Integrity                                     Value
                                                                                     Proposition
   Return on Investment                                        Shareholders
21st Century Bank’s Value Proposition: Value is Relative
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                                                      Telephone banking

                                                                    Branch        ATM              ATM          Internet   Branch of
                                                       Convenience (Access) (1st generation) (2nd generation) (With linked the future
                           Customers                                          Expanded           Remote        Services) (Advisory)
                                                                                  Hours          locations     Extended     Extends
                                                                                                Extended       breath of    depth of
                                                                                                   reach       Services     Service

     Value                                             Level of            Treated like       Feel like an individual    Customisation and
  Proposition                                          customer intimacy   an account         not a number               personalisation of
                                                       Ease of use                                                       services

                                                       Cost                Low cost          High Quality

                                                       Security            Physically safe                  Deposits insured

                                                       Fidelity       Accuracy of information       Discretion              Secrecy
                                                                                                                    Nationalism
                                                       Corporate
                                                                     Morals      Ethics       Community             (keeping the profits
                                                        values
                                                                                                                    in the country)
                           Shareholders                              Profitability
                                                                     Growth
                                                                     Community standing
Understanding the Relativity of the Value Equation
© 2012 Maris   Strategies, ltd. All rights reserved.




           New York City, USA                                                     Nairobi, Kenya
Quantitative Easing
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American Version of Quantitative Easing
© 2012 Maris   Strategies, ltd. All rights reserved.
Understanding the Relativity of the Value Equation
© 2012 Maris   Strategies, ltd. All rights reserved.




               Value is not Simply “Price = Costs Plus a Profit Margin”



                                   Satisfaction of Needs               Fulfilment of desires
        Value =
                                   Resources Used                      Everything required to meet desires




                                       Global Annual Production 2010
                                       130 million carats
Value is Relative
© 2012 Maris   Strategies, ltd. All rights reserved.




           Value                                       perceived       value for
        Proposition                             =        value
                                                                   +    money
                                                                                   +   convenience
© 2012 Maris   Strategies, ltd. All rights reserved.




  Understanding Global Customers
How Bankers See Themselves and Customers
© 2012 Maris   Strategies, ltd. All rights reserved.
The Realities of Banking…it’s Messy
© 2012 Maris   Strategies, ltd. All rights reserved.
No, this is Not a Queue for Excellent Service
© 2012 Maris   Strategies, ltd. All rights reserved.
The Duality of a Retail Banking Transaction
© 2012 Maris   Strategies, ltd. All rights reserved.
The Dichotomy Summarized
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                       Customer’s View
Developing Customer Intelligence
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                       Branch Bank Manager’s Handbook

                                                       Managers should be in      No new current
                                                       frequent communications    accounts should be
                                                       with the head office and   opened without
                                                       with each other            knowledge of, or full
                                                       concerning the character   enquiry into, the
                                                       of customers, changes      circumstances and
                                                       in partnerships, bill      character of
                                                       transactions and other     customers.
                                                       banking interests.
© 2012 Maris   Strategies, ltd. All rights reserved.




                   Customer Behaviour
Understanding Customer Behaviour
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                                                    Fixed interest
                                                                                    Variable interest
                                                                         Credit     Fixed periods
                                                                                    of repayment
                                                           Payments
                                                                         Debit       Variable periods
                                            Transactions                             of repayment
                                                           Savings
                                                                         Current or checking accounts
                                                           Deposits      Good interest rates
      Customer
                                            Precautions                  Access to money
      Behaviours
                                                           Insurance
                                                                         Safety
                                                                         Links to mortgages
                                                                         Ease of investment
                                            Speculations   Investments   Convenience
Case Study: Austria
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                        innovation
                                                        independence
                                                        implementation


                                                       Breaking New Ground in
                                                           High Net Worth
The Black Experience: Euram “UHNW” Card
© 2012 Maris   Strategies, ltd. All rights reserved.




                 Customers who appreciate luxury service, value privacy and remain
                 understated in their habits




               “For those who have,
               not for those that want to have”
Demographic Factors: The Changing World
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                             ?
Europe Contrasted with Emerging Economies
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                        Czech Republic

                                                                                              Jordan



                                                                                        Kenya




                                                           Source: Population Action International 2007
Are Customer Behaviours Predictable?
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                         Black Death
                                                          Outbreaks                   % of Meat In Peasant Diet



                                                                              Shops


                                                 Markets


                                   Fairs
    Ad-hoc
   Gatherings                                                                                 Wage Rates of a Thatcher
                                                                                              Population of England

                    1086                 1200          1300   1400     1500     1600      1700    1800   1900     2000
The Big Question for Europe and the United States
© 2012 Maris   Strategies, ltd. All rights reserved.




               Leave it
                                                               or
                                                                    Spend it?
Developing Customer Intelligence
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                          Do customers always know
                                                            what they really want?
Are Customer Behaviours Predictable?
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                       Preferred Banking Methods
                                                              Youth Market
     40%

     35%

     30%                                                                                 Internet

     25%                                                                                 Branches

     20%                                                                                 ATM

     15%                                                                                 Mail

     10%                                                                                 Call Centre

     5%                                                                                  Mobile

     0%
                                         2007               2008            2009
© 2012 Maris   Strategies, ltd. All rights reserved.




                       Example India
Use of Social Media by Private Sector Banks in India
© 2012 Maris   Strategies, ltd. All rights reserved.




 Source: Simplify360
India’s Mobile Banking Users
© 2012 Maris    Strategies, ltd. All rights reserved.




          (in millions and % market share)

        All others                                      ICICI Bank, 17.75,
       10.72, 25%                                              40%




                                                                             Mobile banking users – Income profile




                                                          HDFC, 9.1, 21%
               SBI, 6.13, 14%

         60% of mobile banking users in India fall
          into the Rs 1 to 5 Lakh income group
Source: Vital Analytics
Nature of Mobile Banking Services in India
© 2012 Maris    Strategies, ltd. All rights reserved.




     Request a
                                                                  Cheching
    Cheque Book,
                                                               Account Balance
      19.11%
                                                               Inquiry, 39.97%



 Payment
Reminders,
 20.92%




        Status of
        Cheques,                                            View Last Three
         21.06%                                              Transactions,
                                                                28.15%
Source: Vital Analytics
© 2012 Maris   Strategies, ltd. All rights reserved.




     What is Our Value Discipline?
The Value Discipline
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                              Product Leaders hip
                                                       offer super innov t ima a per ma in t maket
                                                            ing   ior aion, ge, nd for nce heir r s


                            S hift to                                                                      S hift to
                          Inves tment                                                                     C us tomer
               proliferate new products                                                                  always be firs t
                      & s ervices                                                                             -or-
                          -or-                                                                           always be right
                 s treamline operations



    Operational E xc ellenc e                                                                         C us tomer Intimac y
   offer t bestcombinaion ofl pr r ia it
        ing he         t     ow ice, el bil y,                                                  offer exper a ice a cust t aong w h
                                                                                                     ing   t dv nd omizaion l it
           a ea ofpur se in t maket
            nd se    cha heir r s                                                              pr s a ser ices t ensur t cust ’s success
                                                                                                 oduct nd v o e he omer
                                                                 S hift to Viability
                                                         s tandardize the cus tomer interface
                                                                         -or-
                                                          cus tomize the cus tomer interface
Strategy Alignment Drives the Customer Experience
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                         Product
                                                        Leadership
                                                                       2.8                          European Data

                                                                       2.6

                                                                       2.4
                                 How Most                              2.2
                                 Banks Actually
                                 Behave                                         What Most Banks Believe


                    Operational                                                       Customer
                    Excellence                                                        Intimacy

                                                                     Source: Maris Strategies Financial Services Diagnostic Workshop
Customer Facing Organizational Structures
© 2012 Maris    Strategies, ltd. All rights reserved.




                        Type                                                                             Focus


                                                                          Do stuff
               Value Chain                                Buy stuff                     Distribute It   Product
                                                                           to It


                                                          Define         Harness       Get closure on
                Value Shop                              Opportunities   Resources        each task    Opportunities



        Value Network                                    Establish        Broker
                                                                                        Add Value       Customer
                                                        Relationship    Relationship




               Adapted from Stabell and Fjeldstad
The Organizational Achilles Heel
© 2012 Maris    Strategies, ltd. All rights reserved.




                                                         Product          Operational     Customer
                                                        Leadership        Excellence      Intimacy
                                                         Hierarchical
                                                                             Cost
                  Value chain                                               Control
                 (Product focus)                                                           Delivery
                                                                                            Focus
                                                                             Matrix
                                                         Harness
                  Value shop
                                                        Resources
               (Opportunity focus)

                                                                                          Networked
                                                            Develop & Maintain
                Value network
                                                              Relationships
               (Customer focus)

               Adapted from Stabell and Fjeldstad
Customer Synchronization
© 2012 Maris   Strategies, ltd. All rights reserved.




               Growing Bank                              Mature Bank                  Declining Bank


                                                                                    Revenue
               Cost                                    Revenue
      Revenue                                             Cost                         Cost



         New bank or new product                         Working in a fixed but        Losing customers
                                                        fluctuating profit margin           or profits
Management Attitudes and Customer Focus
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                            Growth Strategy             Competitive Strategy     Survival Strategy


           Corporate                                                                                                   Cost containment
           Mentality                                                           R&D        Zone of False Sense                Downsizing
                                                                          Investment                                        Outsourcing
                                                                                          of Strategy Security
                                                                           Innovation

           Employee Attitude                              Enthusiastic Optimism          Next Quarter Focused    Panic - Search for Next Job


                                                          Cost                          Revenue                  Revenue
           Economics
                                                       Revenue                             Cost                     Cost

                                                                                                                         Outsourced
                                                                                            Process Refined
           Business                                          Process Defined
           Process

                                                                                                                         Sold off
           Employment                                            Scramble for Talent                                    Downsize
                                                                                           Re-organize Labour
           Human
           Resources                                               Skill Alignment        Policies & Benefits    Outplacement, Terminations,
           Organization                                                                                          Talent retention
Focus Strategy on Customers and Top-Line Growth
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                                    Top-line Growth
         Revenues


                                                                                         Profitability
                                                                                         Failure point



                                                                   Bottom-line Savings

                    Costs
                                   Q1 Q2 Q3 Q4 Q5
ROI is Dead: Measure Return on Process (ROP)
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                             The Need for a Process Focus


                       IT Project 1                                 IT Project 2              IT Project 3
                         ROI 22%                                      ROI 8%                    ROI 11%
                      Value £1million                               Value £350K               Value £425K


                 Loan                                    Loan
               Application                                             Infrastructure Underwriting     Settlement
                                                       Processing




               Process Input:                                                                        Process Output:
               • Loan Volume                                   Return On Process                     • Loan Volume
                                                                     (ROP)                           • Profit / Loss
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                       New Competitors
Non-bank Banks?
© 2012 Maris   Strategies, ltd. All rights reserved.
Market Aggregation
© 2012 Maris   Strategies, ltd. All rights reserved.
The Nature of Money is Changing
© 2012 Maris   Strategies, ltd. All rights reserved.
How did People Send Money within Kenya in 2006?
© 2012 Maris   Strategies, ltd. All rights reserved.
How did People send Money within Kenya in 2009?
© 2012 Maris   Strategies, ltd. All rights reserved.
M-Pesa: Person to Person Transfers Trend
© 2012 Maris   Strategies, ltd. All rights reserved.
Growth and Innovation
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                       $141,842,258.90 USD
Key Numbers and Developments
© 2012 Maris    Strategies, ltd. All rights reserved.




               Central Bank of Kenya is in the process of finalizing
               regulations that will allow non bank outlets and
               platforms such as M-PESA as a channel for formal
               deposit taking.

           National Statistics on Banks – (Dec. 2011)         M-Pesa (since 2007)
           Banks               43                             • 82% of mobile customers us M-Pesa
           Branches           1,056
                                                              • 14.9 million people
           ATMs               2,205
           POS Machines 16,604                                 (68% of the working population)
           Pre-Paid Cards 22,405                              • 32,000 agents
           Credit Cards       122,212
           Debit Cards        8,548,390

           Value of Transactions:
           Kshs 57bn ($0.614bn USD) total value            Kshs 314bn ($3.15bn USD)
           of all card transactions (credit, debit,        transferred between April to Sept 2011
           pre-paid, etc.)
New Innovations from M-Pesa
© 2012 Maris    Strategies, ltd. All rights reserved.




        Intercontinental Transfers
                                                        International Transfers



                Vodacom Tanzania reduces
                M-Pesa rates
                      M-Pesa reduced mobile money
                      transfer fees by up to 75%,
                      transfers now Sh50 ($0.03USD)
                      per transaction.
                      Transfer money Kenya to
                      Tanzania.
                                                          Shareholder Rewards

         Corporate Solutions
               • Customer to Business (Pay Bill Service)               Receive your Safaricom
               • Business to Consumer (Bulk Payments Services)         dividends by M-PESA
The People’s Bank of China licenses non-bank Transactions
© 2012 Maris   Strategies, ltd. All rights reserved.
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                       Do Banks Still Make Sense?
Innovation is Not Invention
© 2012 Maris    Strategies, ltd. All rights reserved.




               Michael Jordaan, CEO, FNB Bank,
               Innovation is the ability to differentiate.
               As disruptive technologies and
               business models challenge banks,
               innovation is no longer just a competitive
               advantage but rather a competitive imperative.
Innovation / Adoption Rates Often Differ
© 2012 Maris    Strategies, ltd. All rights reserved.




                                                         Swivel TV   1990s




                                        1939                                                2004




               Projection TV
                                                                          2005
Pod People
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Do I Need a Bank to Lend me Money?
© 2012 Maris   Strategies, ltd. All rights reserved.
Competition from External non-Bank Entities
© 2012 Maris   Strategies, ltd. All rights reserved.
2010: Crowdfunding Platforms 29
© 2012 Maris   Strategies, ltd. All rights reserved.
2011: Crowdfunding Platforms 340
© 2012 Maris   Strategies, ltd. All rights reserved.
Value Proposition
© 2012 Maris   Strategies, ltd. All rights reserved.
Social Lending: Anti-bank Branding
© 2012 Maris   Strategies, ltd. All rights reserved.
Northern Ireland
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                                         Apr 2010
                                          Linking 400 Investors to 900
                                          Entrepreneurs
                                          €26Million


                                                                                JAN 2011
This Can’t Happen in Ireland
© 2012 Maris   Strategies, ltd. All rights reserved.




               Approved Social Lending Organisations in Ireland



Linking Investors to Entrepreneurs
                                                        Specialising in microfinance for
        Dublin 2010                                     business start up throughout Ireland.




                                                        Specialising in community enterprise
                                                        and social infrastructure throughout
                                                        Ireland.
      supported by Bank of America Merrill Lynch
Microfinance was Invented in Ireland
© 2012 Maris    Strategies, ltd. All rights reserved.




          Jonathan Swift’s Irish Loan Funds 1787

               Loans £5 to £10 to poor industrious tradesmen

               20 week loan - weekly instalments 2 to 4 shillings

               Co-signed by 2 neighbours

               Spawned a new industry (microlending)

               Led to 1824 legislation to liberalize the Irish banking system

               By 1840 the Loan Funds Industry was serving 20% of Irish population

                                                          Irish loan funds were very capable of tackling
                                                          the prospect of defaulting borrowers, it was
                                                          faulty management and increased competition
                                                          from banks that eventually led to their demise.
China’s Top 15 Social Networks
© 2012 Maris   Strategies, ltd. All rights reserved.
Life-Stage Approach to Banking
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                                 Car (s)
                                                                     Rent
                                                                   Purchase home         Second home        Retirement dwelling
                                                        20s & 30s            40s
                                                          single            single
                            Young                                                            50s & 60s
      Child                                                          Child support                                       Final
                             adult                                                         with / without   Retirement
                                                       College                                                           expenses
                                                                    Alimony                   partner
                                                             Divorce
                                                                                          Retirement savings & income
                                                                                           Travel
                                                        Wedding
     Saving
      for a                                            20s & 30s            40s
    purchase                                            married            married
    or event
                                                         Child-care expense           Child’s college

                                               Insurance (health, life, car, renters, home owner)
Lifestyle Approach to Banking
© 2012 Maris                    Strategies, ltd. All rights reserved.
           Culture / Religion

                                    Spenders/Borrowers Savers/Bargain Hunters Social Attitude

                                                                                                Income Levels                       Trust

                                                                                                                         Savings                    Convenience             Behaviours

                                                                                                                Search    Price     Compare       Select     Ship
                                                                                                $100+
                                                                                                $60-100k
           Eastern / Western




                                                                                                                           Demographic Profiles
                                                                                                                                                      Defined lifestyle behaviours
                                                                                                                           US
                                                                                                                           Baby-boomer
                                                                                                $40-60k




                                                                                                                           $0-$40k income
                                                                                                                           $40k-$100k
                                                                                                                           $100k+
                                                                                                <$40k




                                                                                                                                                      Defined life-stage behaviours
Rethinking the Bank
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                       Cashless, paperless with
                                                       no back office
Capitec, Really Knowning the Customer
© 2012 Maris   Strategies, ltd. All rights reserved.
No Technology Group and a New Customer Experience
© 2012 Maris   Strategies, ltd. All rights reserved.
Demographic-based Campaigns on ATM
© 2012 Maris   Strategies, ltd. All rights reserved.




                              3




                                                                                                                                       Mortgage
                                                                                                                    High Net Worth
                                                                                                Student                   Internet
                                                                               Car Loan       Debit Card                   Banking
         Personal                                               Insurance    Opportunity     Opportunity
         Loan                   Mid-income Internet Banking     Cross-Sell
         Opportunity                                           Opportunity
                                  Ad campaign chosen                                              2                   Profile mapped to
                                       based on                                                                         demographic
                                    demographic …
                                                                                                               Customer behaviour compared with
                                                                                                               others to decide product promotion
                            4
                                … and delivered to ATM                                                          John Smith                            Other Customers
                                                                                                                          Mortgage                                Mortgage




                                                                                                  Life Style




                                                                                                                                         Life Style
                                                                                                                                                            Internet
                                                                                                                                                            Banking
                                                                                                                            Car loan
                                                                                                                 Credit                                  Credit       Car loan
    6 No interest                                                                                                 Card                                    Card

       shown.                                                                                                    Life Stage                             Life Stage
       Proceed with
       service and
       feedback to
                                                                             1
       Profile                                                                        Card read to
                                                                                 obtain Customer Profile
                                                                                    Name: John Smith
                                                                                    Acc No: 667 389 245
                                                                                    Sort Co: 78-00-21
                                  5                                                 Bank: ABank
                                         Yes chosen. Initiate sale                  Age: 22
                                                                                    Address: 18a Shore Court
Example: Consumer Banking Segment-Product Matrix
© 2012 Maris     Strategies, ltd. All rights reserved.



                                                                          Consumer Banking

                                                              HR          CFO                Legal        IT



    Sales                                         Marketing          Mortgage         Credit Card         Loans           Investments


                Brand          CRM           Insight     Loyalty Direct         Standard Premium                         Growth     Income
                                                         Program                                                        Orientated Orientated

                                                                                                     Home Auto Lines
                                                                                                     Equity      Of
               Regions
                                                                                                               Credit
                      North
                      South
                      East
                      West

               Segments
                          Youth
                          Builders & Borrowers
                          Accumulators
                          Preservers
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                       Banking Products
The Key is Matching Products to Customers
© 2012 Maris    Strategies, ltd. All rights reserved.




                                                                                                                                      Cross-Sell Ratios in
               Cross-Sell Ratios in Retail Banks




                                                                            Number of products per customer
                                                                                                                                      European Banking
                                                                                                               3.5
                USA                                                                                                         2.9
                                                                                                               3.0
                                                                                                                                               2.5
                 UK                                                                                            2.5
                                                                                                                                                                 2.0
     Germany                                                                                                   2.0
                                                                                                                                                                                  1.5
                                                                                                               1.5                                                                                   1.25
                Italy
                                                                                                               1.0
               Spain
                                                                                                               0.5
          France                                                                                                    0




                                                                                                                                                                 Internet banks


                                                                                                                                                                                  Internet brokers


                                                                                                                                                                                                     Special providers
                                                                                                                            (e-customers)


                                                                                                                                               (all customers)
                                                                                                                                            Traditional Banks
                                                                                                                        Traditional Banks
Scandinavia
                                                                                                              6.0
                       0.0                1.0           2.0    3.0   4.0
                         Number of products per customer
Denmark
© 2012 Maris   Strategies, ltd. All rights reserved.
Bank of New Zealand
© 2012 Maris   Strategies, ltd. All rights reserved.
Customer Dashboards
© 2012 Maris   Strategies, ltd. All rights reserved.




                • Dash Boards
In the Future Customers are in Control
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                                        Payment system
               Who will issue this card:                                Bank accounts
               A bank? A telco? A media company?                        Customer loyalty card
                                                                        Points card
                                                                        Gift card
                                                                        Membership card
                                                                        Business card
                                                                        ID card
                                                                        Prepaid card
                                                                        Schedule / Time card
                                                                        Cafeteria card
                                                                        Ticketing / Transportation
                                                                        Security access card
                                                                        Debit card
                                                                        Telephone card
The Right Card to fit a Lifestyle
© 2012 Maris   Strategies, ltd. All rights reserved.
Divorcing Your Account from Your Card
© 2012 Maris    Strategies, ltd. All rights reserved.




               Turn my cards off (default)
                                                                               Cards




                                                                               Accounts
                        Turn on my VISA for 1 hour

                        Turn on my card in a foreign country

                        Turn on my MasterCard for 100 Dirham
© 2012 Maris   Strategies, ltd. All rights reserved.




                                         Distribution
The Nexus of Banking in the Future
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                                                      Social preferences

                                                       Lifestyle
                                                                                         l     l          us
                                                       Approach                        na tura         io         l
                                                                                  g io      l       ig          ca
                                                                               Re        Cu     R el         Lo



                                                                  Styles
                                                                              Targeted behaviours
        Lifestage
                                                         Stages




        Approach                                                                       Banking products / services


          Life events                                                                                      Delivery
                                                                                                           technologies
Multi-Channel Growth
© 2012 Maris   Strategies, ltd. All rights reserved.




        2010³




        2000³




        1990³



        1980³

        1970³

        …0³
Time
Barawa Bank
© 2012 Maris   Strategies, ltd. All rights reserved.
Mauritius: Mauritius Commercial Bank
© 2012 Maris   Strategies, ltd. All rights reserved.
Philippines: Premiere Bank
© 2012 Maris   Strategies, ltd. All rights reserved.




                                                       38 online branches.

                                                       Bank for the entrepreneurs and SMEs.

                                                       Consumer Finance (Personal, Salary and
                                                       Auto Loans), Factoring of Receivables
                                                       and the Purchase of Contract-to-sell
                                                       Receivables.
Turkey: Ziraat Bank
© 2012 Maris   Strategies, ltd. All rights reserved.




         Video Teller Machine


        The VTM technology is aimed for
        small towns which do not have
        Ziraat Bank branches or big
        shopping centres where there is a
        need for a lot of employees.

        The system recognizes the users
        from their fingerprints and then lets
        them get all the private banking
        services they would have in a
        “normal” branch.
Canada: Aboriginal Banking
© 2012 Maris   Strategies, ltd. All rights reserved.
South Africa: Mineworkers Bank
© 2012 Maris   Strategies, ltd. All rights reserved.
Tanzania: Women’s Banking
© 2012 Maris   Strategies, ltd. All rights reserved.
Turkey: Technocrats
© 2012 Maris   Strategies, ltd. All rights reserved.
© 2012 Maris   Strategies, ltd. All rights reserved.




               Thank you for your time




                                                       Joseph A. DiVanna

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2012 Jdivanna

  • 1. © 2012 Maris Strategies, ltd. All rights reserved. Rethinking Banking: Innovations from Emerging Markets Dublin February 28, 2012
  • 2. We Must Learn to Think Differently © 2012 Maris Strategies, ltd. All rights reserved. 3 1 2 1 2 3
  • 3. © 2012 Maris Strategies, ltd. All rights reserved. Global Macroeconomic Trends Reshaping the Banking Industry
  • 4. Forecasting the Future © 2012 Maris Strategies, ltd. All rights reserved. Projection Versus Prediction
  • 5. What are the Trends that Influence our Macroeconomic Future? © 2012 Maris Strategies, ltd. All rights reserved. Macroeconomic Future Today’s World Economy Policy Demography Lower growth Higher risk aversion Increased regulation Higher capital requirements Lower recurring investment yield Inflation / deflation Higher economic volatility Scenarios
  • 6. Four Macroeconomic Trends © 2012 Maris Strategies, ltd. All rights reserved. CHANGE IN WORLD ECONOMIC ORDER Has the Americanization of the World Ended? CHANGES IN ECONOMIC ACTIVITY Will emerging economies surpass service economies? CHANGES IN NATIONAL POLICIES Is free market capitalism an answer or a question? CHANGES IN AGGREGATE CONSUMER BEHAVIOR Will global consumerism initiate a global battle for natural resources?
  • 7. The Financial Crisis in an Opportunity © 2012 Maris Strategies, ltd. All rights reserved. Chinese word for Crisis Danger Opportunity
  • 8. Real GDP Growth Rates per Capita © 2012 Maris Strategies, ltd. All rights reserved.
  • 9. Real GDP Growth Rates per Capita © 2012 Maris Strategies, ltd. All rights reserved. MEASURE: Annual average growth rates per capita
  • 10. A Shift in Consumption © 2012 Maris Strategies, ltd. All rights reserved.
  • 11. Changing Economic Order © 2012 Maris Strategies, ltd. All rights reserved.
  • 12. China Focuses on Domestic Markets © 2012 Maris Strategies, ltd. All rights reserved.
  • 13. The Changing New World Economic Order © 2012 Maris Strategies, ltd. All rights reserved.
  • 14. Will Emerging Markets Continue to Outpace the Rest? © 2012 Maris Strategies, ltd. All rights reserved. High Growth + Low Debt = Opportunities in Emerging Markets United States United Kingdom Ireland France Japan Growth 2.8% Growth 1.7% Growth 4.0% Growth 1.6% Growth 1.4% Gvt Debt 99.5% Gvt Debt 83.0% Gvt Debt 96.0% Gvt Debt 85.0% Gvt Debt 229.1%
  • 15. Emerging Markets Driving Global GDP Growth © 2012 Maris Strategies, ltd. All rights reserved. Ireland
  • 16. Emergence of Middle Class & Urbanization © 2012 Maris Strategies, ltd. All rights reserved.
  • 17. The Rise of the Emerging Markets’ Middle Class © 2012 Maris Strategies, ltd. All rights reserved.
  • 18. Increases in Trade with Africa 2000 - 2010 © 2012 Maris Strategies, ltd. All rights reserved.
  • 19. Transition in the Top 20 Financial Institutions by Market Cap. © 2012 Maris Strategies, ltd. All rights reserved. 1999 2009
  • 20. © 2012 Maris Strategies, ltd. All rights reserved. Socioeconomic Changes
  • 21. Civil Unrest and Unemployment Rates © 2012 Maris Strategies, ltd. All rights reserved. Young populations, high 40% Where is Ireland? youth unemployment 35% Egypt Youth Unemployment Rate Ireland Tunisia 30% Saudi Arabia 25% Lebanon Algeria Jordan Iran 20% Libya Syria Yemen Bahrain Morocco Oman 15% Qatar 10% UAE Kuwait 5% More mature populations lower unemployment 0% 25% 30% 45% 50% 65% 70% 35% 40% 55% 60% % of Population under 24 Years Old
  • 22. Euro Zone Youth Unemployment © 2012 Maris Strategies, ltd. All rights reserved.
  • 23. Global Values and Domestic Concerns © 2012 Maris Strategies, ltd. All rights reserved. Survey of Egyptian Households November 28, 2011 Source: Foreign Policy, December 13, 2011
  • 24. Socioeconomic Forces: Expansion and Compression © 2012 Maris Strategies, ltd. All rights reserved. Number of direct ways to get there Globalization Disintermediation Number of places to go
  • 25. © 2012 Maris Strategies, ltd. All rights reserved. Redefinition of the Value Proposition
  • 26. The Historical Value Proposition for Banking © 2012 Maris Strategies, ltd. All rights reserved. Safety Interest Rates Customers Integrity Value Proposition Return on Investment Shareholders
  • 27. 21st Century Bank’s Value Proposition: Value is Relative © 2012 Maris Strategies, ltd. All rights reserved. Telephone banking Branch ATM ATM Internet Branch of Convenience (Access) (1st generation) (2nd generation) (With linked the future Customers Expanded Remote Services) (Advisory) Hours locations Extended Extends Extended breath of depth of reach Services Service Value Level of Treated like Feel like an individual Customisation and Proposition customer intimacy an account not a number personalisation of Ease of use services Cost Low cost High Quality Security Physically safe Deposits insured Fidelity Accuracy of information Discretion Secrecy Nationalism Corporate Morals Ethics Community (keeping the profits values in the country) Shareholders Profitability Growth Community standing
  • 28. Understanding the Relativity of the Value Equation © 2012 Maris Strategies, ltd. All rights reserved. New York City, USA Nairobi, Kenya
  • 29. Quantitative Easing © 2012 Maris Strategies, ltd. All rights reserved.
  • 30. American Version of Quantitative Easing © 2012 Maris Strategies, ltd. All rights reserved.
  • 31. Understanding the Relativity of the Value Equation © 2012 Maris Strategies, ltd. All rights reserved. Value is not Simply “Price = Costs Plus a Profit Margin” Satisfaction of Needs Fulfilment of desires Value = Resources Used Everything required to meet desires Global Annual Production 2010 130 million carats
  • 32. Value is Relative © 2012 Maris Strategies, ltd. All rights reserved. Value perceived value for Proposition = value + money + convenience
  • 33. © 2012 Maris Strategies, ltd. All rights reserved. Understanding Global Customers
  • 34. How Bankers See Themselves and Customers © 2012 Maris Strategies, ltd. All rights reserved.
  • 35. The Realities of Banking…it’s Messy © 2012 Maris Strategies, ltd. All rights reserved.
  • 36. No, this is Not a Queue for Excellent Service © 2012 Maris Strategies, ltd. All rights reserved.
  • 37. The Duality of a Retail Banking Transaction © 2012 Maris Strategies, ltd. All rights reserved.
  • 38. The Dichotomy Summarized © 2012 Maris Strategies, ltd. All rights reserved. Customer’s View
  • 39. Developing Customer Intelligence © 2012 Maris Strategies, ltd. All rights reserved. Branch Bank Manager’s Handbook Managers should be in No new current frequent communications accounts should be with the head office and opened without with each other knowledge of, or full concerning the character enquiry into, the of customers, changes circumstances and in partnerships, bill character of transactions and other customers. banking interests.
  • 40. © 2012 Maris Strategies, ltd. All rights reserved. Customer Behaviour
  • 41. Understanding Customer Behaviour © 2012 Maris Strategies, ltd. All rights reserved. Fixed interest Variable interest Credit Fixed periods of repayment Payments Debit Variable periods Transactions of repayment Savings Current or checking accounts Deposits Good interest rates Customer Precautions Access to money Behaviours Insurance Safety Links to mortgages Ease of investment Speculations Investments Convenience
  • 42. Case Study: Austria © 2012 Maris Strategies, ltd. All rights reserved. innovation independence implementation Breaking New Ground in High Net Worth
  • 43. The Black Experience: Euram “UHNW” Card © 2012 Maris Strategies, ltd. All rights reserved. Customers who appreciate luxury service, value privacy and remain understated in their habits “For those who have, not for those that want to have”
  • 44. Demographic Factors: The Changing World © 2012 Maris Strategies, ltd. All rights reserved. ?
  • 45. Europe Contrasted with Emerging Economies © 2012 Maris Strategies, ltd. All rights reserved. Czech Republic Jordan Kenya Source: Population Action International 2007
  • 46. Are Customer Behaviours Predictable? © 2012 Maris Strategies, ltd. All rights reserved. Black Death Outbreaks % of Meat In Peasant Diet Shops Markets Fairs Ad-hoc Gatherings Wage Rates of a Thatcher Population of England 1086 1200 1300 1400 1500 1600 1700 1800 1900 2000
  • 47. The Big Question for Europe and the United States © 2012 Maris Strategies, ltd. All rights reserved. Leave it or Spend it?
  • 48. Developing Customer Intelligence © 2012 Maris Strategies, ltd. All rights reserved. Do customers always know what they really want?
  • 49. Are Customer Behaviours Predictable? © 2012 Maris Strategies, ltd. All rights reserved. Preferred Banking Methods Youth Market 40% 35% 30% Internet 25% Branches 20% ATM 15% Mail 10% Call Centre 5% Mobile 0% 2007 2008 2009
  • 50. © 2012 Maris Strategies, ltd. All rights reserved. Example India
  • 51. Use of Social Media by Private Sector Banks in India © 2012 Maris Strategies, ltd. All rights reserved. Source: Simplify360
  • 52. India’s Mobile Banking Users © 2012 Maris Strategies, ltd. All rights reserved. (in millions and % market share) All others ICICI Bank, 17.75, 10.72, 25% 40% Mobile banking users – Income profile HDFC, 9.1, 21% SBI, 6.13, 14% 60% of mobile banking users in India fall into the Rs 1 to 5 Lakh income group Source: Vital Analytics
  • 53. Nature of Mobile Banking Services in India © 2012 Maris Strategies, ltd. All rights reserved. Request a Cheching Cheque Book, Account Balance 19.11% Inquiry, 39.97% Payment Reminders, 20.92% Status of Cheques, View Last Three 21.06% Transactions, 28.15% Source: Vital Analytics
  • 54. © 2012 Maris Strategies, ltd. All rights reserved. What is Our Value Discipline?
  • 55. The Value Discipline © 2012 Maris Strategies, ltd. All rights reserved. Product Leaders hip offer super innov t ima a per ma in t maket ing ior aion, ge, nd for nce heir r s S hift to S hift to Inves tment C us tomer proliferate new products always be firs t & s ervices -or- -or- always be right s treamline operations Operational E xc ellenc e C us tomer Intimac y offer t bestcombinaion ofl pr r ia it ing he t ow ice, el bil y, offer exper a ice a cust t aong w h ing t dv nd omizaion l it a ea ofpur se in t maket nd se cha heir r s pr s a ser ices t ensur t cust ’s success oduct nd v o e he omer S hift to Viability s tandardize the cus tomer interface -or- cus tomize the cus tomer interface
  • 56. Strategy Alignment Drives the Customer Experience © 2012 Maris Strategies, ltd. All rights reserved. Product Leadership 2.8 European Data 2.6 2.4 How Most 2.2 Banks Actually Behave What Most Banks Believe Operational Customer Excellence Intimacy Source: Maris Strategies Financial Services Diagnostic Workshop
  • 57. Customer Facing Organizational Structures © 2012 Maris Strategies, ltd. All rights reserved. Type Focus Do stuff Value Chain Buy stuff Distribute It Product to It Define Harness Get closure on Value Shop Opportunities Resources each task Opportunities Value Network Establish Broker Add Value Customer Relationship Relationship Adapted from Stabell and Fjeldstad
  • 58. The Organizational Achilles Heel © 2012 Maris Strategies, ltd. All rights reserved. Product Operational Customer Leadership Excellence Intimacy Hierarchical Cost Value chain Control (Product focus) Delivery Focus Matrix Harness Value shop Resources (Opportunity focus) Networked Develop & Maintain Value network Relationships (Customer focus) Adapted from Stabell and Fjeldstad
  • 59. Customer Synchronization © 2012 Maris Strategies, ltd. All rights reserved. Growing Bank Mature Bank Declining Bank Revenue Cost Revenue Revenue Cost Cost New bank or new product Working in a fixed but Losing customers fluctuating profit margin or profits
  • 60. Management Attitudes and Customer Focus © 2012 Maris Strategies, ltd. All rights reserved. Growth Strategy Competitive Strategy Survival Strategy Corporate Cost containment Mentality R&D Zone of False Sense Downsizing Investment Outsourcing of Strategy Security Innovation Employee Attitude Enthusiastic Optimism Next Quarter Focused Panic - Search for Next Job Cost Revenue Revenue Economics Revenue Cost Cost Outsourced Process Refined Business Process Defined Process Sold off Employment Scramble for Talent Downsize Re-organize Labour Human Resources Skill Alignment Policies & Benefits Outplacement, Terminations, Organization Talent retention
  • 61. Focus Strategy on Customers and Top-Line Growth © 2012 Maris Strategies, ltd. All rights reserved. Top-line Growth Revenues Profitability Failure point Bottom-line Savings Costs Q1 Q2 Q3 Q4 Q5
  • 62. ROI is Dead: Measure Return on Process (ROP) © 2012 Maris Strategies, ltd. All rights reserved. The Need for a Process Focus IT Project 1 IT Project 2 IT Project 3 ROI 22% ROI 8% ROI 11% Value £1million Value £350K Value £425K Loan Loan Application Infrastructure Underwriting Settlement Processing Process Input: Process Output: • Loan Volume Return On Process • Loan Volume (ROP) • Profit / Loss
  • 63. © 2012 Maris Strategies, ltd. All rights reserved. New Competitors
  • 64. Non-bank Banks? © 2012 Maris Strategies, ltd. All rights reserved.
  • 65. Market Aggregation © 2012 Maris Strategies, ltd. All rights reserved.
  • 66. The Nature of Money is Changing © 2012 Maris Strategies, ltd. All rights reserved.
  • 67. How did People Send Money within Kenya in 2006? © 2012 Maris Strategies, ltd. All rights reserved.
  • 68. How did People send Money within Kenya in 2009? © 2012 Maris Strategies, ltd. All rights reserved.
  • 69. M-Pesa: Person to Person Transfers Trend © 2012 Maris Strategies, ltd. All rights reserved.
  • 70. Growth and Innovation © 2012 Maris Strategies, ltd. All rights reserved. $141,842,258.90 USD
  • 71. Key Numbers and Developments © 2012 Maris Strategies, ltd. All rights reserved. Central Bank of Kenya is in the process of finalizing regulations that will allow non bank outlets and platforms such as M-PESA as a channel for formal deposit taking. National Statistics on Banks – (Dec. 2011) M-Pesa (since 2007) Banks 43 • 82% of mobile customers us M-Pesa Branches 1,056 • 14.9 million people ATMs 2,205 POS Machines 16,604 (68% of the working population) Pre-Paid Cards 22,405 • 32,000 agents Credit Cards 122,212 Debit Cards 8,548,390 Value of Transactions: Kshs 57bn ($0.614bn USD) total value Kshs 314bn ($3.15bn USD) of all card transactions (credit, debit, transferred between April to Sept 2011 pre-paid, etc.)
  • 72. New Innovations from M-Pesa © 2012 Maris Strategies, ltd. All rights reserved. Intercontinental Transfers International Transfers Vodacom Tanzania reduces M-Pesa rates M-Pesa reduced mobile money transfer fees by up to 75%, transfers now Sh50 ($0.03USD) per transaction. Transfer money Kenya to Tanzania. Shareholder Rewards Corporate Solutions • Customer to Business (Pay Bill Service) Receive your Safaricom • Business to Consumer (Bulk Payments Services) dividends by M-PESA
  • 73. The People’s Bank of China licenses non-bank Transactions © 2012 Maris Strategies, ltd. All rights reserved.
  • 74. © 2012 Maris Strategies, ltd. All rights reserved. Do Banks Still Make Sense?
  • 75. Innovation is Not Invention © 2012 Maris Strategies, ltd. All rights reserved. Michael Jordaan, CEO, FNB Bank, Innovation is the ability to differentiate. As disruptive technologies and business models challenge banks, innovation is no longer just a competitive advantage but rather a competitive imperative.
  • 76. Innovation / Adoption Rates Often Differ © 2012 Maris Strategies, ltd. All rights reserved. Swivel TV 1990s 1939 2004 Projection TV 2005
  • 77. Pod People © 2012 Maris Strategies, ltd. All rights reserved.
  • 78. Do I Need a Bank to Lend me Money? © 2012 Maris Strategies, ltd. All rights reserved.
  • 79. Competition from External non-Bank Entities © 2012 Maris Strategies, ltd. All rights reserved.
  • 80. 2010: Crowdfunding Platforms 29 © 2012 Maris Strategies, ltd. All rights reserved.
  • 81. 2011: Crowdfunding Platforms 340 © 2012 Maris Strategies, ltd. All rights reserved.
  • 82. Value Proposition © 2012 Maris Strategies, ltd. All rights reserved.
  • 83. Social Lending: Anti-bank Branding © 2012 Maris Strategies, ltd. All rights reserved.
  • 84. Northern Ireland © 2012 Maris Strategies, ltd. All rights reserved. Apr 2010 Linking 400 Investors to 900 Entrepreneurs €26Million JAN 2011
  • 85. This Can’t Happen in Ireland © 2012 Maris Strategies, ltd. All rights reserved. Approved Social Lending Organisations in Ireland Linking Investors to Entrepreneurs Specialising in microfinance for Dublin 2010 business start up throughout Ireland. Specialising in community enterprise and social infrastructure throughout Ireland. supported by Bank of America Merrill Lynch
  • 86. Microfinance was Invented in Ireland © 2012 Maris Strategies, ltd. All rights reserved. Jonathan Swift’s Irish Loan Funds 1787 Loans £5 to £10 to poor industrious tradesmen 20 week loan - weekly instalments 2 to 4 shillings Co-signed by 2 neighbours Spawned a new industry (microlending) Led to 1824 legislation to liberalize the Irish banking system By 1840 the Loan Funds Industry was serving 20% of Irish population Irish loan funds were very capable of tackling the prospect of defaulting borrowers, it was faulty management and increased competition from banks that eventually led to their demise.
  • 87. China’s Top 15 Social Networks © 2012 Maris Strategies, ltd. All rights reserved.
  • 88. Life-Stage Approach to Banking © 2012 Maris Strategies, ltd. All rights reserved. Car (s) Rent Purchase home Second home Retirement dwelling 20s & 30s 40s single single Young 50s & 60s Child Child support Final adult with / without Retirement College expenses Alimony partner Divorce Retirement savings & income Travel Wedding Saving for a 20s & 30s 40s purchase married married or event Child-care expense Child’s college Insurance (health, life, car, renters, home owner)
  • 89. Lifestyle Approach to Banking © 2012 Maris Strategies, ltd. All rights reserved. Culture / Religion Spenders/Borrowers Savers/Bargain Hunters Social Attitude Income Levels Trust Savings Convenience Behaviours Search Price Compare Select Ship $100+ $60-100k Eastern / Western Demographic Profiles Defined lifestyle behaviours US Baby-boomer $40-60k $0-$40k income $40k-$100k $100k+ <$40k Defined life-stage behaviours
  • 90. Rethinking the Bank © 2012 Maris Strategies, ltd. All rights reserved. Cashless, paperless with no back office
  • 91. Capitec, Really Knowning the Customer © 2012 Maris Strategies, ltd. All rights reserved.
  • 92. No Technology Group and a New Customer Experience © 2012 Maris Strategies, ltd. All rights reserved.
  • 93. Demographic-based Campaigns on ATM © 2012 Maris Strategies, ltd. All rights reserved. 3 Mortgage High Net Worth Student Internet Car Loan Debit Card Banking Personal Insurance Opportunity Opportunity Loan Mid-income Internet Banking Cross-Sell Opportunity Opportunity Ad campaign chosen 2 Profile mapped to based on demographic demographic … Customer behaviour compared with others to decide product promotion 4 … and delivered to ATM John Smith Other Customers Mortgage Mortgage Life Style Life Style Internet Banking Car loan Credit Credit Car loan 6 No interest Card Card shown. Life Stage Life Stage Proceed with service and feedback to 1 Profile Card read to obtain Customer Profile Name: John Smith Acc No: 667 389 245 Sort Co: 78-00-21 5 Bank: ABank Yes chosen. Initiate sale Age: 22 Address: 18a Shore Court
  • 94. Example: Consumer Banking Segment-Product Matrix © 2012 Maris Strategies, ltd. All rights reserved. Consumer Banking HR CFO Legal IT Sales Marketing Mortgage Credit Card Loans Investments Brand CRM Insight Loyalty Direct Standard Premium Growth Income Program Orientated Orientated Home Auto Lines Equity Of Regions Credit North South East West Segments Youth Builders & Borrowers Accumulators Preservers
  • 95. © 2012 Maris Strategies, ltd. All rights reserved. Banking Products
  • 96. The Key is Matching Products to Customers © 2012 Maris Strategies, ltd. All rights reserved. Cross-Sell Ratios in Cross-Sell Ratios in Retail Banks Number of products per customer European Banking 3.5 USA 2.9 3.0 2.5 UK 2.5 2.0 Germany 2.0 1.5 1.5 1.25 Italy 1.0 Spain 0.5 France 0 Internet banks Internet brokers Special providers (e-customers) (all customers) Traditional Banks Traditional Banks Scandinavia 6.0 0.0 1.0 2.0 3.0 4.0 Number of products per customer
  • 97. Denmark © 2012 Maris Strategies, ltd. All rights reserved.
  • 98. Bank of New Zealand © 2012 Maris Strategies, ltd. All rights reserved.
  • 99. Customer Dashboards © 2012 Maris Strategies, ltd. All rights reserved. • Dash Boards
  • 100. In the Future Customers are in Control © 2012 Maris Strategies, ltd. All rights reserved.  Payment system Who will issue this card:  Bank accounts A bank? A telco? A media company?  Customer loyalty card  Points card  Gift card  Membership card  Business card  ID card  Prepaid card  Schedule / Time card  Cafeteria card  Ticketing / Transportation  Security access card  Debit card  Telephone card
  • 101. The Right Card to fit a Lifestyle © 2012 Maris Strategies, ltd. All rights reserved.
  • 102. Divorcing Your Account from Your Card © 2012 Maris Strategies, ltd. All rights reserved. Turn my cards off (default) Cards Accounts Turn on my VISA for 1 hour Turn on my card in a foreign country Turn on my MasterCard for 100 Dirham
  • 103. © 2012 Maris Strategies, ltd. All rights reserved. Distribution
  • 104. The Nexus of Banking in the Future © 2012 Maris Strategies, ltd. All rights reserved. Social preferences Lifestyle l l us Approach na tura io l g io l ig ca Re Cu R el Lo Styles Targeted behaviours Lifestage Stages Approach Banking products / services Life events Delivery technologies
  • 105. Multi-Channel Growth © 2012 Maris Strategies, ltd. All rights reserved. 2010³ 2000³ 1990³ 1980³ 1970³ …0³ Time
  • 106. Barawa Bank © 2012 Maris Strategies, ltd. All rights reserved.
  • 107. Mauritius: Mauritius Commercial Bank © 2012 Maris Strategies, ltd. All rights reserved.
  • 108. Philippines: Premiere Bank © 2012 Maris Strategies, ltd. All rights reserved. 38 online branches. Bank for the entrepreneurs and SMEs. Consumer Finance (Personal, Salary and Auto Loans), Factoring of Receivables and the Purchase of Contract-to-sell Receivables.
  • 109. Turkey: Ziraat Bank © 2012 Maris Strategies, ltd. All rights reserved. Video Teller Machine The VTM technology is aimed for small towns which do not have Ziraat Bank branches or big shopping centres where there is a need for a lot of employees. The system recognizes the users from their fingerprints and then lets them get all the private banking services they would have in a “normal” branch.
  • 110. Canada: Aboriginal Banking © 2012 Maris Strategies, ltd. All rights reserved.
  • 111. South Africa: Mineworkers Bank © 2012 Maris Strategies, ltd. All rights reserved.
  • 112. Tanzania: Women’s Banking © 2012 Maris Strategies, ltd. All rights reserved.
  • 113. Turkey: Technocrats © 2012 Maris Strategies, ltd. All rights reserved.
  • 114. © 2012 Maris Strategies, ltd. All rights reserved. Thank you for your time Joseph A. DiVanna

Notes de l'éditeur

  1. Here are the rules: Draw a line to connect one to one, two to two, and three to three. You cannot cross lines You cannot leave the confines of the large rectangle You cannot pass through the small squares This is designed for 13 year old children who can accomplish it in 15 seconds. Conclusions: directions for self-service must be explicit or they confuse customers because customers have preconceived notions of how things should work.
  2. Regardless of the method used or targeted sub-segment, what retail banks are discovering is that each financial services product offering must have a clear value proposition and a direct appeal to a specific targeted group and an indirect appeal to other groups. The indirect appeal can be used to link products and services together and offer product bundles that appeal across marker sub-segment, such as loyalty schemes. The key is that value propositions are relative to the customer&apos;s perception of value and must be deliberately match to products. Moreover, the value proposition may wax and wane due to changes in a customer&apos;s attitude, lifestage, and lifestyle. When a value proposition begins to wane, it presents, for a limited time, an opportunity for the retail bank to offer another product that have a greater appeal based on past customer behaviours.
  3. Consumer behaviour is the result of a complex interaction in which many factors most of which will vary from customer to customer and will dynamically change over time due to the factors such as fashion, social conditions, and other influencing forces. There are very few absolute rules to behaviour that is repeatedly influenced by new ideas, approaches, and products that are continually adopted. For retail banks is means that the formula for market segmentation and the alignment of products to customer behaviours is a dynamically occurring process and must be re-evaluated periodically to insure the highest yield per banking product. Oddly, few banks map their customer behaviours to their product offerings.
  4. PRG-CKJ016-20040510-10567P1C
  5. PRG-CKJ016-20040510-10567P1C
  6. Tracey and Wiersema’s value disciplines provides a convenient framework for thinking about how the organization reacts to market conditions as it grows and matures. Knowing which value discipline is the current focus of your organization is the essential to establishing a growth agenda.
  7. Technology plays a key role in reshaping the products and services that banks provide to customers. In past decades, access to technology was the primary market differentiator for many institutes as larger banks with more capital to spend on technology set themselves apart from smaller institutions. This is no longer true as the cost of entry into the market for financial services has drop substantially, paving the way for numerous new non-bank providers of financial services. The future of banking is understanding which technologies bring the most value to the various customer segments you have targeted. Market differentiation is derived from the ability to rapidly deploy technology and the level of satisfaction provided to customers. Remember satisfied customers rarely change banks because of delivery technologies, unless the technology is perceived as providing additional value to the relationship.