This document discusses trends in retail banking, including challenges from empowered digital customers who demand simple, relevant experiences across channels. It emphasizes the need for banks to transform their commercial models to focus on customer centricity, engagement, and profitability through specialization, multichannel management, and use of data analytics. Specific areas highlighted for banks include improving the customer experience, cultivating relationships, innovating payment solutions, and taking a mobile-first approach to remain competitive against new players.

1. Tendencias y Futuro de la Banca
Pablo Junco
Presidente de Iasa Spain
pjunco@iasaglobal.org

2. Industry Trends
Retail Banking Challenges
Customer Centric
• Empowered consumers - more information,
less loyalty
• Digital Customers require, simple, relevant
and enjoyable experience
Multichannel
• Omni channel - full channel choice, seamless
journey and consistency across channels
• Mobile first - Smartphones and tablets
Innovation
• Ecosystems: Google, Apple, Amazon,…
• New players that disintermediate banks:
PayPal, BitCoins, …
European Central Bank’s
Regulations

3. Retail Banking Focus Areas
Transforming commercial model to recover profitability
Getting the right channel mix: online, mobile & branch banking
Engaging employees to increase efficiency
Making the most of data analytics to provide a personalized service for customers
Ensuring banks stay ahead of the M-payments game
Cultivating client relationships
Alignment with European Central Bank’s Regulatory

4. Transforming commercial model to recover profitability
Industry profitability under pressure,
specially in Europe
Need to focus on a business model transformation that allows future profitable growth
Return on tangible equity (ROTE) Evolution

5. Commercial transformation with a customer centric approach
•Client’s level of satisfaction
•Transitionally engaged customer is more profitable than a non engaged customer
•Customers with specialized management are more satisfied and profitable:
•Levels of Satisfaction: 51% vs 82%: +31pp (*)
•Gross Margin by Client: x2.6 (*)
•Offer customers specialized value propositions according their segmentation
•Affluent Select: Specialized value proposition tailored for the segment with greater savings/investments focus. Dedicated servicing model
•Middle Market: Value proposition with less specialization, focused on simplicity, transparency and multichannel drivers. Selective multichannel servicing model based on customer profitability and/or relationship
•Mass Market: Basic offer with limited credit access or closed preapproved packaged. Distribution and servicing model based on self-service at any channel
(*) Source: Internal Santander Group study
Improve the processes that our customers “live”
•Quality and client satisfaction
•Effective and efficient business processes
•High added value products and services
•Client lifecycle management model
•Focus of management by segment Attention models
Focus
on the
Customer
Specialization
Customer Experience
Multichannel
•Multichannel: Adapt to Customer habits changes
•Omnichannelexperience with a high usability and consistency across all the channels
•Banks need to adjust their way of doing Business. New products and campaign launches should be designed for all channels and the channels must be connected

6. Multichannel in the Retail Banking Model
Customer
Centric
Understanding customer behaviors and intentions based in their iterations
Real time leads generation and optimization
Segment Specialization
Management
Multichannel Product Development and Campaign Marketing by Channel
Pricing Strategy based on Customer and/or Channel
Multichannel Customer Experience Services, UX and Brand Image
Communication strategy using customer preferences and content features
Multichannel Relationship Matrix by Segments
Identifying Customer cluster based on their iterations with the bank channels
PersonalizedCustomer Relationship Management based in 360 customer view
Multichannel:
•Sales Funnel
•Objectives and incentives (Customers & Employees)
Customer Faced Process Improvement with multichannel view and omnichannelsupport
From Branch Network Management Model to a Multichannel Management Model
Derivationof customersto mostprofitbankchannelbasedontheirprofile

7. Multichannel Campaign Management

8. Data Analytics (Big Data)
Why is important Big Data for Banks?
•To understand our customers
•To look for clusters and find new opportunities
•To predict a next steps
•Who we are competing with?
•What are substitutes for our services?
•Is there any complementary service?
•How sustainable our business model is?
Do banks currently have the right expertise to make effective use of Big Data?
The working assumption is: “In order to effectively use of any Big Data advantages the organization itself should be mature enough on internal data management”
“There is a huge opportunity for banks that Big Data can bring. The benefits will came only if the banks have a strategic plan for collecting and organizing their data in a way they are aligned with the business strategy“

9. Distribution Strategy Model
Using Big Data to optimize their ATM and branches

10. Marketers, The potentialBIG DATA user
Marketers plan to implement a big data solution
71%
Marketers have a single customer view
18%
Deployment for Marketing
45 %
Successful brands use Data to Drive Marketing Decisions
100%
Marketers plan to use data to drive real-time decisioningin the next two years
57%
By 2017 the CMO will spend more on IT than the CIO

11. Marketers want to be data-driven
Data Driven Marketing Turns Data Into Action:
Whatdata use marketersmost?
Collecting and using data requires user touchpoints
Big challenge to gain high value from data

12. AnalyticsisCORE
Digital Leaders
Digital Mainstream
•DWH is based on Analytics Data
•Targeted integration of 3rd parties
•Data for Digital Marketing
•Mostly 3rd Party Digital Marketing Services
•Marketing Intelligence comes from CRM
•Majority does not have DWH for Digital Data
Digital Marketing Platform

13. Digital Marketing Platform(DMP)

14. mCommerce: Winning Formula for Banks

15. Mobile Money Platform

16. Mobile Payment Security Solution
New Belgian standard for secure Mobile payment
Merchant websites and
mobile apps

17. Mobile Payment Security Solution
New Belgian standard for secure Mobile payment
End Users
Merchants
App
Developers
Mobile
Network
Operator
(MNO)
Bank
M-Coupon
Issuer
Available for any consumers through One secure
Mobile App with just your ID
Integrable by any merchants
Open API for any App Developer
Accessible to any couponing issuers
Open to any
Mobile Network Operator
Open to any
Bank

18. MyOrder Cashless Payments
The Dutch order and pay app
• MyOrder is an order and pay app for all daily purchases
• Every Dutch merchant can join and enabling them to easily sell via
smartphones
• Bank independent
• Order anytime, any place
• Receive orders via:
• E-mail
• Receipt printer
• Cash register
• Coupons
• Geofencing push notifications
• Check in to the store (NFC or
GPS)
• Customer recognition
• See activated coupons
• See purchase history
• Relevant approach
• NFC payments
• Coupons
• Over the air
• Retrieve at CheckPoint
• Age check
• Always without pincode
• Up to € 150.00
• Any Dutch bank
March 10, 2013 February 20, 2014
MyOrder is an example of Rabobank
future as retail bank
Customer recognition at the start of
the customer journey. The goal is to
be relevant in the full shopping
experience not just the at payment
phase

19. Enabling Commerce through Payments

20. Taking a mobile first approach
Increasing customer Engagement
•Better Online Product Experiences
•Lead in Mobile Payments
•Extending Credit to Customers
New, Simple products for merchants and partners
Enabling Commerce through Payments

21. Reinventing PayPal
1. PayPal Classic
Web-centric
PayPal-centric
2. PayPal App
Mobile-first
PayPal-centric
3. Mobile SDK
Mobile-centric
Ecosystem-centric

22. Success Factors of Banks
Real time marketing based on CRM data
Digital products as sales-service process
Separate profit and loss (P&L) management
Strong collaboration with marketing and UX agencies (differentiation will came from UX)
Investment in research and Technologies
Have an agile IT