The future of finance is digital. If you are a financial services company. The problem isn’t predicting whats going to happen or what you NEED to do .... its figuring out what you CAN do and HOW you are going to achieve it.
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The future of banking - NextBank Sydney 2013
1. The Future of Banking
Keeping pace with Digital evolution in Financial Services
Next Bank Sydney
2013
2. The Future of Banking
We are in an exciting phase of change
The Renaissance: !
15th Century
Da Vinci
Michelangelo
The Medicis
The Industrial
Revolution: !
19th Century
The steam engine
The Digital Age: !
1990 to ?
Google
Facebook
Cloud computing
Quantum computers
3. Recent history is littered with “game changing” technology The Future of Banking
1973
personal
computer
1876
1927
phone
1987
1982
tv
camcorder
1963
1895
radio
mobile
phone
2007
iphone
1984
vcr
laptop
1979
walkman
2010
ipad
1983
cd
5. Technology is changing the world we live in
The Future of Banking
22.32 million people
16.2 million Australians online
72.5% : Internet penetration
E-commerce market size : $37.1 billion
Nielsen online landscape review january 2013.pdf
7. Mobile continues to evolve
• There are 6.8 BILLION people on the planet 4 BILLION of them use a
mobile phone.
• 91% OF ADULTS have their mobile phone within arm’s reach 24/7
• There are 5 X as many mobile phones in the world as there are PCs
• Australia has been identified in the top 6 nations that have not only
adopted smartphones, but actively use them for consumer
purchases
The Future of Banking
8. Marketing in the digital world is more complex
retail
TV
radio
PR
outdoor
DM
The creative idea
strategy
digital
insight
mobile
The Future of Banking
9. The Future of Banking
The perfect storm
NBN
BIG DATA
BROADBAND
APPS
MOBILE DEVICES
SOCIAL MEDIA
WEARABLE TECHNOLOGY
10. The Future of Banking
There are many digital channels to consider
viral
search
display
email
social
digital strategy
mobile
ads
buy now
request
info
downloads
contact us
product info
11. The Future of Banking
And they continue to grow
games
community
viral
search
word of
mouth
tagging
email
display
RSS
podcasts
digital strategy
mobile
ads
social
blogs
forums
request
info
buy now
online
trial
widgets
downloads
videos UGC
product info
click to call
contact us
12. The Future of Banking
Implications for
financial services
The problem isn’t predicting whats going to happen or what you NEED to do
.... its figuring out what you CAN do
13. The Future of Banking
Short fuse, big bang
IMPACT
SHORT FUSE, BIG BANG
LONG FUSE, BIG BANG
ICT & media
Finance
Transport
Professional
Services
Arts and
Recreation
Health
Recruitment
Agriculture
Real estate
Government
Utilities
TIME
Accommodation
& food service
Constructing
Wholesale
Manufacturing
Mining
SHORT FUSE, SMALL BANG
LONG FUSE, SMALL BANG
Source: Deloitte consulting
15. Social media drives customer choice
The Future of Banking
•83% of consumers say it would be important to read user-generated content before making a decision about
banking or other financial services.
•26% of consumers would never choose a bank without reading at least one piece of user-generated content
•Financial Services saw the highest portion of reviews that mention "customer service" at 17%.
•77% of long-term customers say they would recommend their financial firms to others
•32% of total product reviews come from financial customers.
Source: Kelton Research/Bazaarvoice, September, 2011
16. Increasingly, people are buying online
The Future of Banking
Product Purchasing by Channels 2010 v 2015
Current Accounts
84%
Savings Accounts
77%
Investments
78%
Mortgage
80%
0
Branches
Call Centres
0.375
59%
58%
4%
28%
72%
11%
10%
32%
12%
0.75
43%
38%
16%
73%
Consumer Finance Production
53%
9%
1.125
1.5 0
47%
0.375
0.75
1.125
1.5
Agents / Brokers
Direct Channels
Source: EFMA Online Survey Across 150+ Euro Banks
17. People are interacting across many digital touch points The Future of Banking
SMS
email
GPS
devices
3G content
kiosk
Digital TV
search
Display
Gaming
devices
Podcasting
Desktop
applications
Websites
PDA’s
Digital signage
18. The Future of Banking
Traditional channels have digital amplification opportunities
QR code
bluetooth download
search
enter
vote
send to a friend
hear
photograph & share
send to a friend
word of mouth
print
buy
augmented reality
QR code
buy
augmented reality
QR code
voice
notify
tweet
In store/demos
promotions
website
coupons
notify
competitions
radio
tv
apps
augmented
photos
ideas
bookmark
download
outdoor
pos
social
share
like
download
coupon
loyalty
post
19. People have high expectations digitally
•People expect 24/7 access to their money
•They expect to be able to manage it through all their devices
The Future of Banking
21. A seamless omni-channel experience is the norm
The Future of Banking
People expect financial services will provide Channel choice, consistency, and continuity
Source: Forrester - Next-Generation Digital Financial Services
22. The Future of Banking
Right device, right service
46%
consumers that start banking
activity on one device continue
later on another
98%
will move between devices
within the same day
26. Big Data represents big opportunities
Source: US Bureau Analytics McKinsey Global Institute analysis
The Future of Banking
27. The Future of Banking
New Banking Relationship
“We are moving away from a banking relationship
defined by the goal of being a customer's primary
financial institution to one where we focus on
becoming their primary financial application. It's no
longer about wallet share. It's about app-driven
mindshare”
Bradley Leimer, The Era of Engagement Banking
(2013)
39. Value equals efficient business models
Jibun Bank
Mobile Only
1.5 Members
150 employees
The Future of Banking
40. The Future of Banking
We are now face-to-face with an engaged customer
who expects
a completely frictionless, personalised always on
experience......
delivered on the device of their choice.
41. The Future of Banking
Size
The real
challenges
Organisational structure
Core technology
Incentives
Culture & Communications
Ownership
What your customers will tolerate
43. Operational and political silos
The Future of Banking
CEO
BOARD
12 month
Marketing strategy
CMO
5 year
technology roadmap
CXO
CFO
CSO
CIO
44. “
The Future of Banking
This is all too much, we just
need to keep this simple
That’s all very well but we
are not there yet
We have a 5 year plan that
addresses that
“
Avoidance strategies
45. The executive continuum
The Future of Banking
THE EXECUTIVE CONTINUUM
LAND GRAB
This is my chance to be
the next CEO!
DENY & BLOCK
With luck, this won’t
happen in my time
47. Layers of resistance to overcome
The Future of Banking
CEO
“We are not a digital business we have been
doing XYZ for a long time very successfully”
EXECUTIVES
“My KPI’s relate to profit, I do not want to
put that at risk”
MIDDLE MANAGEMENT
“I am way too busy doing what I need to I have
no time to try new things that are untested”
COAL FACE
“This is the way we do things around here and
it has always worked well”
53. The typical path(s) to business evolution
The Future of Banking
Leverage
VALUE IN DELIVERY
THE HOW
Integrate
VALUE IN PROPOSITION
Create
Enhance
Extend
THE WHAT
Refine
Source: IBM Institute for Business Value analysis
54. The ideal path to transformation
The Future of Banking
Integrate
Envisage a
transformed
customer value
proposition and
operating model and
build a new set of
capabilities around
that
Leverage
VALUE IN DELIVERY
THE HOW
END STATE
E
U
I
H
K
N
ET
R
E
H
AL
T
O
AL
V
T
T
VALUE IN PPROPOSITION
VALUE IN PROPOSITION
Create
Enhance
Extend
THE WHAT
Refine
Source: IBM Institute for Business Value analysis
55. Link digital to all other strategies
The Future of Banking
Corporate Strategy
Distribution Strategy
ATM
Technology
Strategy
PHONE
CALL CENTRE
ONLINE
BRANCH
Digital Strategy
Sales
Strategy
Brand
Roadmap
Product
Plan
Payments
Strategy
People
Strategy
MOBILE
Strategic
Themes
Vendor Relationships
!
Digital Branch
!
Architecture, Data, "
!
Simplicity
!
Seamlessness
!
Financial Coaching
!
Family Focus
!
Multi-cultural "
software etc
!
Mobile
People +"
Culture
!
Risk
Treasury
Leverage Data
Product
!
Marketing
Technology Roadmap
Retail +
Advice
!
Opportunity
56. Ensure digital benefits internal & external audiences
e-Commerce enablement"
transactional + administrative
Online product acquisition
The Future of Banking
Drive awareness/media spend/"
social sharing opportunities
Digital
Strategy
Build and enhance"
community program
Enable employee
education and training
Demonstrate"
Innovation
Connect employees with
members digitally
57. Define ownership and responsibility
Shareholder visibility
Digital Governance Board
Specific digital KPI’s
Inspiration, Training and
mentorship
The Future of Banking
CEO
EXECUTIVES
MIDDLE MANAGEMENT
COAL FACE
59. The Future of Banking
BAU
=
Developing a business model
that can embrace disruptive
change
60. Engage all levels & silos of the organisation
The Future of Banking
board of directors
(investors and advisors)
audit committee
DIGITALS ROLE IN THE BUSINESS
CEO
CFO
PROFITABILITY, REVENUE
STREAMS AND COST REDUCTION
CIO
divisions
divisions president
Sales
Mfg
R&D
Res
ea
rch
3D p
r
dep inting
CRM
loym
ent
auto system
syst
s, sa
ems
mat
ion,
les
CRM
"
Divis
io
CIO n
divisions CFO
Marketing
Int.
Cos
t
redu
ction
Finance
Prod
u
grou ct dev
"
ps a
nd r
esea
s
rch
Warehouse
HR
IT
Purchasing
Hum
Intra
War
nets
Res an
eho
ourc
,
All
onlin
ianc
man use
es
e
age
train
data es,
men
trac
ing
t an
king
ROI
proc
d
calc
syst
urem
ulati
ems
and
ent
ons
cost
redu
ction
s
61. A SMALL TEST IN
THE REAL WORLD
TO PROVE AND
EVOLVE THE
CONCEPT
PILOT
LAB
DEVELOP AND TEST
IN A SIMULATED
ENVIRONMENT
The Future of Banking
"GLOBAL"
IMPLEMENTATION
ROLLOUT
A Culture of fast, inexpensive experimentation
62. Embrace a culture of change
The Future of Banking
Be
the change you want to see in
your organisation
Take
Business actions to shift
the culture
Align
culture with business
strategy
Align culture with business
strategy