keybank case study
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12TH ANNUAL MBA MINORITY STUDENT CASE COMPETITIONCLEVELAND, OHIO
PresentersAlternate Hypothesis Consulting
Success in the Digital Age:Leveraging KeyBank’s Branch Legacy
2
Can you guess what this picture is?
Origins of KeyBank (The Commercial Bank of Albany) America's export potential (Agriculture, textiles and chemicals) Signed by Dewitt Clinton
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Agenda
Executive Summary
Key Competitive Advantages
Industry Trends
1. Key4Growth, 2. KeySideCar, 3.KeyMelange, 4. KeyAdapt
Mr. Simpson’s KeyBank experience
ROI, Risks and Mitigation
KeyMet – Solution Tenets
Summary and Concluding Thoughts
4
Team Introduction
PravinRamasamy Balasundaram
GeethanjaliMani
JyothsnaKakarwada
6 years of technology consulting experience (4 years in ERP & SAP Analytics)
Cross-functional experience (Biz. Dev., Process improvement, pre-sales)
Technology Evangelist Published novelist working on his 2nd
Novel
5+ years of experience as an IC design engineer and team lead
Product management experience including module design and new product development analysis
Plays the role of 'devil's advocate' by critiquing our team's ideas and solutions
4 years of experience as SAP Consultant
Expertize in Business Process Improvement & Client Advisory
Cross-functional Leadership experience
Led multiple SAP HCM implementations
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Executive Summary
Maximize value of KeyBank’s existing
branch network
Business Case Solution Objectives
1
2
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Disruptive technologies have spurred creation of new products, services, and delivery models
Internet and Mobile have accelerated move away from branch visits, while increasing the number of interactions
A Googolplexian dollar question: Is bank branch network an asset or a liability?
MaximizeRevenue
IncreaseProfitability
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KeyBank Competitive Advantages
47%% of customers who feel a bank is not legitimate without a branch. Ubiquitous.
Best Checking Accounts of 2015.Hassle Free.
Top 10
944 Number of Branches across 13 states. Highly evolved network.
Number of states where KeyBank has footprint. Diversity.
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Industry Trends
A Tectonic Shift!
Why is retail bank on the decline?
A no brainer!Shift in customer
from retail to online
Need for Wholesome
Banking Experience
3,000
50%
Number of bank branches closed from 2009-2012
% of today’s bank branches may be obsolete by 2020
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Solution Tenets
KeyAdaptInternal transformation
KeyMélangeOne Teller to rule them all
Key4GrowthNew Growth Services
KeySidecarIncidental Services
Integrated Marketing Communications
Metamorphosis of KeyBank’s existing Branch Networks
KeyMet
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KeyMélange – One Teller to rule them all
Key Kiosk
BAU Banking
Fin. Advisory (Hello Wallet)
Currency Services
IT returns filing
Printing
Rent a room
Utility Bill
Mobile Connection
Print Token Here
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KeySideCar
KeyBank
Incidental Services
Strategic Partnerships
Leverage Internal Resources
‘Huddle Rooms’ for Biz. meetings
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KeyAdaptInternal Business process re-engineering through changes to
People & Place
Training Hub and Spoke
training Train the trainer Branch layout
restructuring Nimble and agile
props (Ex: Movable walls)
Branch Makeover
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Key4Growth
Introducing Media Walls
Equip Key Bankers with Tablets Predictive Analytics
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Mr. Simpson’s experienceKeyMetBefore
10:00 AM
Amazon Locker
9:15 AM
Café Meeting
with Investor
11:00 AM
2:00 PMMeeting with Financial advisor
4:00 PM
I’m too tired. Let me bank
online
9:15 AM
Let me go straight to KeyBank.
Lockers, Printer, Café, Advisor and
Huddle room. They have it all!
After
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Integrated Marketing Communication
Now that we have seen how KeyMet initiative helps improved branch revenue and profitability, there needs to be consistency in KeyBank’s communication and messages across various media.
Why? What? How?
Consistent Messaging“A single window to world of banking”
“NextGen Banking”
“Convenience Banking”
Multi-Channel Marketing Active presence in
social media to promote discussions
Redesign and rebrand KeyBank’s marketing messages in hoardings
Ads during TV Shows
Tectonic shift in banking Make every single Key
Banker understand the gravity of the changes
Change without communication is recipe for disaster
Empower all Key Bankers
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Return on Investment
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37
-2500000
-2000000
-1500000
-1000000
-500000
0
500000
1000000
Net Income
Time(in Quarters)2017 2024
Break-even Point
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ROI & Timeline estimates for KeyMet
2020Jan, 2017
Technology Upgrade
Infrastructure Upgrade
Kiosk Development
Ongoing Training
1/01/2017 - 31/12/2020
Key Adapt
1/01/2017 - 1/1/2019Key4Growth
1/01/2017 - 1/6/2018
Key Mélange
Jun, 2017 Jan, 2018 Jun, 2019Jun, 2018 Jan, 2019 Jan, 2019 Jun, 20192017
Analytics Upgrade
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Risks and Mitigation
Recommendation Risks Mitigation
Key Sidecar Contractual complexities Partner with ‘minimalist-transaction’ oriented organizations and services
KeyAdapt Workforce’s resistance to change and training
Positive reinforcement (awards, incentives)
Key4Growth Investments for redesigning
individual bank branches Technology deprecation
Leverage a single architecture firm to minimize costs
Focus on simplicity/austerity Periodic software upgrades and audits
KeyMélange Communicating new brand
image and services Breach of Privacy
Integrated marketing communication Biometric logins and cyber security
audits
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Summary and Concluding Thoughts
KeyMetTectonic Shift in Banking
Growth Services Incidental Services Internal Change One-Stop Shop
Thank You!Thank You!
FCOB and KeyBank
Thank You!Questions?
Thank You!Appendix
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References
EFMA, “The future of banking branch networks”, December 2012 http://www.huffingtonpost.com/gobankingrates/we-ranked-the-10-bes
t-che_b_6502390.html http://voxglobal.com/intersection/2014/07/the-future-of-retail-banking
/#sthash.g1TbCWVb.dpuf https://www.capgemini-consulting.com/the-future-of-bank-branches McKinsey & Company, The Future of U.S. Retail Banking Distribution Harvard Business Review:
https://hbr.org/2009/09/what-service-customers-really-want http://www.zipcar.com/press/releases/15years Tower Group; McKinsey & Co., Novantas
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Financials – Pro Forma Income Statement
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Assumptions
Our project costs are for one prototype branch only. However, many of the costs will be reduced because of economies of scale.
Costs for ongoing R&D activities like Facial recognition and Biometric activities are not included in the calculation.
Revenue generated from new customer acquisition and employee engagement are not included in the calculation.
There will be ongoing training and maintenance. No depreciation has been considered. Model assumes steady value of USD and no inflation.
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