global perspectives in retail banking webinar

Global Perspectives in Retail Banking: Leading Practices for Transforming the Branch

Financial Services presents:

Branch

Moderator: Don Ogilvie

Presenter: Scott Burgess, Chris Gill

May 20, 2008

• Introductions

• A Global Tour In Search of Retail Insights

• Getting Customers in the Door

• Enhancing the Customer Experience

Agenda

1Copyright © 2008 Deloitte Development LLC. All rights reserved.

• Enhancing the Customer Experience

• Leveraging New Distribution Models

• Questions & Answers

Branch density varies significantly across geographiesBranch Density

Number of Branches per Million People in 2005

304 312436

563

952

0200400600800

1000

Australia U.S. Japan Germany SpainNumber of 6 92 56 46 42

• Self-service channel usage– Penetration of direct deposit of payroll– Cultural preference for face-to-face

contact

• New branch formats– Smaller branch footprints

Underlying Factors


Number of 6 92 56 46 42branches (000s)

270 317 332

862

1116

0200

400600800

1000

1200

New York Chicago Tokyo Frankfurt MadridNumber of 5.8 3.2 4.2 0.6 5.4branches (000s)

Source: US: FDIC; Australia: Australian Prudential Regulation Authority; Japan: BIS, Japan Bankers Association, Tokyo Metropolitan Government; Germany: Deutsche Bundesbank; Spain: Accom Consulting, European Central Bank, CECA, AEB; Population data from the Economist Intelligence Unit

– Supermarket banking

• Retail banking competitive environment

– Shared branching– Usage of post office locations for

banking transactions

Poll question #1

1. How many times per month do you visit a branch for your personal banking transactions?

A. 0B. 1-2C. 3-4


C. 3-4D. 5 or more

Why focus on the branch?

• Face-to-face contact in branches is still preferred for certain types of interactions

– New account opening (82% of consumers)– Problem resolution (51%)

• Convenient branch access remains one of the most important criteria in

23%21%

2006 2010

Branch Transactions by Type


one of the most important criteria in selecting a bank

– In a recent Deloitte survey, 40% of consumers said convenient locations were extremely important

• Branches allow banks to compete on service and convenience rather than price

4%

12%

Sales Service

Poll question #2

2. What is your most important reason for visiting a branch (rather than using another channel such as an ATM, telephone banking, or online banking)?

A. Open a new deposit account / apply for a loanB. Conduct a complex transaction or make a significant deposit or


B. Conduct a complex transaction or make a significant deposit or withdrawal

C. Report / resolve a problem or servicing issue with your account (e.g., change your address, obtain a notary signature)

D. Obtain specialized / personalized financial adviceE. Visit your safe deposit boxF. None of the above

A global tour in search of retail insights

• United Kingdom– Barclays– Coutts– HBOS– Hoare & Co.– HSBC– Lloyd's– Nationwide Building Society– Sainsbury

• Amsterdam– Rabobank– ABN AMRO– Postbank

• Dubai– Emirates Bank– Mashreqbank– United Bank


– Sainsbury– Tesco

• Spain– Banco Santander– Banco Popular Espanol– Bancaja– Bank Inter– BBVA– CAN– El Corte Ingles

– United Bank

• Australia– Australia Post– ANZ– Bank of Queensland– Bendigo Bank– Commonwealth Bank– GE Money Australia– HBOS– MBF– Members Equity– National Australia Bank– St. George’s– Westpac

Getting Customers In The Door

Enhancing The Customer Experience


Enhancing The Customer Experience

Leveraging New Distribution Models

Creating a showcase destinationRabobank


Source: Rabobank website

Creating a showcase destination

Umpqua Bank


Source: BBVA, Umpqua Bank

BBVA

Partnering with cell phone providers

• Sign up for cell phone service and obtain equipment at a Rabobank branch (in partnership with Orange Mobile)

• Conduct financial transactions – Pay bills– Transfer funds


– Transfer funds– Check balances

• Use your phone to buy merchandise and tickets

• SMS messaging with special offers

Poll question #3

3. What is your interest level in mobile banking for making transfers or paying bills?

A. Already using mobile banking for these transactionsB. Very interestedC. Somewhat interested


C. Somewhat interestedD. Not at all interestedE. Not sure

Promoting the branch as a community center

Umpqua Bank


CAN (Madrid)

Source: CAN, Umpqua Bank

Offering crowd-pleasing promos

High-Demand Exclusive

Promotional Gifts


New Account Sweepstakes

Source: Mashreqbank

Poll question #4

4. Which of the following events would be of greatest interest in getting you to visit your branch more often?

A. Seminars on financial topics (e.g. investments)B. Seminars on non-financial topics (e.g. digital photography, wine

tasting)


tasting)C. Social networking eventsD. Special marketing promotions (e.g. obtain a “hot” new product at a

discount when opening a new account)E. Local community events (e.g. community organization fundraiser)F. None of the above

HSBC London

Self-service – the next generation


Greeter

Dance Floor

Source: HSBC

Replacing branch specialists with videoconferencing and webcams

Ask an Expert

16Copyright © 2008 Deloitte Development LLC. All rights reserved.Source: Umpqua Bank

Poll question #5

5. When purchasing a specialized financial product, if your options are to either meet immediately with a specialist over a videoconferencing link, or schedule a face-to-face meeting with a bank representative at a later date, at the branch or your home/office, which option would you select:


select:

A. Videoconferencing linkB. Face-to-face meeting in the branchC. Banker visit at your home or officeD. None of the above

Enhancing customer service and transparency

The Bancaja Commitment• Bancaja has a 17 point commitment contract it has made to

its retail customers in relation to their personal transactions.

Sample Commitments Penalty

3. We will notify our customers of insufficient funds and non-payments by

If we fail to send the SMS message, we will pay €10.

18Copyright © 2008 Deloitte Development LLC. All rights reserved.Source: Bancaja Web site

insufficient funds and non-payments by means of an SMS message.

will pay €10.

6. We will reply to loan applications within 24 hours.

In case of breach, we will waive the arrangement fee.

9. We will inform you about the status of your claims within 48 hours.

For each day of delay, we will pay €5, up to a maximum of €50.

11. We will replace your card within 24 hours In case of breach, we will pay €10.

14. If you lose your job, we will defer your mortgage repayments for 6 months for no extra charge.

In case of breach, we will defer an entire year's repayments at no cost.

Leveraging third party sale forces to visityour customers


mortgage connect 1 300 555 222 mobile home loans

Source: Deloitte Australia

Franchising –“McBanks” compete with community banks

Bank of Queensland


Source: Bendigo Bank Web site, Bank of Queensland Web site

Bendigo Bank

Franchising –“McBanks” compete with community banks

Customer Satisfaction Financial Impact

79%

88%

BOQ

Bendigo

Loan Growth – 3 years

100

178

0 50 100 150 200

Major 4 Banks

Franchisors

Deposit Growth – 3 years


65%

68%

69%

74%

CBA

NAB

Westpac

ANZ

Source: Roy Morgan; IRESS; Deloitte Consulting analysis

Loan Growth – 3 years

PE Multiples

100

157

0 50 100 150 200

Major 4 Banks

Franchisors

14.5

17.8

0.0 5.0 10.0 15.0 20.0

Major 4 Banks

Franchisors

Poll question #6

6. Would you be more or less likely to conduct your banking at a franchised branch location vs. a bank-owned branch, assuming you had the choice?

A. Franchised branchB. Bank-owned location


B. Bank-owned locationC. Not sure

Expanding geographic reach through partnerships


Poll question #7

7. What aspect of franchising appeals to you the most?

A. Local ownershipB. Local credit decision-makingC. Better pricing flexibility tailored to the local marketD. Re-investment of branch profits into the community


D. Re-investment of branch profits into the communityE. Greater commitment to customer serviceF. None of the above

What are the implications for your institution?

• Create better opportunities to interact with retail and small business customers

Branch


• Position the branch as a retail outlet or community center, rather than as a transaction center

• Tailor branch “look and feel” to the local community

Branch Design


• Position the branch as a “destination”

• Pursue opportunities to better understand customer needs and increase salesCustomer


increase sales

• More aggressively promote options for routine transactions through multiple self-service channels

• Better leverage emerging technology to support specialized product sales

Customer Experience


• Provide greater transparency of fees and chargesCustomer

Relationship


• Establish commitments to specific service levels

Relationship Building


• Leverage third party distribution

• Establish partnerships to expand Distribution


• Establish partnerships to expand customer reach and reduce servicing costs

• Create lower-cost branch prototypes

Distribution Strategy

Questions & Answers

Join us on May 27th at 2 PM EST as Financial Services presents:

Online Loans:


Online Loans: The Silver Lining in the Cloud Over The Mortgage Industry?

Thank you for joining today’s webcast.


To request CPE credit, click the link below.

Contact info

Don Ogilvie: email: [email protected]

Scott Burgess: Tel: +1 703 251 3459email: [email protected]

Chris Gill: Tel: +1 704 887 1855email: [email protected]


email: [email protected]

mailto:[email protected]




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