the bank of the future
Post on 14-Jul-2015
1.287 Views
Preview:
TRANSCRIPT
The bank of the future
Kiev, June 4, 2013 Georges Massoud, Managing Partner McKinsey Ukraine
CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of McKinsey & Company is strictly prohibited
2nd International Banking Conference & Exhibition
McKinsey & Company |
BDP-ZWO832-20120208-7592P1EA-WS
1
Modern financial services revolution
SOURCE: Oracle; web search; McKinsey
The trend Primary financial industry implication Fact
Always online
▪ Smartphone becomes the integrated personal online multifunction device
▪ Mobile payment revolution in transaction industry
Global smart phone penetration will reach 50% by the end of 2019 and account for over 80% of banking relevant population
▪ Industry leaders get opportunity to make more and smarter data-based decisions
▪ Change in customer service model and data operations
“Every 48 hours in 2010, more data was created than in the past 30,000 years” /Eric Schmidt, Google/
Big data
“New” customers
▪ Customers are getting “over-informed” and finding new forms of emotional decision making
▪ Next generation PR, marketing and product customization
“Gen-Y customers demand exclusivity and personalized products. …[they] expect everything suited to their preferences”
Digital revolution
▪ Customers demanding increasingly faster and more convenient service
▪ The digital channel revolution
“Newest generation checks emails before breakfast and after going to bed” /Eric Schmidt, Google/
McKinsey & Company |
BDP-ZWO832-20120208-7592P1EA-WS
2 SOURCE: Bank 2.0; McKinsey
Customers adopt tech enabled innovation faster than ever before
0.8
2.0
2.0
3.0
4.0
7.0
22.0
38.0
iPod (2001)
iPad (2010)
Groupon (2008)
Twitter (2006)
Facebook (2004)
Internet (1974)
TV (1928)
Radio (1902)
Years required to reach 50 mln units/users Years
McKinsey & Company |
BDP-ZWO832-20120208-7592P1EA-WS
3
Death of the hour-glass – new generation customers simply do not want to wait
“Video on Demand consumption will increase to 9% of the TV viewing total by 2015 from 3% in 2008”
British Telecom to offer 300 Mbps fiber optic broadband 'on demand' in 2013 vs. the current average vs. the current UK broadband average of 7.6 Mbps
“And new job entrants are changing careers faster than college students change their majors, creating frustration for employers struggling to retain and recruit talented high-performers”
“On the average Web page, users have time to read at most 28% of the words during an average visit; 20% is more likely.”
SOURCE: bbc.com; USAToday; Enders Analysis; Harald Weinreich, Hartmut Obendorf, Eelco Herder, and Matthias Mayer: "Not Quite the Average: An Empirical Study of Web Use," in the ACM Transactions on the Web, vol. 2, no. 1 (February 2008), article #5.
Expected limit for waiting time for banking services are down from 15 minutes to 5 mintes in just 7 years
McKinsey & Company |
BDP-ZWO832-20120208-7592P1EA-WS
4
Social media – important vehicle for information and advice
Social Media
Social networks
1
Micro- blogs
2
Media sharing
3
Social gaming
4
Discussion forums
5
Blogs
6
Reviews
7
▪ Register for communities to discuss specific topics, seek advice, and discuss mutual interests
▪ Evaluate and rate products and services based on personal experience
▪ Create individual blogs to discuss opinions and experiences based on daily life
▪ Sign up for a personal feed to broadcast activities and receive real-time updates (e.g., news, friends, celebrities)
▪ Upload, share, and comment on photos, videos, and audio to facilitate mass distribution of rich media
▪ Create personal profiles to facilitate keeping in touch, meeting new people, and sharing key interests
▪ Connect with friends and strangers to play and discuss popular games in the online space
SOURCE: McKinsey research
McKinsey & Company |
BDP-ZWO832-20120208-7592P1EA-WS
5
Changing customer banking behavior – where is the bank?
Example of the day in a life of a mobile payments users
Tube ride Enable easy and convenient transit payment NFC (POS payment)
Purchase coffee Allow for quick purchase of coffee at local story through mobile prepaid card
Barcode (POS payment)
Pay pocket money Enable quick and paperless payment of a micro payment
Micro-payment
Transfer funds Enable secure and quick transfer of funds from an overseas account of a friend
Remittance
Pay a friend Quick and convenient way to make a micro payment to a friend after a meal
P2P payment
Account summary One-touch summary of account balances across all your accounts
Account aggregation
Pay plumber Convenience to pay plumber for fixing water pipe at home through portable card reader
SMB acceptance
Travel home Ability to pay easily for afterhours via mobile Authentication, micro-payment
Purchase gift online One click pay that is fast and secure via mobile for gift purchased online
1-click payment
Locate restaurant and pay bill
Allow for real-time location of a restaurant with ability to easily prepay the bill
Location, Coupon, Loyalty
Potential non-bank providers
SOURCE: McKinsey
McKinsey & Company |
BDP-ZWO832-20120208-7592P1EA-WS
6 SOURCE: Forester; World Retail Banking Report survey of 41 banks, Finalta / EFMA Multichannel survey 2008, McKinsey analysis
Split of transactions by channel, Europe %
70
4230
19
29
28
25
1828
34
Branch ATM
5 4
2015F
2
2010F
34
5 2
Phone
Internet
Other
12
2005
2
9
2000
2
Over the next few years, mobile will become the predominant channel for banking services
McKinsey & Company |
BDP-ZWO832-20120208-7592P1EA-WS
7
Top 200 iPhone financial applications As of Aug 2011 (subject to fast change)
SOURCE: Press search; Apple AppStore; McKinsey
Non-banks are clearly attacking banks in the smart phone space
54
100
100% =
Bank
Non-Bank
Paid
200
0
Free
200
46
Sample non-bank entrants Description of activity
▪ Square allows anyone to accept card payments using their smart phones
▪ TxtLoan provides a quick way to get a £100 loan for seven days via your mobile phone
▪ Moneyzoom provides an easy-to-use personal financial management tool
▪ Lending Club is a peer-to-peer lending platform for credit worthy borrowers & affluent lenders
McKinsey & Company |
BDP-ZWO832-20120208-7592P1EA-WS
8
Opportunity is far bigger than just (mobile) payment
SOURCE: McKinsey; web search
Value-chain
Effect of mobile revolution
Examples
▪ Certain test applications support comparing local retailers
▪ Mobile phones are capable of contacting and navigating to retailers
▪ Mobile phones can compare prices, offers of different providers and also the opinions of other customers
▪ Purchase feedback can immediately be shared after transaction
▪ Experiences, opinions are shareable on social networks
Loyalty / returning customer
Purchase evaluation, feedback
Payment Purchase decision
Contacting / searching the deal
Price comparing sites
Map retailers
Search, evaluation of alternatives Decision making Transaction Post-evaluation
▪ Mobile phones are capable of real-time location based search
▪ Mobile payment
▪ Mobile phones are able to collect loyalty points and participate in other promotions
▪ Yelp helps to find the best retailer with evaluations
▪ Google Local collects information
▪ Google Maps plans routes
▪ RedLaser maps the best prices
▪ Foursquare is a place to share customer experience
▪ Swipely collects post sales discounts
▪ AroundM compares local stores and prices
▪ Tabbed-Out helps restaurant payment without waiting for the waiter
Generate demand
▪ Mobile phones are effective tools for image development and advertisement (location-based)
▪ Cellfire collects unique coupons and discounts
1 Considering commercial margin along the value chain
Bank penetration
Entire retail intermediary universe1
~$10bn
Transaction universe1
~$1bn
McKinsey & Company |
BDP-ZWO832-20120208-7592P1EA-WS
9
Many innovations, but no winners yet
SOURCE: GKIenet; eMarketer; MRSZ; Pyramid research; websites; McKinsey
Overview: ▪ Main application: payments without a mobile operatior ▪ Company Citi (MasterCard PayPass) ▪ POS: 70,000+ ▪ NFC device: no ▪ TSM: No ▪ Security element: Passive vignette ▪ Other partners: Visa Europe, MasterCard Worldwide,
Oberthur Technologies (matrica), Infineon Technologies (chip)
▪ Passive vignette that can be attached to the mobile phone and can be used at all MasterCard PayPass terminal
▪ Citi did not wait for solutions integrating mobile phones for market entry, however opened towards the market e.g., as key partner for Google Wallet
▪ No information on additional services offered at the moment
MicroSD kártya
Passzív matrica
Customer benefit ▪ Safer than credit cards, because of contactless technology
Retailer benefit ▪ Can track shopping habits and trends for effective customer
targeting
Overview ▪ Mobile payment system for Android phones that can be swiped
against an electronic reader to make payment – May also be used for other purposes, e.g., P2P transfers,
coupon subscriptions, link to noncommercial information (e.g., linking movie ticket purchase to reviews)
▪ Requires use of NFC-enabled phones ▪ Developed in conjunction with Citigroup and MasterCard, in
consultation with VeriFone Systems ▪ System still undergoing testing
McKinsey & Company |
BDP-ZWO832-20120208-7592P1EA-WS
10
Banks will have to deal with big data explosion
Worldwide data generated Exabytes (= 1 Billion Gigabytes)
Worldwide data storage capacity Exabytes (= 1 Billion Gigabytes)
Nature of this growth in generated and available data
▪ Scale: massive, multi-petabyte (= 1 Million Gigabyte) data sets, designed to scale and collect more information
▪ Distribution: dispersed data sources from inside and outside the organization
▪ Diversity: semi-structured, unstructured, or a combination of different data types, especially from social media
▪ Timeliness: rapid and real-time capture of data, analytics, and decision making
SOURCE: IDC Digital universe study 2011 and 2010; Team Analysis, McKinsey Global Institute; Hilbert and López, “The world’s technological capacity to store, communicate, and compute information,” Science, 2011
ESTIMATE
85013055
2000 2005 2010 2015 2020
4,800
15,000
11050 1,300
2005 2000 2020
35,000
2015
7,900
2010
All information stored inside the US Library of Congress amounts to < 0.00025 Exabytes
McKinsey & Company |
BDP-ZWO832-20120208-7592P1EA-WS
11
Banks are very well positioned to integrate the multiple “hot topics” of the puzzle…
Cash 20%
80% Transfers and transactions
SOURCE: McKinsey
Current marketing systems
GROUP BUYING
Spamming without personalized offers
LOYALTY PROGRAMS
Fragmented, minor share of wallet (2–5%)
ONLINE ADS
No connection with actual spending
BANKS
Building on current and
new clientele
MOBILE PAYMENT TECHNOLOGIES
Mobile banking/ payment apps
BIG DATA
Consolidated, but underutilized data
CUSTOMER RELATIONSHIP
Trusted partner (No random
“bargain hunters“)
LOCATION
Determine customers’ current position (POS
data, smartphone data)
SHOPPING BEHAVIOR
Full information about spending details
FINANCIAL STATUS
Purchasing power of customers is knowd Banks can
leverage their 360 degree view of the customer
Individual spending
McKinsey & Company |
BDP-ZWO832-20120208-7592P1EA-WS
12 SOURCE: McKinsey Global Banking Pools
traditional banking products are likely to be increasingly attacked by non-banking players also in the EE region
Bank account and Transaction
Lending
Deposits and investments
Protection and Insurance
80 % of profit pool is under attack
Banking products
Specialty Lenders
Insurers
Postal Services Specialized Private Banking Players
Telecoms
Technology Companies
Retailers
Global retail revenue after risk cost
McKinsey & Company |
BDP-ZWO832-20120208-7592P1EA-WS
13
Challenges to overcome in CIS
▪ Cash based economies in CIS ▪ Infrastructure, large investments
▪ Customer behavior & trust
▪ Regulations
▪ Banking new operating models
▪ Talent
How and how quickly to embrace the change
top related