everyday bank: a journey to digital transformation

The Bank of Everyday Positioning banks on the digital revolution

The reality is that change will be driven by emerging customer behaviors

Digital Revolution Drivers

4 5

2 3

1

Copyright © 2014 Accenture. All rights reserved. 2

Digital can become, as well, a lever to help ROE to

come back to a new normal Impact on Common Equity Tier 1 ratio from 2013 to 2016 in the adverse scenario by country and

for individual banks sorted by size of the impact

Source: European Banking Authority


Banking mega macro trends are reshaping the world

banks operate in the digital world

Serve new pools of customers efficiently

Digital and mobile technology allow to access new pools on under

banked or unbaked population across the globe

Differentiate and segment Customer experience for different

customer pools

New customers behavior differ by segment : millennials, aging

population, women, etc .

Create new products and services in the digital ecosystem

Collaboration y the ecosystem create new opportunities


Customer behaviours (1/3)

Global customer behaviours are changing extensively…

1. Data as of 2012. Source: Accenture Global Consumer Survey 2013



…and leading digital players are transforming the essence of customer interactions and relationships


New digital competitors

New digital competitors are contesting specific business

areas, which are currently typical strongholds of Banks

Source: Accenture analysis


Innovative players are already exploiting opportunities associated with

pre- and post-sale interactions: 5-7 times larger than the payments fee

New profit pools

1. Source: MagnaGlobal, Bloomberg Industries

2. Source: Accenture Researh analysis and estimations on BIS, ECB and central banks data

3. Source: Kelton Research/Bazaarvoice, September, 2011


How Banks will orchestrate the fulfilment of life needs

Banks can now satisfy

all customer life

needs in their entirety

by developing

3 new

roles


Benefits for the main stakeholders

The “Everyday Bank” proposition provides clear value for Customers, the

Bank and other parties in the Ecosystem


JUST IN TIME

Business

+ Customer

+ Interactions

+ Transactions

+ Variable cost

+ Assembling services and

utilities

+ Flexible & fast

Embedded into

customer digital life

Multiplying

customer

interactions with

bank thru

ecosystem

Advice benefits &

New banking

facilitator thru

ecosystem

Banking services

ecosystem internal /

external

Explaining

potential

business thru

digital

UBIQUOUS AND MOBILE

Just in time personalized

marketing and analytics

services

The Everyday Bank’s obsession will be to pursue the

following imperatives…


Operating

Income %

as of today

Revenues

at risk impact1

Impact of

defensive

actions

Potential

Everyday

Bank upside

Operating

Income %

by 2020

Money on the table for the Bank

(% on operating income – year by 2020)

100%

-10/ 30 p.p.

(Up to -32 p.p.)

+15/20 p.p. revenues increase

+30/35 p.p.

costs

decrease2

125-135%

Money on the table The decision to evolve into the Everyday Bank is “mission-critical”: we expect a

gap of at least 50% in Operating Income between Banks who conduct the

journey and those who do not

Impact of

“revolutionary”

actions

1. The value of Revenues at Risk is relative as it is compared to that of a Bank that is not evolving their business and operating model

2. Data includes Operating costs and Cost of risk.

Source: Accenture analysis. Note: Operating income = Revenues - Operating costs - Cost of risk.


In summary

• “True Omnichannel”

• Branches YES but different

• Open to ecosytem

• New Entrants YES , but …at core?

• Trust & Reputation

• Migration vs transformation

• Service y customer Experience

Matters : new segmentation?

• Just in time Banking


Two speeds , Three Hats


everyday bank: a journey to digital transformation

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