EVOLUTION OF BANKING

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INTRODUCTION Digital Wallet and Mobile Payments New Banks and Divested Banks The next few years will see a significant number of new entrants enter the Australian financial services industry. Some will be well known and trusted brands who will leverage and deepen their relationship with customers through provision of financial services, with a particular focus on payments and mobile wallets. Others will be new names. Some will offer new innovative approaches to addressing customers’ needs through solutions like crowd funding; rethinking how SMEs finance the growth in their business. Some will exploit gaps in the market in the same way we have seen the short term lenders growing in prominence in recent years. Key areas of focus for these new entrants will be: £ Short Term Lenders Crowd Funding • Which markets are the most attractive to enter, in terms of customer segments, location and products? Australia’s financial services sector is being reshaped. The momentum for significant disruption, even as the banks look forward to delivering moderate profit growth, is being fed by a number of emerging trends. Consumers are demonstrating increased willingness both to shop around and to purchase financial services and products from non traditional providers. This move away from traditional sources is due in no small part to negative perceptions of the existing industry. Banks and other financial institutions are already facing the need to be bold to foster and accelerate change as they distinguish their products and services offering in a market characterised by promising growth. Strategic vision and innovation must be new priorities. • Which is the most viable approach to market entry? Should prospective entrants look to buy an incumbent or one of the businesses that are currently being divested, attempt to partner with an existing firm, search for an affinity relationship, or build an entire greenfield operation? In many cases, their decisions will be influenced by regulatory requirements. • What products will they offer and how will they differentiate their offer from the competition? Will differentiation centre on price, customer experience, customer service, or exploiting a new technology capability? • How will they distribute? Remotely or via face-to-face channels? • What will their operating model look like and where will their core competencies sit? Based on these characteristics, should they manufacture and distribute themselves and what should they look to outsource? 24 | The Evolution of Banking and Financial Services
MOBILE PAYMENTS: AN OPPORTUNITY AND THREAT VALUE DIAGRAM: MOBILE PAYMENTs Customer Priorities Customer Loyalty Levers Change Initiative: Mobile Payments Company Operation Levers Company Value Levers POSITIVE EXPERIENCE = CUSTOMER VALUE Save Time Increase Convenience Reduce Spending Avoid Counters/ATM Queues Queue Time Move cash whenever, wherever # of Payment Options Lower Bank Costs = Lower Charges Cost of Banking Improve Service and Increase NPS Avg time to serve Increase Customer Self-Service % Customers using mobile payment Reduce Capital ATMs and Property # of ATMS and branches per Customer Increase Revenue Reduce Costs Reduce Working Capital FREE CASHFLOW = SHAREHOLDER VALUE RISK – LOSS <strong>OF</strong> TRANSACTIONAL DATA IMPACTING BANK’S ABILITY TO HARVEST DATA AND KNOW THEIR CUSTOMER TO SERVE THEM WELL The Evolution of Banking and Financial Services | 25
Page 1 and 2: COMPETITION LOYALTY COMPREHENSIVE-R
Page 3 and 4: 01 CUSTOMER 02 REGULATORy Framework
Page 5 and 6: EXPECTATIONS OF THEIR BANK Know me
Page 7 and 8: MULTI CHANNEL SERVICING Convenience
Page 9: The way forward A move to a custome
Page 12 and 13: Responding to the global financial
Page 14 and 15: Comprehensive Credit Reporting is a
Page 16 and 17: DRIVING CUSTOMER CENTRICITY Good co
Page 18 and 19: A MODEL OF CHECKS AND BALANCES FOR
Page 20 and 21: DELIVERING GREAT CUSTOMER EXPERIENC
Page 23: 03 NEW ENTRANTS The Evolution of Ba
Page 27 and 28: NON BANKS: DIGITAL WALLET, MULTIPLE
Page 29 and 30: CROWD FUNDING AND INVESTING Crowd f
Page 31 and 32: DELIVERING CHANGE Legacy Systems Of
Page 33 and 34: AP Interfaces TO SUPPORT BANKS’ S
Page 35 and 36: HARNESSING BIG DATA TO SERVE CUSTOM
Page 37 and 38: INNOVATION IMPACTING BANKING: ID an
Page 39 and 40: EXAMPLE OF PERSONAL FINANCIAL MANAG
Page 41 and 42: MOBILE BANKING payment £ £ PAY Mo
Page 43 and 44: VIDEO INNOVATION IMPACTING BANKING
Page 45 and 46: The way forward Technology solution
Page 47 and 48: 05 BANKING EVOLUTION The Evolution
Page 49 and 50: THE FUTURE Customer Educated and em
Page 51 and 52: RETAIL A new bank proposition - hel
Page 53 and 54: THE way forward Financial instituti
Page 56: Experian Australia Pty Ltd Melbourn

EVOLUTION OF BANKING

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