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Customer Centricity - Driving Growth in Today's Leading Banks

Larry Dalus
Senior Solutions Consultant, Financial Services Industry
Oracle Corporation
Safe Harbor Statement

The following is intended to outline our general
product direction. It is intended for information
purposes only, and may not be incorporated into
any contract. It is not a commitment to deliver any
material, code, or functionality, and should not be
relied upon in making purchasing decision. The
development, release, and timing of any features
or functionality described for Oracle’s products
remains at the sole discretion of Oracle.

Customer Service –
A Sustainable Competitive Differentiator?

                         “The customer should only have to ask once”
                             “Leveraging the service profit chain”

          “Our mission is to be a Premier Bank in the Asia-Pacific region, committed to
                 providing Quality Products and Excellent Customer Service.”

          “Understanding and responding to our customer needs is fundamental to the
                                   way we do business”

           “Fundamentally, we owe our improved performance to a customer-centric
              approach that puts customers at the core of our business strategy”

                   “We listen to our customers and understand their needs”

                                    “Reaching Out To You”

                                “Helping You Get On With Life”

 Is the Customer’s Experience Important?
Improving the customer experience is critical in order for banks to meet customer-
                                centric goals

 What is an Exceptional Customer Experience?

• Every customer interaction is a “moment of truth” – a point in time where the
 customer will form a view of the Bank and their willingness to continue the

• Ingredients of an exceptional customer experience includes:

   – Know your customer

   – Anticipate and understand their needs, up-servicing the customer

   – Being a customer advocate and trust advisor

   – Leveraging existing customer and interaction data

   – Only ask for customer for specific information once, but capture for future use

   – Address issue promptly removing any non-value added processes

   – Regularly update and realign to changing customer needs and feedback

Challenges to Delivering an Exceptional Customer

         FACTOR                        CHALLENGE

         Customer       Bank’s are required to scale relationships
        Recognition           across millions of customers

      Blended Sales &   >80% of customer interactions are purely
          Service                 service transactions

       Consultative     Agents and sales reps focus on selling the
         Selling                 most familiar products

                        Customer requests not fulfilled at the point
      Follow Up Leads
                                   of communication

       Multi-Channel       Customer interactions typically span
        Capabilities               multiple channels

Retail Banking Investment Priorities
Core Systems Replacement                   Performance Analytics
    Technology refresh due to              Executive analytical dashboards
     outdated, legacy technology             deployed at the front line through
     platforms                               pre-packed analytical applications
                                             to drive business transformation
    Opportunity to redefine business
     processes, customer relationship       Aligns with KPI and incentive
     models, and fee based products          realignment

   Multi-Channel CRM                      Branch Transformation

    Deploying core CRM capabilities to     Recognises the importance of the
     both assisted and self-service          Branch network in building
     channels                                customer relationships

    Examples include Internet Banking,     Transforms branches from
     Call Centre, Relationship Manager,      transaction processing centres into
     and Branch Sales                        customer-centric financial sales
                                             and service centres

           The Underlying Objective of Branch Transformation
"Like many organisations, post the internet revolution, we're recognising that branches and face-to-face (service)
are more important than we might have expected, so further developing our branch network is an important goal
for us.“ – Les Matheson, CEO, Citibank Australia
                                                                     Main Business Goals of Branch

                                                                    Source: US FST Survey 2003; Datamonitor

Source: “Citibank Hunting for Deals”, October 31, 2005
Pre-Interaction      Branch Banking Example

                       New Loan product created                Static list of target customers                   ‘One size fits all message’
                       Promotion launched
Branch Interaction

                       Branch Staff unaware of        Teller is unaware of         Referrals are written on     CSR has to manually follow-up
                       promotion or other calls      whether customer has                   paper
Post Interaction

                       Compensation for Teller and           CSR manual follow-up about                       Uncertain about product sales
                            CSR is Manual                         product closing

                       Addressing the Challenge through a
  Pre-Interaction      Multi-channel Customer-Centric Transformation

                          New Loan product created                  Effective Target                          Segmentation to leverage
                          Promotion launched                         Campaign & Offers
                                                                                                                 predictive customer insight
  Branch Interaction

                            Branch Staff are      Teller reads       Referral electronically captured     CSR verifies product fit and
                             aware of customer      product offer      Automatically assigned to the         applies online
                             campaigns                                  appropriate user
Post Interaction

                         Product sales known               Automated follow-up                   Compensation is
                                                             on product closing                     automatically tracked

Siebel CRM 8 – Transformational CRM

Empower Users
  – Provide proactive, real time insight at the
    moment of customer interaction through
    a flexible, role-based user interface

Enable Business Responsiveness
  – Enable the business to respond to
    ongoing business process changes and
    to directly improve the customer

Ensure Value
  – Provide choice by supporting multiple
    deployment options and ease of
    integration at the lowest cost

Superior User Experience

                Empowering Users :: Task Based User Interface

Embedded Intelligence

                        Empowering Users :: Embedded Intelligence

Information Discovery

            Empowering Users :: Enterprise Search

  Empowering Knowledge Workers

Empowering Users ::              Email and Collaboration

    Siebel Branch Banking Solutions

Branch Platform Sales & Service                      Branch Teller
      360 degree view of customer across channels          Embedded 360 degree view of customer
      Process oriented account origination                 Customer centric transaction processing
      Needs analysis and sales tools                       Optimised for maximum speed
      End to end service management                        Prompts and indicators to offer superior service levels
      Campaign and lead management                         Referral capture and routing
      Fully integration with desktop productivity          Cross- & up-selling
       applications                                         Store and Forward / Offline Processing
      Contact management

    Siebel Finance Analytics Solutions

Siebel Analytics for Retail Banking                     Siebel Analytics for Institutional Finance
       Over 120+ purpose built analytical charts for          Institutional Sales dashboards
        retail banking                                         Investment Banking dashboards
       Pre-built mappings to Siebel operational CRM           Corporate and Commercial Banking dashboards
       Executive dashboards                                   Wealth Management dashboards
       Credit Origination and Credit Card dashboards          Account Management dashboards
       Private Banking dashboards                             Investment Holdings dashboards
       Marketing dashboards

 What’s new in Siebel 8 for Financial Services?

• Streamlined Account Origination
• Rules Based Loan Underwriting
• Advanced Insurance Claims Management
  – Automatic Reserve & Coverage
  – Payment & Invoice
  – Subrogation
  – Fraud

                            Core                   Human      Banking
     Teller    Sales,                Financials
                           Banking                Resources   Analytics

The Global Leader in Front Office Solutions for Retail Banking

   Westpac Banking Corporation

• As of September 30, 2005 Westpac had:
   – 27,000 Employees
   – Global assets of $260 billion AUD
   – Net profit after income tax was $2,818 million

• Westpac is ranked in the top 10 listed companies by market capitalisation on the
  Australian Stock Exchange Limited (ASX)

• Westpac serves 8.3 million customers, through key business areas of:
   – Business and Consumer Banking
   – Wealth Management
   – Institutional Banking

           Five Year Strategy to Transform Westpac’s
           CRM Capabilities

                                                                    CRM at Westpac
                                                                    CRM at Westpac
          Sales & Service                                                                    Marketing
                                                                                             Marketing                        Technology Delivery
                                                                                                                              Technology Delivery
          Sales & Service                     Sales Skills Upgrade
                                              Sales Skills Upgrade
          Transformation                                                                  Transformation
                                                                                          Transformation                        Transformation
                                              Proactively call customers
                                              Proactively call customers             From “above” and “below-
                                                                                      From “above” and “below-              Install market-leading
                                                                                                                             Install market-leading
      Capture future customer
      Capture future customer                                                         the-line” to Integrated
                                                                                        the-line” to Integrated               packaged applications
                                                                                                                               packaged applications
       needs and profiles
       needs and profiles                     Disciplined sales
                                              Disciplined sales                       Marketing
                                               management                                                                    Integrate these
                                                                                                                             Integrate these
      Lead actioning
      Lead actioning                                                                 From intuitive customer
                                                                                      From intuitive customer                applications with existing
                                                                                                                               applications with existing
                                              Dashboards for visibility
                                              Dashboards for visibility               selection to “needs” and
      Easy to do referrals,                                                           selection to “needs” and               systems
      Easy to do referrals,
                                                                                       event-triggered campaigns
                                                                                       event-triggered campaigns
       service requests, single
       service requests, single                                                                                              Strategic joint-
                                                                                                                             Strategic joint-
       customer view, etc.
       customer view, etc.                                                                                                    development

                                                                   Strategic Benefits
                                                                   Strategic Benefits

                                        Revenue uplift
                                        Competitive advantage through CRM capability leadership
                                        Superior customer experience
                                        Operational excellence & staff satisfaction

Source: “Customer Centric Bank Transformation”, Fernando Ricardo, Head of Sales and Service Desktop, Process and Channel Transformation, Westpac Bank
           Five Year Strategy to Transform Westpac’s
           CRM Capabilities

   • Customer Needs Based Conversation is linked to Oracle CRM across the
      Bank’s branch network:

   • Westpac’s CRM program provides the bank’s sales teams with the context to
      understand and meet customer needs

Source: “2006 Market Update”, Westpac Bank
           Five Year Strategy to Transform Westpac’s
           CRM Capabilities

                                                    Customer              Employee                Partner
                                                                      Multi Channel Access

                         Branch                     Web                   Call Centre                Face to Face                   ATM

              Managing the Customer Experience                 Enabling the Sales & Service Team                 Managing Business Performance

                 Customer Contact Management
                                                                       Sales & Service Skills                         Dashboards & Scorecards
                       Westpac Leads
                    Future Need-based Leads
              (NCR Relationship Optimiser)
                       Event-based Leads                         Opportunity/Pipeline Management                           Alerts & Insights
                                                                      The Westpac Way
                                                                                                                    (Oracle Siebel Analytics)
                   Product/Transaction History
                  Relationship Builder                              Sales & Service Leadership                       Aligned Performance Targets
                 Customer Feedback/Complaints
                (Oracle Siebel eBusiness)
               Customer Profile & Needs Capture

                                                                     Analytical Optimisation
                   Event                Behaviour &              Customer                 Needs &              Risk Adjusted
                  Detection     Leads
                                   Preference                     Value           Enterprise Modelling Environment
                                                                                      Propensities        Pricing
                                                                                                                                      Credit & Fraud
                  (Relationship Optimiser)                                                   (SAS eMiner)

                                                               Managing (Real-Time) Information

                                Metadata                     Operational data
                             Oracle Siebel                                        Data warehouse                       MQ Series/
                              management                             NCR Teradata/Oracle
                              Analytics                                                                                Websphere

Source: “Customer Centric Bank Transformation”, Fernando Ricardo, Head of Sales and Service Desktop, Process and Channel Transformation, Westpac Bank
           Five Year Strategy to Transform Westpac’s
           CRM Capabilities

                                                                                5,500                   users
                                    300                  users

           2002                   2003                     2004                   2005                    2006                        2007


Source: “Customer Centric Bank Transformation”, Fernando Ricardo, Head of Sales and Service Desktop, Process and Channel Transformation, Westpac Bank
           Five Year Strategy to Transform Westpac’s
           CRM Capabilities

   “I now have the ability to track sales
   every day across the network. I can
   drill down to a small business
   banker individually and look at what
   their pipeline looks like. As you can
   imagine, this is a great capability for
   a small business manager for

   – Mike Pratt, Group Executive, Business and
   Consumer Banking, Westpac Bank

Source: “Customer Centric Bank Transformation”, Fernando Ricardo, Head of Sales and Service Desktop, Process and Channel Transformation, Westpac Bank
• 155 Year Old Bank of the Philippine Islands
   – 11,000 Employees
   – 890 Branches
   – Assets of over $10 Billion USD
   – Headquartered in Manila

• Significant Market Share:
   – 2.6 Million Customers
   – Second largest commercial bank

• For years, international publications and rating agencies have given annual awards
  to BPI as one of the best banks in the region.

• Among these are the Far Eastern Economic Review, The Banker, Euromoney,
  Asiamoney, BusinessWeek, The Asset, Global Finance, Finance Asia, and The
  Asian Banker.

• BPI recognised the need to constantly look for ways to maintain its market leading
 position, viewing technology as vital to supporting their business strategy

• In 2001, BPI became the first bank in the Philippines to implement a Customer
 Relationship Management (CRM) system. This was to address:
   – No centralised sales system

   – RM’s using different application or manual paper files to locate customer information

   – RM’s managed their time and client data using paper calendars and notebooks

   – No automated method of monitoring sales campaign responses, gleaming knowledge from sales
     data, or targeting campaigns to specific customer segments

• “Our vision was to become a customer centric organisation, delivering
 personalised service and superior products. But even at the branch level we had no
 standard way of managing customer relationships or leveraging cross-sell
 - Arlene S. Dayrit, Assistant Vice President, CRM, Bank of the Philippine Islands

• BPI divided its customer base into different segments,
 focusing its CRM initiatives on the Preferred customer group.
 Each Preferred Customer was:
   –   Assigned a dedicated RM
   –   Given an express lane in bank branches to complete transactions quickly
   –   Provided with updates on developments and trends in the economy
   –   Profiled in order to better understand their needs

• BPI restructured its branch organisational structure into two
 distinct teams:

       Sales Team       • Lead by the RM
                        • Concentrates on selling and managing a portfolio of preferred customers

       Service Team     • Focuses on processing counter transactions

• Improved Marketing Performance
   – Marketing users are now able to query the customer database, develop customer segments, and
     distribute prospect lists to RM’s
   – Reduction in prospect list creation from 30 days to only 1-3 days
   – 233% increase in campaign response rates
   – 174% increase in campaign conversion rates

• Enhanced Customer Service
   – Call Centre Agents now have real time access to customer information
   – 40% reduction in service request processing time
   – Increased customer satisfaction

• Increased Sales Over Non-CRM Branches
   – 71% increase in Auto loans
   – 110% increase in mortgage lending
   – 164% increase in Credit Card applications

• BPI recovered 105% of its cumulative investment in hardware, software, and
  training in just three years

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Customer Centricity - Driving Growth in Today's Leading Banks
Oracle | Siebel CRM 8

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