Global Perspectives in Retail Banking Webinar 1227717447007052 9

Financial Services presents:
Global Perspectives in Retail Banking:

Leading Practices for Transforming the
Branch
Moderator: Don Ogilvie
Presenter: Scott Burgess, Chris Gill
May 20, 2008

Agenda
• Introductions
• A Global Tour In Search of Retail Insights
• Getting Customers in the Door
• Enhancing the Customer Experience
• Leveraging New Distribution Models
• Questions & Answers
Copyright © 2008 Deloitte Development LLC. All rights reserved. 1

Branch density varies significantly across geographies
Branch Density Underlying Factors
Number of Branches per Million People in 2005
1000
952 • Self-service channel usage
800 – Penetration of direct deposit of payroll
563 – Cultural preference for face-to-face
600 436
400 304 312 contact
200
0 • New branch formats
Australia U.S. Japan Germany Spain – Smaller branch footprints
Number of 6 92 56 46 42
branches (000s)
– Supermarket banking
1200 1116
1000 862
• Retail banking competitive
800
environment
600 – Shared branching
400 270 317 332 – Usage of post office locations for
200 banking transactions
0
New York Chicago Tokyo Frankfurt Madrid
Number of 5.8 3.2 4.2 0.6 5.4
branches (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
Poll question #1
1. How many times per month do you visit a branch for your
personal banking transactions?
A. 0
B. 1-2
C. 3-4
D. 5 or more

Why focus on the branch?
• Face-to-face contact in branches is

Branch Transactions by Type
still preferred for certain types of
2006 2010 interactions
– New account opening (82% of consumers)
23% – Problem resolution (51%)
21%
• Convenient branch access remains
one of the most important criteria in
selecting a bank
12% – In a recent Deloitte survey, 40% of
consumers said convenient locations were
extremely important
4% • Branches allow banks to compete on

service and convenience rather than
price
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 loan

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 advice
E. Visit your safe deposit box
F. None of the above

A global tour in search of retail insights
• United Kingdom • Amsterdam

– Barclays – Rabobank
– Coutts – ABN AMRO
– HBOS – Postbank
– Hoare & Co. • Dubai
– HSBC – Emirates Bank
– Lloyd's – Mashreqbank
– Nationwide Building Society – United Bank
– Sainsbury
– Tesco • Australia
– Australia Post
• Spain – ANZ
– Banco Santander – Bank of Queensland
– Banco Popular Espanol – Bendigo Bank
– Bancaja – Commonwealth Bank
– Bank Inter – GE Money Australia
– BBVA – HBOS
– MBF
– CAN
– Members Equity
– El Corte Ingles
– National Australia Bank
– St. George’s
– Westpac

Getting Customers In The Door
Enhancing The Customer Experience
Leveraging New Distribution Models

Creating a showcase destination
Rabobank
Source: Rabobank website

Creating a showcase destination
Umpqua Bank
BBVA
Source: BBVA, Umpqua Bank

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
– 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 transactions

B. Very interested
C. Somewhat interested
D. Not at all interested
E. 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)
C. Social networking events
D. 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)

Self-service – the next generation
HSBC London
Greeter
Dance Floor
Source: HSBC
Replacing branch specialists with
videoconferencing and webcams
Ask an Expert
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:
A. Videoconferencing link
B. Face-to-face meeting in the branch
C. Banker visit at your home or office
D. 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 If we fail to send the SMS message, we

insufficient funds and non-payments by will pay €10.
means of an SMS message.
6. We will reply to loan applications within In case of breach, we will waive the
24 hours. arrangement fee.
9. We will inform you about the status of For each day of delay, we will pay €5, up
your claims within 48 hours. 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 In case of breach, we will defer an entire
mortgage repayments for 6 months for year's repayments at no cost.
no extra charge.
Source: Bancaja Web site

Leveraging third party sale forces to visit
your customers
mortgage connect 1 300 555 222 mobile home loans
Source: Deloitte Australia

Franchising –“McBanks” compete with
community banks
Bank of Queensland
Bendigo Bank
Source: Bendigo Bank Web site, Bank of Queensland Web site

Franchising –“McBanks” compete with
community banks
Customer Satisfaction Financial Impact

Deposit Growth – 3 years
Bendigo 88% Franchisors 178
Major 4 Banks 100

BOQ 79%
0 50 100 150 200
Loan Growth – 3 years
ANZ 74%
Franchisors 157
Major 4 Banks 100

Westpac 69%
0 50 100 150 200
PE Multiples
NAB 68%
Franchisors 17.8
CBA 65% Major 4 Banks 14.5
0.0 5.0 10.0 15.0 20.0

Source: Roy Morgan; IRESS; Deloitte Consulting analysis

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 branch
B. Bank-owned location
C. Not sure

Expanding geographic reach through
partnerships

Poll question #7
7. What aspect of franchising appeals to you the most?
A. Local ownership
B. Local credit decision-making
C. Better pricing flexibility tailored to the local market
D. Re-investment of branch profits into the community
E. Greater commitment to customer service

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

Design outlet or community center, rather
than as a transaction center
• Tailor branch “look and feel” to the

local community

• Position the branch as a

“destination”
• Pursue opportunities to better

understand customer needs and
increase sales
Customer
Experience • More aggressively promote options
for routine transactions through
multiple self-service channels
• Better leverage emerging

technology to support specialized
product sales
• Provide greater transparency of

fees and charges
Customer
Relationship • Establish commitments to specific
Building service levels

• Leverage third party distribution
• Establish partnerships to expand

Distribution customer reach and reduce
Strategy servicing costs
• Create lower-cost branch

prototypes

Questions & Answers
Join us on May at 2 PM EST 27th
as Financial Services presents:
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: dogilvie@deloitte.com
Scott Burgess: Tel: +1 703 251 3459

email: scottburgess@deloitte.com
Chris Gill: Tel: +1 704 887 1855

email: cgill@deloitte.com

This presentation contains general information only and is based on the
experiences and research of Deloitte practitioners. Deloitte is not, by means of this
presentation, rendering business, financial, investment, or other professional
advice or services. This presentation is not a substitute for such professional
advice or services, nor should it be used as a basis for any decision or action that
may affect your business. Before making any decision or taking any action that
may affect your business, you should consult a qualified professional advisor.
Deloitte, its affiliates, and related entities shall not be responsible for any loss
sustained by any person who relies on this presentation.

About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member
firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a
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Financial Services presents:

Global Perspectives in Retail Banking:

Moderator: Don Ogilvie

Presenter: Scott Burgess, Chris Gill

May 20, 2008

• A Global Tour In Search of Retail Insights

• Getting Customers in the Door

• Enhancing the Customer Experience

• Leveraging New Distribution Models

• Questions & Answers

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

Copyright © 2008 Deloitte Development LLC. All rights reserved. 3

• Face-to-face contact in branches is

4% • Branches allow banks to compete on

Copyright © 2008 Deloitte Development LLC. All rights reserved. 4

2. What is your most important reason for visiting a branch

A. Open a new deposit account / apply for a loan

Copyright © 2008 Deloitte Development LLC. All rights reserved. 5

• United Kingdom • Amsterdam

Copyright © 2008 Deloitte Development LLC. All rights reserved. 6

Enhancing The Customer Experience

Leveraging New Distribution Models

Copyright © 2008 Deloitte Development LLC. All rights reserved. 7

Source: Rabobank website

Copyright © 2008 Deloitte Development LLC. All rights reserved. 8

Source: BBVA, Umpqua Bank

Copyright © 2008 Deloitte Development LLC. All rights reserved. 9

Copyright © 2008 Deloitte Development LLC. All rights reserved. 10

3. What is your interest level in mobile banking for making

A. Already using mobile banking for these transactions

Copyright © 2008 Deloitte Development LLC. All rights reserved. 11

Source: CAN, Umpqua Bank

Copyright © 2008 Deloitte Development LLC. All rights reserved. 12

Copyright © 2008 Deloitte Development LLC. All rights reserved. 13

4. Which of the following events would be of greatest interest

A. Seminars on financial topics (e.g. investments)

Copyright © 2008 Deloitte Development LLC. All rights reserved. 14

Source: Umpqua Bank

5. When purchasing a specialized financial product, if your

Copyright © 2008 Deloitte Development LLC. All rights reserved. 17

The Bancaja Commitment

3. We will notify our customers of If we fail to send the SMS message, we

Source: Bancaja Web site

mortgage connect 1 300 555 222 mobile home loans

Source: Deloitte Australia

Copyright © 2008 Deloitte Development LLC. All rights reserved. 19

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

Copyright © 2008 Deloitte Development LLC. All rights reserved. 20

Customer Satisfaction Financial Impact

Major 4 Banks 100

Major 4 Banks 100

CBA 65% Major 4 Banks 14.5

0.0 5.0 10.0 15.0 20.0

Copyright © 2008 Deloitte Development LLC. All rights reserved. 21

6. Would you be more or less likely to conduct your banking

Copyright © 2008 Deloitte Development LLC. All rights reserved. 22

Copyright © 2008 Deloitte Development LLC. All rights reserved. 23

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

Copyright © 2008 Deloitte Development LLC. All rights reserved. 24

• Create better opportunities to

Branch • Position the branch as a retail

• Tailor branch “look and feel” to the

Copyright © 2008 Deloitte Development LLC. All rights reserved. 25

• Position the branch as a