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© IG&H Consulting & Interim
Innovations in Retail Financial Services
Woerden, October 2008
Remarkable initiatives from around the globe
Innovations / 2© IG&H Consulting & Interim, Woerden 2008
Purpose of this document
� In Financial Services these days a lot of companies struggle to win in severe price competition
� However a financial institution should develop its business on long lasting and customer value driven business models: price difference isn’t enough
� An element could be innovation, a financial institution is able to defeat its competitors only if it keeps on surprising its customers with bright innovations
� In this presentation we would like to bring you eighteen remarkable innovations in Financial Services from all around the globe, hopefully they will inspire you. This presentation is part of broader research performed by IG&H Consulting & Interim
� We are more than glad to join you in a meeting to discuss the possibilities for your business
Innovations / 3© IG&H Consulting & Interim, Woerden 2008
Online consumers searching for financial services have various characteristics, innovative online tools can serve all
� Online consumer profiles vary between independence and convenience:� Independent searchers focus on price and do
not want any help or advice in their search for financial products
� Convenience searchers focus on support and depend on advice in their search for financial products and services
.
Focu
s on
Pri
ce
Focus on Support
Innovative online services could serve all, for example:
� Online innovation serves the ‘Delegator’ in making specialist advice accessible online, like Mint.com at page 9
� Online innovation serves the ‘Self-directed’ by supporting in their independent choice, such as FindABetterBank.com at page 5
� Online Innovation serves the ‘Avoider’ in taking over their search efforts, like MoneyAisle at page 6
Focus on Price or Focus on Support?
1
2
3
4
Self-directed
Validator
Avoider
DelegatorSource: Forrester
Innovations / 4© IG&H Consulting & Interim, Woerden 2008
Contents
Advisory Savings Lending
Payments Insurance
Page 4-8 Page 12-15Page 10-11
Page 24-26Page 20-22
Trading
Page 17-18
Innovations / 5© IG&H Consulting & Interim, Woerden 2008
Findabetterbank.com: comparing features and fees of banks just around the corner
Explanation
� FindABetterBank.com compares interest, banking fees and banking conditions of several banking facilities� FindABetterBank.com uses Google Maps to pinpoint the user to the nearest branch of the best rated bank� Unfortunately FindABetterBank.com does not have real mandates, so the consumer has to go the bank to open an account
Score
� Search is based on customer preferences
� Transparency in earnings of FindABetterBank.com
� No consumer ratings experiences, just product characteristics
Innovations / 6© IG&H Consulting & Interim, Woerden 2008
MoneyAisle: auctions your certificate of deposit or High Yield Savings among banks
Explanation
� MoneyAisle provides an easy way to high rates on excessive liquidities� MoneyAisle auctions the amount of money among a number of banks� These auctions should provide the user the highest rate for Certificate of Deposit or High-Yield Savings
Score
� A real turnaround in the value chain
� User does not need to search
� FDIC guaranteed� Doesn’t increase
bargaining power
Innovations / 7© IG&H Consulting & Interim, Woerden 2008
Boulevard R: a complete financial advice for your future perspectives
Explanation
� Boulevard R provides a customized financial advice with advanced web based software which is designed by financial planners
� Clients can start to put in their financial situation with assets, debts and income. For a fixed fee the client receives customized and up-to-date financial plan
� Instead of expensive bankers or other advisors paid with high fees the customer receives a complete financial advice for USD 50
Score
� Fixed fee and no extra commissions
� Makes life planning accessible for great audience
� High complexity still creates an entrance barrier
� Relatively expensive for an online service
Innovations / 8© IG&H Consulting & Interim, Woerden 2008
Wesabe: Peer to Peer advisory for people with debt issue's
Explanation
� Wesabe provides an overview of bank accounts of different banks. Wesabe structures the spending and set up savings targets
� Wesabe’s mission statement is to support consumers on their financial planning and help realize financial targets� Wesabe is alo a community with peer to peer advisory on debt relief and investment planning� Wesabe does not want to compete with traditional banks but wants to be compulsory � Wesabe has already 100.000 online participants, experts predict a great future
Score
� The system accesses several banking systems in one time
� Wesabe does not compare products but spending behavior
� Real peer-2-peer comparisons
� Security level is questionable
Innovations / 9© IG&H Consulting & Interim, Woerden 2008
Mint: brings all your finance portfolio in just one overview
Explanation
� Mint provides customers a web based platform for financial planning� Mint categorizes and analyses the consumers’ spending, and actually advices on how to improve financial efficiency� Over 5.000 financial institutions are connected to Mint, they provide current account data, savings data, investment results
etc.� Over 180.000 customers are already using Mint.com
Score
� State of the art technology
� Strong partnerships with financial institutions
� Provides clear overview
� Reel peer-2-peer tools
Innovations / 10© IG&H Consulting & Interim, Woerden 2008
Contents
Advisory Savings Lending
Payments Insurance
Page 4-8 Page 12-15Page 10-11
Page 24-26Page 20-22
Trading
Page 17-18
Innovations / 11© IG&H Consulting & Interim, Woerden 2008
Keep the Change: makes it possible to save money for people that have difficulties putting money aside
Explanation
� Bank of America developed Keep the Change accounts for people that have difficulties to save money on a regular basis� Every time a consumer buys something the amount will be rounded up and the difference will be transferred in to a savings
account� Since the start in 2005 already one million accounts are opened
Score
� Easy way of saving, automatically creates savings
� Low amounts, many transactions and high costs
Innovations / 12© IG&H Consulting & Interim, Woerden 2008
SmartyPig: special purpose or target saving together with family or friends
Explanation
� SmartyPig is saving like 2008: it is fun, easy, social and for a special goal� SmartyPig offers an online savings account by West Bank for a special purpose like a journey or a boat� Special feature is that family and friends also can make a deposit on this account� The concept is already rewarded with several Banking Awards
Score
� It is social and goal oriented
� It is funny!� Making deposits cost
money� Minimum real value
added
Innovations / 13© IG&H Consulting & Interim, Woerden 2008
Contents
Advisory Savings Lending
Payments Insurance
Page 4-8 Page 12-15Page 10-11
Page 24-26Page 20-22
Trading
Page 17-18
Innovations / 14© IG&H Consulting & Interim, Woerden 2008
GreenNote: helps students get low-cost private student loans from social networks
Explanation
� GreenNote helps students get low-cost private student loans from social networks while lenders get a fair return on the loans they give to students
� It starts with contacting your network of family and friends, and ends with you reaching your goals
Score
� Theoretically this could support students
� Attracts wrong people outside peer group
� Peer to peer lending is perceived as risky
Innovations / 15© IG&H Consulting & Interim, Woerden 2008
SameDayCash: lending platform for money in your current account on the same day
Explanation
� SameDayCash is providing small loans on the same day up to a maximum of 200 pounds� SameDayCash is collecting the money just a couple of days later from the user’s debit account, with a maximum period of 30
days� Concequences of not paying back could give the user a bad credit score immediately
Score
� Fast and Easy� Cost model is very
transparent� It could attract people
that already have money problems (social responsibility?!?)
Innovations / 16© IG&H Consulting & Interim, Woerden 2008
LendingClub: Peer to Peer lending inside established social networks
Explanation
� LendingClub Peer to Peer lending inside established social networks� LendingClub uses established social networks that should guarantee more save lending and better rates� The loan request includes information that helps ensure that loans get funded at the best available rate� There is a two-week loan listing period during which the loan can be funded and issued
Score
� Uses established social networks that reduces risk perception
� Again peer 2 peer, it has not been proven as successful yet
Innovations / 17© IG&H Consulting & Interim, Woerden 2008
Contents
Advisory Savings Lending
Payments Insurance
Page 4-8 Page 12-15Page 10-11
Page 24-26Page 20-22
Trading
Page 17-18
Innovations / 18© IG&H Consulting & Interim, Woerden 2008
Tradeking: sharing trading strategies and showing off your brilliance
Explanation
� Tradeking provides a stock trading platform� The platform facilitates the user to share their strategies and let them learn from other traders� Tradeking keeps up the score and let the user show off if they trade well� Tradeking also offers an extensive learning center to educate to inexperienced trader
Score
� Stimulates consumers’ admire to be the best
± It is just another trading platform
� Question is if people want to switch just for being in competition
Innovations / 19© IG&H Consulting & Interim, Woerden 2008
Zecco: free stock trading and following star-investors
Explanation
� Zecco is in the United States a famous trading platform� Zecco provides Free stock trading and learning from star-investors� The free trades are capped at just 10 trades with a minimum of $2.500 net equity otherwise $4.50
Score
� Nice add-on for following star-investors
± Again just another trading platform
� You only get ten free trades
Innovations / 20© IG&H Consulting & Interim, Woerden 2008
Contents
Advisory Savings Lending
Payments Insurance
Page 4-8 Page 12-15Page 10-11
Page 24-26Page 20-22
Trading
Page 17-18
Innovations / 21© IG&H Consulting & Interim, Woerden 2008
Barclaycard OnePulse: a public transportation, credit card and chip in one card
Explanation
� Barclaycard OnePulse has three built-in functions, helping you to save time, money and hassle� Barclaycard is the only card in the UK to offer public transportation, credit card and chip card in just one card� In-built Oyster card for the fastest, smartest and easiest way to travel around London� Go cashless with OneTouch, a new and quick way to pay for purchases of £10 and under
Score
� Integration of three different card services
� For everyday use� Public transport
services are still limited by geographical constraints
Innovations / 22© IG&H Consulting & Interim, Woerden 2008
PräsentCard: client gift card for expanding your client network
Explanation
� Deutsche Bank offers its SME clients a tool that is normally only available for huge retail shops� “Present Card” is a gift card that facilitates SME business giving their clients a gift card� The “Present Card” is all about increasing client commitment and expending client base
Score
� New level in bank-SME relationship, it introduces the bank as a marketing partner
� No fundamental value for a bank other than a platform for tracking client payment data
Innovations / 23© IG&H Consulting & Interim, Woerden 2008
Rabo SMS Pay: direct easy pay for small amounts
Explanation
� It facilitates to pay small amounts directly without having cash� In a community that is excluding small cash the SMS-paying service is a good fit in the modern banking features� It does appeal young people and Rabobank is likely to cross sell other banking services to non-clients
Score
� A real target group initiative for cross-selling
� Not really user friendly
� Will mobile internet take over, what’s the unserved customer need?
Innovations / 24© IG&H Consulting & Interim, Woerden 2008
Contents
Advisory Savings Lending
Payments Insurance
Page 4-8 Page 12-15Page 10-11
Page 24-26Page 20-22
Trading
Page 17-18
Innovations / 25© IG&H Consulting & Interim, Woerden 2008
Sheilas’ Wheels: creating a social network that has a low risk insurance profile
Explanation
� Sheilas’Wheels is a car insurance only available for women� The insurance policy provides distinctive features like handbag coverage and female friendly repair� With this Esure creates a portfolio with a attractive risk profile
Score
� A real target group initiative
� Clever selection of low-risk clients
� Minimum of extra services
Innovations / 26© IG&H Consulting & Interim, Woerden 2008
Ibuyeco: 100% carbon neutral car insurance
Explanation
� With this BISL is helping the user to balance out the impact their driving has on the environment� Not only will it get the user a good rate, it will make it easy for the user to offset 100% of the vehicle’s annual CO2 emissions
Score
� It services a distinct and life customer need
� While you drive trees will be planted…
� But saving the environment while driving a car? It is a bit contradictory!
Innovations / 27© IG&H Consulting & Interim, Woerden 2008
Teensurrance: creating a social network that holds a high risk profile
Explanation
� Teensurance, powered by SafecoTeensurance, is a completely new kind of package that gives parents a way to determine how their teen is driving
� Teensurance provides a range of ways to keep teen drivers safer, including roadside assistance, GPS real-time car tracking and parent-teen discussion resources
� Introduced to encourage responsible teen driving – and give parents some peace of mind
Score
� A real multi-media service
� Razor-sharp target group tool
� Typically US service� Probably sales will
rise if the service is marketed separately
Innovations / 28© IG&H Consulting & Interim, Woerden 2008
IG&H Consulting & Interim market driven, operation wise
IG&H Consulting & Interim is an independent company in consultancy and interim management with 150 professionals. Our specialism: the financial services sector
IG&H has successfully worked on cases like:
� Lean Change – IG&H is the specialist in Lean for the financial services industry
� Operating Strategy – realizing challenging turnarounds in operations starts with the right course
� Strategic Execution – really implementing new strategies
� Business Development – development of value adding, innovative solutions
� Sales effectiveness – realizing of breakthroughs in sales effectiveness, for example banc assurance or intermediary distribution
Innovations / 29© IG&H Consulting & Interim, Woerden 2008
IG&H Consulting & Interim market driven, operation wise
IG&H Consulting & Interim
Vijzelmolenlaan 10 – 183447 GX Woerden
P.O. Box 572 3440 AN WoerdenThe Netherlands
T: +31 (0)348 496 300 F: +31 (0)348 496 397I: www.igh.nl
© IG&H Consulting & Interim
Innovations in Retail Financial Services
Woerden, October 2008
Remarkable initiatives from around the globe
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