BACS to the future The rebranding of a national institution

David Sear16th February 2006

Begin at the beginningWhat is your business and what are your capabilities?

The Banker’s Automated Clearing Service

36 years of operation as the ‘back office’ processor of the UK economy

• Mutual governance structure

– Owned by 12 major banking institutions

• Old banking culture

• Run by ex-bankers

• ‘Not for profit’

A critical function in the payments processAll Direct Debits and over 90% of UK salaries

The UK’s Automated

Clearing House

By the end of 2005, over 90% of state benefits and pensions will be paid via our technology platform - now a key part of the critical national infrastructure.

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Direct Debit Standing Orders Direct Credit Item Price

Occasional DDFaster time to first collection

BACSTEL-IP

TODDASO

PDD

Automation of DD amendments and cancellationsAutomated return of unpaid DCs

Automated return of unpaid DDs

Automation of DD instructionsAutomated advice of wrong accounts

BACSTEL

TODDASO4

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Building on a long history of volume growth and service developments

Understanding your environmentCreating the strategic context

Strategic drivers

Drive to faster clearing cycles

• OFT ‘task force’

• Internet banking growth

• International standards

Rapidly increasing volumes

• £100m investment to replace legacy systems

• Leading edge secure internet input

• Hugely scalable payments engine

Changing needs in the market

• New markets, new uses of electronic payments

– Electronic billing, mobile payments

Competition - domestic and international

• Regulation ends 36 years of sole supply - the processing company no longer owns the BACS brand

• Move towards ‘Single European Payments Area’

The final frontier 27 domestic clearing houses in Europe

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The EU has mandated that by 2010 there will be a ‘Single Euro(pean) Payments Area’ (SEPA)

Strategic framework

Key strategic objectives:

1. Be commercial ‘for profit’

2. Diversify: double revenue by 2009

3. Geographically expand: 2 additional markets by 2009

Integrated marketing to communicate vision and support business development

CORPORATE IDENTITY

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Internal communications

Research strategy

Web strategy

New products and propositions

CRM project

Corporate Social Responsibility

Cross functional working

All of Voca’s marketing has a key objective and target audience considered within the branding whole

Deal with perceptionsThe good, the bad and the downright ugly

A branding journey - 2004Identify our starting point – good and bad newsBrand Awareness for BACS was almost a universal awareness when prompted – 99%

Brand attributes

Trusted 97%

Efficient 96%

Secure 96%

Proven / Capable 94%

Experienced 93%

In touch with customer needs 77%

Confidence in staff 75%

Easy to deal with staff 67%

Always striving to improve 63%

Staff that pay attention to what I say64%

Staff take responsibility for problems 59%

Makes me feel valued as a customer 52%

93% would recommend BACS & 92% had confidence in the company

Building a B2B corporate profile through PRIt was important to educate our target audiences that BACS Limited was more than just a product.

LEADING EDGE

Test 3

Test 4

Test 2

Finding a new name for the company Research survey on prospect names

SERVICE FOCUSED BUSINESS

PROVEN APPROACH

PRODUCT FOCUSED BUSINESS

?

Finding a new name for the companyBrand Values

Trusted: Respected,proven, reliable, certainty, transparent, experienced

Robust: Secure, safe, resilient, global capability, unparalleled scalability

Knowledgeable: Expertise, experience, insight, understanding, informed, smart_______________________________________________________________

Agile: Dynamic, attuned to market,customer-responsive,fast moving

Progressive: Enterprising, leading innovators,commercial, visionary, best technology, learning and developing

Passionate: A people business, fierce pride in every job, commitment, friendly, energetic, passion to achieve our goals

Why did Voca win?

Latin - ‘call’ call down funds

Simple, clear and explainable

Is international in feel, European and

implies speed

Clear links to communication

There is very little ‘noise’ from similar

sounding names in our sector

‘.CO.UK./ .NET/ .COM’ domain names available

Available, registrable and explainable asset with a positive response from internal and external

audiences

Take the people with you‘Tell me and I forget, show me and I remember, involve me and I understand’

International payments industry

Domestic payments industry

Marketing tools determined by target audience

450 Staff

Customers - 12 Larger

Domestic/ Retail Banks

International Banks

Shareholders- 12 Larger Domestic/

Retail Banks

Over 100,000 Corporate

Customers using BACS payments

Media and influencers

European banking

influencers

Target audiences have key concerns and areas of interest

Audience Concern or interest Marketing strategy

StaffFuture - change and business growth

Engagement

Banking customers Transaction cost and reliabilityTailored reporting and discussion forum

Shareholders Business growth and revenuePre-briefings and involvement

MediaPayment products and corporate innovation

PR and thought leadership

Corporate customers

Payment products and efficiency

Direct Mail, branding and productisation

International influencers

SEPA, products and costsLobbying and thought leadership, conferences

An easily integrated system for online bill presentment and payment available to consumers through their secure online banking facility.

• Partnering with US online billing behemoth CheckFree

• Leveraging bank relationships to sign up HSBC and LTSB

• Market research indicates 24% of banking customers would use the service

OneVuVoca’s first joint venture

Digital Payments

A joint venture with fraud specialists Retail Decisions (ReD) and mobile technology experts Mi-Pay the company promotes new media payments.

• First customer Carphone Warehouse will leverage the Direct Debit model for mobile payments

Implementation - Internal involvement Manager’s conference – creating advocates

Brand involvement question Score prior to event and following

I understand what we are changing and when and what we're building on.

7.8 9.6

I understand how living the brand values will help us achieve our business plan.

7.1 9.4

I feel involved. 6.8 9.7

I know what actions I need to take personally.

5.7 9.1

Implementation - Internal involvement Staff survey and changes in language

• 5 of the 6 values (passionate missing) feature in the top 10 for ‘Voca’

Top 10 words used to describe ‘BACS’ – Nov 2004

1. Reliable

2. Professional

3. Ambitious

4. Changing

5. Secure

6. Committed

7. Trusted

8. Innovative

9 Optimistic

10. Trustworthy

Top 10 words used to describe ‘Voca’ – June 2005

1. Ambitious

2. Reliable

3. Professional

4. Progressive

5. Changing

6. Robust

7. Trusted

8. Innovative

9 Knowledgeable

10. Agile

Email campaign & ‘All about brand’ website

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Target audiences – one year on

Audience Concern or interest Today........

StaffFuture - change and business growth

Fully engaged

Banking customers Transaction cost and reliabilityTailored reporting and discussion forum

Shareholders Business growth and revenueGood although perceptions of Voca emergence are mixed

MediaPayment products and corporate innovation

Mixed – understanding of Voca strategy is inconsistent - (“I only know Voca as a bank clearing system”)

Corporate customers Payment products and efficiencyFTSE 350 – measured @ 9% awareness

International influencers

SEPA, products and costs

Good- as demonstrated through SIBOS coverage:”leaders in the PEACH race”

Voca take home pay indexLaunched November 2005

Using your assets Integrated across all media

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….and evolving your assets

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Key learningsRe-branding a national institution

• Proceed with caution– People have emotional commitments to the past– Your people will be your strongest advocates and

(potentially) your greatest critics

• Understand your capabilities– Brand values must reflect

• Respond to the strategic context• Understand your audiences• Listen to your people & involve them• Be patient• Take the past with you

Sell it how it is