oracle financial services banking strategy and case studies · •strategy: •initial launch of...

Oracle Financial Services Banking Strategy and Case Studies

Ada Guan Senior Director, Global Client Advisor Jan 2015

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3


50 Years 6

Properties

550+

800,000+

4

Business Impact Of Digital Disruption Today

Valuation, as a multiple of revenue 2.1x

40x

Copyright © 2014, Oracle and/or its affiliates. All rights reserved. | 5

Revenue Up For Grabs For New Digital Players

27B$

..in revenue up for grabs in Australia by new digital players

500B$

…estimate of revenues at risk in banks in the G7 countries

Source: Research published by Macquarie Bank, 2014


In October Alone,76 “Fintech” Companies Worldwide Attracted $1 Billion In New Equity Investments

‘Fintech’

Best of Breed Digital First The Millennials Agile

Regulatory Brand equity and Trust

Financial Institutions

Barriers of Entry

Holistic Offers All Channels All Generations Legacy Systems


The Imperative For Change

Estimate of Global Non-Cash Transaction Volumes in 2014 402B$

Registered users on PayPal and AliPay 252M

Active Users on Starbucks app 10M

Of the Millennials likely to bank with non-FS banks 72%

Peer-to-peer lending in 2013 (US & UK) 4.8B$

Market share grab by Square in two years! 25%


Singularity Of Digital Change

2001 2014

Digital Natives and Digital Immigrants

The Millennials


The Millennials Are The New Customer!

Sources: E&Y, Wealth Front, PewResearch, World Bank

Born after Of the world population

Of the global workforce by 2025

Living in the US

Aggregate net worth

Have enough money or expect to in the future

30% 1980 60%

90m 2T$+ 85%


Source: Edelman Trust Barometer, 2014 Global Results

#2 of 8

#8 of 8

10

Who Do Millennials Trust?


Who Do Millennials Trust?

Friends Online Search Engines

Person like me

A regular employee


Resulting In A Different Level Of Expectations

Empower me WOW

me

… Requiring You To Think Customer In

Know me


Customer In Changes The Way Banks Engage Customers

Checking Mortgage Insurance

Product Out


• Data as an asset

– Leverage rich reserve of customer behaviour data from both within and outside the four walls of the bank

• Two speed delivery

– Agile delivery of new capabilities, especially around customer touch points

– Modernize the business and technology architecture of the bank, progressively “thinning” down legacy systems

14

• Collaborate to become a ‘Fintech’

– Bring in innovation and agility via partnerships with technology companies

– Get in on the ground floor through incubation of target technologies

Learning From Other FS Organizations


Vertical Slice

-Deliver a top to bottom slice of the business and technology architecture

- Deliver a subset of the solution to prove out end-to-end capability

- For example, start with unsecured lending then expand to secured lending followed by deposits

Horizontal Slice

- Modernize channels and business processes without changing the core systems

- Improve customer experience and increase cross sell

-For example, start with digital services, expand to assisted channels followed by enterprise originations

New Target State

- Build new target business and technology architecture for a new business brand

- Enable business growth by tapping new markets

- For example, start with new brand, New market and then expand into main franchise

Exploring 3 different transformation strategies

15

Channels

Processes

Core Processor

Channels

Processes

Core Processor

Channels

Processes

Core Processor


Case Study: National Australia Bank, an early adopter of Oracle Banking Platform, executing full retail transformation

National Australia Bank – Facts & Figures

• Global Top 50 Bank, head-quartered in Melbourne Australia

• Fundamentally a Retail Bank, with Retail Banking operations in

Australia, New Zealand, the UK, US and international offices in

Asia

• Strategy:

• Initial launch of “green-field” direct

banking business, UBank, initially

to build deposits & reduce reliance

on wholesale funding

• Full build-out of platform capability

sets up transformation of NAB’s

Australian Retail franchise

• Most transformational project

currently being undertaken in

Banking, in any market

• Annual cost savings of

approximately $800M expected by

the end of the 5 year program

Total Assets $883B

Net Profit (Income) $5.3B

Return on Equity 10.9%

Cost Income (Business Efficiency) Ratio 53%

Total FTE 42,853

Source: NAB Annual Review 2014


NAB and UBank

• One of Australia’s large banks

• Top 50 globally

• AA rated senior debt

• 4 million customers

• ~$81AUD Billion market cap

• $5.3 Billion net profit (2014)

• Banking, Wealth Management, Insurance

• Operates in Australia, New Zealand, USA

Hong Kong, Singapore, Japan, UK

• NAB’s Direct Bank

• Launched Oct 2008

• Operates branchless/ standalone from NAB channels

• Limited product set

• Targeting specific customer segment

• Taking leadership position in service and useability

• Has raised significant deposits since launch

• First user of new enterprise technology platform


What is UBank?


Evolution of UBank

October 2008 - Launch

• Attract “new” retail customers

$500 million deposits in one month.

• UBank is recognized for innovation

• Effective use of non-traditional marketing

Customer advocacy and satisfaction levels rise

• Amongst the highest of any institution in Australia

10K customers in a month!

• UBank is acknowledged as the driver of NAB's fast growth in deposit market share compared to other major banks.

Launching the “fighter” brand


Evolution of UBank

August 2009 Usaver Launch

• 2 days to 5 mins online account opening!

December 2009

• Money Magazine's "Best of the Best" award.

February 2011

• "UBank’s now well over $7 billion"

March 2011

• UBank reaches $10 billion in deposits

Announce to become a full service retail

bank.

The 5 minute deposit account!


Evolution of UBank

October 2012

• UBank had ”raises$15–16 billion in deposits".

• $18.5 billion in deposits is held by ING Direct and launched in 1999, 9 years earlier than UBank.

February 2011

• UBank launched its first home loan product

October 2011

• UBank won the BAI Financial Global Product Innovation Award for its refinance mortgage UHomeloan.

2012

• Australian Lending Awards: Best Online Operator

… building up to the 15min Mortgage…


Summary And Overview BUSINESS RESULTS

• ROI realized within 12 months of go-live • Reduced the Account Opening time from 2 days to

5 minutes • First year customer deposits target exceeded

within first two months • Two year customer acquisition target exceeded

within first six months NOTABLE HIGHLIGHTS

• Launched on budget , on time within a year • Seamless Integration of application landscape

through SSO and Web Services for business / data service integration

What is UBank?

• Branchless direct bank – retail banking

• Limited product set - Savings, Term Deposit and Mortgages

• Heavy use of social media

• Focus on customer service and application usability

Oracle Banking Platform

CRM On Demand

Oracle Financials Account Hub

OFSAA

IDM Suite

WebLogic Portal

Content Management

SOA Suite

Challenges

• Originally launched on the bank’s legacy infrastructure with limited success


NAB Retail Transformation Plan

Source: NAB Investor Presentation March 2013


NAB’s uptake of Oracle is wholistic and transformational

24 Oracle SAP NAB legacy


Vertical Slice

-Deliver a top to bottom slice of the business and technology architecture

- Deliver a subset of the solution to prove out end-to-end capability

- For example, start with unsecured lending then expand to secured lending followed by deposits

Horizontal Slice

- Modernize channels and business processes without changing the core systems

- Improve customer experience and increase cross sell

-For example, start with digital services, expand to assisted channels followed by enterprise originations

New Target State

- Build new target business and technology architecture for a new business brand

- Enable business growth by tapping new markets

- For example, start with new brand, New market and then expand into main franchise

Exploring 3 different transformation strategies

25

Channels

Processes

Core Processor

Channels

Processes

Core Processor

Channels

Processes

Core Processor


Westpac Group Australia’s First Bank

Source: Westpac FY14 Financial Result Presentation Pack


Westpac Customer Centric Strategy Service Revolution

Source: Westpac FY14 Financial Result Presentation Pack


Ray is considering specialised design equipment for his

business start-up, and tweets looking for some advice on

financing


Ray continues his investigation while accessing his online

banking and browses Ashcroft Financial’s products and

services. He spots the “starting a business” link


He receives a proactive pop up message

from a virtual assistant while he is

browsing online


Ray decides to chat with the specialist to hear what

solutions the bank could offer.

The specialist discusses options

and based on the timing of the

need, suggests Ray meet a

banker in branch


The specialist arranges pushes the appointment options

to Ray’s screen. It prompts Ray to provide relevant

documents in preparation for the meeting. The

appointment is created in Ray’s local calendar.


At the branch, the banker instantly recognises Ray

via Google Glass


Branch Concierge

2:00 pm Appointment

Mr Peter Weller 43 years old Julius Avenue North Ryde, NSW 2133

No Appointment

Mrs Kira Tut 35 years old

Pia Avenu Marsfield, NSW 2122

4:00 pm Appointment

Mr Ray Aamos 45 years old Bentley East Melbourne, Victoria 3165

In branch now Account details Next appointment

Suggested actions Activity history

Upcoming visitors


The banker is notified that Ray appears to have booked travel

recently and proactively offers Ray a fee free travel card


Ray and the banker start the conversation

about Ray’s business and begin exploring

his needs…


The banker activates the new services and

advises that these are available for Ray to use

immediately through any channel


The banker is prompted to offer Ray the

option of joining a membership program with

additional benefits for small businesses


A unique program that enables you access to unique services from Ashcroft and enables our customers to benefit more – more often.


While still in the branch, Ray’s is notified that his

Flexi-Loan is available within his mobile banking app


Ray feels enabled, with immediate access to his new services and is excited

about his getting his new business started, and is now relaxed about his

upcoming holiday.

The banker has provided Ray a personalized experience and a mutually

agreed plan to advance his business


The banker walks Ray through his

options and recommends the option

best suited to Ray

At the end of day, Tim the relationship

manager can assess his performance


Westpac Mobile Customer Conversation

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