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Delivering on the PromiseBenchmarking Turkish Banks Performance:EMEA Retail Banking Study 2005
Richard Lowrie
Director Banking Strategy
SAP AG
December 15th, 2005Istanbul
Trends in Retail Banking
2
Agenda
Observations
Key Findings EFMA/SAP Retail Banking Study with focus on Turkey
A glimpse of 2010
Conclusion
3
Observations - Turkish Bank websites:
“The bank in your mind…at every step of the way”
“Our technology, your freedom!”
4
Business Drivers Today
PRODUCTIVITYDIFFERENTIATION
Sustainable competitive differentiation through process innovation
Speed of innovation and time-to-market
Increased productivity
Regulatory requirements
Outsourcing
Customer retention
5
Banking: From Differentiation to Productivity
PRODUCTIVITYDIFFERENTIATION
Courtesy to G. Moore’s “Living on the fault line”
INNOVATION STANDARD-IZATION
COMMODI-TIZATIONINVENTION
Mis
sion-
Cri
tica
lA
ctiv
itie
s
Enablin
gA
ctiv
itie
s
IT OutsourcingIT Outsourcing
Legacy-Legacy-
integrated,integrated,
Core Banking, Core Banking,
Back-Office Back-Office
systemssystems
Front EndFront End
MarketingMarketing
CORE CONTEXT
6
The Seamless Customer-Centric Banking Lifecycle
Sales& Offer
Forecasting & Marketing
Contract Closure
Service & Reporting
Customer- Centric Banking
Customer- Centric Banking
Reporting / AccountStatements:Customer
Helpdesk and Self Services
Acquisition and Cross-Selling
Customer Advisory andContract Closure
Forecasting &Analytics on Customer,
Financial Productsand Services Marketing and
Campaign management
1
2
3
4
5
6
Customer Operationsand Service
7
Actual Situation in Many Banks: Blocked Loop
Sales& Offer
Forecasting & Marketing
Contract Closure
Service & Reporting
Customer- Centric Banking
Customer- Centric Banking
Reporting / AccountStatements:Customer
Helpdesk and Self Services
Acquisition and Cross-Selling
Customer Advisory andContract Closure
Forecasting &Analytics on Customer,
Financial Productsand Services Marketing and
Campaign management
1
2
3
4
5
6
Customer Operationsand Service
Sales& Offer
Forecasting & Marketing
Contract Closure
Service & Reporting
Customer- Centric Banking
Customer- Centric Banking
8
IT Challenges In Meeting Business Needs
IT support
Business strategy
IT flexibilityInvestment protection
(CIO)
Implementation gap
Growth and agility (CEO)Compliance (CFO)
Vicious circle
Cost pressure
Quick fixes
Complexity
Increased TCO
Little scope for innovation and investment
in future-oriented IT architecture
State-of-the-art IT systems are not focused towards business needs
9
Research Objectives
There are many studies taking place in the banking marketplace but few, if any, focus on core banking capability within the context of Customer Management. The objectives of this ongoing research is to:
Conduct an assessment of the current state of the EMEA Banking industry in terms of Core Banking and Customer Relationship Management and provide a ‘state of the nation’ view.
Identify the strengths and gaps of EMEA banks in implementing state of the art "customer centric“ processes
10
Agenda
Observations
Key Findings EFMA/SAP Retail Banking Study with focus on Turkey
A glimpse of 2010
Conclusion
11
Participation by Top International Banks
Austria (1)Belgium (4)Belarus (4) Croatia (1)France (2)Georgia (1)Germany (3)Hungary (2)India (3)Ireland (1)Italy (5)Kazakhstan (1) Malaysia (1)Netherlands (1)Nigeria (1)Poland (1)Romania (3)Russia (1)Serbia (4)Slovenia (2)South Africa (3)Spain (2)Sweden (2)Switzerland (1)Turkey (6)UK (5)
Choice criteria: Large international Banks
Source: E
ME
A R
etail Banking S
tudy 2005
20%22%
28% 27%
3%
< 500' 500' - 1 mill. 1-5 mill. 5-10 mill. > 10 mill.
N = 61
12
People & Organisation (27-30)
Information Technology & Application Systems (Q31-33)
Business Intelligence & Controlling (Q7-12)
Strategy (Q5, 6)
Acquisition(Q15-17)
Advisory(Q18)
Processing (Q19-24)
Service(Q25, 26)
Product & Service
Development(Q13, 14)
Multi-Channel Customer Management
Banking Assessment Topography
Profile / Statistics: Q1-4
13
0
10
20
30
40
50
60
70
80
90
100
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61
Current and Future Ranking
The graph for the future ranking is getting flat largely i.e. the bank’s performance is expected to converge within the next three years.
Overall score per Bank [%]
Order of Banks (n=61)Current State Expected State (+3 Years)
Source: E
ME
A R
etail Banking S
tudy 2005
14
Efficiency Ratio
Q2: What is the current cost income ratio of the bank?
30%
23%
28%
11%8%
< 50 % 51 - 60 % 61 - 70 % 71 - 80 % > 80 %
N = 59
Q2: What is the expected improve of cost income ratio?
N = 59
5%
10%
27%
38%
20%
0%
1 to <3 %
3 to <5 %
5 - 10 %
> 10 %
Source: E
ME
A R
etail Banking S
tudy 2005
About one third of the surveyed banks in EMEA plan to improve their cost income ratio by 5 to 10% within the next three years.
15
14%
34% 34%
18%
6%
40%38%
16%
0%
20%
40% 40%
0%
50%
17%
33%
0-5% 6-10% 11-15% >15% 0-5% 6-10% 11-15% >15%
IT Investment
Q4: What percentage of your overall Retail Banking costs do you spend on information technology (ongoing & investments)?
Participating Turkish banks spent a higher percentage of their overall Retail banking costs for IT. Different from EMEA this trend is getting stronger.
N = 6
Current State Expected State (+3 Years)
EMEA
Source: EMEA Retail Banking Study 2005
N = 55
16
0%
20%
40%
60%
80%
100%Strategy
Business Intelligence & Controlling
Product & Service Development
Acquisition
AdvisoryProcessing
Service
People & Organisation
Information Technology & ApplicationSystems
Current State EMEA Future Expected State EMEA
Results per Section – Current & Future Expected State
Participating Turkish banks are ahead of the EMEA group concerning the current state as well as the future expectations.
Source: E
ME
A R
etail Banking S
tudy 2005
Current State Turkey
Future State Turkey
17
Primary Business Strategy - EMEA
Q5: What is your bank's primary business strategy?
Growth strategy Cost cutting strategy83%
17%
9%
43%48%
22%
33%
12%
0%
33%
Primarilydriven bygrowthstrategy
Externalgrowth bymerger &
acquisition
Newcustomer
acquisition
Cross-sellingproducts &services to
existingcustomers
Primarilydriven by cost
cuttingstrategy
Incrementalprocess
improvement
Broaderlarge-scalebusiness
process re-engineering
Head countreductions
Outsourcing/shared
services
Elimination ofunprofitablecustomers
N = 61
Source: E
ME
A R
etail Banking S
tudy 2005
Most banks in EMEA focus on a growth strategy - mainly achieved by cross selling to existing customers.
EMEA
18
Primary Business Strategy – Turkish Banks
Q5: What is your bank's primary business strategy?
Growth strategy Cost cutting strategy
83%
17%
0%
60%
40%
0% 0%
100%
0% 0%
Primarilydriven bygrowthstrategy
Externalgrowth bymerger &
acquisition
Newcustomer
acquisition
Cross-sellingproducts &services to
existingcustomers
Primarilydriven by cost
cuttingstrategy
Incrementalprocess
improvement
Broaderlarge-scalebusiness
process re-engineering
Head countreductions
Outsourcing/shared
services
Elimination ofunprofitablecustomers
N = 6
Source: E
ME
A R
etail Banking S
tudy 2005
Participating Turkish banks focus on growth strategy too, but mainly achieved through “New customer acquisition”.
19
Cross-selling Ratio in Retail Banking
Participating Turkish banks intend to increase the cross-selling ratio by one product per customer within the next three years.
20%
33%
2%
26%
18%
38%
0%
60%
20%
0%0% 0% 0%
83%
17%16% 15% 16%16%20%
Less than 2 2- 2.5 2.6-3 3.1-3.5 More than 3.5 Less than 2 2-2.5 2.6-3 3.1-3.5 More than 3.5
Source: EMEA Retail Banking Study 2005
N = 6
Current State Expected State (+3 Years)
EMEA
Q3: Typically how many of your products do your customers use?
N = 60
20
Strategic Value of IT
Q6: What is the strategic value added by your current IT systems?
10%
28%
41%
21%
0%2%
51%47%
0%
50%
17%
33%
0% 0%
33%
67%
Strategicdisadvantage
Constrains ourability to deliveron our strategic
promise
Sufficientlysupports our
businessstrategy
Strategiccompetitiveadvantage
Strategicdisadvantage
Constrains ourability to deliveron our strategic
promise
Sufficientlysupports our
businessstrategy
Strategiccompetitiveadvantage
N = 61
Current State Expected State (+3 Years)
Participating Turkish banks feel more constraint by the current IT systems but plan stronger improvement in comparison to EMEA banks.
N = 6
EMEA
Source: EMEA Retail Banking Study 2005
21
Business Intelligence & Controlling
EMEA Current State EMEA Future Expected State
0%
20%
40%
60%
80%
100%Strategy
Business Intelligence & Controlling
Product & Service Development
Acquisition
AdvisoryProcessing
Service
People & Organisation
Information Technology & ApplicationSystems
22
13%
54%
8%
49%
38%
0%
33% 33%
100%
25%
10%3%
33%
0%0%0%
None Partial Substantial Complete None Partial Substantial Complete
Customer Information Plan (CIP)
Participating Turkish banks are ahead of the EMEA group andstrongly commit to the implementation of a CIP
N = 6
Current State Expected State (+3 Years)
EMEA
Q8: Do you have a comprehensive and accessible Customer Information Plan covering information value; acquisition priorities;information management and usage?
N = 61
23
Customer Segment Planning
18% 17%
26%
8%2% 3%
41%44%
0%
17% 17%
33%
0% 0% 0%
83%
31%
10%
33%
17%
Product levelplans only
Customerplans butvalue not
considered
Partially Substantially Completely Product levelplans only
Customerplans butvalue not
considered
Partially Substantially Completely
Participating Turkish banks are slightly ahead of EMEA banks and plan to apply segment planning almost completely within the next three years
Source: EMEA Retail Banking Study 2005
N = 6
Current State Expected State (+3 Years)
EMEA
Q7: Do you create plans that explicitly define strategies for the customer segments you wish to acquire, those you wish to retain and those you wish to develop based on their estimated value to the bank?
N = 61
24
Transaction & Research Data Availability
11%
23%
34%
22%
10%
3% 2%5%
40%
50%
0%
33% 33% 34%
0%0% 0% 0%
50% 50%
Limited salestransaction data
only
Comprehensivetransactionaldata but no
research data
Gaps inresearch and/or
transactionaldata sets
Easy access toseparate
comprehensiveresearch &
transactionaldata sets
Easy access tocomprehensive
combinedtransaction &research data
Limited sales transaction data only
Comprehensivetransactionaldata but no
research data
Gaps inresearch and/or
transactionaldata sets
Easy access toseparate
comprehensiveresearch &
transactionaldata sets
Easy access tocomprehensive
combinedtransaction &research data
Improved availability of customer relevant data has a high relevancefor all banks in EMEA as well as in Turkey
Q9: Do you have easily accessible customer transaction data and attitude/satisfaction data?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 62
25
Customer Data Analysis
3%
31%
22%26%
2%5%
60%
0%
17%
33%
0% 0%
17%18%22%
11%
33%
17%
0%
83%
Customerdata notanalysed
Ad-hoc basicanalysis
Regular,structured
basicanalysis
Regular basicanalysis withad-hoc data
mining
Regular &consistentprocess of
data mining
Customerdata notanalysed
Ad-hoc basicanalysis
Regular,structured
basicanalysis
Regular basicanalysis withad-hoc data
mining
Regular &consistentprocess of
data mining
Regular Data Mining will become a common instrument for customer data analysis in the whole EMEA region
Source: EMEA Retail Banking Study 2005
N = 6
Current State Expected State (+3 Years)
EMEA
Q10: To what degree do you analyze or mine customer data?
N = 62
26
14%
29%
2%2% 2%
21%
44%
31%
83%
0% 0%0%
33% 33%
17%
34%
21%17%
0%
17%
Unsegmented& not alignedto moments
of truth
Segmentedbut not
aligned tomoments of
truth
Covers keymoments oftruth but notsegmented
For eachsegmentcoveringsome
moments oftruth
Fully for eachsegmentacross all
key momentsof truth
Unsegmented& not alignedto moments
of truth
Segmentedbut not
aligned tomoments of
truth
Covers keymoments oftruth but notsegmented
For eachsegmentcoveringsome
moments oftruth
Fully for eachsegmentacross all
key momentsof truth
Understanding Moments of Truth
Participating Turkish banks intend to catch up with regard to understanding the moments of truth
Q11: To what degree does your market research provide understanding of different customers' satisfaction at each moment of truth?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 62
27
18%
25% 23%
31%
48%
33%
50%
0%
17%
66%
16%18%
8%8%5%
17%
0%0%
17%
0%
No customermeasures
exist
Developmentunderway butno measures
yetimplemented
Top-levelmeasures
only
Top-levelmeasures
cascade tosome staff
REAPmeasures
used to drivethe business
No customermeasures
exist
Developmentunderway butno measures
yetimplemented
Top-levelmeasures
only
Top-levelmeasures
cascade tosome staff
REAPmeasures
used to drivethe business
REAP Measures
A cascade of customer management relevant objectives into the organization is desired by the majority of the banks
Source: EMEA Retail Banking Study 2005
Q12: Do you have a clear top-level set of measures that define Customer Management performance for your organization in terms Retention, Efficiency, Acquisition and Penetration (REAP) that cascade to form objectives for departments and individual employees
N = 6
Current State Expected State (+3 Years)
EMEA
N = 61
28
Product & Service Development
0%
20%
40%
60%
80%
100%Strategy
Business Intelligence & Controlling
Product & Service Development
Acquisition
AdvisoryProcessing
Service
People & Organisation
Information Technology & ApplicationSystems
EMEA Current State EMEA Future Expected State
29
Customer propositions
67%
33%
0%0%0% 0%
17%
50%
17%17%
64%
3%5%2%
18%
31%31%
12%8%
26%
Completely tocreate
differentiatedproduct &service
propositions
To createdifferentiated
product &undifferentiated
servicepropositions
To createdifferentiated
productpropositions
only
To createundifferentiated
productpropositions
only
Customer needsnot validated
Completely tocreate
differentiatedproduct &service
propositions
To createdifferentiated
product &undifferentiated
servicepropositions
To createdifferentiated
productpropositions
only
To createundifferentiated
productpropositions
only
Customer needsnot validated
There is a strong trend towards the creation of differentiated customer propositions based on validated customer needs.
Source: EMEA Retail Banking Study 2005
N =6
Current State Expected State (+3 Years)
EMEA
Q13: To what degree are validated customer needs used to create differentiated propositions for each customer segment?
N = 61
30
Banks Infrastructure Capability
10%
24%
47%
6%2%
8%
39% 38%
0%
50%
17%
0% 0% 0%
50% 50%
13%13%16%17%
Little or nocustomisation
Capabilitybeeing
developed
Somecustomisation
only
Full capabilitybut mixed usage
Full capabilityused
consistently
Little or nocustomisation
Capabilitybeeing
developed
Somecustomisation
only
Full capabilitybut mixed usage
Full capabilityused
consistently
Participating Turkish banks seem slightly behind EMEA banks but they intend to catch up within the next three years.
Q14: To what extent can the bank's infrastructure support the efficient creation of customer relevant product bundles?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 62
31
Acquisition
0%
20%
40%
60%
80%
100%Strategy
Business Intelligence & Controlling
Product & Service Development
Acquisition
AdvisoryProcessing
Service
People & Organisation
Information Technology & ApplicationSystems
EMEA Current State EMEA Future Expected State
32
Targeting of Prospects
8%
15%
47%
24%
6%2% 3%
11%
40%44%
0%
50%
33%
17%
0%0% 0%
17%
50%
33%
Little/nocapability totarget non-customers
Capability beingdeveloped
Some capabilityexists
Comprehensive- but onlysometimes
alw ays base onsegmented
profiles of non-customers
Comprehensive- alw ays baseon segmentedprofiles of non-
customers
Little/nocapability totarget non-customers
Capability beingdeveloped
Some capabilityexists
Comprehensive- but onlysometimes
alw ays base onsegmented
profiles of non-customers
Comprehensive- alw ays baseon segmentedprofiles of non-
customers
Participating Turkish banks are about to develop the required capabilities and intend to get closer to the EMEA sample
Source: EMEA Retail Banking Study 2005
Q15: What ability does your bank have to generate campaigns and target these at the customers you wish to acquire?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 62
33
18%
31% 31%
20%
7% 8%
20%
65%
17%
0%
50%
33%
0% 0%
17%
83%
More than 12weeks
8-12 weeks 4-8 weeks Less than 4weeks
More than 12weeks
8-12 weeks 4-8 weeks Less than 4weeks
Campaign development timescale
Participating Turkish banks as well follow the trend to target a campaign development timescale of less than 4 weeks
Source: EMEA Retail Banking Study 2005
Q16: How long does it take to deliver a major TIME CRITICAL direct marketing campaign?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 61
34
Leveraging IT on Inbound Contacts
8%
18%
47%
2%0%
7% 8%
29%
56%
0%
17%
50%
0% 0% 0%
50% 50%
25%
16%17%
Little or nocapability
Capabilitybeing
developed
Somecapability
only
Full capabilitybut mixed
usage
Full capabilityused
consistently
Little or nocapability
Capabilitybeing
developed
Somecapability
only
Full capabilitybut mixed
usage
Full capabilityused
consistently
The expectation is to better exploit the sales potential of inbound contacts within the next three years in the whole EMEA region
Source: EMEA Retail Banking Study 2005
Q17: To what extent do front line staff have Information Technology support to initiate appropriate sales opportunities versus simply responding tocustomer requests?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 61
35
Advisory
0%
20%
40%
60%
80%
100%Strategy
Business Intelligence & Controlling
Product & Service Development
Acquisition
AdvisoryProcessing
Service
People & Organisation
Information Technology & ApplicationSystems
EMEA Current State EMEA Future Expected State
36
Product/Service Expertise
6%11%
23%
52%
8%2% 3% 2%
53%
0% 0%
33%
50%
17%
0% 0% 0% 0%
100%
40%
Not at all Insufficientautomation
Inconsistentautomation
Partiallyautomated
Fullyautomated
Not at all Insufficientautomation
Inconsistentautomation
Partiallyautomated
Fullyautomated
Participating Turkish banks fully commit to automated support for front line employees as much as possible
Q18: To what extent do your front line employees have the automated tools to provide personalized service or advice across all Retail Banking products?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 62
37
Processing
0%
20%
40%
60%
80%
100%Strategy
Business Intelligence & Controlling
Product & Service Development
Acquisition
AdvisoryProcessing
Service
People & Organisation
Information Technology & ApplicationSystems
EMEA Current State EMEA Future Expected State
38
Timeliness in Delivering Account Products
11%
3%
19%
39%
28%
3%0%
5%
21%
71%
0% 0%
17%
33%
50%
0% 0% 0%
17%
83%
Variessignificantlyby channel
Over 5 daysin all cases
2-3 days onaverage
Within 24hours
irrespective ofchannel
Immediately(real time) in
multi-channels
Variessignificantlyby channel
Over 5 daysin all cases
2-3 days onaverage
Within 24hours
irrespective ofchannel
Immediately(real time) in
multi-channels
Real time account initiation will be the future standard for whole EMEA
Source: EMEA Retail Banking Study 2005
Q19: What is your ability to deliver current & deposit or savings account products from the time of initial customer inquiry to account initiation?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 62
39
Timeliness in Delivering Mortgage Products
18%
11%
3%5%
34%
14%
0%
17%
83%
0% 0%0% 0%
67%
0%
26%
42%
21%26%
33%
Variessignificantlyby channel
Over 5 daysin all cases
2-3 days onaverage
Within 24hours
irrespective ofchannel
Immediately(real time) in
multi-channels
Variessignificantlyby channel
Over 5 daysin all cases
2-3 days onaverage
Within 24hours
irrespective ofchannel
Immediately(real time) in
multi-channels
Significant time to approval reductions aimed within thenext three years in EMEA in general
Source: EMEA Retail Banking Study 2005
Q20: What is your ability to deliver mortgage products from the time of initial customer inquiry to approval?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 62
40
Timeliness in delivering Credit Card products
8%
44%
12%5%5%
47%
18%
0%
83%
17%
0% 0%0%
33%
50%
0%
31%
10%
20% 17%
Variessignificantlyby channel
Over 5 daysin all cases
2-3 days onaverage
Within 24hours
irrespective ofchannel
Immediately(real time) in
multi-channels
Variessignificantlyby channel
Over 5 daysin all cases
2-3 days onaverage
Within 24hours
irrespective ofchannel
Immediately(real time) in
multi-channels
Participating Turkish banks do not intend to offer credit card productsin real time, but almost a fifth of the EMEA banks plans to do
Source: EMEA Retail Banking Study 2005
Q21: What is your ability to deliver Credit Card products from the time of initial customer enquiry to approval?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 61
41
7%15%
54%
2%7%
17%
74%
0%
33%
17%
50%
0% 0% 0%
100%
24%
No commonprocess & no
plans to develop
Recognise need& implementation
underway
Yes - Euro Zoneonly
Yes - allcountries
No commonprocess & no
plans to develop
Recognise need& implementation
underway
Yes - Euro Zoneonly
Yes - allcountries
Payment handling processes
The results for participating Turkish banks are quite similar to the EMEA group
Source: EMEA Retail Banking Study 2005
Q22: Does your organization have common processes for handling domestic & international payments?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 59
42
Exception Handling for Current Accounts
8%
17%
39%
20%16%
2% 3%
28%
42%
0%
67%
16%
0%0% 0%
33%
50%
25%
17% 17%
Processtotally
manual
Largelymanual
intervention
Someautomation &
overridecapability
Fullyautomatedbut mixed
usage
Fullyautomated &
usedconsistently
Processtotally
manual
Largelymanual
intervention
Someautomation &
overridecapability
Fullyautomatedbut mixed
usage
Fullyautomated &
usedconsistently
Banks expect significant improvements in closing enquiries at first contact
Source: EMEA Retail Banking Study 2005
Q23: How automated is the process for handling exceptions for Current Accounts?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 61
43
8%
20%
44%
15% 13%
2%5%
38%33%
0% 0%
83%
18%
0%0% 0%
33%
50%
22%17%
Processtotally
manual
Largelymanual
intervention
Someautomation &
overridecapability
Fullyautomatedbut mixed
usage
Fullyautomated &
usedconsistently
Processtotally
manual
Largelymanual
intervention
Someautomation &
overridecapability
Fullyautomatedbut mixed
usage
Fullyautomated &
usedconsistently
Exception Handling for Lines of Credit
Half of the participating Turkish banks intend to consistently use fully automated support in comparison to only one third of the EMEA group
Source: EMEA Retail Banking Study 2005
Q24: How automated is the process for handling exceptions for Lines of Credit?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 60
44
Service
0%
20%
40%
60%
80%
100%Strategy
Business Intelligence & Controlling
Product & Service Development
Acquisition
AdvisoryProcessing
Service
People & Organisation
Information Technology & ApplicationSystems
EMEA Current State EMEA Future Expected State
45
11%16%
25%
33%
15%
2%
8%
47%
0% 0%
50% 50%
0%0% 0% 0%
67%
33%28%
15%
None orhardly any
Less than25%
25-50% 50-80% Over 80% None orhardly any
Less than25%
25-50% 50-80% Over 80%
Handling Customer Enquiries
Participating Turkish banks mainly target at a closing rate between 50–80% while almost half of the EMEA banks plan a rate >80%
Source: EMEA Retail Banking Study 2005
Q25: What proportion of customer enquiries, transactions and complaints do your call centre/banking help desk handle & close at first contact?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 61
46
6%
24% 23%29%
18%
0%
8%
56%
0%
16% 17%
50%
0% 0% 0%
83%
23%
13%17% 17%
No integratedaccountstatus visible
Someproducts/ services insome channels
All products/ services in
some channels
Someproducts/
services in all channels
Yes - for allproducts/
services in allchannels
No integratedaccountstatus visible
Someproducts/ services in
somechannels
All products/ services in
somechannels
Someproducts/
services in allchannels
Yes - for allproducts/ services in all
channels
Real Time Customer View
Participating Turkish banks are ahead of the EMEA banks with regardto real time and channel independent information delivery
Q26: To what degree can customers access a real time, channelindependent view of their portfolio?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 62
47
People & Organisation
0%
20%
40%
60%
80%
100%Strategy
Business Intelligence & Controlling
Product & Service Development
Acquisition
AdvisoryProcessing
Service
People & Organisation
Information Technology & ApplicationSystems
EMEA Current State EMEA Future Expected State
48
Q27: What is the predominant organization model for your retail institution?
11%
26%
5%
37%
21%
2% 3%
50%
32%
0%
17% 17%
33% 33%
0% 0% 0% 0%
100%
13%
Pre- dominantly by Product
Groups
Mix of Product
Groups &Channels
Pre- dominantly by Channel
Mix of Customer
Segments &Channels
Pre- dominantly by CustomerSegments
Pre- dominantly by Product
Groups
Mix of Product
Groups &Channels
Pre- dominantly by Channel
Mix ofCustomer
Segments &Channels
Pre- dominantly by CustomerSegments
Operating Model
Participating Turkish banks strongly commit to apply an organisation model based on customer segments within the next three years
Source: EMEA Retail Banking Study 2005
N = 6
Current State Expected State (+3 Years)
EMEA
N = 62
49
10%
35%
27%
13% 15%
0%
8%
22%
0%
33% 33%
0% 0%
24%
46%
17%17% 16%17%
67%
Known issueswith functionalsilo structure
Relies on co-operation offunctional
heads
Crossfunctional co-
operationsupported
with sharedobjectives/incentives
Crossfunctional
middlemanagement
owner ofCustomer
Management
Crossfunctionalowner of
CustomerManagementat board level
Known issueswith functionalsilo structure
Relies on co-operation offunctional
heads
Crossfunctional co-
operationsupported
with sharedobjectives/incentives
Crossfunctional
middlemanagement
owner ofCustomer
Management
Crossfunctionalowner of
CustomerManagementat board level
Organisation Support for Customer Management
The majority of banks in EMEA intend to support the Customer Management approach by cross functional middle management topic owner
Source: EMEA Retail Banking Study 2005
Q28: To what degree does the organizational structure support the implementation of Customer Management strategy?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 60
50
8%
37%33%
15%
7%4% 5%
39%37%
17%
33% 33%
17%
0%0% 0%
33%
50%
15%17%
CustomerManagementcompetency
requirementsnot identified
Competencyrequirements
beingidentified
Competencyrequirements
identified &implemen-
tation started
Identified &implemented
for allcustomer
facing roles
Identified &implementedin all relevant
functions
CustomerManagementcompetency
requirementsnot identified
Competencyrequirements
beingidentified
Competencyrequirements
identified &implemen-
tation started
Identified &implemented
for allcustomer
facing roles
Identified &implementedin all relevant
functions
Customer Management Competencies
Participating Turkish banks have higher ambitions to close the gap between customer propositions and job competencies within three years
Source: EMEA Retail Banking Study 2005
Q29: To what degree are job competencies consistent with delivering customer propositions?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 60
51
32% 32%
24%
7% 5%0%
19%
27% 29%25%
17%
50%
33%
0% 0%0% 0%
17%
83%
0%
Only formallyidentif ied a few
CustomerManagementprocesses
All processesidentif ied - some
SLAs beingimplemented
SLAsimplemented for
all keyprocesses
All processesmeasured
against SLAs
The regularmeasurement of
all processesagainst SLAsused to drive
continualimprovement
Only formallyidentif ied a few
CustomerManagementprocesses
All processesidentif ied - some
SLAs beingimplemented
SLAsimplemented for
all keyprocesses
All processesmeasured
against SLAs
The regularmeasurement of
all processesagainst SLAsused to drive
continualimprovement
Customer Management Processes
Participating Turkish banks do not plan regular measurements against SLAs, while a quarter of the EMEA group is planning that step
Source: EMEA Retail Banking Study 2005
Q30: To what degree are customer based processes identified & managed?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 62
52
Information Technology & Application Systems
0%
20%
40%
60%
80%
100%Strategy
Business Intelligence & Controlling
Product & Service Development
Acquisition
AdvisoryProcessing
Service
People & Organisation
Information Technology & ApplicationSystems
EMEA Current State EMEA Future Expected State
53
Q31: How would you characterize your current infrastructure for Core Banking?
IT Landscape
11%
27%
55%
7%
0%2%
30%
5%
17%
67%
0% 0%0%
50%
0%
47%
16% 16%
33%
17%
Completelydeveloped in-
house
Pre- dominantly
developed in-house
Mixed in-house
development& standardsoftware
Pre- dominantlystandardsoftware
Completelystandardsoftware
Completelydeveloped in-
house
Pre- dominantly
developed in-house
Mixed in-house
development& standardsoftware
Pre- dominantlystandardsoftware
Completelystandardsoftware
There is a clear trend towards standard software in EMEA which is significantly stronger for the participating Turkish banks
Source: EMEA Retail Banking Study 2005
N = 6
Current State Expected State (+3 Years)
EMEA
N = 62
54
Customer Data Capture
7%13%
40%
11%
0% 2%
55%
0%
17% 17%
60%
16%
0% 0% 0% 0%
100%
29%
13%
30%
Little or nocapability
Capabilitybeing
developed
Somecapability
only
Fullcapability butmixed usage
Fullcapability
usedconsistently
Little or nocapability
Capabilitybeing
developed
Somecapability
only
Fullcapability butmixed usage
Fullcapability
usedconsistently
Participating Turkish banks are ahead of the EMEA group significantly and intend to improve their position to the maximum extent
Source: EMEA Retail Banking Study 2005
Q32: How capable are your IT systems in the collection, storage and effective retrieval of customer data?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 62
55
Customer Information Updating
15%
29%
16%
24%
16%
2% 3%
34%
48%
0%
17% 17%
33% 33%
0% 0% 0%
83%
13%17%
Greater than1 day for
somechannels
24 hours onaverage
Within hours- all channels
Real time -most
channels
Real time -all channels
Greater than1 day for
somechannels
24 hours onaverage
Within hours- all channels
Real time -most
channels
Real time -all channels
Participating Turkish banks are ahead of the EMEA group and intend to strongly improve their position further
Source: EMEA Retail Banking Study 2005
Q33: How promptly is customer data or information updated across all channels?
N = 6
Current State Expected State (+3 Years)
EMEA
N = 62
56
Agenda
Observations
Key Findings EFMA/SAP Retail Banking Study with focus on Turkey
A glimpse of 2010
Conclusion
57
The EIU-SAP Survey: Business 2010
Telephone and online survey, conducted in November-December 2004
577 C-level executives (46%) and senior managers (54%)
50% from Europe, 36% from APAC, 14% from the Americas
Mix of small/mid-size & large enterprises; 60% with >$350m in revenue
Part of a global survey of 4,018 executives in 20+ sectors
Survey complemented by interviews with selected executives
58
Consolidation will force financial services providers to seek new ways to compete with larger rivals
The ability to adapt strategy and business models quickly will be a critical source of competitive advantage
Firms will focus increasingly on speed of innovation and customer retention to create long-term value
IT will be integral to firms’ ability to boost competitive advantage, not just cost efficiency
In 2010:
The Industry’s View on Future Business Needs
59
How the Role of IT will Change
IT is viewed as central to organisations’ future ability to adapt business models, and increasingly as a source of competitive advantage
84% of financial industry executives view IT as critical to firms’ ability to change how they operate over the next five years
59% view IT as becoming more of a competitive tool than simply a driver of cost efficiency; a substantial majority of APAC and US executives (65% and 61%, respectively) hold this view, while European respondents are more equivocal (53%)
Do you agree: “Technology will be critical to organisations’ ability to adapt business model and implement strategy?”
Yes84%
Don't know5%
No11%
60
How the role of IT will Change – Delivering on the Customer Service Promise
Within the financial services firm, IT’s role will be most critical in helping to improve customer knowledge and servicing
The areas of business in which IT will be most critical in 2010 (Top three responses)
1. Getting me the right information at the right time (63%)
2. Ensuring access to information anywhere (22%)
3. Getting instant alerts on things going wrong (15%)
1. Getting me the right information at the right time (63%)
2. Ensuring access to information anywhere (22%)
3. Getting instant alerts on things going wrong (15%)
What executives feel IT should improve upon most to help them make decisionsWhat executives feel IT should improve upon most to help them make decisions
14%
14%
14%
17%
27%
28%
30%
40%
71%
Corporate security
Managing the workplace
Partner & supplier relationships
Team-based working
Sales and marketing
Distribution channels
Finance
New product/service development
Customer relationships/ customer service
61
Agenda
Observations
Key Findings EFMA/SAP Retail Banking Study with focus on Turkey
A glimpse of 2010
Conclusion
62
Our Vision
63
Contacts
Kay PatzwaldSenior Business ConsultantSAP Business Consulting EMEA
SAP Deutschland AG & Co. KG
T +49-6227-7-47052M +49-160-90822957E [email protected]
If you require further information please contact:
Richard LowrieDirector Banking StrategyIBU Banking
SAP AG
T +44 208 917-6708M +44 7966-975708E [email protected]