australian business & michael hawker · extend the enterprise and create new businesses 4...

UBS W

a rbu rg Confere nc e

UBS W


Michael HawkerMichael HawkerGroup Executive

Australian Business &Personal Banking

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UBS W

arbu rg Confere nc e

UBS W


Agenda• Strategic context• Customer acquisition• Market influences• Building blocks• Differentiation - it’s in the execution• Measurement of success• Sources of future growth

Extracting value through cross-Extracting value through cross-sellingselling

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UBS W


1 Organise around where & how we createvalue

2 Optimise the ‘old’ production functions

3 Extend the enterprise and create newbusinesses

4 Deepen & broaden customer relationships

5 Build the capabilities & culture to succeed

5-Point strategic plan5-Point strategic plan

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UBS W


Corporate strategyCorporate strategy

Capture the significant valueembedded in our franchise through:

- a customer centric focus,

- delivering individualised financialsolutions,

- via a fully e-enabled, multi-channelplatform.

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UBS W


Aligned to customer needsAligned to customer needs

PrivateBanking

PriorityBanking

Personal MiddleMarkets

BusinessDirect

AustralianBusiness & Personal Banking

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UBS W


• Challenge Bank - December 1995~ 400,000 customers

• Trust Bank, NZ - May 1996~ 850,000 customers

• Bank of Melbourne - November1997~ 1.1 million customers

Customer acquisitionCustomer acquisition

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• The integration task is nowcomplete

• Westpac has over 7.5 millioncustomers in Australia, NewZealand and the Pacific Region

• The focus today is on the 4.5million Australian consumercustomers

Customer baseCustomer base

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UBS W


“Up to 40% of ourcustomers

are still havingmost of their financial needsmet by our competitors…”

David MorganManaging Director & CEO1999 Annual Report

Competitive realityCompetitive reality

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Customer needs and behaviourCustomer needs and behaviourchangingchanging

• Customers are bewildered bychoices

• They are generally time ‘poor’• Are looking for clarity,‘leadership’, &• A trusted adviser, who values as well

as providing value• Operating in a 24/7 world• Looking for ‘wealth creation’

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Customer in controlCustomer in control

• The changing face of competitionmeans we must be better atunderstanding- customer’s financial goals- drivers of customer value

• Focal point is in providing financialsolutions

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Our challengeOur challenge

• To hold customers

- while they have the ability to shopworldwide

- when they can end a bankingrelationship with just a click of abutton

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Five fundamental building blocksFive fundamental building blocksunderpin wealth creationunderpin wealth creation

TRANSACTIONS

LOANS

ADVICE

INVESTMENTS

RISKMANAGEMENT

- cross-selling is the- cross-selling is theprocess of drawingprocess of drawing

on the moston the mostappropriate buildingappropriate building

blocks to meetblocks to meet customer customer

needs needs

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UBS W


From our perspective housingFrom our perspective housingloans are a cornerstone toloans are a cornerstone tomaximising valuemaximising value• Westpac housing loans

- Approx $50 billion of possible $255 billion- Grew 16.7% in Australia in 12 mos to 31/3- ‘W’ market share new lending - owner

occupied 26.7%* of major banks, 22.4%*all lenders

- An ‘anchor’ product in terms of customerretention and cross selling

* APRA data adjusted for securitisation

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From the customers’ perspectiveFrom the customers’ perspective

• Housing loans decision is

- difficult and emotional- often the biggest single investment most

will make- difficult to compare loans, pricing and

benefits

• Most prefer to have face-to-face/personalcontact at least at the ‘decision’ phase- a key cross sell opportunity point

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ValueMeasurement

Cultural &behavioural

changeTeamwork &Incentives

Salesprocesses

Informationtools

Products &packagingLead referral

Contactmanagement

So what?...So what?...

The realdifferentiationis in

the execution

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Cultural changeCultural change

• One goal - double the number ofvaluable customers

• Communication, communication,communication

• Happy staff leads to happycustomers, leads to happyshareholders

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Behavioural changeBehavioural change

• From reactive (product based) topro-active (needs based)- closer management structure- customer analytics behavioural training- opportunity spotting- lateral thinking- use of specialists- accreditation

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Information (Information (CRMCRM) tools) tools

• Seibel Technology & LotusNotes

• Priority customer recognitionat all touch points

• Customer analytics• ‘Next’ sales program• Message enablement• Automated workflow capability

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Information management -Information management -targeted tacticstargeted tactics

• The right CRM tools will deliver

- the right value proposition- to the right customer- at the right time- through all/any touch points

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Products and packagingProducts and packaging

• Extensive and flexible awardwinning product range

• Targeted packages eg.‘Professional’ package

• New investment products• Better product performance• Leveraging Olympic sponsorship

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Product fulfilmentProduct fulfilment

• Self-service/straight throughprocessing

• On time, first time, every time

• 7/24

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Sales processesSales processes

• Review programs to grow andretain valuable customers

• Re-engineering/innovation• Web enablement• Multi-channel strategy

-24/7, face-to-face/phone/onlinebanking & broking

• Alliances & partnerships eg. f2

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Contact ManagementContact Management

• Better coordination andconsistency of priority customerexperience across channels- customer life stage contact plans- increased effectiveness/alignment of

market and sales approaches

• Standardised reporting• Utilise refined contact lists

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Lead referralLead referral

• Referral process powerhouse- from all ‘W’ outlets- specific targets- high conversion rates

• Use of third party originators- follow-up process to capture opportunities

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Value measurementValue measurement• Recognition and reward

- ‘Thank you’ benefits program - newcustomers

- Priority benefits program

• Focus on improving customersatisfaction - throughout thelifecycle

• Internally by customer, productand segment - ‘CUBE’

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Teamwork & incentivesTeamwork & incentives

• Aligned sales forces

• Joint responsibility

• Economic value basedincentives

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Measurements of successMeasurements of success

• Volume• Market share• Valuable customers• Portfolio dynamics• Economic profit

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43%

37%

11%

25%

17%

0% 10% 20% 30% 40% 50%

General insurance sales

Life risk sales

Funds under management

Credit card outstandings*

Home mortgages*

Volume growth in core productsVolume growth in core products

Growth(%) 1H 1999 to 1H 2000

* Australia only

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Total New LendingOwner Occupied Housing

Strong core product market shareStrong core product market shareStrong core product market share

%

1416182022242628

Apr-99 Jun-99 Aug-99 Oct-99 Dec-99 Feb-00

Banks All lenders

%

14

16

18

20

22

24

Oct-98 Feb-99 Jun-99 Oct-99 Feb-00

Market Share: Credit CardsTotal amount Spent

1 in every 4

1 in every 5

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Priority customer focus -Priority customer focus -numbers up 20% since Sept 1999numbers up 20% since Sept 1999

000’s

Num

ber o

f Prio

rity

Cus

tom

ers

350

450

550

650

750

850

Sep-98 Mar-99 Sep-99 Mar-00 Sep-00

Target Actual

Target to doublepriority customers

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Customer value and channel migrationCustomer value and channel migrationstrategies are deliveringstrategies are delivering

1500

1600

1700

1800

1900

2000

2100

2200

A-99 M-99 J-99 J-99 A-99 S-99 O-99 N-99 D-99 J-00 F-00 M-00

Consumer - Low valuecustomers

1.5

1.6

1.7

1.8

1.9

2

A-99 M-99 J-99 J-99 A-99 S-99 O-99 N-99 D-99 J-00 F-00 M-002.4

2.5

2.5

2.6

2.6

2.7

All consumer (LHS) Priority (RHS)

Consumer - Products per customer

(000

s)

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0

5

10

15

20

25

Customer Value Segments

% in segment June 1999 % in segment Feb 2000

Positive shift in consumerPositive shift in consumercustomer * valuecustomer * value

Low High

%

Perc

enta

ge in

Seg

men

t

Value Shift

*Australian consumer customers

Value diluting Value creating

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Economic profit *Economic profit *

281

397

314 272333

493

0

100

200

300

400

500

1H99 2H99 1H00

ARFS Westpac Group

$M

* Excess of adjusted net profit over min. required rate of return on equity invested.

Impacted by non franking of dividend

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Transactionaccount or

Credit card

Transactionaccount

Transactionaccount

Transactionaccount

Housingloan or

Credit card

Housingloan

Housingloan

Credit card

Credit card

Investments/risk

products

Singleproduct

Twoproducts

Threeproducts

Fourproducts

Only 40% of high value customershave more than 2 products...Only 40% of high value customersOnly 40% of high value customershave more than 2 products...have more than 2 products...

30%

30%

30%10%

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• By product- Loans - housing

- Transactions -credit cards

- Advice - FNAs

- Investments

- Risk management - General insurance - Life insurance

Sources of future growthSources of future growth

• By segment

- Private banking

- Priority customers

- Business banking -middle marketcustomers

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“If the 40%* of customers whohave only one product with us,decided to entrust us with just

one more piece of theirbusiness …

…this could add around $500million of revenue each year.”

David MorganManaging Director & CEO1999 Annual Report

Cross selling imperativeCross selling imperative

* All Australian consumer customers

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UBS W


UBS W


Michael HawkerMichael HawkerGroup Executive

Australian Business &Personal Banking

australian business & michael hawker · extend the enterprise and create new businesses 4...

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