Digital Banking: a trend or a necessity ?

6 May 2015

Global Social Statistics

TOTAL GLOBAL POPULATION

ACTIVE INTERNET

USERS

ACTIVE SOCIAL MEDIA USERS

UNIQUE ACTIVE MOBILE USERS

ACTIVE MOBILE SOCIAL

USERS

7.18 Billion URBAN POP 52%

2.5 Billion PENETRATION 41%

2.03 Billion PENETRATION 28%

3.61 Billion PENETRATION 50%

1.56 Billion PENETRATION 22%

Source: We are social Blog, Aug 2014

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Customer Behavior: Shift to Digital

1 – 2 Times per Year 5 – 6 Times per Year

3 – 5 Times per Month

7 – 10 Times per Month

20 – 30 Times per Month

Source: Disruption in Digital Banking, www.slideshare.com, Dec 2014

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Digital consumers represent a sizable population in most markets

2014 Digital-banking penetration*(2014)

“Digital consumers” represent more than 700 million customers across Asia

96% 96% 94% 93% 92% 83%

57% 44% 41% 36%

19% 18% 13%

*“Digital banking” penetration is defined as the number of users of internet or smartphone banking divided by total banking consumers in each country; only urban consumers are included“ SOURCE: McKinsey Asia Personal Financial Services Survey, 2014Digital

What is now important for a digital customer?

VP of experience design at Singapore-based OCBC Bank believes that the ‘beauty imperative’ in financial services will begin to differentiate offerings. She believes beauty is also important in designing financial channels and products.

Simplicity Clarity

Responsive design

Terminals Phone Banking

Branch Online

Banking

What Does Digital Stand for?

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Ana Botín, chairman at Santander, “The fact is, even young people like to go to a branch at least twice a year. That means you need quite a significant retail presence, which the tech companies don’t have,”

Lab Branch – “Learn About Banking” • Learning environment among digital self-service

technology • Remote advisor accessibility • Mobile device demos • Digital “avatar” welcoming customers

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Branch vs. Digital or Branch and Digital

Digital Technologies will not replace Branch but will definitely change it

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Strategic hot spots and important urban locations Limited product range for daily needs Modern self service devices Customer support in doing quick and simple transactions Multifunctional cash machines, but no cash desk Videoconference meeting room for advice on more complex range of products

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ERSTE Group - Service branch

Is the local market prepared for the digital disruption?

http://www.internetworldstats.com/eu/ro.htm, www.internetlivestats.com/internet-users/

7,8mil

280k

1,6mil

782k

187k

54% 71% 77%

61% 58% 52% 50% 46% 47% 48%

Overall Romania Urban Romania Bucharest-Ilfov West North - West South -East Centre South (Muntenia) South West(Oltenia)

North - East

Households internet penetration

Sources: National Institute of Statistics (Population access to information and communication technology in 2014)

54% household with internet access

70% household with internet access in the urban area

90% household with internet access from banked population

Online banking active users bellow 10%

Real challenge … how to move clients to digital channels

BCR Digital Banking

ecosystem

Internet Banking

Web Portal

Personal Finance

Manager

Self Service Terminals

Mobile Transactions

(USSD)

Personal Finance

Manager

(IOS/ Android)

eToken (IOS/

Android/ Windows)

Smartphone banking

(IOS/ Android)

Complete range & fully integrated digital

Real challenge … how to move clients online

Next Step in digital banking evolution: Consaltancy & Sales. PFM feature is providing financial assistance through an automated 360 degree overview of the financial status to our PI customers

PFM is a financial education tool available in Click24 or standalone as app for IOS & Android, helping customers to:

View spending automatically categorized by transaction destination;

Efficiently administrate their budget, setting monthly targets;

Benefit from an advanced automatic prediction module for their expenses;

Rapidly and intuitively see displayed in different types of graphics their personal expenses and incomes;

Have an overview on their financial status (what they spent their money on, how much money they have / borrowed);

Real challenge … how to move clients online

Invest in educating your clients

Educate bank personnel to better advise our customers