on-line banking - danske bank group
TRANSCRIPT
Capital Market Day, Copenhagen, 29 June 2000
On-line BankingJohn Andersen
Senior Vice President e-Finance
Den Danske Bank
Agenda
Ø Current status
Ø Discussion of market challenges
Ø Danske Bank Initiatives
Den Danske Bank
Internet penetration (kommentar fra TDK)
0%10%20%30%40%50%60%70%80%90%
100%
Sweden Finland Norway DenmarkSource: Salomon Smith Barney
Does not use PC
Uses PC but not theInternet
Internet user
Internet shopper
Den Danske Bank
Customer status
Danske PC 64.500 Danske Netbank or both 129.600 Private customer agreements in Denmark 194.100 Customers covered by powers of attorney 62.900 Total private on-line customers in Denmark 257.000 Agreements in Norway 25.600 Agreements in Sweden 23.000 Total nordic private customers on-line 305.600
Business On-line agreements 11.700 Corporate customers covered by Business-Online agreements 12.600 Danske Netbank, corporate 25.000 Online corporate customers in Sweden 7.000 Online corporate customers in Norway 5.000 Total corporate customers online 61.300
On-line customers total 366.900
Den Danske Bank
Daily expansion of on-line customer base
New Danske bank on-line customers
0
200
400
600
800
1000
1200
1400
1600
1. maj 00 15. maj 00 29. maj 00 12. jun 00
Den Danske Bank
Development in distribution of agreements
Sale of pc-bank product discontinued in may 2000. PC-Bank expected to be closed in spring 2001
0%
20%
40%
60%
80%
100%
maj 99 jul 99 sep 99 nov 99 jan 00 mar 00 maj 00
Danske NetBank Danske PC
Den Danske Bank
Danske NetBank coverage in the privatecustomer segments
Measured as number of agreements to households. If alternatively measured by number of online customers includingpowers of attorney to the number of private customers (1,917,000) the coverage amounts to 13.4%
25,62%
7,20%
9,86%
1,09%
9,80%
12,80%
18,55%
0,00%
5,00%
10,00%
15,00%
20,00%
25,00%
30,00%
High value customers
Other core customers
Age below 25
Customers with lowtransaction volume
Avg. coverage DK
Avg. coverage NO
Avg. coverage SE
Den Danske Bank
Distribution of households
0
100.000
200.000
300.000
400.000
500.000
600.000
High valuecustomers
Other corecustomers
Age below 25 Customers withlow transaction
volume
Den Danske Bank
Ø Transfers of money to own accounts, other DDBaccounts and accounts in other domestic banks
Ø Bill paymentØ Export of account data to others software productsØ Loan, mortgage and credit card applicationsØ On-line ordering of products (insurance, new account
etc.)Ø STP trading of stocks, bonds and mutual funds on
Copenhagen and Stockholm ExchangesØ Currency trading for corporate clientsØ Order receival and confirmation for trading of shares
on 12 other exchangesØ Participation in IPOsØ Calculation of loan costs, life assurance need
etc.
Functions in on-line bank
Den Danske Bank
36%
31%
4%
4%
14%
3%8%
Standing orders/ PBS
Danske Bank TeleService
Telephone Banking, DanskeNetBank/ Danske PC
Manual
Cheques
Danske Giro
Payment forms
Transactions no accounts belonging tocorporate customers
Den Danske Bank
2%1%
71%
4%
6%
2%
14% Standing orders/ PBS
Telephone Banking, DanskeNetBank/ Danske PC
Manual
Cheques
ATM's
Danske Giro
Payment forms
Transactions no accounts belonging toprivate customers
Den Danske Bank
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
January February March April May
Retailbank total
Customers withinvestmentadvisor
Other customers
Share of security trading on-line
Den Danske Bank
Status - Private customersØ Retail online products are currently - apart from
investments - focused on payments services. Manuelpayments including checks only account for 9% ofpayments in Denmark. The highly automated traditionalsystem has delayed penetration of Internet banking
Ø On-line credit card payments are in Denmark today hand-led through PBS. Danske Bank has acquired the rights toAmerican Express in Denmark in order to build expertisebefore a more competitive structure emerges on the creditcard market
Ø The Financial Supervisory Authority is still studying ourrequest regarding ownership of a B-t-C exchange(focused on DDB customers)
Den Danske Bank
Status website / redesign
Ø First phase of redesign concluded 1 May. Mainsystems redesigned by 1 September in accordancewith name change
Ø DDB has despite the not yet concluded redesignachieved good rankings in last to Danish websitesurveys. 1st place among 300 top Danish corporates(Proffice) and 2nd place among Danish banks(Strand Consult)
Den Danske Bank
Status - Investment services
Ø For customers without an assigned investmentadvisor online trading today account for a significantshare (25%) of total trading
Ø Customers with investment advisors still prefer totrade through retail trading desks. This may of coursechange if the pricing structure is changed
Ø The newly introduced corporate product - DanskeMarkets - including securities and forex trading havebeen met with very high interest from clients
Ø DDB has not yet experienced any noticeable loss ofcustomers to discount brokers.
Den Danske Bank
Business to business / cash management
Ø Den Danske Bank´s branches in Denmark, Sweden,Norway, Finland, Germany and the UK are fullyintegrated with the Banks central computer systemsfor real time processing.
Ø The product includes liquidity overview,(MultiCurrency) Interest Netting, Cash Pool andformat translator.
Ø Offer virtually all types of local payments. Localcash management is also available
Den Danske Bank
Branches in Den Danske BankDenmark Sweden Norway Finland United
KingdomGermany USA
Danske Bankestablished inthe country
1871 1984 1995 1995 1983 1985 1983
Branch Yes Yes. AlsoÖstgöta En-skildaBank network,39 branches
Yes, AlsoFokus BankNetwork,70 branches
Yes Yes Yes Yes
Domesticpayments
All types All types All types Virtuallyall types
All types All types Fedwire andCHIPS
Interest Nettingand Cash Pool
Yes Yes Yes Yes Yes Yes Yes
Office bankingsystemavailable
DBTS DBTS DBTS DBTS, OPUSCAPITA andANALYSTE
DBTS DBTSMulticash Plus
DBTS
Office bankingsystemlanguage
Danish Swedish Danishor English
Finnish(Multibank),Englishor Swedish
English German(Multibank) orEnglish
English
Help desklanguage
Danish Swedish Danishor English
English English English English
On-site ITsupport
Yes Yes Yes Yes Yes Yes No
Den Danske Bank
Before the name change
Danskebank.dk
Danica.dk
Nordania.dk
Forenedefactors.dk
Danskebo.dk
Danskekredit.dk
Danskeinvest.dkDanskejob.dk
site4you.dk
Merchantbank.dk
Mastercard-services.dk
Danskebank.com
Fokus.noDanskebank.lu
Danskebank.co.uk
Danskesecurities.dk
öeb.se
dbts.com
Den Danske Bank
Online branding strategydanskebank.dk
danskebank.com
danica.dk forenedefactors.dk danskebo.dknordania.dk
danskesecurities.com
fokus.no
Online Business Online
Business PC
oeb.se
Den Danske Bank
One Group – One System
Den Danske Bank
One Group – One System
Group Data
Security
Group
System
System Markets
New areas
Asset Man.
Life &Pension
Retail
Wholesale
Securities
Products
Leasing
Channels
New channels
WAP
Telephone
Offices
Branches
Internet
Call Center
Den Danske Bank
Planned scenariou All users (customers, employees, partners
etc.) log in to an enterprise WEB/VML rolebased portal (my portal), from where theyflexible have access to all the services theyneed.
u Secure realtime access to all componentsinside Den Danske Bank from anywhere(B2B)
u Östgöta fully integrated 1/10-2000u Fokus fully integrated 1/10 2001
Den Danske Bank
Agenda
Ø Current status
Ø Discussion of market challenges
Ø Danske Bank Initiatives
Den Danske Bank
Impact of the web
Buy side
Procurementthroughexchanges
Participationin specialisedexchanges forfinancial pro-ducts (eg. cur-rency options)
Inside
Use of Intranet toimprove workflowand communication
Improve develop-ment processesthrough integrationof Intranet andInternet
Sell side
On-line banking,brokerage andinsurance
Distribution ofresearch etc.
Extranet services
Financial servicesfor online exchangesetc.
DDB main focus has so far been sell side. Organisational change aimed atstrengthening focus on internal processes
Den Danske Bank
Competition parameters
Customer experience Functionality and content
User friendliness
Contact opportunities and quality
Price / value
Operations Economies of scale
Level of STP transactions
Time to market
Strong e-commerce position
Den Danske Bank
Business to business
Ø We believe a strong cash management productis a necessary basis for a strong business-to-business online offering
Ø Online exchanges will take over a substantialpart of transactions between businesscounterparties. A substantial part of financialtransaction will be initiated through exchanges
Ø A key success factor for commercial banks willbe to identify value added services which canimprove customers possibility of achieving costefficiencies in an ebusiness world
Den Danske Bank
Retail banking
Ø The product best able to create loyalty is a fullydeveloped budget account with bill paymentand presentment, accoutn transfer, budgetreconsiliation, attached credit card and loanopportunity
Ø Customer loyalty can further be developed byinteresting content including various offersfocused on the various customer groups.
Ø High quality requires a full integration acrosssales channels including branches and callcenter
Den Danske Bank
Investment Services
Ø Investors are met with so massive amounts ofcontent that the primary concern is relevance
Ø It requires substantial effort to target theresearch and information produced by the bankat specific customer groups
Ø The cost of international share trading act as alimitating factor on trading volume. STP in thisarea is a key success factor in order to be ableto lower commissions without reducing profit
Den Danske Bank
Operations
Ø The rationalisation associated with further use ofwebbased service by clients cannot be separated fromthe general rationalisation efforts included inCentralisation Project 2000
Ø The rationalisation target for 2001 (hvad er det?) ispartially founded on rationalisations through furtheruse of flexible Intranet services and through reducedmanual transaction volumes through generally higheruse of webbased services among customers
Ø The new Process Development organisational unitwill have as a key part of its charter to reduce time-to-market and improve STP quality of all new systems
Den Danske Bank
Agenda
Ø Current status
Ø Discussion of market challenges
Ø Danske Bank Initiatives
Den Danske Bank
New organisational structure for operations
Strategy & Financial InfrastructureCarsten Høegh
e-Finance & Product DevelopmentJohn Andersen
s. Klaus Frandsen
Process DevelopmentPeter Trier Schleidt
s. Einar Rud Pedersen
Business SystemsArne Løcke
s. Erik Andreasen
Core Systems & Technological InfrastructurePoul Ellerød Andersens. Jørgen Lundgaard
OperationsBjarne Helvig Nielsen
LogisticsUdo Christiansens. Troels Heide
Group Service CentreJørgen Klejnstrup
Hans E. Mørk
Target for new organisation:ã to strengthen focus on Process
Development includingimprovements of speed andSTP
ã to support ongoingrationalisation process
ã to integrate web platforms forcustomers and employees
ã Quality focus throughintegration of e-Finance andcustomer service centre
Den Danske Bank
Wap Banking- demo of the next step
The first mobil Stock trading solution iDenmark
Launch next month
Den Danske Bank
WAP phase 2 - securities trading
Den Danske Bank
WAP phase 2 - securities trading
Den Danske Bank
Private customers
Ø Improved payment functions when privatecustomers buy online
Ø On-line STP consumer loans. Medium termshould yield substantial cost savings
Ø Full scale budget function - high loyalty valueØ Integration of Swedish retail operationØ Stand alone introduction of personalisation
tools in Fokus Bank
Den Danske Bank
Investment services
Ø Retail directed researchØ Selected newsØ Portfolio analysis / benchmark etc.Ø STP of trades in non-nordic sharesØ Fokus Bank will introduce trading on Oslo
Stock exchangeØ Expansion of Danske Markets corporate
product to Norway and Sweden
Den Danske Bank
Business to business
• Payment functions for corporate customers onlineactivities on own website or through exchanges
• Working on two specific business to businessexchanges
• Expanded version of corporate cash managementproduct
• Studying how we can support customers effort toincrease share of STP transactions
Den Danske Bank
Customer contact
Intelligent routing of e-mail. Project will improve servicequality and support integration between online andtraditional channels
(suppleres)
Den Danske Bank
Datamining / CRM
Ø Project to build long-term structure for datamining andCRM in the group
Ø Test project in Norway with market leading CRMsystems supplier
Ø Selection of news and research presented to the customeron the basis of portfolio and interests
Den Danske Bank
Alliances
Ø Selection of partners for customer micrositeØ WAPØ Discussions with potential B-t-B exchange partnersØ Other strategic initiatives
Den Danske Bank
Cost savings
The target is that branches are staffed only by sales andadvisory staff. This staffing will - with some practicallimitations - be fully scalable depending of share ofcustomers wishing to use this channel
Back-office will be fully centralized and scalable dependingof reduction of manual transactions routines and increasedlevel of STP transactions initiated by customers
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