yar-bank launch of ib project 2014
TRANSCRIPT
Launch of
Internet bank
YAR-Bank start of new products
and customers’ service
19.05.2014
MoscowOlga Maslova
Project Leader
1. Executive summary
It took more than two years of enormous day-to-day efforts of our small, but effective team to begin our internet bank. By now we have accomplished to:
1. Create and tide together into one network several very powerful and complex IT systems,
2. Develop and design modern retail products with very attractive market conditions,
3. Do rebranding of our Bank to get its appearance as much client oriented as possible,
4. Go strictly within the budget, approved by the shareholders, affecting very little other units of the Bank.
Today we are confident to ensure smooth and successful launch of our new service during theese months.
Please refer to next pages to view our results in more details.
2. New functionality implementation
Built for Internet Bank project (10 new applications were created from scratches):
Processing Center (“Compass+” based)• Introduce modern chips plastic cards;
ABS for retail business (“Inversia XXI centure” based)• ABS can calculate more then 1 mln. Clients;
Application Conveyor (CRM “Terrasoft” based)• Flexibility business process support;
Credit Conveyor (“Neoflex FO” & FICO based)• Make fast automatic credit decision;
Deposit Conveyor (CRM “Terrasoft” based)• Make fast automatic deposit decision;
Call center (CRM “Terrasoft” & Cisco based)• Flexibility connect with clients;
General Leger Accounting System (ABS “RS-Bank” based)• Minimum changes;
New Internet Site (“Qulix” based)• New friendly looking for users design;
Internet Bank (“iSimple” based)• Chip and appropriate decision;
Integration (IBM WebSphere & P2P based)• Modern architecture.
Bonus for existing business:
Change all existing plastic card with
magnetic stripe to modern plastic cards with chips (based on
our Processing Center)
Japanese experience in building of Internet-banks (Soft-bank, Tokyo)
Platforms IBM, Oracle
FICO products for Risk management
3. IT Architecture
Distribution Channels
Customer
CALL-CENTER
Internet-Bank/
WEB-Site
Risk managementCredit conveyer
Business-process
management
Управление
данными (MDM)
Аналитические приложения
IBM Web-sphere (intergation)
Product
managementScore
Decision-
making
Credit
History
AntiFraud
ABS CRM ProcessingCourier service
Cards’
delivery
4. Fraud prevention policy
• “Zero Tolerance’ for fraud attempts” - all suspicious cases referred to authorities
• 100% documents verification prior to card activation
• 100% applications verification through the Credit Bureaus
• 100% passports verification through the Federal Migration Service
• Underwriters and Validators trained in falsified documents recognition
• Regular meetings of Credit Risk Manager - review of all suspicious cases and deciding on actions to be taken
• Manual underwriting system will be used in line with automated Fraud Prevention tools: ID Verification, National Hunter & Passport data check through FMS
• Income verification calls to customers with status “No credit history” or “Indefinite credit history”
• No cash disbursement/cards activations without verification by Call-Center
5. Credit Risk mitigation:
processes and analysis
Technical analysis
• Stop-list verification
• List of Terrorists verification
• Federal Migration Service: stolen, lost and/or overdue passports verification
• National Hunter verification – confirmed fraud cases and/or suspicious application (multiple requests with different data)
• ID Verification
• Photo docs on-line verification
Financial analysis
• FICO-Score & NBCH-score calculation
• Own scorecard for customers with “No Credit history” status
• Credit history analysis
• Income verification
• Essential Ratio to be observed calculation: Debt to Income ratio, Obligations to Income ratio, etc.
• Max available loan amount calculation (credit capacity)
Disbursement Analysis
• Borrower’s docs review after delivery by Couriers
• Jumbo-loans and “Grey Zone” loans review by Credit Officers
• Credit card/accounts activation and loan disbursement in case of positive Customers’ identification via Call Center
• SMS-confirmation for each transactions done by Customer
6. Credit Risk mitigation:
Behavioral Scorecard
• Bureau Score – is behavioral score-card designed by United Credit Bureau (former
Experian-Interfax) and National Bureau of Credit histories and completely meets
international quality standards and requirements
• Bureau Score aggregates data from both credit histories and credit enquiries
• Bureau Score estimates the risk of borrower credit default during next 12 months
• Bureau Score is an efficient tool for credit risk assessment process
• Min acceptable Score will not allow to exceed the admissible level of Bad rate of
4,15% (based on ГСИ) and 5,7% (based on NBCH).
Bureau
Bank 1
Bank 2
Bank 3
Bank N
`
`
`
`
`
`
Requests to Bureau
Credit records update
500
7. New products and services• Loans • Deposits
Classical
• Fixed high interest rate,• Maturity period ranges from 31 days to 730 days,• Interest paid monthly (optional reinvestment of
principal and interest),• Prolongation,• Banking card with free of charge first year service
Apply online Apply online
With minimum balance• Recurring,• Maturity period ranges from 31 days to 730 days,• Interest paid monthly (optional reinvestment of
principal and interest),• Prolongation,• Banking card with free of charge first year service
Flexible rate
• Floating rate deposit with advantage of rate increase based on a level of balance,
• Recurring, prolongation available• Maturity period ranges from 31 days to 730 days,• Interest paid monthly (optional reinvestment of
principal and interest),• Banking card with free of charge first year service
Credit card with grace period the product, that offers competitive market conditions
Major benefits:
• TTY: 2+ minutes,• TTC: 3+ days, • Single APR for cash withdrawal and non-cash
operations is charged,• Risk-based pricing implemented• High credit limit: RUB 1 Million,• Grace period up to 55 days,• Minimal monthly payment – only 5% from
outstanding principle and interest,• Individual interest rate ranges from 17.5% to
38.9%,• Free of charge first year service,• Card is issued for 4 years
Additional benefits:
• Chip-And-Pin modern security technology,• Option of service: Classic or Premium,• Premium cards (Gold and Platinum) are subject to
privileges provided by Visa and MC, if applicable,• 5000 units available for cash withdrawal,• FREE Up-front fee for the 1st year,• FREE cash transfer (for incoming amounts),• 28,000+ ATMs of bank-partners for FREE cash deposit, • 4,500+ terminals of Eleksnet for FREE cash deposits
Our plan is to have 11’958 loans and 2’640 deposits by the end of 2014
8. Our competitive advantagesParameters YAR-Bank TKS bank
Credit limit RUB 50’000 – RUB 1’000’000 Up to RUB 300’000
Interest rate for non-cash operations
From 17,5% up to 38,9 %
From 24,9% up to 45,9 %
Interest rate for cash withdrawal From 32,9% up to 45,9 %
Grace period Up to 55 days
Minimal monthly payment5 % from loan o/s + %%
(min RUB 600)6 % from total debt
(min RUB 600)
Up-front Fee:
1st year FREE Platinum only - RUB 590
2nd year +Gold – RUB 900
Platinum – RUB 1’200Platinum only - RUB 590
Cash withdrawal Fee3,3% from amount + RUB 330 (both
cash and non-cash transactions)2,9% from amount+ RUB 290
Cash transfer Fee (incoming)
FREE
Cash deposit Fee: Through Eleksnet and ATMs of banks-partners
Eleksnet payment system(4,500+ cash terminals)
FREE
NKO ORS (160+ banks & ATMs 28,000+)
FREE
Our service fees’ proposals are better or the same at least. We plan to offer better quality of
service to our clients: attentiveness to needs, flexibility, accuracy in details, simplicity
9. Launch To Do plan
Pre-Launch promotion (from the end of March 2013);
Social media marketing:- SNS official account (Facebook, Bkontakte,
Odnoklassniki),- YAR-Bank own blog,
Launch promotion;
1) Public relation:- Press conference (expect to plan on September 2014),- Media (Mass, Consumer) communication
2) Online advertising:- Search engine marketing (SEO, Search AD),- Display banner/text AD,- Lead generation partner
3) Campaign
10. Launch plan in details
Product Target number of application
Credit Card 6,000 per month
Deposit 1,000 per month
1) Public relation 2) Online advertisement
Event with journalist and blogger
■ IB project’ challenge from 2014 financial model
Create a unique information for media
Increase lead generation partner
Quality control of advertising channel
Brand recognition ↑ High quality traffic volume ↑
Synergy
3) Branding campaign “Matsuri” (Lottery)
Total 13 Japanese company in Moscow will join our campaign
They provide their high quality product / service for YAR Bank customer
KRUB 51’040 (KUSD
1’398) is budgeted for
Marketing and
advertising in 2014)
Appendices
I. Decision-making automated system:Bureau score Generation 2
II. Application Score card
III. Scoring-Bureau:Score for New-to-Bank customers
I. Decision-making automated system:
Bureau score Generation 2
Score bands
GB oddsBad rate Decision
MIN MAX
0 560 0,5:1 52,91% reject
560 640 2:1 27,48% refer
640 720 4:1 17,77% refer
720 800 8:1 9,48% refer
800 880 24:1 4,15% approve
880 960 60:1 1,75% approve
960 1040 85:1 1,1% approve
Reliability index
At least one credit history record found at UCB Credit history record found only at NBCH
Score and risk index returned according to table above (United Credit Bureau and
National Bureau of Credit bands).
Min acceptable Score will not allow to exceed the admissible level of Bad rate included in
Financial Model for break-even point calculation.
Score bandsG:B Odds Bad Rate Decision
MIN MAX
0 499 1,2:1 44,80% reject
500 549 1,8:1 35,90% refer
550 599 3,4:1 22,80% refer
600 659 7,2:1 12,20% refer
660 699 16,7:1 5,70% approve
700 749 30,5:1 3,20% approve
750 789 62,1:1 1,60% approve
790+ 97,0:1 1,00% approve
II. Application Score cardReliability index
No credit history records found at Credit Bureau
Score bandsGB odds Bad rate Decision
MIN MAX0 883 60,34:1 1.6% reject
884 895 61,55:1 1.6% reject
896 906 65,03:1 1.5% reject
907 916 68,96:1 1.4% reject
917 928 78,13:1 1.3% Refer
929 939 89,20:1 1.1% Refer
940 950 106,29:1 0.9% Refer
951 961 116,29:1 0.9% Refer
962 972 134,67:1 0.7% Refer
973 984 142,13:1 0.7% Refer
985 995 160,70:1 0.6% Refer
Score and risk index returned according to table above (in case of lack of data from Credit Bureau).
Application score card was developed based on the customers from credit portfolio of United Credit
Bureau and used in the absence of data from the Credit Bureau.
III. Scoring-Bureau:
score for New-to-Bank customers
Bureau score is incorporated into
current process flow with other scoring
steps as well as it is used as
independent score
Bureau score will be used for Risk-
Based pricing (assigning interest rate
and/or credit limit)
Score band Risk index Credit limit Interest rate
[Low : 560] 1 None None
[561.0 : 640] 1 Low High
[641.0 : 720] 2 Medium Medium
[721.0 : 800] 3 Medium Medium
[801.0 : 880] 4 Medium Medium
[881.0 : 960] 4 High Medium
[961.0 : 1040] 5 High Low
Score bandsBad rate Decision
MIN MAX
0 560 52,91% reject
560 640 27,48% refer
640 720 17,77% refer
720 800 9,48% refer
800 880 4,15% approve
880 960 1,75% approve
960 1040 1,1% approve