April 2016 Issue 724 www.retailbankerinternational.com CANDID CAMERON

DOUGLAS BLAKEY SPEAKS TO THE CEO OF MONITISE

● STRATEGY: Ceska Sporitelna ● MARKETING: The Facebook Top 100 ● DISTRIBUTION: MUFG Union ● ANALYSIS: Myanmar

RBI 724.indd 1 04/04/2016 10:13:00 Multichannel digital solutions for fi nancial services providers

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IE RBI final design.indd 1 17/09/2015 11:21:32 Retail Banker International COMMENT: EDITOR’S LETTER

CONTENTS 2 STRATEGY: CESKÁ SPORITELNA 7th annual Asia Trailblazer Ceská Sporitelna has successfully imple- mented FICO’s Optimisation Technology Awards: DBS scoops 13 awards for pre-approved loans. Douglas Blakey looks at the results that this change has brought; so far, it seems impressive 4 MARKETING: FACEBOOK TOP 100 Patrick Brusnahan writes on the efforts made by financial institutions on social he 7th annual Retail Banker Interna- Excellence in Service Innovation: media, particularly Facebook. Why are tional Asia Trailblazer Awards broke DBS BANK turning towards this channel? a number of records: a record number Excellence in SME Banking: RBI also releases its Most ‘Liked’ FIs on Facebook rankings T of nominations, winners and attend- DBS BANK ees at the Gala Dinner on 17 March 2016 at Best Initiative in Financial Inclusion: 7 DIGITAL: MEXICO the Carlton Hotel Singapore. HBL PAKISTAN Robin Arnfield reports on the digital transformation occuring in Mexico More importantly, the awards, celebrat- Best Mortgage Offering: through players such as Banamex, ing the best in product innovation,, process, Santander, BBVA, and strategy, channel, marketing, communica- Best Loan Offering: 10 DISTRIBUTION: MUFG UNION BANK tions and people excellence produced the MAYBANK The San Francisco-based subsidiary best ever quality of nominations. Best Bancassurance Product: of Japan’s Mitsubishi UFJ Financial Group, MUFG Union Bank, sees an DBS had some night, winning 13 awards BANK DANAMON INDONESIA opportunity to use digital distribution in all including ‘Excellence in Internet Bank- Best Deposit Offering: to gain nationwide opportunities. Robin ing’ and ‘Trailblazer of the Year 2016’, while AUSTRALIA AND NEW ZEALAND Arnfield investigates BANKING GROUP LIMITED 12 FEATURE: MYANMAR won four awards on the night. Xiou Ann Lim reports on the Judging the awards was no easy task. My Best Card Offering: monumental changes currently thanks to Ruben Kempeneer and my fellow AUSTRALIA AND NEW ZEALAND happening in Myanmar. Not only is it judges: Michael Allen, Founder and Group BANKING GROUP LIMITED going through cultural and political evolution, but its banking sector is CEO of allen international, Richard Har- Outstanding Investment Services, Retail finally gaining some traction tung, who has over 20 years of experience in Clients:

14 FEATURE: RBI BANKING ROUNDTABLE the payments & consumer CITIBANK MALAYSIA Are challenger banks as dangerous industry and Xiou Ann Lim, Asia Editor at Most Innovative Branch Offering: as the hype makes them out to be? Timetric. STANDARD CHARTERED BANK KOREA How important are digital and mobile Excellence in Loan Origination: Innovation in Service Delivery - ATM: platforms? These are just a couple of the questions asked at a banking round- DBS BANK, SINGAPORE CTBC BANK table in Paris hosted by Retail Banker Excellence in Collection and Debt Management: Excellence in Contact Centre Innovation: International on behalf of Assurant TAISHIN BANK, TAIWAN DBS BANK Solutions. Anna Milne writes Excellence in Client On-Boarding and Excellence in Internet Banking - Cross Border: 16 INTERVIEW: MONITISE Communication: DBS BANK Monitise has had a near-cinematic rise and fall story in a short amount of time. DBS BANK Excellence in Internet Banking - Overall: its new CEO, Lee Cameron, believes that Excellence in Business Model Innovation: DBS BANK the time is right for the company to be back on the rise again, in fact, it has DBS BANK Excellence in Mobile Banking - Customisation: to be. As he tells Douglas Blakey, the Excellence in Customer Centricity: UNITED OVERSEAS BANK market will not tolerate any more failure AUSTRALIA AND NEW ZEALAND Excellence in Mobile Banking - Overall: 20 GUEST ARTICLE: COGNISCO BANKING GROUP LIMITED UNITED OVERSEAS BANK Mary Clarke discusses the value of Dynamic 3rd Party Partnership: Excellence in Multi-Channel Integration: proper training of staff. Poorly trained staff can lead to a ‘domino effect, which BANK MUAMALAT MALAYSIA BERHAD AUSTRALIA AND NEW ZEALAND can lead to nothing but failure. How to Best Social Media Marketing Campaign: BANKING GROUP LIMITED banks rectify this? ’ CITIBANK SINGAPORE Best Graduate Employment Scheme - Retail Best Digital Marketing Campaign: Banking: DBS BANK ALLIANCE BANK MALAYSIA BERHAD Excellence in Internal Communications: Best Staff Training & Development Programme: DBS BANK CITIBANK SINGAPORE Excellence in Social Media - Customer Relations Best Bank in Community Outreach Initiative: and Brand Engagement: DBS BANK CTBC Bank Trailblazer of the Year for 2016 (Individual): Best New Product, Service or Innovation DR KOSON SAPPRASERT, SIAM Launch: PCL MAYBANK Trailblazer of the Year for 2016 (Institution): Best Marketing Campaign: DBS BANK DBS BANK Excellence in Mass Affluent Banking: Douglas Blakey CITIBANK SINGAPORE [email protected]

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RBI 724.indd 1 04/04/2016 10:13:03 STRATEGY: CESKÁ SPORITELNA Retail Banker International

Optimising results in the Czech Republic Česká Spořitelna has successfully implemented FICO’s Optimisation Technology for pre-approved loans. As Česká’s Zuzana Sloukova tells Douglas Blakey, the returns have been impressive, increasing profits by 26% while new sales are also up by 29% all with no increase in credit risk costs

rste’s Czech Republic subsidiary, Česká cash loan portfolio of pre-approved loans. from the initial idea to a launch of real-time Spořitelna, with more than 600 branch- Projecting the results across our portfolio, optimisation. This included not only the es and five million customers, ranks we forecast an annual increase of $16m in development of the optimisation model, but first in the country by assets and retail APP and $41m in new sales primarily the integration of the new software E In October 2015 more advanced analyti- banking market shares in all main product (FICO Xpress Optimization Suite) into the areas. cal procedures using real-time optimisation Česká IT family. In terms of consumer finance, Česká is models for decisions were launched. “The task was quite complex: it required the country’s long-term market leader with For this, the bank’s analysts use FICO development of more sophisticated decision a market share in in total outstanding busi- Optimization Modeler, powered by the FICO process (optimised offer of loan limit and ness of consumer loans of more than 32%. Xpress Optimization Suite, to configure the price), but also some changes in the sales In response to aggressive pricing by its optimisation models used for real-time deci- process.” rivals and with its market sions. For its part, FICO has spoken in glowing share lead under attack, Česká sought to In order to react to increasing demand of terms about how Česká went about the pro- increase its competitiveness without a loss in debt consolidation and to deal with greater ject implementation. profitability. competitive pressure, it was necessary to pre- Bill Waid, vice president and general man- Zuzana Sloukova, who leads the pare a more suitable offer of debt consolida- ager for decision management solutions at optimisation, reporting and analysis team tion for each customer, taking into account FICO tells RBI: “Our optimisation tools are for Retail Risk at Česká Spořitelna tells RBI: customer price sensitivity and credit risk second to none in giving analysts and busi- “Optimising our strategy for pre-approved profile, etc. ness teams the power they need to develop, cash loans was a significant part of this cam- Česká forecast a 15% increase in new sales test and deploy new strategies. paign.” compared to the prior strategy, again part of “Česká Spořitelna has put these tools to the Česká performed analysis showing that it its campaign to win market share. test, and achieved remarkable results.” could increase the absolute portfolio profit Sloukova says that the first generation As the results of the investment have out- (APP) of pre-approved cash loans by identi- of this optimisation, returning optimised performed the bank’s forecasts, Sloukova fying the optimal offer price and initial credit results within one second, helped the bank says that internal feedback is very positive: limit for each individual borrower, based on to increase its market share on new bookings “In comparison with previous internal pro- their risk profile, loan appetite, price sensitiv- from a 34% average in the first three quar- cess setting, it is much more important to be ity and personal wealth. ters of 2015 to 39% in the fourth quarter. in close contact with the business part of the Utilising optimisation tools that form part She adds that Česká calculates pre- bank such as distribution, product develop- of FICO’s Decision Management Suite, the approved limits on consumer loans, over- ment and marketing. Good communication, bank was able to analyse data to arrive at the drafts, credit cards and building society loans. cooperation and understanding of this new best price and credit limit. From a credit risk viewpoint, there are two advanced approach by all stakeholders is Sloukova’s team developed a new processes of decisions: the standard approval critical for the success of such a project.” approach using an iteration algorithm that process (real-time decisions based on actual Looking ahead, Sloukova summarises took into consideration all the possible information available at the time, when a her team‘s priorities this years as follows: loan limits in order to maximise profit. The client applies for a loan) and calculation of “This year we would like to focus on the team also developed a highly sophisticated pre-approved or pre-qualified limits where optimisation of overall client exposure to amount take-up model, which predicts the decision is based on proprietary information unsecured products. It means a shift from loan amount that clients will take. about a client. single-product optimisation to a compre- Based on the successful results from a “In cases where a client is considered com- hensive approach, which focuses more on similar project for non-pre-approved loans, pletely creditworthy for a certain credit prod- customer's needs. Česká forecast a 5% to 10% increase in APP, uct, a 'conditionally approved’ limit can be “Internally, we are talking about second and a 7% to 12% increase in new volume. offered,” she says. generation of real-time optimisation. Our When Česká analysts tested optimised sce- Implementation of the optimised strat- goal is to help our clients to find the best narios in the FICO Decision Optimizer, they egy for pre-approved limits took the bank possible credit options.” showed even better results. around one to two months. She explains that Says Sloukova: “When the strategy went the change was not such a complicated task, Digital at the heart of Česká sales strategy live, it outperformed our expectations. APP due to the bank’s experience in development Pre-approved or pre-qualified limits are pri- increased by 26% and new sales increased and implementation of optimised strategies marily relevant for the sale of lending prod- 29%, without an increase in credit risk costs. from previous projects. ucts via alternative distribution channels “Currently, the strategy runs on our entire “For comparison, it took around one year such as internet banking and mobile banking.

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RBI 724.indd 2 04/04/2016 10:13:03 Retail Banker International STRATEGY: CESKÁ SPORITELNA

n ERSTE FOOTPRINT: CEE-ERSTE CUSTOMER n DECLINE IN BRANCH NUMBERS ERSTE - BRANCH NUMBERS BY MARKET 2010-2015 NUMBERS BY MARKET (MILLION) Czech Republic 5.00 1200 2010 2015

Austria 3.5 1000 Romania 3.00 800 Slovakia 2.3 Croatia 1.10 600

Hungary 0.9 400 Serbia 0.40 200 Source: Erste 0

n CESKA SPORITELNA - 2010-2015 % OF Austria Slovakia Romania Hungary CUSTOMERS USING ONLINE BANKING Czech Republic

Source: ERSTE % Czech Republic 50

n ERSTE - PERCENTAGE OF CUSTOMERS USING DIGITAL CHANNELS 2010-2015 BY MARKET 40 60 2010 2015

50 30

40

20 30

2010 2011 2012 2013 2014 20

Source: ERSTE 10

Explains Sloukova: “Simple decision pro- 0

cesses and suitable, attractive offers are now- Austria epublic Croatia Slovakia Hungary Romania adaysdata for absolutelyeach ‘line’ is a column essential. of numbers This in the innovation data form Czech R definitelyremove strokes helped around datusa topoint increase squares on sales graph; through Source: ERSTE theseconnecting channels line is 2pt and stroke, we no arefill still hard at work onblurbs further in 7.4/6pt improvements. Officina Sans ITC book on how to get started online and how vari- The bank says that the George project colour“Developing is Pantone 655 sales EC of lending products in ous features such as mobile payments work,” incorporates a system that ‘thinks for itself alternative distribution channels (including says Peter Bosek, chief retail officer of Erste and continually grows’. m-banking) has been included in the long- Group Bank. Customers have the option to build their term strategy of Česká for many years. All Erste branches in Hungary and Serbia own system by adding smart personal plug- “More and more clients are requesting the now offer Wi-Fi as do the majority of branch- ins. blurb possibility to arrange a loan within minutes es in the Czech Republic (80%) and Croatia George started on 1 January 2015. And and above all immediately at the time, when (70%); around one-half of Austrian outlets by mid-July there were over 315,000 users the customer needs money (in a shop or are Wi-Fi enabled with plans to achieve full onboard. when surfing on a website) without having coverage across the branch network. In June 2015, the offering added a person- to visit a bank branch.” Mobile internet penetration in Central al Finance Manager option analysing cash and Eastern Europe was 53% in 2014 and is flows and different classes. Now customers “Mobile banking and tablets are the optimal expected to grow to 72% by 2017. In 2014, can fix appointments directly with their per- way to satisfy these needs” 72% of the ‘online population’ accessed the sonal advisors via George as well the system Group wide, nearly 50% of Erste’s 2,735 internet from their mobile phone. This figure automatically offering available diary slots in branches in Austria and Central and Eastern is expected to grow to 92% in 2017. the bank advisor’s calendar. Europe are equipped with free Wi-Fi internet Erste’s digital drive was kick-started with access and the bank plans to continue to George: Erste’s digital programme for a the launch in 2011 of its in-house start-up, increase coverage. new financial ecosystem Erste Hub. “The branch remains an important touch Then philosophy of Erste’s George digital “We decided to start innovating from inside point, especially for advisory services, but at programme is to make banking more person- out because we believe that this is the best the same time we encourage our clients to al. The group rolled out a uniform platform way how we can change our corporate cul- manage their accounts digitally. So with this in 2015 in Austria with the aim of enabling ture. With Erste Hub, we are able to substan- initiative we combine the benefits of personal group wide transformation from a branch- tially shorten the time-to-market of a new in-branch service and mobile banking – for centric model to a 360 degree omnichannel product, which is traditionally the biggest example our clients can get hands-on advice bank model. blurb challenge for large banks,” explains Bosek.<

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RBI 724.indd 3 04/04/2016 10:13:06 MARKETING: FACEBOOK TOP 100 Retail Banker International

Which bank is the most ‘Liked’? Long gone are the days when a branch was needed to speak to your bank. Now, there are a variety of options, including the exponentially growing realm of social media. While banks are unlikely to be defined as ‘social’, they are taking the medium, particularly Facebook, by storm. Patrick Brusnahan writes

BI’s 100 Most Liked Institutions on Facebook table shows that n THE 10 MOST IMPROVED BANKS ON FACEBOOK the financial sector is still focusing on the site to interact with its BANK PAGES TOTAL FANS 2015 TOTAL FANS 2014 CHANGE % customers. With an average rise in ‘Likes’ of 66%, it has been a State 4620713 355704 1,199 strong showing for the financial sector. Bank of R India Visa finished top of the table yet again with a total of 19.8 million fans, a rise of 19% compared to last year. MasterCard finished second with Intesa Intesa Sanpaolo/Banka 906309 75501 1,100 13.4 million fans, a rise of over 25% year-on-year. Sanpaolo BIH/Romania/Card University Award/Card/ While these two remained triumphant again, some institutions saw Live Inspire remarkable rises in the amount of ‘Likes’ they received with both State Access Access Bank 862436 143315 502 Bank of India and Intesa Sanpaolo increasing their total fans by over Bank

1000%. The region with the biggest risers was the Middle East and Mashreq Mashreq Bank 494151 168478 193 Africa, with six of the ten most improved banks in this realm from this Arab Arab Bank 298614 104815 185 region. Bank

The bank with the highest rating was HDFC in fourth place, closely Seylan Seylan Bank 331144 117085 183 followed by Banco Bradesco and ICICI, with 6.8 million fans, 41% Bank

more fans than the previous year. First First Bank of Nigeria 836894 380424 120 The highest placed UK-based bank was Barclays in tenth, the same Bank of position as last year. The lender saw a 21% rise in fans to hit 4.3 million. Nigeria Kotak Kotak Mahindra 626736 287643 118 Why are banks looking at Facebook? Bank Lebanon/Cards 196471 90564 117 What possible purpose could banks have for Facebook? It seems a step Audi outside of the market’s comfort zone. BNP Net/Open/Cardiff/Fortis 1534725 711304 116 Paribas Belgie/BMCI Groupe/ However, social media is a constant in modern life. Recent research Net УкрСиббанк/UBCI Groupe/ from Innovalue reported that almost 2.1 billion people are now engaged BGZ/Ma /Fortis België/ with social networking. In addition, wearesocial.net found that 28% of Geojit/Masters/careers people’s time online is spent on social media, more than half of which Source: RBI/Facebook is on Facebook. On the other hand, social media and banking analytics firm, The of reasons. Financial Brand, state on its website: “As social media marketing con- “They like our brand, they like to be informed, and we proactively tinues to gains team in retail banking, financial marketers need to pause inform them when there is a hiccup in our services. For example, if and think about how they use social channels and whether this activity some of the digital services are down for some time, we let people know is really adding any value.” through social media.” Samantha Gray, head of social media at Barclays, speaking to RBI, Another factor is the links that ING has through sponsorships, events says: “Facebook plays an integral part of our customer service and com- and the like. munications functions. We are able to reach potential and existing cus- Smale says: “We also use this format for campaigns focused on our tomers, with relevant messages specifically created for them; whether products and sponsorships. What we see if that our followers very much this is around education on a new product, a digital initiative or some- appreciate that sort of initiative. A couple of examples are the sponsor- thing our customers need to be aware of quickly.” ship of the national football team, famous museums and even a big event Jacqueline Smale, manager of social media for ING Netherlands, adds: of ours that was sold out in ten minutes.” “We mostly use it for interacting with our target groups. Our Facebook Erik van Roekel, manager of social media across the entirety of the Netherlands account is less for stakeholder management; it’s wider than ING Group, believes that is a ‘big sector’ across the entire brand and not just our customers. We use it for a couple of sections, mainly for our just in Holland. web care, customer service and also for brand and representation man- However, rather than just providing for customers, Facebook allows agement. We publish articles and blog posts to share our opinions and consumers to help ING in return. expert information from ING.” “We ask our community to think along with us in what should be Smale believes that Facebook is a good service to deliver up-to-date developed for the app or other services. What do our customers see feedback to ING’s customers. She explains: “We work together with the as the most important thing to develop? And this leads to co-creation web care team to see what information is missing on more of the practi- where people can come see what we’re thinking about and give their cal stuff and the way people use ING services. Things about how the input. It’s a more time-consuming effort so we don’t do this every day, online and banking app environments work. This is the kind of informa- but every now and then, and appreciation is really high,” says Smale. tion that most of our followers really like so they follow us for a couple Praveen Bhatt, head of marketing and customer service at Axis Bank,

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RBI 724.indd 4 04/04/2016 10:13:06 Retail Banker International MARKETING: FACEBOOK TOP 100

n THE TOP 100 BANKS ON FACEBOOK RANKED BY LIKES n THE TOP 100 BANKS ON FACEBOOK RANKED BY LIKES

Bank Pages Total fans Total fans Change Bank Pages Total fans Total fans Change 2015 2014 % 2015 2014 %

1 (1) VISA VISA/Small Business 19893994 16687686 19 33 (29) RBS Scottish Rugby/6 Nations/Early 1014547 976431 4 Careers/ 2 (2) Mastercard Mastercard 13493178 10740313 26 34 (92) Intesa Intesa Sanpaolo/Banka BIH/ 906309 75501 1,100 3 (3) American /OPEN/Amex 7328919 5829930 26 Sanpaolo Romania/Card University Award/ Express for Business Australia/Amex for Card/Live Inspire Business Canada/Serve 35 (32) JSC TBC TBC Bank/Kredit/Smart Club 903242 782872 15 4 (5) HDFC HDFC Bank/HDFC Life 6801518 4817442 41 36 (34) USAA USAA 902504 705579 28 5 (4) Banco Bradesco/Seguros/Teatro 5350147 5049398 6 Bradesco 37 (72) Access Bank Access Bank 862436 143315 502

6 (9) ICICI ICICI Bank/Fellows/Lombard/NRI 5121033 3555145 44 38 (39) Commonwealth Commonwealth Bank/Business/ 853104 591905 44 Bank Indonesia 7 (11) Citi/Citibank US/Malaysia/UAE 4825997 3057172 58 Philippines/careers/Brasil/ 39 (46) First Bank of First Bank of Nigeria 836894 380424 120 Thailand/Singapore/India/ Nigeria Magyarország/Every Step/Korea/ 40 (36) SABB SABB 836203 624885 34 IPB EMEA/Bike 41 (44) Unicredit Austria/Italia/Bulbank/Champions/ 788653 487932 62 8 (7) Capital One Capital One/UK/Canada/Investing 4766758 3889017 23 Universities/Srbija/Bosna I for Good/Small Business/360 Hercegovina/Ceska Republika/ 9 (49) State Bank of State Bank of India 4620713 355704 1,199 Slovensko/Russia/Romania India 42 (35) ING Vysya Bank/Śląski/Turkey/New York 756834 663871 14 10 (10) Santander Students/UK/Mexico/GP/Brasil/ 4581020 3549078 29 City Marathon/Australia/Belgique/ Chile/Universades/Rio/Totta/US Belgie/nederlands/Bank

11 (8) Barclays UK/Football/Business UK 4356324 3595821 21 43 (37) Banco Falabella Chile/Peru/Colombia 735910 621940 18

12 (15) BBVA Bancomer/Colombia/Compass/ 4068594 2341777 74 44 (40) Banco Costa Rica/Dominicano/Portugal/ 711737 580025 23 Espana/Continental/Provinvial Popular Banco Popular PR/Virgin Islands/ adelante/Chile/Frances/Paraguay/ Honduras Uruguay 45 (38) HBL HBL/ID/Asset Management 708428 594679 19 13 (6) Chase Chase 3863260 4409960 -12 46 (42) TD Canada TD/Canada Trust 668219 536082 25 14 (16) GT Bank GT Bank/Ghana/Kenya 3573635 2266373 58 47 (55) Kotak Kotak Mahindra 626736 287643 118 15 (12) Axis AXIS Bank 3168931 2739262 16 Mahindra

48 (48) RHB Bank RHB Group 612358 356690 72

16 (17) Standard Standard Chartered/UAE/Malaysia/ 2961277 1984364 49 49 (41) OCBC OCBC Bank 607511 542595 12 Chartered Marathon Pages/India/Pakistan/ Kenya/Indonesia/Bangladesh/Nigeria/ Vietnam/HongKong/Thailand/Ghana 50 (51) Jordan Ahli Jordan Ahli Bank 578575 332409 74 Bank 17 (14) CIMB Malaysia/Thai/Group/Singapore/ 2875344 2472405 16 Indonesia/Niaga 51 (56) Credit Credit Agricole/Nord de France/ 541313 281431 92 Agricole Store/Polska/Normandie/Egypt/ 18 (13) HSBC Brasil/Students/Mexico/UK/ 2178426 2717585 -20 ACBA/Loire/Lorraine/Normandie Arena/HSBC/Expat/Argentina/ Seine/D'ile de France UAE 52 (43) Bank of Bank of Georgia/Bank of Georgia 537633 503058 7 19 (21) Banco do Banco do Brasil 2029097 1533585 32 Georgia Brasil 53 (45) Diamond Diamond Bank/鑽石銀行 508397 381885 33 20 (19) KBank Live KBank Live 1908917 1647947 16 Bank 21 (22) Maybank Maybank/PH/Kim Eng Securities/ 1907615 1515917 26 54 (52) Sterling Bank Sterling Bank 505904 327320 55 Maybankard/Indonesia/ Championship 55 (69) Mashreq Bank Mashreq Bank 494151 168478 193

22 (18) Garanti Garanti Bankasi/Garanti Bank 1821917 1696956 7 56 (53) Sberbank Sberbank/Hrvatsa/Slovensko/u 422822 310541 36 Bih/srbija a.d. 23 (20) Akbank/Sanat/Yatırımcı/Direkt/ 1706384 1564065 9 Kariyer/Kobi 57 (50) Finansbank Finansbank/Kariyer/Enpara 414136 339539 22

24 (26) Yapi Kredi Yapi Kredi/Insan Kaynaklari 1549938 1064443 46 58 (60) Banco Ciudad Banco Ciudad 408952 237023 73

25 (33) BNP Paribas Net/Open/Cardiff/Fortis Belgie/ 1534725 711304 116 59 Investec Investec/Super Rugby/Sport/People 393676 N/A N/A Net BMCI Groupe/UBCI Groupe/BGZ/ (NEW) and Planet Ma /Fortis België/Geojit/Masters/ careers 60 (47) Bank Leumi Leumi Digital/Business/Card 392919 376757 4

26 (23) Interbank Peru/Interbank 1507452 1380901 9 61 (54) DNB DNB 347867 289438 20

27 (25) Scotiabank Scotiabank/Jamaica/Mexico/ 1451529 1074981 35 62 (59) Royal Bank of RBC 338659 244054 39 Bahamas/Nuit Blance/Dominican Canada Republic/Chile/Antigua&Barbuda/ 63 (81) Seylan Bank Seylan Bank 331144 117085 183 StVincent&Grenadines/Saddledome 64 (58) Commercial Commercial Bank of Qatar/Masters 321378 251576 28 28 (31) IDBI Bank IDBI Bank 1326055 826373 60 Bank of Qatar

29 (27) Wells Fargo Wells Fargo/Centre/Advisers 1191179 1028586 16 65 (62) Natwest Natwest 316882 223835 42

30 (24) Davivienda Davivienda/Costa Rica/Empleos 1182907 1102801 7 66 (57) CIBC CIBC 312148 272560 15

31 (28) DenizBank DenizBank/Akademi/Insan 1161514 1024151 13 67 (82) Arab Bank Arab Bank 298614 104815 185 Kaynaklari 68 (66) PNC Bank PNC/Arena 283182 190862 48 32 (30) Multibanca Multibanca Copatria 1037134 871733 19 Colpatria 69 (67) mBank Polska mBank Polska/.sk 271479 174761 55 Source: RBI/Facebook Source: RBI/Facebook

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also believes Facebook is a good method of making a connection with Facebook, it doesn’t count for much if nobody even glances at it. With customers. so much posted on social media sites, it can be difficult to truly engage He says: “The strategy for Axis Bank is to look at social media as a key with consumers, or even get their attention. medium of reaching out to our customers. We are consistently trying to Smale comments: “It really depends on the content. In the Nether- reach out to younger customers and we want to be positioned as a young lands, we have approximately 250,000 followers. If you post organically, and progressive brand. It is extremely important for us to be present on the people that we reach can range between 30,000 and 100,000. platforms where young and progressive people are present. That is why “The engagement on videos is really high. Also, what works really well social media is important.” is simple saving tips. Every time we post something, we consider what’s in it for the customer. There should always be something useful or ben- Truly engaging eficial in the content.” While banks, and other organisations, can post as much as they want on Bhatt says: “[The engagement figures] are usually around 12-16% on the content we post on Facebook, but it really depends on the type of n THE TOP 100 BANKS ON FACEBOOK RANKED BY LIKES content. We do related content or topical, around thing such as Father’s

Bank Pages Total fans Total fans Change Day, and that sees a far much higher engagement rate.” 2015 2014 % Gray comments that the engagement levels vary, but ‘on average, we 70 (64) Qatar Qatar Development Bank 253409 202404 25 are please with engagement levels’. Development Bank Advantages and struggles 71 (68) US Bank US Bank 252079 174269 45 On the advantages of maintaining a presence on Facebook, Gray adds: 72 (61) La Banque La Banque Postale/Jeunes 243065 224657 8 “Facebook and other social media platforms help us to get meaningful Postale messages to the relevant audiences as they offer such strong targeting 73 (75) Westpac Westpac 220910 131953 67 options. 74 Absa Absa 217266 “We can choose who receives which messages and switch it on and off (NEW) as appropriate. If for example, we are able to provide information about 75 (87) Bank Audi Lebanon/Cards 196471 90564 117 mortgages to people that are looking to buy a hose, or information on 76 (80) Standard Standard Bank of South Africa 195240 119943 63 our Blue Rewards offering to those who have been comparing current Bank of South account they are much more likely to engage and react.” Africa Smale believes that Facebook has huge potential. She says: “It’s per- 77 (65) Magma Magma 182770 197021 -7 sonal communication en masse. The impact is high. It is beneficial, but 78 (73) Crédit Mutuel Credit Mutuel 175818 136727 29 also a risk, but I think that’s one of the main advantages. It’s where our 79 (79) Capitec Capitec 174211 121124 44 target group is so that’s one of the main reasons why we’re there. And 80 (71) Chebanca! Chebanca! 173738 149900 16 it allows us a lot of speed.” 81 (74) Swedbank Sverige/Lithuania/Latvia/Eestis 166852 133254 25 However, there are downsides. “We can’t control Facebook. We don’t

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84 (78) OTP Bank OTP Bank 147575 124507 19 post and spend more money on it,” Smale adds. “In the past, one of the main benefits was the low cost. It’s still low 85 (76) Charles Charles Schwab 141413 128740 10 Schwab compared to other forms of mass media, but the price is increasing.”

86 (77) ASB ASB Bank 140734 127816 10 Gray also finds that they are difficulties with Facebook. She says: “Social media is 24/7 so it doesn’t sleep. We ensure that out channels are 87 (89) ABN AMRO ABN AMRO/World Tennis/ 139470 81681 71 Studenten/Werken Bij monitored at all times and we have a team who do this and are available

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90 (85) la Caixa la Caixa 122129 100025 22 Compliant at great speed With the overwhelming pace of social media present, it can be tempting 91 (83) Kuwait Kuwait Finance House/Malaysia 115897 103949 11 Finance to just post whatever comes to mind on Facebook, especially consider- House ing the disinhibition effect caused by the internet. 92 (96) Erste Bank Erste Bank/Austria/Srbija/Open 113270 56890 99 Banks cannot afford to be careless when it comes to this issue. All

93 (88) Deutsche Deutsche Bank/Careers/Services 113058 84092 34 communication needs to be tightly monitored in order to not break Bank regulation. 94 (90) E-trade E-Trade Financial 109191 78638 39 Smale says: “We are always cautious with what we publish. We try to Financial educate our customers on how to treat their personal data and informa- 95 (86) AmBank AmBank 108776 93356 17 tion, so we have a lot of guidelines for that that are helpful. We haven’t 96 (98) Bank Mandiri Bank Mandiri/Syariah 102574 54410 89 run into any struggles there.

97 (97) Lloyds Lloyds Bank 101338 56123 81 “Social media is a fast game, so we have processes for it in place, but we are very aware of this issue. There always needs to be checks, we 98 (93) Credit Suisse Credit Suisse/Careers 92219 70579 31 have our procedures like in any other section of the bank where we need 99 (91) VUB VUB Banka 77310 76223 1 to take precaution.” 100 Halifax Halifax 76070 65529 16 “All channels use the same FAQ and the same knowledge base. Social (94) media, the website and the call centre will all give the same information,” Source: RBI/Facebook van Roekel adds. <

6 y April 2016 www.retailbankerinternational.com

RBI 724.indd 6 04/04/2016 10:13:09 Retail Banker International DIGITAL: MEXICO

Mexicans slow to adopt digital banking Despite Mexico’s high Internet and mobile phone penetration, the country’s 39% bancarisation level means there is low usage of online and mobile banking services. However, major Mexican banks are investing in their digital platforms to take advantage of the growth opportunities. Robin Arnfield reports

ccording to John Price, managing Mexicana de Internet, Mexico had over 50 The percentage of banked customers director at Americas Market Intel- million Internet users in 2013. receiving banking alerts and notifications ligence in Miami, Florida, Mexico is The Competitive Intelligence Unit esti - via SMS doubled to 29% between 2013 and the most unbanked middle-income mates that there were 104 million mobile 2014, the survey found. Between 2013 and A 2014, the percentage of customers down- country in the world. “In terms of loans as phone connections in Mexico in 2014, with a percentage of GDP and the percentage of 53 million Mexicans owning a smartphone. loading banking apps increased from 5% to people with bank accounts, Mexico is really A May-July 2014 survey by Banamex 13%. underpenetrated,” he says. found that in 2014 39% of Mexicans aged Jeffrey Bower, a digital finance specialist In recent years, the Mexican government over 15 in the A, B, C and D socioeconomic with the United Nations Capital Develop- has introduced legislation to facilitate finan- segments living in cities of over 400,000 ment Fund’s Better Than Cash Alliance, says cial inclusion by allowing different levels inhabitants, had bank accounts. This repre- mobile banking use remains relatively lim- of simplified bank accounts and simplified sented 22% growth in bancarisation since ited to younger consumers, mostly under the capital requirements for start-up banks. 2011, Banamex says. age of 35. “Less than 4% of Mexicans have Taking advantage of these reforms, several Over three quarters (78%) of Mexi - signed up for banking products using their new mobile-only banks are targeting the cans with bank accounts are Internet users, phone,” he says. unbanked and underbanked with digital according to Banamex, and 85% of banked offerings. In addition, large banks such as consumers who use the Internet do so via Financial inclusion BBVA Bancomer, the Mexican arm of Spain’s mobile phones. The Mexican government is using regula- BBVA, and Citigroup’s Mexican subsidiary Surprisingly, the survey found that 75% of tion to improve financial inclusion. In 2009, Banamex see opportunities to use mobile banked Internet users don’t bank online, cit- it introduced a law simplifying the capital money accounts to reach this segment. ing reasons such as a preference for branches requirements for start-up banks that restrict “Mobile banking is currently a bet that or concerns about security. themselves to offering savings, micro-loans most major banks are taking, since it has The number of customers banking online and payments instruments such as prepaid the potential to provide access to banks to has grown slowly since 2011, Banamex says. cards. The first so-called ‘banco de nicho’ an otherwise left-out sector of the popula- However, the percentage of consumers mak- (niche bank) licenses were issued in 2012, tion,” says the PwC report, Retail Banking ing purchases online has risen from 18% in enabling start-up banks to integrate with in Mexico: An Industry Outlook. 2011 to 42% in 2014, indicating there is still Mexico’s ATM and card switches and elec- “Consumer and corporate digital banking opportunity for growth in online banking in tronic funds transfer infrastructure. services are less well developed in Mexico Mexico, it says. In 2011, Banco de México (the Central than in Brazil,” Price says. “With its high According to Banamex’s survey, Internet Bank), Comision Nacional Bancaria y de level of unbanked consumers and past finan- users with bank accounts have 10.5 contacts Valores (CNBV, Mexico's national banking cial crises which led to banks going bankrupt, per month with their bank, of which 48% and securities commission) and the Mexican Mexico isn’t as profitable a banking market are via ATMs, 21% online, 27% at branches, government introduced legislation allowing as Brazil, and its banks have been undercapi- and 4% via call centres. Between 2011 and four different levels of bank account, with talised. However, Mexican banks are trying 2014, customers’ online contacts with their different limits on monthly deposits and dif- to speed up their investments. There’s a lot banks rose by 16%. ferent KYC requirements. of appetite at the senior levels of Mexican Banamex says 93% of customers who The tiered structure aims to ensure provi- banks to adopt more technology.” bank via the Internet log onto online bank- sion of low-cost, basic bank accounts with ing at least once a month. But the average simple KYC identification requirements to Internet and mobile banking Internet banking user logs onto online bank- unbanked consumers, with the possibility of According to a January 2015 BBVA Research ing 8.7 times a month, its survey found. linking these accounts to mobile phones. report, in 2013 only 16 % of total Mexican Three-quarters (75%) of Internet banking The lowest level of account, an anonymous banking transactions took place via the users log on to check their account balances, prepaid card, requires no proof of identifica- Internet and 6.4% via mobile phones. This is 43% do so to make transfers, 19% pay util- tion and can’t be used with mobile phones, despite the fact that, according to Asociación ity bills and 18% pay credit cards. while the highest level, a traditional bank

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RBI 724.indd 7 04/04/2016 10:13:12 DIGITAL: MEXICO Retail Banker International

account, requires standard KYC procedures. According to Martha Casanova, a consult- ant at World Bank subsidiary CGAP’s (Con- sultative Group to Assist the Poor) Technolo- gy Programme, citing CNBV data, in January 2015 there were 1.9 million Level 1 accounts, 5.6 million Level 2 accounts, 430,000 Level 3 accounts and 70 million Level 4 (traditional) bank accounts in Mexico. “Mexico has a very solid payments infra- structure, but its population is still largely cash-based,” says Elizabeth McQuerry, a consultant with Glenbrook Partners. “How- ever, people are now opening basic bank accounts and the level of bancarisation is growing.” “Mexico’s multi-level basic account regula- tion is allowing some financial institutions to develop digital business models for low- risk accounts,” says Álvaro Martin Enriquez, Head Economist, Digital Regulation, at BBVA Research in Madrid. “Some banks such as Acertum (a mobile-only bank owned by Grupo Salinas), Bankaool (an online and mobile bank formerly called Agrofinanzas) and Banco Azteca (owned by Grupo Salinas’ a long way to go to cover its entire populated ool, which describes itself as Mexico’s first financial services and retailing arm Grupo territory with correspondent agents. These branchless bank, had over 20,000 deposit Elektra) are opening Level 2 accounts online, agents are non-bank locations such as con- customers at the end of 2015. The bank says with a focus on specific segments of the venience stores where bank customers can it signs up an average of three new customers unbanked population such as the under-30s.” deposit and withdraw cash or pay bills. every hour via its digital channels. “The big players will probably start offer- Bankaool’s credit portfolio grew by 25% ing Level 2 online account opening during Banamex between December 2014 and December 2016,” says Enriquez. “Level 1 accounts are Currently, Banamex has 1.4 million online 2015. anonymous and very limited, so there’s no banking customers, says spokesperson In July 2015, BBVA Bancomer opened the point in offering them online. In my opin- Gerardo Gregoire Crespo. Mexican offshoot of the BBVA Innovation ion, the most interesting part is how the In October 2015, Banamex launched its Centre, a space where the bank can dem - unbanked are now receiving distinct value first digital branch in Mexico City offering onstrate emerging technologies. BBVA has propositions according to their specific char- videoconferencing with product specialists, also opened Innovation Centres in Bogota, acteristics. Moreover, digital banking might a central workbench with touchscreen com- Madrid and New York. further evolve thanks to these new clients puters, digitally-literate millennial staff, and Hugo Najera Alva, BBVA Bancomer’s entering the market.” a self-service area with ATMs and tablets. Head of Digital Banking, said in a state - Bower says the lack of interoperability “We expect to have 200 digital branches ment that the bank has three prerogatives: between different Mexican mobile money in Mexico by 2018,” says Gregoire Cre - “Mobile first, as mobile devices are what ena- schemes such as Banamex’s Cuenta (account) spo. “This branch is based on the new digital ble the bank to assist customers with their Transfer and BBVA Bancomer’s Dinero branch design that Citi will offer to all its big decisions; big data, because by learning Móvil (mobile money), with schemes being customers worldwide.” to use data we can identify the key moment limited to one provider, is hindering adoption According to Mexican press reports, the in which the bank needs to contact a cus - of mobile money accounts by the unbanked. purpose of Banamex’s digital branch is to tomer; and the Openlab environment where “However, the Mexican Central Bank has encourage customers to use self-service tech- FinTech startups and main market players been upgrading its national interbank pay- nology, with cashiers available for transac- collaborate.” ment settlement system, SPEI (Sistema de tions of over MXN 10,000 ($542) and for BBVA Bancomer has 2.7 million mobile Pagos Electrónicos Interbancarios), to act more personalised transactions. banking customers who carried out 490 mil- as the default settlement system for payment For unbanked consumers, Banamex offers lion mobile banking transactions in 2015. networks, including potential mobile money the Transfer SMS-based mobile P2P service The bank has 2.7 million web banking cus- transactions,” he notes. “This should help in partnership with mobile operator Tel - tomers, who carried out 1.17 billion web ensure low-cost mobile money transfers.” cel and Mexican convenience store Oxxo. banking transactions last year. Another barrier to the growth of mobile Transfer’s two million users can deposit and Najera Alva tells RBI that 19% of the money is the fact that, according to Madrid- withdraw cash using a prepaid at bank’s total transactions occur via its mobile based Tecnocom and Analistas Financieros Oxxo’s 11,000 stores as well as at 7-Eleven channel. Internacionales’ Trends in Payment Instru- Mexico and Soriana stores. During 2015, BBVA Bancomer made the ments 2015 report, Mexico has progressed following changes to online banking: slowly in the rollout of non-bank corre - Bankaool and BBVA Bancomer spondent agent networks, even though it has According to Mexican press reports, Banka- • Eliminating passwords for frequent

8 y April 2016 www.retailbankerinternational.com

RBI 724.indd 8 04/04/2016 10:13:15 Retail Banker International DIGITAL: MEXICO

transactions; Santander Mexico more primary customer relationships, sim- Santander Mexico has over 500,000 active plify and digitise the customer experience, • New one-time password generation mobile banking customers, who carry out and optimise its structure to fund growth. process for non-frequent transactions; over 300 million transactions a year. The Scotiabank Mexico will be a ‘leaner, more bank has 700,000 active web banking cus- competitive diversified bank’ with more • Simplification of the fund investment tomers who carry out over 280 million web digital offerings and a larger customer base, process; transactions a year. Bloomberg quoted him as saying. Mobile accounts for over 20% of Scotiabank predicts C$40m ($28m) to • New loan simulator, allowing custom- Santander Mexico’s total banking transac- C$60m in incremental earnings from digit- ers to simulate different loan scenarios, tions, says spokesperson Gamal Duran Cas- ising its Chilean, Colombian, Mexican and pay existing loans, and apply for new tellanos. Peruvian banking operations, plus C$35m to loans; During 2015, Santander Mexico embed- C$50m from developing more primary cus- ded a security token in its mobile banking tomer relationships, and C$30m to C$40m • More history (up to five years) and app, so its customers no longer need a token in cost-savings from optimising its infrastruc- greater flexibility in transaction search- device for transactions. ture. es, and “Our app was the first banking app in Mex- Scotiabank has appointed digital banking ico to be compatible with all four platforms, innovator Ignacio Deschamps as Strategic • Online feedback at the end of sessions. Android, iOS, Windows Mobile and Black- Advisor, Global Digital Banking to its Presi- berry,” says Duran Castellanos. “Our Super- dent and CEO, Brian Porter. Based in New • The bank made the following changes Móvil app offers investments, York and , Deschamps will work to its mobile banking service in 2015: payments, utility bill payments, and trans- with technology Co-heads Michael Zerbs fers, while in addition to these our SuperNet and Kyle McNamara to digitise Scotiabank's • Simplified enrollment process; web banking service offers tax payments, systems and processes, it said. withdrawals from credit card accounts, and Deschamps was formerly chairman and • Higher transaction amounts can now money transfers.” CEO of BBVA Bancomer and Global Head be processed through the channel; Santander Mexico operates the Autocom- of retail banking at BBVA and has extensive para, Viajacompara and Casacompara por- FinTech and digital experience. • New loan simulator, allowing custom- tals where consumers can search for best car The January 2016 investor presentation ers to simulate different loan scenarios, insurance, travel and property deals respec- said that, as part of the digitisation process, pay existing loans, and apply for new tively. Scotiabank Mexico wants to cut its branches’ loans, and Casacompara currently showcases 78,000 share of its total transactions from 35% in homes and offers quotes for Santander mort- 2015 to 20% over the next three to five years, • Four new apps: gages. In Q3 2015, the site had over 455,000 with other channels growing from 65% to visits, Santander says. 80% in the same timeframe. Scotiabank • BBVA Wallet: generates a one-time Autocompara offers car insurance quotes plans to enhance its Mexican mobile and password for online purchases, plus from 10 insurers. In August 2015, Santander online banking channels, while migrating card-blocking and activation; launched the new Autocompara app ena - low-value transactions from branches to bling users to report accidents and their mobile and online. • BBVA Send: money transfers to precise location from their smartphone via Previously, Scotiabank Mexico a sender’s mobile phone contacts geolocation. announced plans in October 2014 to without needing their bank account “Autocompara has changed the way people invest MXN3.6bn ($195m) up to 2019 number. Beneficiaries don’t need to get car insurance in Mexico, because every- to improve its operational platforms and be a bank customer; thing is online and you can choose the best delivery network. quote for your car,” says Duran Castellanos. In 2015, Scotiabank Mexico had 70,000 • Vida Bancomer: geolocalised, target- mobile banking customers, who carried out ed offers from merchants to BBVA Scotiabank 10 million mobile banking transactions. The Bancomer cardholders, and Dieter Jentsch, Scotiabank’s group head bank also had 335,000 Internet banking cus- of international banking, told a Mexico tomers who carried out 50 million web bank- • Línea Bancomer: enabling customers City Investor Day in January 2016 that ing transactions in 2015. to phone call centre agents directly, Scotiabank plans to expand its retail bank- Scotiabank Mexico spokesperson Hec- without needing to go through the ing operations and enhance its banking plat- tor Lopez Rangel told RBI that 20% of the bank’s IVR system. forms in Mexico, Chile, Colombia and Peru bank’s total banking transactions take place to capitalise on the expanding middle class via web banking and 4% via mobile banking. In 2012, BBVA Bancomer launched the in these countries. Services offered to digital banking cus - Dinero Móvil SMS-based P2P transfer ser- “Scotiabank has realised that technology tomers include bill payments, time depos- vice which is targeted at unbanked con - is key to its success in Mexico and Latin its, balance transfers, credit card payments, sumers, allowing recipients to withdraw America,” says Americas Market Intel - mortgage and personal loan payments, and cash via mobile phones and 12-digit codes ligence’s Price. “But this is a new realisa - a virtual token sign-in option. from ATMs without needing cards or bank tion, and Scotiabank has a long way to go During 2015, Scotiabank Mexico accounts. In March 2015, BBVA Bancomer to modernise its Latin American banking launched a new version of its mobile app enhanced the service to enable it to be used systems.” which allows bill payments to be made by for mass payments from employers and gov- Bloomberg quoted Jentsch was quoted scanning the bill’s barcode and generates a ernment welfare departments. as saying Scotiabank wants to develop security token during the transaction flow. <

www.retailbankerinternational.com April 2016 y 9

RBI 724.indd 9 04/04/2016 10:13:15 DISTRIBUTION: MUFG UNION BANK Retail Banker International

MUFG Union Bank sees nationwide opportunities from digital MUFG Union Bank, the San Francisco-based subsidiary of Japan’s Mitsubishi UFJ Financial Group, sees an opportunity to use digital technology to expand its reach across the US. This includes social media, free chequeing, digital banking and education for consumers. Robin Arnfield investigates

he digitalisation of retail banking cess,” Habis says. “We’ve looked into mobile Rafael, California-based Tamalpais Bank and changes the playing field compared to ATM withdrawals and have the capability to Everett, Washington-based Frontier Bank how banking has been for the previous introduce this feature. But we’re trying to sepa- through agreements with the Federal Deposit “Tcouple of decades,” says Pierre Habis, rate out the PR talk about it versus the actual Insurance Corporation, adding 57 banking Union Bank’s Managing Director and Group capability that will be used. We could have offices. Head of Consumer, Business and Private Bank- rolled it out before introducing higher limits for ing. “Retail banking was anchored by physical mobile RDC, but we thought higher limits for Banking by Design locations, and, if you didn’t have 5,000 branches RDC was more important than mobile ATM In September 2013, RBI profiled Union Bank’s across the US, you wouldn’t be a national player. withdrawals.” Banking by Design offering, an unbundled Then came the direct banks like ING Direct Union Bank does offer to its debit banking package which enables customers to and Ally which enable customers to disaggre- cardholders, as it sees the Apple payments plat- select individual chequeing account features (see gate their higher-value funds from their primary form as table stakes which banks have to sup- ‘A la carte banking pays off for Union Bank’). bank. But there’s also an opportunity for a bank port, Habis says. Union Bank launched Banking by Design without a nationwide physical distribution net- “In terms of digital banking, Union Bank will in September 2012, after conducting market work to sit in the middle between the banks with always be with the tide, whether we lead the tide research to discover what features customers national retail footprints and the direct banks.” or not,” says Habis. “In most cases, we’ll be right would want if they built their own chequeing Currently, Union Bank has 365 consumer- alongside the tide. Once the big banks had rolled account. "They told us that they didn't want oriented branches in California, Oregon and out mobile banking, within a few months we expensive charges and that they wanted trans- Washington State. Four of these branches are had also rolled it out.” parency about pricing,” Habis told RBI in 2013. student-run branches inside High Schools in Habis says Union Bank’s traditional branch “We also discovered from our research that, if we California. transactions are decreasing by double digits, unbundled our chequeing account, customers According to Habis, Union Bank has an while its digital transactions are growing. would be prepared to pay for features that they opportunity to use digital technology to have “In the last seven years, we’ve grown substan- valued and needed." a broader, nationwide reach than its physical tially in terms of our balance sheet and in terms Customers can compare and apply for Bank- footprint. of customers, but our transaction volumes are ing by Design and Union Bank’s other accounts “We think there are enormous opportunities constantly being reduced,” he says. “This is online at its website. to bring a different banking experience com- because we’re seeing fewer and fewer people The account requires a minimum initial pared to the direct banks, which is founded on coming into our branches, since people have deposit of $100, and, to avoid the $3 monthly convenience, security and value exchange,” he greater access to cards, and can now do bank- service charge, customers must make a sin- says. “We’ve been working on this for almost ing the way they want to, for example by using gle direct deposit of $250 or more, or a single three years based on a lot of research, and think mobile RDC and mobile P2P payments.” mobile cheque deposit during each monthly we can offer a platform that is the next step up While declining to disclose exact details, statement period. from the direct banks,” he tells RBI. Habis says Union Bank is planning ‘a variety of Customers can write an unlimited number branch evolutions as part of the bank’s ongoing of cheques free of charge, and online banking, Digital banking investment in digital banking’. mobile cheque deposit and online bill pay are “I would say that our mobile platform is at a par free. However, customers pay a $2 monthly fee with the digital services offered by the largest US Acquisitions for paper statements and a monthly fee for safety banks,” Habis says. “We don’t have any major Union Bank, which had assets of $114.3bn as deposit boxes. There is a $1 per month fee for an differentiators with our competitors, although of 30 September, 2015, has expanded in recent unlimited supply of cheques and $1 per month our limits for mobile remote deposit capture years through acquisitions. In 2014, it bought for incoming wire transfers. A linked savings or (RDC) are higher than other banks’ limits. Usu- First Bank Association Bank Services to expand money market account costs $1.50 a month. For ally, for risk reasons, banks have limits for daily its nationwide banking services to US home- $3 per month, customers enjoy two free non- and weekly mobile cheque deposits. But we owners’ association management companies. It Union Bank ATM transactions per month. invested a lot in risk management so we could bought Klik Technologies in 2011 and Smart- “In terms of Banking by Design’s configurabil- allow higher-value mobile cheque deposits. This street in 2012 in order to acquire a platform ena- ity and fee structure, nothing has really changed is a feature which is particularly useful for our bling it to provide banking services to homeown- since its launch,” says Habis. “Consumers really mass-affluent customers who tend to deposit ers’ association management firms. like the freedom of it offers, and it’s a posi- higher-value cheques.” In 2012, Union Bank acquired Pacific Capital tive product from the P&L perspective for us.” Mobile ATM withdrawals are definitely Bancorp and its bank operating subsidiary Santa Offering Banking by Design gave Union Bank on Union Bank’s roadmap for consideration. Barbara Bank & Trust, adding 38 branches in an insight into consumer behaviour in differ- “We’re working through the prioritisation pro- California. In 2010, Union Bank bought San ent segments. “It has helped us to understand

10 y April 2016 www.retailbankerinternational.com

RBI 724.indd 10 04/04/2016 10:13:15 Retail Banker International DISTRIBUTION: MUFG UNION BANK

more clearly where the value lies, when people its chequeing accounts, credit cards, and home tation, for example for our diversity and inclu- are empowered to make financial choices and equity products, are on a par with its competi- sion policies.” turn on or turn off specific features,” Habis says. tors’ offerings. Habis says he is often asked at what point “Banking by Design caused us as a company to “The biggest differentiator is that we offer social media will drive Union Bank’s profitabil- rethink what tomorrow looks like in terms of free chequeing in a number of ways, while ity. “We aren’t there yet as a company,” he says. product sets for the different segments. We now our competitors offer free chequeing only for “We aren’t sure when social media will get there understand more clearly how the mass-affluent balances over a certain level and for direct in terms of profitability.” segment differs from the mass market segment deposit,” he explains. in terms of their trade-offs, and we’ve started to Similar to Banking by Design customers, Student-run branches act on that knowledge.” Union Bank’s Ready to Go Checking custom- In January 2016, Union Bank opened its fourth ers get free chequeing in return for monthly student-run branch in California offering bank- Mass affluent mobile cheque deposits, as well as through ing services to school students and school staff. Originally, Union Bank had hoped that the monthly direct deposits. Otherwise, there is Located inside High School campuses, the transparency and empowerment offered by an $8 monthly fee for Ready to Go Checking student-run branches are staffed by student Banking by Design, which has worked well for accounts without paper statements and an $11 bankers and overseen by a Union Bank branch the mass market segment, would also be attrac- fee for accounts with paper statements. manager. The program aims to provide students tive to mass-affluent customers. Union Bank’s Priority Banking account cus- with real-world financial education, work expe- “We had thought Banking by Design could go tomers get free chequeing if they hold a mort- rience, and mentoring opportunities. upstream, but we learnt that what mass-affluent gage with the bank or a combined balance of Union Bank’s latest student-run branch was customers are interested in is different to what $50,000. opened in partnership with Anaheim Union the mass market wants,” Habis says. “Empow- “We’re the only bank that offers free accounts High School District in Anaheim. erment isn’t as important for mass-affluent cus- in return for RDC,” says Habis. “But we think “When we make announcements about pro- tomers, who really want a higher-value package. this is the future.” grams such as our student-run branches, there They don’t want to turn on and off different fea- is a huge social media response,” says Habis. tures to optimise cost, as they don’t traditional Partnership with Gallup “We get a lot of discussion online, as students pay banking fees anyway. So we developed a In summer 2015, Union Bank began working are involved and they are typically in the social Priority Banking premium account for the mass- with customer analytics firm Gallup in the area media space.” affluent, which we created from our learnings of customer experience. from Banking by Design.” “The client experience is very important to Financial education In addition, for high-net-worth customers us,” says Habis. “We’re focused on omnichan- In 2014, Union Bank launched Yuby, an holding combined balances of $250,000 with nel and, working with Gallup, want to better Android- and iOS-based banking app which Union Bank, the bank created the Private Bank understand our strengths and opportunities at teaches children about responsible spending, Private Advantage Checking Account. every touch point and delivery channel. We’re saving, budgeting and charitable giving. The The package that Union Bank offers the mass- focusing on how we hand off our clients for app was developed with software company affluent isn’t ‘a la carte.’ “Priority Banking is a specialised questions and how we resolve these Mutual Mobile. fully packaged product with relevant discounts questions. There are only a few ways to differ- “We wanted to put something out there to and features,” Habis says. “We’re still working entiate yourself in banking, and one of them is help educate children about the value of money on our strategy of building a holistic relationship the way in which you work with your clients and which wasn’t about Union Bank,” says Habis. which will be of value to the affluent segment, come access to them. It’s more than just having a “As an industry, banks have a responsibility to and in the next twelve months we will be offering greeter at a branch.” help parents educate their children about bank- several new products to that segment.” Habis says Union Bank is working with Gal- ing, especially as many US schools no longer Union Bank aims to be innovative in the mass- lup on several journey maps. teach home economics. We’ve had a lot of posi- affluent market, Habis says. “For example, our “These will take the best out of every industry, tive feedback from schools, parent groups and fee-free offer to that segment is tied to a mort- not just out of the banking industry,” he says. fellow bankers. The app has certainly helped gage product, although mass-affluent customers “Customer experience is part of everyone’s score raise awareness about Union Bank and our posi- without a mortgage can qualify for fee bank- card from our bankers right up to me. We look tion on financial education.” ing through their investments with us,” he says. at it holistically, not just from the perspective of Union Bank has a community outreach team “Traditionally, you get fees waived by having transaction experience.” within its Corporate Social Responsibility divi- direct deposits or balances above $50,000. sion. The team works with non-profit organisa- “Now we look at loans as a way to bring the Social media tions to meet the needs of low- and moderate- affluent segment into our bank. What tends to “Social media is important enough for us that we income communities, Union Bank says on its happen with affluent individuals and families have an internal team focused on learning, lis- website. Union Bank employees carry out vol- early on in their financial lifecycle is that they tening, understanding and responding to what unteer activities such as: become highly leveraged, and then later on they people are saying in this channel,” says Habis. start to accumulate wealth, pay off their loans “We need to hear what our competitors, custom- • Offering financial education workshops and have money to invest. We want to get a rela- ers and people in our community are saying. But in partnership with non-profit groups in tionship with affluent customers when they’re social media for us is still more about waiting disadvantaged communities; still heavily leveraged and need to borrow, so and seeing what it all means.” they will become loyal to us.” Nevertheless, Habis says social media has • Connecting bank employees with commu- proved a positive experience for Union Bank. nity-based organisations, and Free chequeing “We’ve learned how consumers feel about Habis says that Union Bank’s product set for us as a socially-responsible bank,” he says. • Coordinating senior-level officer board consumer and small business clients, such as “We’ve scored very well in terms of our repu- service with non-profit organisations. <

www.retailbankerinternational.com April 2016 y 11

RBI 724.indd 11 04/04/2016 10:13:16 ANALYSIS: MYANMAR Retail Banker International

The two-step: Myanmar’s dance with liberalisation and modernisation Myanmar’s political front is not the only landscape that is undergoing a liberal revolution, its banking sector is experiencing rapid changes as well. Xiou Ann Lim reports on the emerging market and how not only banks, but government initiatives are bringing life to the financial sector

losed off from the global economy es. “The domestic

12 y April 2016 www.retailbankerinternational.com

RBI 724.indd 12 04/04/2016 10:13:18 Retail Banker International ANALYSIS: MYANMAR

ernisation is a challenge for the whole coun- try – especially in terms of banking practices, corporate governance and risk management. Yoma Bank – which received a $5m con- vertible loan from the International Finance Corporation in 2014 as well as assistance to improve its risk management – is very focused on good corporate governance. But issues pertaining to governance – espe- cially in a nascent market such as Myanmar – needs to be helped along by having a coher- ent regulatory framework. “The CBM has been working hard on devis- ing a comprehensive regulatory framework for the industry and has made significant progress in the last four years,” Fujii shares. But there is still much more to be done. He reveals that the CBM has a limited number of staff who have to juggle the dual respon- sibilities of coming up with new policies and regulation while overseeing the implementa- tion of the existing ones. supported by an enabling regulatory frame- But this challenge is not contained only work and implemented through a network

www.retailbankerinternational.com April 2016 y 13

RBI 724.indd 13 04/04/2016 10:13:23 EVENT: RBI BANKING ROUNDTABLE Retail Banker International

Will digital really lead to a revolution? How much of a threat are challenger banks? What are banks’ opinions on digital transformation? What are the most successful digital offerings in France? How profitable are credit cards? These are just some of the questions pondered at a roundtable hosted by RBI on behalf of Assurant Solutions. Anna Milne writes

hen banks seek to push the and term life, BNP Paribas Cardif, said: away at some of the traditional forms innovation boundaries, they “Yes- there are experiments with user of banking revenue, eg, remittances or tend to brainstorm ideas experience, not only from the banks but international payments and compete. based on their experience as also from the para-banking companies, BNP Paribas launched Hello Bank as a W for example applications for sharing new brand.” a consumer. It’s true the retail con - sumer market often informs finance money between people.” Corrine Leger-Licoine, head of opera - sector products. With this is mind the tions at HSBC, said: “Hello Bank came roundtable discussion kicked off with a Fintech competition: boom or bust? out and said it wanted to create a new round-up of favourite apps, and more Delegates discussed the sea change in bank but continue to use the process - importantly, why they are chosen as the number of mobile-only challenger es done by BNP. That's the reason for favourites. banks coming out now in the UK. And which Hello Bank is absolutely not Whatsapp, Uber (ironically, given whether there is an actual appetite for profitable. Which is not the case of the difficulty people had getting to the people to conduct all their banking Boursorama, which has developed as venue on the day on account of the cab on their phone. A similar situation is two different banks, it has re-created driver strike in the capital over the car reflected in France, with the likes of its entire IT system, with which they sharing app), Spotify, Instagram, You - Boursorama Banque. are able to be very agile.” Tube and ‘connected appliance’ apps Jeong continued: “BNP Paribas was Delegates described the current mar - were some of the more well-known very late to launch a dedicated digital ket as ‘very energetic, similar to the apps cited as favourites. bank and still we are trying to find a dotcom boom’ when there were some Brought to light was the fact that very way to extend the business. Boursora - great people with great ideas and inno - few actual banking apps were chosen. ma Banque for example has its own site vation and eventually what happened This, for an industry that is one of for its transactions and everything. was they all got consolidated and the biggest spenders and investors in “To have maximum benefit to attract bought. mobile technology; a sector in which new clients there needs to be differenti - The bankers agreed this was a sce - millions of pounds are spent on con - ation. Boursorama Banque is doing very nario likely to be replicated. After all, sultants, analysts and innovation labs, well in terms of the customer interface given the muscle in the big banks, and is perhaps surprising at best, disap - and total value.” the amount of money they have, it's pointing at worst. Politics were brought into the frame not very difficult for them to buy the Douglas Blakey, group editor of as well, there being a very different small challengers, taking them out of Timetric finance titles including Retail political climate in the UK to France. the market. Banker International, and chair of the French banks were not bailed out to discussion, asked: “Can you see in the the same extent as publicly as the UK Crossing the digital line- how far to next two to three years, you answer - banks. take it? ing your bank app to this question of Douglas Blakey: “French custom - Blakey said: “BBVA is a very success - favourite apps? Because with the invest - ers, generally, have a higher regard for ful Spanish bank, digitally-speaking. ment being made by the banks, argu - banks than UK customers so there's Unlike Santander, which grew market ably we should be there already.” not the feeling of antipathy. There share in the UK by acquisitions, BBVA Jae Won Jeong, global head of savings are moves from fintech players to eat had virtually no presence in the UK,

14 y April 2016 www.retailbankerinternational.com

RBI 724.indd 14 04/04/2016 10:13:29 Retail Banker International EVENT: RBI BANKING ROUNDTABLE

tomers still want a personal interaction COMPANY NAME TITLE for a sensitive transaction? BNP Paribas Cardif Jae Won Jeong Global head of Savings&TermLife Jeong: “Once you are too digitalised BNP PARIBAS Personal Finance Jean-Marc Buresi CEO PF INSIDE REGION you grow tired of digital. A few years BOURSORAMA Brice Groche Director of Investment Operations ago I did everything digitally; I don't Credit Agricole SA Roberta Cecchin International Retail and Commercial banking Multichannel like it anymore because I don't want Project Manager to replace human interaction on the phone.” Credit Agricole SA Konstanty Kasprzyk Agile Service Projects HSBC BANK PLC France Corinne Leger Licoine Head of Operations Is the demise of the physical branch HSBC BANK PLC France Antoine de Murat Head of Banking & CDD-Deputy Head of Operations - premature? Natixis Global Asset Management Lientu Lieu Head of Strategy and Planning Blakey asked the French bankers to Natixis Global Asset Management Samuel Behrens Strategy and Business Planning discuss the reduction in branches in France. “In the UK, Barclays are down NBAD FRANCE Fadi Halout Country CEO & Managing Director Wholesale-France from 2,200 to 1,300, over a third of NEWEDGE (SG) Eric Bonnefoy Directeur des Opérations branches. Do you see real reduction in Santander Consumer France S.A Martin Thomas CEO branch networks of the type we see in Santander Consumer France S.A Philippe Pouget Chief Technology&Operations Officer the UK?” SG CIB Angel Galdano Head of Static Data Quality and Functional Transversal Leger-Licoine: “A lot of branches are closing in France. And yet the custom - Societe Generale Camille Durand DRH Head Office International Banking and Financial ers do still want direct contact for sen - Services sitive transactions. Assurant Solutions Alexandra Berger Directeur Commercial Corporate “The best in class in terms of customer Assurant Solutions Joanna Gittens Marketing Executive service in France are the mutual banks, Ecobank France (EBI SA) Elfried Didehia Senior Credit Analyst Credit Mutuel, Credit Agricole, and why are they considered best in class? had bought a third stake in Atom very Leger-Licoine: “We need to propose Because they provide a physical link cheaply - £45m ($65m), call it £60m all the activity of digitalisation for the for the customer, that's very important, - loose change. It is possible that the customer. despite the fact 60-80% of customers start-up digital banks may not be very “We don't think that even for mort - use internet banking.” independent for very long if they're suc - gages for example, it's possible to do One thing is for sure, the pace of cessful.” via the internet, we see that, we have change. Roberta Cecchin, international retail opened an offer for our customers for Konstanty Kasprzyk, who man - and commercial banking multichannel mortgages in France and one person ages agile service products at Credit project manager, Credit Agricole, said: has completed the process, one person. Agricole, commented on the recent “The big banks have a lot of money and The others prefer to discuss in person. changes in the market: “A few weeks can buy these fintech banks, it’s true People are afraid of the risk involved if ago to change the credit limit on my but I think the danger comes more from they make a mistake, they don't want card I was told I had to speak to an Apple, Google and Facebook. to decide the rest of their lives with a advisor but since then I’ve received an “Banks can die, despite all the money mortgage via the internet. update to my app informing me that they have. I don’t think I would bank Agility is easier achieved with small - there are new options and I can now do with Google but I think my nephew er customer numbers, Leger-Licoine it through my app. So the changes are would.” explained: “When you have larger num - happening now.” However, Leger-Licoine said: “We bers, it is more difficult. HSBC, global - Elfried Didehia, senior analyst, Eco - cannot compare Google or Apple with ly has more than 80 million customers. bank France (EBI SA) brought the a bank - it’s totally different. I don’t “We think in the future we will be roundtable full circle by reconsider - think that we will finance the economy more agile but today our main issue is ing the question of what actually is the through Google or Apple; we can cer - to be robust, to deliver the same service best mobile app: “Maybe the best app tainly pay through Google and Apple, to all countries, to be sure we have no is about discretion, and in providing a but I don’t think we will do structured risk of fault: the main thing. The credit fast, discrete service, you forget, you bonds through them. And I think we card is an activity which is not profit - don't spend a lot of time in it so maybe are confusing the most important vol - able because we accept to pay when the if we ask ourselves the question again, ume of activity, and the real activity of customer has an issue. everybody might well say their favour - the bank, which is financing. “I think to try to attract the customer ite app is their banks'. Because I need “For this type of flow the main com - with free cards of payments is slightly something where I have two clicks and petitor should be Google and Apple stupid from an economic point of view. it's done.” but I am more worried by someone like I'm not sure that digitalisation is the Wrapping up, Blakey came in: “If Boursorama, backed by a big bank.” solution to all our worries today. Advi - it's just a case of taking holiday insur - Brice Groche, director of investment sory services are important and can’t ance the scope surely is as Alexandra operations, Boursorama: “It's totally necessarily be done online.” [Berger, director commercial corporate, different. Hello Bank is based on the The question is how far to take digi - Assurant] says, just to be able to do it site of BNP but we do not rely on the tal, are customers ready even if the quickly on your phone to add it to your site of Societe Generale.” technology is? To what extent do cus - product.” <

www.retailbankerinternational.com April 2016 y 15

RBI 724.indd 15 04/04/2016 10:13:30 INTERVIEW: MONITISE Retail Banker International

“We are out pitching every day...” Lee Cameron has one of the toughest jobs in fintech. Soaring losses, impairments, declining revenues and repeatedly missed targets have all combined to weaken market confidence in Monitise, the onetime darling of the UK fintech sector. As he tellsDouglas Blakey, the market will not tolerate any more failure

onitise CEO Lee Cameron does a the tyres of Monitise ahead of a possible sale;

tells RBI: “Everyone is holding their “We spoke to a number of organisations in H115 H215 H116 breath a bit.” our space but if it has anything to do with M us, we will stay as an independent company,” Revenue 42.2 37.3 33.4 Few technology vendors have endured such a rollercoaster ride as Monitise. And Lee Cam- says Cameron. Gross Profit 21.6 24.9 18.5 eron, the firm’s third CEO in a year, has been The Cameron turnaround plan incorpo- Operating Expenses -52.4 -35.9 -38.7 with the firm since day one. rates drastic cost-cutting; headcount has “I was part of the founding management almost halved. EBITDA -30.8 -11 -20.2 team when we had no customers, no revenue He says: “We have taken out the cost cen- Depreciation, amortisation -58.1 -165.1 -211.6 and no employees. I have seen it all the way trally and prioritised customer facing roles. and impairment through.” We had too much corporate stuff that was Exceptional and share -14.4 -47.8 -11.4 Appointed as CEO last September, Cam- not supporting customer engagement or gen- based payments eron inherited something of a hospital pass in erating revenue – that has been taken out of Attributable loss -56.8 -166.8 -205.4 business terms from his predecessor who spent the business.” Source: Monitise only six months in the role. Cameron’s plan also incorporates acceler- Losses quadrupled in the six months to end ating a change in strategy away from charging vide a compliant framework within which December 2015; impairments soared as the licence fees to banks. banks can compose and package their services firm wrote off £167m ($235m) while sales fell Instead, Monitise is banking on a single in conjunction with other third party services. to £33m from £42m in the year ago period. cloud platform with the aim of deriving more FINkit features prebuilt component archi- Market confidence dried up after a number consistent revenues from subscriptions as well tecture and is built in such a way that can ingest of targets were set and missed with depressing as new business partnerships, such as a major APIs from fintechs and from the banks them- predictability; the share price fell by 97% from deal with IBM. selves. a peak of 80p to less than a meagre 2p by the Historically, the Monitise business model Adds Cameron: “A lot of banks tell us that end of 2015. involved the firm selling its proprietary soft- they have in-house innovation they want to And amid all the management upheaval and ware to its bank clients and charging a licence commercialise and bring to market. negative press coverage, the firm was burning fee, plus professional services fees, for the “Co-opetition may be a terrible word but it through its cash pile at an alarming rate. implementation and localisation work around does exist. We can be the platform to enable the that and to provide ongoing support and main- mixing and matching. Candid Cameron tenance. “So when we go and pitch to banks it is not As for what went wrong, Cameron does not That strategy, says Cameron, worked just a pitch to push more to the self-service pull his punches. ‘extremely well’ for a few years. channel to lower costs. “We projected a vision and an ambition that And then in March 2014, Monitise raised “It is to look at the revenue side of balance was so enormous that we were over-stretched. fresh capital of £100m to build what it terms sheet; we can now deliver to banks lots of ser- We opened offices everywhere and saw the its MCP or Monitise Central Platform. vices - some they might want to build them- opportunity for a digital financial services land “We wanted to move away from charging a selves, some we will build for the bank and grab,” he says. licence fee and charge banks transaction fees some they may want from a fintech but cannot “For a little UK AIM-listed company, we when their customer uses the service.” get them into their systems because they will were too ambitious and we did over-stretch not satisfy their security guys. and we have taken a long time to pivot and Sell FINkit “Other organisations are coming over the transition the business. Looking ahead, the future of Monitise – if it top and inserting themselves into the supply “We grew so rapidly but did not have the sub- is to have a future as an independent outfit – chain. stance to support it. We have missed targets can be summarised in two words: sell FINkit. “It may not matter to the banks today because and repairing the consequences has been very Cameron does not quite admit that the suc- are enormous and successful at what they do public. We now accept that we are not going to cess or otherwise of FINkit will determine the but if they allow other people to get access to own digital financial services.” future of the firm but he comes close. their customers’ spending behaviour and their Nor, says Cameron, will the firm embark on “Whether we are super successful or just go transaction data it will over time mean that the another strategic review or seek a sale of the down in history as another UK fintech compa- bank loses its ability to own and be the custodi- business. ny that did okay will depend on how successful an of these services of value to their customers. A strategic review of the business in early we are with FINkit,” he explains “So my message to the banks is to let them 2015 resulted in some major players kicking The new FINkit offering is designed to pro- leverage us and you can launch those services

16 y April 2016 www.retailbankerinternational.com

RBI 724.indd 16 04/04/2016 10:13:30 Retail Banker International INTERVIEW: MONITISE

SHARE PRICE ROLLERCOASTER MONITISE - SHARE PRICE JANUARY 2014-MARCH 2016 (£P) DECLINING CASH PILE - MONITISE - CASH AT END OF REPORTING PERIODS H115-H116 (£M) 100 Share price (£p) 150

80 120

60 90

40 60

20 30

0 0 6

Jan 14 Jul 14 Jan 15 Jul 15 Jan 16 end h115 end h215 end h11

Source: Monitise Source: Monitise MONITISE TIMELINE • 2003; Monitise founded by Alastair Lukies to end June 2014 of £31.4m; shares decline by 4% year; blames switch in 2014 to a subscription • 2006; Monitise signs up first major client; HSBC to 44p; Visa, the firm’s fourth-largest sharehold- model from one based on licences; press reports subsidiary ; er says it is considering selling its stake in Moni- link a number of potential suitors with Monitise • 2007; Monitise lists on London’s AIM; tise; appoints JP Morgan to advise on its options; including Visa, MasterCard, Fiserv, TCF, IBM and • 2009; Visa Inc takes a 15% stake in Monitise • 10 October 2014; Monitise attracts negative Temenos; (subsequently diluted to 5.5% by capital raisings) press and analyst comment following reports of • 25 March 2015; Monitise ends sales process; • 2013; Market capitalisation of Monitise hits Lukies total pay package. For the year to June Founder and co-CEO Alastair Lukies steps down; £900m 2014 it rose to £1.17m from £616,000 the prior hands over full executive control to Elizabeth • 10 January 2014; Monitise share price peaks at year; Lee Cameron, head of sales is awarded a Buse; accelerates cost-cutting programme; share 81p 40% pay rise from £473,000 to £677,000 for the price falls 22%; • January 2014; UK Prime Minister David Cameron year to June 2014; • 6 July 2015; Monitise CEO Elizabeth Buse said rev- appoints Alastair Lukies as Business Ambassador; • 27 November 2014; Monitise raises £49.2m from enues will be lower than previously forecast due to • 6 June 2014; Elizabeth Buse, a 16 year veteran senior share issue; share price rises 12% to 34p; a ‘difficult year’; r executive at Visa Inc appointed co-CEO of Monitise • 2014; Management Today names Monitise The • 9 September 2015; CEO Elizabeth Buse resigns • 13 June 2014; Alastair Lukies recognised in UK’s Least Admired Company, ranking 247th out for ‘personal reasons’ after little more than a year Queen’s Birthday Honours List – appointed CBE; of 247 firms surveyed by Leeds Business School; in post; Monitise share price collapses 29% to a • 26 June 2014; Monitise acquires Markco Media • 22 January 2015; Monitise issues another profit six year low; Lee Cameron, deputy CEO takes over; Limited in all all-share deal worth up to £55m, the warning; discloses it holds gross cash of £129m; • 31 December 2015; Monitise share price ends the parent company of MyVoucherCodes.co.uk; hires Moelis & Co to conduct a strategic review of year below 2p; • 8 July 2014; Monitise issues second profit warn- the company; • 12 February 2016; Monitise posts loss of £20.2m ing in four months; warns it will miss sales targets; • 23 January 2015; Monitise reportedly receives ‘a for six months to end December 2015; writes off share price falls 8.6% to 45p; says it remains on number of expressions of interest’, with potential £167m from value of its business; cash balance target to break even in 2016 and ‘increased con- transactions including a merger with a third party has declined to £53.4m from £88.8m six months fidence’ in hitting its target of 200m users by or outright sale of the business at end June 2015; mid-2018; • 16 February 2015; Sky News links FIS with a pos- • 4 March 2016; Monitise reportedly in talks to • August 2014; Alastair Lukies appointed non- sible bid for Monitise; dispose of content business unit, Markco Media executive chairman of FinTech industry body, • 17 February 2015; Monitise reports loss of including MyVoucherCoes.co.uk; Monitise share Innovate Finance at its launch; £30.8m for six months to end Dec 2014 up from price surges by almost 50% to a three-month- • 15 September 2014; Monitise posts loss for year loss of £10.2m in corresponding period the prior high of 3.2p. <

to your customer to drive additional revenues of £3m per month to end June, bringing total we turn up and tell a bank what we can do for - and more importantly you are defending your costs to around £35m. them, we may meet with some resistance as the role with your customers.” Revenue in the last six months was approxi- bankers say ‘well, our own internal team can mately £33.4m and is expected to be broadly do it better, faster, cheaper.’ Looking forward similar in the six months to end June. “It is so often not the case. The internal team Cameron is adamant that the firm is now Such figures stress just how important it is has to deal with legacy change at the back end stabilised, focused, moving towards profit- for Cameron’s sales guys to get new deals on and so often do not have the time or resource ability, adequately funded with tight man- board for FINkit. to focus on innovation at the front end which agement controls in place, transparent and “We are out pitching every day. A number is where we help.” accountable. of our competitors have disappeared or been Are there deals in the offing that might He faces no easy task. Monitise’s half-yearly acquired. Often, the competitor is the banks improve City sentiment towards Monitise? costs for the six months to end December 2015 themselves via their in-house teams. “More than one – before 30 June,” concludes were £53m; it is targeting a reduction in costs “But just look at the in-house history. When Cameron.<

www.retailbankerinternational.com April 2016 y 17

RBI 724.indd 17 04/04/2016 10:13:31 NEWS: DIGEST Retail Banker International

DIGITAL the Gulf markets and to act as a with 16 branches in Mozam - start making payments for goods Google to shut down its preferred regional intermediary bique, according to the Nedbank and services with their mobile financial comparison for its clients in terms of securing website. device. site their cross border banking needs. TD’s chief digital officer Meantime, AUB Group chair- TECHNOLOGY Rizwan Khalfan said: "The Technology giant Google is set man Hamad Al Humaidhi has New fintech hub adoption of Visa's tokenisation to close its financial comparison been named as new chairman launched in Israel solution allows us to deliver a site Google Compare one year of AUBL, while CB Ganesh was faster, simpler, and more accessi- after its launch in the US and UK. appointed as the CEO. A vertical-focused financial tech- ble mobile payments experience, Citing the reason for the site's Commenting on the UAE ven- nology hub, named The Floor, backed by a secure technology closure, Google said that the ture Al Humaidhi said: "The has been launched in Tel Aviv, developed by a global leader in service had been unable to offer launch of DIFC operations rep- Israel to support start-ups in the payments." the desired success in terms of resents another important mile- fintech sector. Visa Canada head of technol- revenue even though it received stone in AUB's evolution as a Financially backed by Chi - ogy and digital innovation Derek a good level of traffic from users. truly diversified regional bank nese venture capital fund Pando Colfer said: "Visa Token Service The comparison site was origi- and enables it to more effectively Group, the new hub will include provides a secure environment nally launched in March 2015 service its UAE and regional an R&D centre, 1,600 square for mobile commerce, allowing as a car insurance comparison customers through a dedicated metres of collaborative work- consumers to shop seamlessly site for California's automobile presence." space and host events to connect and with confidence using their buyers, and was later expanded Ganesh said: "AUBL has the country's fintech start-ups devices." to other markets such as credit already seen very strong interest with investors and partners. cards and mortgages. from AUB Group clients across In addition, The Floor has STRATEGY Google Compare enabled the UAE and the region and we also secured the support of four ABN AMRO partners online shoppers to view offers will work to significantly devel- major banks including Banco with First Data for from auto insurers, mortgage op and enhance these relation- Santander, HSBC, Intesa San- lenders and credit card issuers ships in the coming period." paolo and RBS. payment services on entering personal data. Up to 25 companies can rent ABN AMRO has teamed up with Google took commission from M&A office space at the hub, gaining First Data to offer a range of dig- insurers and lenders on referrals, Nedbank to take access to international financial ital and cash payment methods and was also licensed to sell controlling stake in players, venture capitalists and to businesses with physical and products directly to consumers other mentors. online stores. in some cases. Mozambique’s Banco The hub is managed by Moises The bank will deliver these The service would be wound Unico Cohen, Avi Cohen and Gil Devo- services through its joint venture down this month and terminated South Africa's Nedbank has ra. European Merchant Services on 23 March. announced plans to invest (EMS), which processes credit ZAR178m ($11.4m) to increase SECURITY card and debit card payments DISTRIBUTION its stake to 50% plus one share TD Bank adopts Visa's for businesses. Ahli United Bank in Mozambican lender Banco secure tokenisation The bank is planning to launches banking Unico. expand this service to all of its The South African lender, technology business clients later in 2016. operations in Dubai which currently owns a 38.3% Canada's TD Bank Group has ABN AMRO Corporate Bank- Ahli United Bank Limited stake in the bank, is now the adopted Visa's global standard ing director of products & busi- (AUBL), a subsidiary of Bahrain- joint largest shareholder in the tokenisation technology for its ness development Berend Dinkla based Ahli United Bank, has bank with Gevisar, which is a TD app for the Android operat- said: "We are pleased that, based launched its banking operations joint venture between Grupo ing system. on our new partnership, we can in Dubai International Financial Américo Amorím and Portu - The tokenisation technology, now offer clients a single con - Centre (DIFC), UAE. guese conglomerate Visabeira. powered by Host Card Emula- tract with payment solutions The expansion into the UAE Other shareholders include tion (HCE), will improve the for both webshops and physical market follows the receipt of Banco Único's former CEO, security of the bank's customer stores. Together with our part- a Category 1 Licence from the João Filipe Figueiredo Júnior by substituting sensitive account ners EMS and First Data, we Dubai Financial Services Author- with a 10.69% stake; SF Hold- information with encrypted will continue to invest in relevant ity (DFSA) on 25 February. ings with a stake of about 7%, 'tokens' during mobile payment payment solutions." The new office will provide and Mozambique's state social transactions. European Merchant Services corporate banking, private bank- security fund INSS with a 2.14% The transition to tokenisation general manager Bart Damstra ing, wealth management, trade stake. obviates the need for smart - said: "The partnership between finance, treasury and cross-bor- Nedbank said that the increase phone owners to go to their car- First Data, ABN AMRO and der financial products and ser- in stake would offer Nedbank a rier and get a NFC SIM Card. EMS has enabled us to further vices to clients based in the UAE controlling share in the Mozam- The bank said that its clients increase our footprint in the as well as in the wider Middle bican bank. can download the updated TD payments industry. We are com- East region. In 2013, Nedbank took a Bank app, which available on mitted to further developing our This move is part of the 36.4% stake in Banco Único for Android phones running 4.4 and product offering to make pay- group's strategy to develop inte- $24.4m which has now grown above. After adding their Visa ments even more convenient for grated banking presences in all to 38.3%. Banco Único operates card to the app, customers can our clients."

18 y April 2016 www.retailbankerinternational.com

RBI 724.indd 18 04/04/2016 10:13:32 Retail Banker International NEWS: DIGEST

First Data head of global busi- chairman and founder Uday land and Asia, the wealth divi- It will eventually be rolled out ness solutions EMEA Shane Kotak in 2014. sions will become part of the to all Nordic countries including Fitzpatrick said: "Through this Following the latest sale, Sum- retail teams. Sweden, Norway, Denmark and exciting partnership, First Data itomo's stake in the Indian lend- Finland. The company earlier and ABN AMRO will be able to er will be diluted to about 1.8%. PAYMENTS used separate fraud solutions for offer clients a true omni-channel In 2010, the Japanese firm had Number26 teams various countries and channels. experience: innovative point-of- acquired a 4.5% stake in Kotak with TransferWise for FICO regional director of sale, mobile and online solutions Mahindra Bank through a pref- Nordics, the UK and Ireland that connect businesses with erential allotment for $201.2m. international money Steve O'Malley said: "FICO their customers." transfers already partners with Nordea in STRATEGY Number26, a German digital multiple parts of their business, M&A ANZ to merge wealth banking start up backed by Peter including customer account Eurobank Bulgaria unit with retail Thiel, has teamed with Transfer- management and scorecard wraps up its acquisition Wise, a UK-based peer-to-peer development, and our work with businesses money-transfer firm, to offer them on customer fraud protec- of Alpha Bank Bulgaria ANZ Banking Group has decid- its customers in-app access to tion is a natural extension of that Eurobank Bulgaria (Postbank), ed to overhaul its wealth division TransferWise's service. partnership. the Bulgarian subsidiary of by aligning some of the wealth The service will be immediate- "Enterprise-wide fraud man- Greece's Eurobank, has closed businesses into its existing retail ly rolled out to the bank's cus- agement is a goal for many the acquisition of Greek lender operations and on a geographi- tomers in Austria, France, Ger- banks worldwide, since crimi- Alpha Bank's Bulgarian branch. cal basis to improve returns and many, Greece, Ireland as well as nals are keen to exploit gaps The acquisition makes capital efficiency. Slovakia. between fraud systems. Nor- Postbank the fourth largest Bul- As part of the restructure, the The transfers will be initially dea's leadership will show how a garian bank in terms of deposits bank's Australian insurance, available from Euros into eight centralised approach can reduce and loans, with assets of over superannuation and investments currencies, namely US Dollar, fraud losses while improving the BGN6.3bn ($3.4bn). operations will be rebranded as British pounds, Swedish krona, customer experience." Eurobank said in a statement Australia Wealth, which will be Indian rupees, Australian dollars, that the transaction, announced led by Alexis George as manag- Hungarian forints, Swiss francs, M&A in July 2015, will strengthen its ing director. and Polish zloty, the bank said in Citigroup to buy position in the Bulgarian bank- ANZ Banking Group CEO a statement. Costco’s US co-brand ing sector and help expand its Shayne Elliott said "These The updated version of N26 customer base in the retail and changes generate more value apps, with TransferWise built card portfolio wholesale segments. for our eight million customers in, are available on iOS and Citigroup has signed a defini - "Starting from 1 March 2016, by making it simpler and more Android platform. tive agreement with American branch originating customers convenient to access wealth solu- TransferWise CEO Taavet Express to purchase warehouse will continue to enjoy high-qual- tions through closer coordina- Hinrikus said: "We want to chain Costco's co-brand credit ity services through the same tion and alignment of our wealth make it as easy and fair as possi- card portfolio in the US for an service channels and in the near and retail products. ble for people who need to send undisclosed amount. future, during which the opera- “The changes help us unlock money abroad, so we're very Under the agreement, Costco's tional integration is expected to more potential from wealth and excited that Number26 custom- users with co-branded American be completed, they will be able reduce complexity, duplication ers can now access the Transfer- Express cards will be transferred to use the extended Postbank and cost across our business.” Wise experience without leaving to Citi. branch network," Eurobank "The simplified approach their banking app." The transition is expected to said. also provides the opportunity close in the middle of 2016. to focus on improving returns SECURITY Citi Cards CEO Jud Linville M&A and capital efficiency from our Nordea selects FICO’s said: "We are immensely pleased Sumitomo offloads half insurance, superannuation and platform to counter to have entered into an agree - of its stake in Kotak investments product business ment to acquire the Costco port- given higher regulatory capital payment cards fraud folio and look forward to a long- Mahindra Bank requirements," Elliott added. Swedish lender Nordea has term partnership with Costco Japan's Sumitomo Mitsui Finan- Joyce Phillips - who led ANZ's selected FICO's fraud manage- and the opportunity to deliver cial Group has sold half of its wealth, marketing and innova- ment solution, FICO Falcon value, convenience and seamless 3.58% stake in Indian private tion divisions - will leave the Platform, to protect its custom- service to their 51 million loyal sector lender Kotak Mahindra bank. ers from credit, debit and e-pay- members across the country." Bank for nearly $300m. Following the reorganisation, ments fraud. Currently, the bank is working According to media reports, the private bank division in Aus- The company will also use with the well-known and popu- a large portion of the stake has tralia will report to the group FICO's adaptive analytics tech- lar warehouse chain to offer a been acquired by Canada Pen- executive for Australia, Fred nology to refine its fraud detec- new value proposition to its sion Plan Investment Board Ohlsson. tion. cardholders. (CPPIB). ANZ financial planning will The fraud management solu- Citi said that it does not expect An existing investor, CPPIB become part of the retail distri- tion will be implemented for the the impact of the acquisition and acquired stake in Kotak Mahi- bution division and report to company's retail banking as well conversion to be material to its ndra Bank from the bank's vice Catriona Noble. In New Zea - as corporate banking segments. earnings in 2016. <

www.retailbankerinternational.com April 2016 y 19

RBI 724.indd 19 04/04/2016 10:13:32 GUEST ARTICLE: COGNISCO Retail Banker International

People Risk: The Domino Effect at the Heart of Banking

The 2008 financial crash and the many banking scandals over the past few years Editor: Douglas Blakey have led to increased regulation in the sector in a bid to change banking culture Tel: +44 (0)20 7406 6523 Email: [email protected] for good, argues Mary Clarke Deputy Editor: Anna Milne Tel: +44 (0)20 7406 6701 hilst many retail banks have invested dures in place to assess their fitness and propriety Email: [email protected] heavily in governance, risk and compli- before applying for approval, and at least annu- Reporter: Patrick Brusnahan ance and enterprise risk management ally afterwards. Tel: +44 (0)20 7406 6526 infrastructures, these systems and pro- The Certification Regime applies to other staff Email: [email protected] W Asia Editorial: Xiou Ann Lim cesses fail to measure human behaviour – how who could pose a risk to the bank or its custom- Email: [email protected] employees think, act and behave at work – and ers. Firms will need procedures for assessing the Group Publisher: Ameet Phadnis this was one of the key issues at the heart of the fitness and propriety of staff, for which they will Tel: +44 (0)20 7406 6561 financial crisis. be accountable to the regulators. This will include Email: [email protected] We only need to reflect on the market-fixing the recruitment and on-going reassessment of any Sub-editor: Tom Langfield and PPI mis-selling cases to recog- staff that fall under this regime. Director of Events: Ray Giddings nise that people’s conduct and risky behaviours These regimes highlight that cultural change Tel: +44 (0)20 3096 2585 went unchecked. The consequences led to hefty must be embedded in banks and firms will also Email: [email protected] fines, damaged reputations and the erosion of need to demonstrate that boardroom-backed Head of Subscriptions: Sharon Howley Tel: +44 (0)20 3096 2636 public trust. governance and risk structures are in place, rein- Email: [email protected] According to the latest Chartis RiskTech100 forced from the bottom up. Sales Executive: Alexander Koidis report, human behaviour-based solutions have How can banks do this? One effective solution Tel: +44 (0)20 3096 2586 been deficient in the risk and compliance market. is to identify the specific training needs, gaps in Email: [email protected] The report also highlighted that a lack of human- understanding and confidence levels of every indi- Customer Services: based solutions in risk and compliance has cost vidual. Such insight will begin to provide human- Tel: +44 (0)20 3096 2636 or +44 (0)20 3096 2622 Email: [email protected] the banking sector $60bn over a 12 month period. based behavioural analytics that highlight how For more information on Timetric, visit our 98% of these losses (by value) and 82% (by fre- people think, act and behave at work. website at www.timetric.com. As a subscriber, quency) were as a result of employee misconduct Human-based behavioural analytics is not sim- you are automatically entitled to online access to and human factors. ply about putting people through more training, Retail Banker International. For more information, please telephone +44 (0)20 3096 2636 or email I understand that many managers within banks it is about understanding what they know, if they [email protected] are still in the dark about the extent of their ‘peo- understand how to apply this knowledge appro- London Office ple risk’, because the systems they use do not priately, how confident they are and where the 71-73 Carter Lane collate data about what people truly understand gaps lie so they can be addressed. London about their jobs, how confident they are in their Mercer’s ‘People Risks in M&A Transactions’ EC4V 5EQ knowledge and how they apply it at work. report highlights that ‘assessment is becoming Asia Office more and more critical’ in banking. The company 1 Finlayson Green, #09-01 Singapore 049246 Avoiding the ‘Domino Effect’ also points out that organisations that bring the Tel: +65 6383 4688 If banks fail to identify, manage and mitigate same discipline and rigor to addressing the peo- Fax: +65 6383 5433 against their people risks, a ‘domino effect’ is cre- ple issues as they do to managing balance sheet Email: [email protected] ated. Evidence from the past indicates that if a risk and the other key operational aspects of a Financial News Publishing Ltd, 2012 Registered in the UK No 6931627 single individual makes a ‘wrong’ decision, it can deal, will ultimately realise the most value from Unauthorised photocopying is illegal. The contents escalate into a major issue, damaging reputations, the transaction. of this publication, either in whole or part, may not depleting share price and leading to hefty fines be reproduced, stored in a data retrieval system or transmitted by any form or means, electronic, Limiting exposure to risk is clearly fundamen- Why insights into behaviour are crucial mechanical, photocopying, recording or otherwise, tal and it has a major role to play in many stra- As many as 30% of any workforce have gaps in without the prior permission of the publishers. For information on additional copies or syndicatedonline tegic and risk agendas within the banking sector. their understanding with mis-placed confidence access to this newsletter, please contact Customer These agendas include the alignment of risk and to such an extent that it puts the organisation, Services. compliance functions, operational risk, cyber people, reputation and shareholder value at sig- security, anti-money laundering, customer expe- nificant risk. rience, regulation and reputation. With an insight into what people understand, Banks need to optimise their workforce in misunderstand and how confident they are, order to reduce this risk and to comply with the banks can reduce their risks and build a picture various new rules and regulations introduced in of behaviour patterns. recent years to govern how people behave and Culture change takes time, and it’s fair to say act at work. the industry is making positive changes. However, banks will continue to struggle and expose them- DID YOU KNOW? New rules hold banks accountable selves to the ‘domino effect’ if they do not com- Your subscription to this newsletter entitles you to access its five-year online archive. Go to www. Under the Senior Managers Regime, individuals plement their existing efforts with the available retailbankerinternational.com who hold key roles and responsibilities will have insight and analytics about their people. People more checks placed on them. Whilst they will still hold the key to change, and it’s about time retail need to be pre-approved by regulators, the legal banks invested in bridging the gap between their onus will be on banks to ensure there are proce- people, their processes and their systems.<

20 y April 2016 www.retailbankerinternational.com

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