ManagementManagement BriefingBriefing London, May 2007
CREATINGCREATING AA BANKINGBANKING REVOLUTIONREVOLUTION
Presentation by David Guinane, General Manager, Branch Banking
Management Briefing – May 2007 IRELAND PERSONAL BANKING MARKET ¦ Traditionally dominated by the big 2 AIB / BoI – up to 80% of the market
¦ Economic success attracting new competitors Halifax BOS Danske NIB Rabobank Fortis Bank
Management Briefing – May 2007 BACKGROUND
● permanent tsb launch - 2002
● Customer acquisition – key priority
●Current Accounts identified as key product
● 200,000 new current accounts opened by end 2007
Management Briefing – May 2007 CREATING A BANKING REVOLUTION
Outstanding Best Product Customer Service
RevolutionRevolution
Mobilise Breakthrough the Staff Advertising
Management Briefing – May 2007 BEST PRODUCT IN THE MARKET
● Launch of new current account
● Free banking for the first time in Ireland
Management Briefing – May 2007 OUTSTANDING CUSTOMER SERVICE
● Dedicated Switcher Team established
● Current Account Sales Co-ordinator appointed in each branch
● Mobile company visit Sales Team established
Management Briefing – May 2007 BREAKTHROUGH ADVERTISING
● Straight talking / direct
● Highlight current dissatisfaction – Wake Up!
● Switching is simple
Management Briefing – May 2007 CURRENT ACCOUNT ADVERTISING
Management Briefing – May 2007 PRESS ADVERTISING
Management Briefing – May 2007 TVTV ADVERTISINGADVERTISING
www.irishlifepermanent.ie MOBILISE THE STAFF
● Serious internal focus
● Staff up for the challenge
● Training and development
● Incentives
● Celebrate success
Management Briefing – May 2007 WHATWHAT DOESDOES THETHE REVOLUTIONREVOLUTION LOOKLOOK LIKE?LIKE?
Management Briefing – May 2007 BRAND NEW ACCOUNTS ONLY 200,000 new current accounts opened by end 2007 68,000
49,000
23,600
2004 2005 2006
Management Briefing – May 2007 SWITCH BALANCES SINCE LAUNCH Switch Current Account €m 800 698 700 646 600 500 400 300 300 200 100 0 2005 2006 2007 (April)
Management Briefing – May 2007 CUSTOMER QUALITY Stable average Balance for a/c € 6000
5000
4000
3000
2000
1000
0 2005 2006 2007 (April)
Management Briefing – May 2007 PROFILE OF CUSTOMERS
% of Age Accounts
18-25 18% 26-34 39% 36-45 22% 46-55 12% 55+ 9%
Management Briefing – May 2007 OVERDRAFT as a % of NEW CURRENT ACCOUNTS Overdraft Penetration
30% 28% 28%
25%
20%
15% 12%
10%
5% % of Current Accounts 0% 2005 2006 2007
Management Briefing – May 2007 INCREASING PURCHASE CONSIDERATION
50%
40% 33% 29% 30% 26%
20% 19% 16% 10%
0% Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06
Current Account Consideration
Source: BMR Research
Management Briefing – May 2007 COMPETITION RESPONDS
All major competitors have now reacted: ● Some form of free banking provided
● Credit interest
● Stepped up advertising
Management Briefing – May 2007 HOWHOW DODO WEWE CONTINUECONTINUE THETHE REVOLUTION?REVOLUTION?
Management Briefing – May 2007 CONTINUING THE BANKING REVOLUTION
Outstanding Best Product Customer Service ● 0% Overdraft ● Mobile Phone Banking ● Credit Interest up to €1,500 RevolutionRevolution
Mobilise Staff Breakthrough Advertising ● Staff incentivisation ● Ongoing investment Group Cross Sell in advertising
● Irish Life Opportunity
Our competition have reacted on Product, but we have the Service, the Brand & the Staff
Management Briefing – May 2007 THE REVOLUTION CONTINUES
● Largest Retail Bank in Ireland by 2016
● 500,000 new customers required in next 9 years
●Confident of continued success
Management Briefing – May 2007 ManagementManagement BriefingBriefing London, May 2007
ProfitingProfiting fromfrom thethe RevolutionRevolution
Bringing Life Assurance Sales Culture to the Bank
Presentation by Gerry Hassett, General Manager, Business Development
Management Briefing – May 2007 Key Topics
§ ptsb Bancassurance – Key Success Factors
§ Value Added
§ Applying the lessons learnt going forward
Management Briefing – May 2007 permanent tsb Bancassurance – A brief history
§ Started 1999 with merger of Irish Life / Irish Permanent ¾ new start-up
§ Priority objective for Irish Life & Permanent ¾ market share growth ¾ profit growth ¾ develop bank ‘sales engine’
§ Successful Business Model ¾ 100 Advisers ¾ 400 licensed branch sellers ¾ circa €50m new business profit (VNB)
Management Briefing – May 2007 Track Record of Growth ptsb Bancassurance Sales 2003-2006 (€M APE) 120
100
80
60
40
20
0 2003 2004 2005 2006
Management Briefing – May 2007 The Most Productive Bancassurer in Ireland
2006 - €000’s APE per Branch
€880 €682
€467
permanent tsb Bank A Bank B
Management Briefing – May 2007 permanent tsb Bancassurance – How to profit from the Revolution
§ Fantastic Customer Experience
§ High Performance Salesforce
§ Process Driven
§ Activity Management
Management Briefing – May 2007 Fantastic Customer Experience
§ Position Adviser around Full Financial Review service § Collaborative approach – no ‘hard-sell’ § Fully compliant § 94% would recommend to their friends § Simpler versions for Branch- based sales
Management Briefing – May 2007 High Performance Salesforce
§ High Quality People ¾ direct salesforce ¾ and young, ambitious branch personnel § Vibrant ‘Life Co’ Culture ¾ very pro-active, high energy ¾ resilient, result focussed ¾ highly incentivised § But, Delivering a Service ¾ strong relationship skills ¾ investment in skills and knowledge
Management Briefing – May 2007 Process Driven § Map out Life Co process and import into Bank ¾ Prospecting, campaigns, call centre etc. ¾ Seed with Life Co sales management § Significant Investment in Technology ¾ Highly electronic – diary, point of sale, execution ¾ Transparent, interactive and engaging § Customer Focussed ¾ Built around personal & family goals and priorities ¾ Repeatable and compliant process § Strong foundation for rapid growth ¾ Full support infrastructure
Management Briefing – May 2007 Activity Management 1,200 Planned § Focus on the Inputs Appointments ¾ prospects, appointments, reviews
§ Working Smarter not Harder €1,650 APE per ¾ Focus on quality and conversion efficiency Appointment + § Simple, Clear metrics 25% Walk-in ¾ Understood by all Business ¾ Feely available to all
§ Proactive line management €2.5m APE ¾ Intensive management of sales advisers Next week ¾ Direct link to Branch/ Area Managers
Management Briefing – May 2007 Value Added
§ Current Account Cross – Sell
§ Mortgage Cross – Sell
§ SSIA Conversion
Management Briefing – May 2007 Current Accounts % Cross-Sell to Current Account Customers
Bancassurance 14%
Credit Card 30%
Mortgage 12%
Term Loan 8%
*The % of New Current Account Customers that buy another product within two years of opening their account
Management Briefing – May 2007 Mortgage Cross-Sell Average APE per €1,000 Sum Assured
permanent tsb €4.39 IL Direct Sales €4.25 Lender A €3.16 Lender B €3.16 Irish Life Brokers €2.91 Lender C €2.90 Lender D €2.70 Lender E €2.49 Lender F €2.39
* This measures the value add per sale for every €1,000 cover issued with a mortgage Management Briefing – May 2007 SSIA Conversion
% Cross-Sell of SSIA Maturities
permanent tsb 21
Bank A 13
Bank B 10
*This measures the number of Bancassurance products sold for every 100 SSIA Deposit Maturities
Management Briefing – May 2007 Continuing to profit from the Revolution
§ Bancassurance
§ Branch Banking
Management Briefing – May 2007 Bancassurance - driving for further growth
Customer Experience Hi-Performance Sales Team
§ Upgrade Financial Review § Significant Investment ¾ Based on customer feedback ¾ Grow to 130 Advisers ¾ Major up-skilling programme § New Wealth Manager offering ¾ Sophisticated Advice process § Specialist Wealth Managers ¾ Broker-type product offerings ¾ Grow to 15/20 ¾ 20% of sales by 2009/10 § Outside Branch Hours ¾ Mobile sales unit § Dedicated Branch Sales personnel ¾ Target areas of population growth ¾ Driving SSIA activity
Management Briefing – May 2007 Bancassurance - relentless pursuit of Process
Process Driven Activity Management
§ “Paperless” Execution § Transparent view of activity ¾ 100% by end 2007 ¾ “open diary” analysis ¾ All compliance fully automated ¾ Daily analysis § Investment in CRM § Self-improvement analysis ¾ Prospecting 100% electronic ¾ Benchmark against colleagues ¾ On-line access to Diary/ mis ¾ Advisers to think as entrepreneurs § Campaign Analysis § Re-Allocation of Leads ¾ 100% electronic - “Closed loop” ¾ Maximise value of the customer base
Management Briefing – May 2007 Branch Banking - importing best practice
Customer Experience Hi-Performance Sales Team
§ SMART Sales § De-clutter the Branch ¾ Savings & Investments (Jan ’06) ¾ Centralise core admin processes ¾ Mortgages (Sept ‘07) ¾ Branch focus now primarily sales § Dedicated Sales Roles § Outside Branch Hours ¾ Branch Manager now sales ¾ Mobile sales unit ¾ Specialist Branch roles ¾ Target areas of population growth ¾ Investment in Training § Highly Incentivised ¾ Potential bonuses doubled
Management Briefing – May 2007 Branch Banking - sharing the obsession with Process
Process Driven Activity Management
§ Point of Sales Process § Activity Data on Bank Products ¾ Highly automated ¾ Weekly prospecting analysis ¾ Compliant and repeatable ¾ Focus on conversion efficiency ¾ Skills development § Investment in CRM ¾ Leverage Bancassurance platform § Re-define Branch Manager role ¾ Drive mortgage activity ¾ Primary focus on sales ¾ Managing a sales team § Centralisation of Admin ¾ Pro-active approach ¾ “one and done” in-branch ¾ Investment in self-service
Management Briefing – May 2007 The Revolution in Irish Banking
Customer Acquisition
Largest Retail Bank + = in Ireland by 2016
Pro-Active Cross-Sell
Management Briefing – May 2007