Retail Banking Group · 2015-03-03 · 4 Retail Banking in Japan An under-served market ATM...
Transcript of Retail Banking Group · 2015-03-03 · 4 Retail Banking in Japan An under-served market ATM...
Retail Banking Group
Shinsei Analyst Day 2005October 6, 2005
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Table of Contents
CREATING A UNIQUE BANKING EXPERIENCE ------------------------- 2
CUSTOMERS --------------------------------------------------------------------------- 13
CHANNELS --------------------------------------------------------------------------- 18
PRODUCTS ------------------------------------------------------------------------- 28
STAFF ------------------------------------------------------------------------------- 32
IMAGE -------------------------------------------------------------------------- 34
KEY MEASURES ------------------------------------------------------------------- 45
CONCLUSION ------------------------------------------------------------------------ 53
CREATING A UNIQUEBANKING EXPERIENCE
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March 2000 – Where We Started
Shinsei Bank is formed when the Long Term Credit Bank (LTCB) is privatized.
The Old LTCB Individual Banking was:Funding engine for corporate loan businessSold debentures Not defined as a profit-earning business propositionHad no need to focus on customer service
Customer base: Concentration of high net worth individuals65% of customers over age of 50
Image: upscale bank for wealthy individuals to park retirement money
24 branches across Japan, adjunct to centers of corporate banking, mainly Tokyo and Osaka
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Retail Banking in Japan
An under-served market
ATM services are inconvenient and expensiveMost banks do not offer 24hx7days ATM accessBanks may charge up to 210 yen per withdrawal
Cumbersome and difficult – Lots of forms and waitingin queues
The post office still dominates
Very low penetration of investment products
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Shinsei Style
AccessibleAlways available when I need it [24hx 7days]
Easy & convenientIs easy to deal withBanking that ‘wows’
ResponsiveAlways understands andanticipates my needs
Delivers valueOffers the best solution for me
A set of values that defines Shinsei in customer terms.
Overall theme: Empowerment(Customers manage and control their banking needs)
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Accessible – 24hx7days
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Easy and Convenient- Extended Hours & Saturdays
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Responsive - Instant Account Opening
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Delivers Value
NO FEE - ATMS & Funds Transfers*
* Customers with a/c balance of ¥10M or more at the end of the previous month are allowed to make domestic fund transfers through PowerDirect free of charge (refundable) up to 30 times per month. Otherwise, up to 5 domestic fund transfers are free (refundable).
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The story so farDespite the backdrop of a struggling economy we have successfully established a unique and thriving retail banking business:
A great brand franchise – with almost limitless potential
A tremendous team of people at all levels
A proven and flexible “bricks and clicks” business model
Robust and constantly improving business processes
Technology advantage – the ability to aggregate risk on a real-time basis
A fast growing customer base
Strong revenue growth
A sustainable profit-growth trajectory
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We have chosen how we want to position ourselves
A Mega bank? A Niche bank?
A “New kind of bank”
Totally customer centricInformedResponsiveAccessibleA trusted business partner
Big but not mega
A leader not a follower
Fast and flexible
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Vision and Mission
OUR VISIONWe are creating a new type of Bank
OUR MISSIONTo be the Only One for our Customers
OUR VALUEWe Care!
OUR MOTTOOur Customers’ success is our success
CUSTOMERS
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Customers - Key success factors
Acquisition momentum - we have a compelling value proposition
Efficient acquisition - remote channels to acquire customers more efficiently
Targeted acquisition – segmentation/relationship potential based
PowerWelcome and Customer Development process - to optimize customer activity
Customer Care – to improve customer loyalty and retention
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Retail Bank Profileas of June 2005
83.2%
95.6%
33.5%
8.5%
32.7%
16.5%0.0%
63.9%
67.9%
61.8%
0.3% 4.4% 2.6%
23.5%
5.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Customers Assets Liabilities Off B/S Revenue (FY2004)
Mass Retail Mass Affluent HNW
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Customer Segmentation
Created 7 demographic segments based upon internal analysis of the customer base
Split by age bands to improve targeting within the segments
74 sub-segments in total
Going forward we will add a psychographic dimension to the segments (eg Retirees Baby Boomers)
They will be continuously refined as we learn with the benefit of external input
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Customer Segmentation
Q1(Y101K+) Maintain Optimize Optimize Optimize Optimize
Q2(Y51-100K) Maintain Optimize Optimize Optimize
Cultivate
Cultivate
Cultivate
Medium/High
Optimize
Q3(Y21-50K) Maintain Cultivate Cultivate Cultivate
Q4(Y11-20K)
Cost Manage/Exit Cultivate Cultivate Cultivate
Q5(Y0-10K)
Cost Manage/Exit Cultivate Cultivate Cultivate
Low Low/Medium
Medium High
Cus
tom
er C
urre
nt V
alue
Relationship Potential Indicator
CHANNELS
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Channels – Key success factors
“Bricks and Clicks” – the Customer chooses
Physical channelsCreating a “sales culture”Strong sales process managementFocus on consultative sales
Remote channels The Internet is “strategic”Full functionality & capabilityGrowth in transaction (incl Mutual Funds)Growth in income
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Expanding Presence
PowerDirectPowerCall
ATMs
BANKSPOT
Financial Center
Platinum Center
Remote Distribution
Physical Distribution
Financial Centers (SFC)Provide full banking services focusing on consultation to mass affluent customer segment
Platinum CenterDevelop and enhance relationships with wealthy customers
ATMs deploy in strategic locations to build brand visibility and minimize off-us transactions
BankSpots “mini-branches”, primarily in Tokyo and Osaka, providing both self-service and consultation
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Current Branch Network
30 Financial Centers provide nationwide coverage of major metropolitan centersCarefully selecting new locations with the highest commercial/business concentration and easy access from terminal stations
GinzaShinsaibashi Ginza Corridor
Kyobashi
Shinjuku South
Co-located with Starbucks Cafe
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Sales Productivity – Revenue
0
10
20
30
40
50
60
FY2002 FY2003 FY2004
(Annual Revenue/Sales Staff : JPY Million)
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Productivity :Share of Door - Mutual Funds
Shinsei Bank sales staff are far more productive than competitors – A common theme across product categories
3.35
1.3
1.89
0.63 0.49
0
1
2
3
4
0 100 200 300 400 500 600 700 800
Shinsei Bank BOTM SMBC UFJ Mizuho # of Branch
Efficiency Index The Share of Door Index compares Market share with share of branches
Source: Institute for Financial Affairs Research Center FY2004
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Remote Channels
Prior to June 2001, we had no web site, no Internet banking, and a phone center that operated from 9-5 on weekdays onlySince then, we have largely surpassed the local competition
24x7x365 telephone bankingProduct salesBalance inquiriesCustomer service
PowerDirect Internet BankingReal-time balances and transaction dataAbility to transact almost all productsFree funds transfer service (up to 5 or 30/month)—best offer in the market
Remote channels—the Internet and phone—are now primary channels for customers to open new accounts and do transactions
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Customer Contact
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Apr-05 May-05 Jun-05 Jul-05
WebCall CenterATMBranches
6 Month Average Monthly Data
Rapid customer growth has been possible essentially through remote channels.
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Acquisition
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
FY2001 FY2002 FY2003 FY2004
Remote Channels Branch
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Sales Volumes
0
200
400
600
800
1,000
1,200
FY2003 FY2004
Remote Channels Branch
(Billion Yen)
PRODUCTS
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Products – Key success factors
Needs based profiling
Solutions based
Continuous Innovation – eg Powered One Plus/Powered Teiki Plus
Speed to market
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Philosophy
“IDEA-FULL”
Proposals that say, “Why didn’t someone think of this before?”
Simple and easy to use
Customers transact on their own
Covers a wide range of risk and tenor preferences, a mix of currencies and instruments (e.g. deposits, mutual funds and annuities)
More complex products are available to sophisticated customers (e.g. hedge funds, structured products)
A strong sales process backs each offering
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Product Offerings
- Japan Trend Select <Bull> - INVESCO OTC&Develop Open- Japan Trend Select <Bear> - HSBC India Open- Japan Bond Bear - Global High Income Stock
- Fidelity Japan Growth - W.Pincus- Daiwa value equity - JF Asia active- 225Index(Nikkou) - HSBC China- 225Index(T&D)
- Daiwa J-REIT - Emerging Sovereign Open- Fidelity Balance - High Yield Corporate Bond Open - Upside10
- Securities - J-World CB - Schroders Equity - Manu Solution- Life Plan 70 - Fidelity US-REIT A
- Dual - Life Plan 50 - Fidelity US-REIT B - Sirius Harmony(7/10)Currency - PowerChance - MSCI Index world portfolioDeposit
- SPJT - Nissay /Putnam Income - Foreign - Foreign - GS US neutral - Galileo
Currency Currency - GS Japan Neutral - Life plan 30Savings Time Deposite - CITI Australia - Global Sovereign
- PowerLink -FX- - Europian Income - Sirius Harmony(5)
- New Adagio- Power Pocket Overdraft - Power Life - MMF - Mass freedom - Yen SA - Yen - PowerLink225 - Sonata
Savings Time Deposit - Yen - PowerSmart HLTime Deposit - Powered One Plus
Short <3Years
- Platinum Life - New Adagio
- ManuSolution
Hig
hM
iddl
eLo
w
3Years< Medium < 7Years 7years< Long
Ri s
k
Tenor
STAFF
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“Our People Are The Difference”Career Excitement Center
Winning the Talent War
“We hire customer focused people, and train the daylights out of them”
Shinsei Business School
April 2004
Sales Management
Management & Leadership
Sales Skills
Solutions
Branch Training
90 Player/trainers
Sales Skills daily
Innovative Fridays
Internal Communications
Shinsei Daily Celebration
Daily Sales Call
Daily “Why Shinsei?”
Color Your Life e-letter
Weekly Power Go
National Monthly & Qtr Sales
IMAGE
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Brand AwarenessIn the 4 years since new retail banking business launch, brand awareness on Shinsei Bank has significantly increased as compared with the other competitors, and reached 97% in June 2005.
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20
30
40
50
60
70
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100
Shinsei Bank Citibank Sony Bank BOTM
2001.11 2002.06 2003.06 2004.07 2004.12 2005.06
Source: Asatsu-DK Survey
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Brand Image Perception
Findings through Awareness and Image SurveyShinsei Bank is perceived as unique and innovative, and responsive to customer needs.
BOTMShinsei Tokyo Star Citibank(Score as of June 2005) 99%
48%
41%
3%
6%
10%
3%
5%
92%
7%
11%
10%
11%
9%
3%
3%
81%
1%
1%
16%
13%
4%
2%
3%
97%
2%
2%
29%
20%
22%
8%
8%
Brand Awareness
Stable Business/ Sound Management
Good/Favorable Image
Innovative
Unique
Advanced Internet Service
Will choose even if branch located
in the distance
Responsive to Customer Needs
Source: Asatsu-DK Survey
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CUSTOMER AND MEDIA RECOGNITIONThe Asian Banker
The Asian BankerBest Retail Banks by Country
Japan – Shinsei BankHong Kong – HSBC (Hong Kong)Indonesia – Bank Central AsiaSingapore – DBS Bank Vietnam – ANZ Bank
Awards for Excellence in Products and ProcessesBest Retail Banking Branch Innovation Award– Shinsei Bank
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CUSTOMER AND MEDIA RECOGNITIONRetail Banker International
Retail Banker InternationalBenchmark intelligence on consumer financial services
Recognising the best in the worldPublished: December 8th, 2004Issue: Retail Banker International - RBI524The winners of RBI’s Retail Bank of the Year awards were announced during the Retail Banking Forum in London on 7 December. In this special feature, RBI lists the winners of all the awards and profiles the victors in the major national and sub-regional markets around the world
Country and Sub-Regional Award Winners 。Retail Bank of the Year – JapanShinsei BankA year of strong retail banking growth was capped by Shinsei’s acquisition of Aplus, one of Japan’s leading consumer finance companies. The deal is part of Shinsei’s strategic plan to actively expand its non-bank business and at the same time to generate higher returns and profitability in each of its three key business lines - retail banking, non-bank consumer finance and institutional banking.As a result of the deal, Aplus - which has a nationwide distribution network - has become a leading component of Shinsei’s "non-bank" business. The main task of Aplus has been to enhance the competitiveness of the group’s shopping credit unit - at the same time, the deal will lead to significant cost savings when a common IT platform will be implemented using Shinsei’s technology.Apart from the Aplus acquisition, Shinsei boosted net income by 25.2 percent in fiscal year 2003 (which ended in March 2004) by diversifying its revenue sources and lowering its reliance on interest income - some 56 percent of total customer funding comes from retail customers - up 6 percent on fiscal 2002. Net profits were up 5 percent on the previous financial year.Non-performing loans dropped 58.3 percent, and there was also a corresponding drop in bad debt provisions. Return on equity for fiscal 2003 stood at 9.4 percent, up from 8.1 percent in fiscal 2002.
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CUSTOMER AND MEDIA RECOGNITIONNikkei Survey on Financial Institutions
Nikkei Survey on Financial Institutions- Consumers in Three Largest Metropolitan areas (Tokyo・Osaka・ Nagoya)
Shinsei bank 「Ranked first by users’ satisfaction for the 2 years running」 (2004 / 2005)
The year 2005
•「Consulting service ・ Teller Counter service・Business hours」 (1st)
•「Products・Services」 (1st)
•Ranked in the Top 3 in all the items
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CUSTOMER AND MEDIA RECOGNITIONSurvey on Financial Institutions
Ranked first by users’ satisfaction survey (Consumers in Three Largest Metropolitan areas)
20’s 30’s 40’s 50’s 60’s
1st 城南信用金庫
2nd イーバンク銀行
UFJ銀行
ジャパンネット銀行
三井住友銀行
東京三菱銀行
東京三菱銀行
イーバンク銀行
Sony Bank 城南信用金庫 東京三菱銀行
3rd
4th
5th
.The Nikkei Kinyu (The Nihon Keizai Shimbun), September 6&7, 2005
郵便貯金
住友信託銀行CITIBANK
東京三菱銀行
イーバンク銀行
ジャパンネット銀行
城南信用金庫
東京三菱銀行
郵便貯金
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CUSTOMER AND MEDIA RECOGNITIONNext to Disney Land / Disney Sea!
Ranked Second by ’Users’ “Consumer Relation Index”Rank Brand Name Score Rank Brand Name Score
1 Tokyo Disney Land / Sea 87.68 21 Bakery Restaurant Saint-Marc 68.032 SHINSEI BANK 83.26 22 Freshness Burger 67.423 Tokyu Hands 82.60 23 Wacoal 67.064 Mos Burger 81.95 24 SHOP99 67.035 Louis Vuitton 77.72 25 Seijo Ishii (Supermarket) 66.706 Franc franc (Furniture & sundries) 76.87 26 Burberry 66.617 Yokohama Zoological Gardens Zoorasia 76.21 27 one's (Curtain) 66.468 Afternoon Tea TEAROOM 75.99 28 Japan Air Lines (JAL) 66.229 Seven-Eleven 75.54 29 DUO (Volkswagen dealer) 66.1310 The Daiso - 100YEN PLAZA 73.07 30 Excel Hotel Tokyu 66.0911 Singapore Airlines 72.38 31 Beard Papa's (Confectionery) 65.9712 Japan Post office 72.10 32 Sony Plaza 65.9613 Henri Charpentier (Confectionery) 71.45 33 All Nippon Airways (ANA) 65.9214 The Imperial Hotel 71.21 34 a.v.v (Apparel) 65.4215 Hermes 70.58 35 Kinokuniya (Book store) 65.2316 Bvlgari 70.28 36 ACTUS (Furniture) 64.7417 Coach 70.08 37 Create Super Drugstore 64.4018 Rolex 68.84 38 Subaru Store 64.3319 Starbucks Coffee 68.54 39 Tiffany 64.1920 MUJI 68.19 40 Triumph (Lingerie) 64.05
Research on “Store & Service Brand 500” by Nikkei Research
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Image
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Color Your Life
SHAREInformation, dreams, worries, aspiration, future…
with our colleagues, customers, families
CARERespond flexibly, speedily, hospitably, based on others’ needs
“IDEA-FULL”Proposals that say, “Why didn’t someone think of this before?”
WAKUWAKUExhilarating at every contact.
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“When I am feeling sad, or things don’t go my way, I always look up into the sky.
The big sky makes my troubles seem so small
This encourages me to paint my dreams across the big blue sky”
KEY MEASURES
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Customer Database
We have achieved 1.5 Million customer mark.
0.00
0.50
1.00
1.50
2.00
2.50
3.00
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4.00Ju
ne
Sept
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r
Dec
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FY2001 FY2002 FY2003 FY2004 FY2005
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000(Trillion Yen) # of customers
Total AUMs
# of customers
47
AUM Composition
Debentures are being replaced by yen deposits and risk products
Apr-97 Apr-01
Apr-00
Apr-99
Apr-98 Mar-02
Jun-02
Sep-02
Dec-02
Mar-03
Jun-03
Sep-03
Dec-03
Mar-04
Jun-04
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Jun-05
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60%
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80%
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100%
Debenture Yen DepositYen Deposit Structured Depo. + FCY + MF + VA/FA
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Cross Sell
Through active cross selling we have doubled the number of customers holding risk products in a year
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Apr-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05
# of customers
49
PowerSmart Housing Loan
0
50
100
150
200
250
300
350
Mar-02
Jun-02
Sep-02
Dec-02
Mar-03
Jun-03
Sep-03
Dec-03
Mar-04
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Dec-04
Mar-05
Jun-05
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4,000
6,000
8,000
10,000
12,000
14,000
(Billion Yen)
Monthly Fundings (Billion Yen)
# of customers
50
Revenue Growth
0
10,000
20,000
30,000
40,000
FY2002 FY2003 FY2004
(Million Yen)
51
Expense Growth
0
10,000
20,000
30,000
40,000
FY2002 FY2003 FY2004
(Million Yen)
52
OBP (Margin) Growth
(10,000)
(5,000)
0
5,000
10,000
FY2002 FY2003 FY2004
(Million Yen)
53
In ConclusionIn just 4 years we have successfully established a “New Kind of Bank”Looking forward, market conditions are increasingly positiveShinsei Retail is ideally positioned for rapid growth:
We have a unique and clearly defined business model which cannot be easily copied by our competitionOur brand proposition gives us differentiation and competitive advantageWe are centered around the customer in everything we doWe will continue to innovate and lead the market
We know what we have to do to be successful and we have clear strategies for all key aspects of the business:
CustomersBrand/MarketingProductsChannelsPeople
Retail is a key component of the overall Shinsei strategyOur financial results are strong Shareholder returns from Retail will continue to grow rapidly