Digitalisation of our lending process and digital payment ...
Transcript of Digitalisation of our lending process and digital payment ...
Digitalisation of our lending process
and digital payment solutions
© Swedbank
Swedbank’s approach
to IT and business
development
Theme 1
March 2018
Our customer
offering
Theme 2
May 2018
Channel
transformation
Theme 4
December 2018
Digitalisation of lending
process and digital
payment solutions
Theme 3
September 2018
© Swedbank
Re-cap of Theme day I and II
3
Modular and
step-wise
renovation
First
mover
Long history and
strong experience
combined with
access to data
Our infrastructure is a flexible core
platform enabling us to change with
customer behaviour, supported by our
innovation culture and increasing use of
intelligent automation tools
Improve customer experience and sales
through customer data and digitalisation
in savings and lending products.
Scale up current business model
and capture growth potential
© Swedbank
For almost 200 years we have helped our customers save and borrow for a better future
4
Loans (p) Loans (c) Deposits (p) Deposits (c) Payments Funds
46% 37% 55% 44% 59% 42%
31% 18% 32% 16% 50% 42%
34% 18% 40% 23% 49% 37%
23% 17% 21% 20% 36% 20%
(p) private (c) corporate
Loans corporate excluding the Swedish National Debt Office and repurchase agreements
Payments include BankGiro for Sweden, domestic payment transactions (Estonia, Latvia, Lithuania)
Almost half of the
population in our home
markets are Swedbank
customers
© Swedbank 5
By leveraging our strengths we secure future relevance and competitiveness
Strong financial position
Channel network and
products in place
(and developing)
Wide customer
base
© Swedbank 6
Lending is a cornerstone in our corporate identity - to enable people, businesses and society to grow
Making banking
easier for the
customer
Loans (p) Loans (c)
46% 37%
31% 18%
34% 18%
23% 17%
Leading position in
mortgage lending
Digital banking capabilities
Extensive access to, and
knowledge of, customer data
Market share, (p) private (c) corporate
Loans corporate excluding the Swedish National
Debt Office and repurchase agreements
© Swedbank 7
Swedbank has a strong position in the payments business
Payments
MARKET
SHARE***
50%
49%
36%
Market leading
payment provider
in home markets
5th largest acquirer
in Europe*
10th largest card
issuer in Europe**
*Number of card transactions
**Number of card transactions, debit cards
***Payments include BankGiro for Sweden, domestic payment transactions (Estonia, Latvia, Lithuania)
59%
© Swedbank
Digitalisation of our lending process and digital payment solutions
Our starting
position
Strong, established lending and
payments position that closely binds
our customer relationships.
Enhanced by digital capabilities
The lending
journey
Digitalisation and automatisation of
our mortgage, consumer and
corporate lending provides large
potential to improve customer
experience, loyalty, and efficiencies
The payments
area
Continuous initiatives and
investments to ensure payment
products and services stay relevant.
Protect our market position and
retain economies of scale
8
Increasing customer satisfaction through digitalisation and
automation of lending
Leif Karlsson, Head of Group Lending & Payments
9
© Swedbank 10
From paper to digital Working in one process – customers served in multiple channels
BRANCHES
TELEPHONE
BANK
INTERNET
BANK
MOBILE
BANKID
DIGITAL
& AUTOMATED An Omni-process where
customers can jump between
channels regardless of their
choice of paper or digital
signature
© Swedbank 11
It’s no longer only about the product Inspiring customers to choose us when they expect…
CUSTOMER
EXPERIENCE
DIGITALISATION &
AUTOMATION
INNOVATION &
NEW REVENUE
STREAMS
…more services… …more speed… …and best in class solutions
© Swedbank 12
A journey that we started long ago
2010 2016 2017 2018
CUSTOMER EXPERIENCE
ENABLERS
Pre-calculated limits
for private individuals
across Baltics
Connection to
Mortgage
renewals
Automated
individual
pricing
Launch of pre
calculated
consumer loans
in mobile bank
Connection to
Digital
consumer
loans in
internet bank
New
simplified
decision
process
Digital mortgage
approvals in
internet bank
Digital
consumer loans
in the mobile
app
Digital
consumer
loans for two
applicants
Digital consumer
loans for non
Swedbank
customers
Future
Lending
Process
program
Fully automated
credit origination
for mortgage
approvals
Lending
Operations
(centralised
processing)
Pre-calculated
limits for small
corporate
segment
Cooperation with
fully owned
Fully automated
credit origination
and disbursements
1st bank in SE
to have 100%
automated
process
= Consumer credits = Corporate credits = Mortgages
© Swedbank 13
Fully digital application process for consumer loans in Sweden
Calculate Verify & send
application
Offer Additional
information
Sign
agreements
Confirmation Application
details
1 3 4 5 6 7 2
Open to all - you don´t
need to be a
Swedbank customer
Takes only five
minutes to apply
Can add a co-
applicant in the digital
process
Credit decision takes
just 4 seconds
Approve digitally
with bankID.
Money in your
account
immediately
60% of digital
applications gets
an instant
response
70% of
disbursed
consumer loans
goes through the
digital process
© Swedbank 14
Faster processing time for mortgage approval in Sweden
Application
details
2
Contract
signing
3
Contract
activation
4
Calculate
1 Open to all - you
don´t need to be a
Swedbank customer
Takes only five
minutes to
apply
Can add a co-
applicant in the digital
process
Approval is
delivered within
just 4 seconds
50% of
approved
mortgage
agreements
goes through the
automated
process 40% of digital
applications gets
instant response
© Swedbank 15
Processing time for Baltic consumer loans significantly shortened through pre-calculation
Decision
making
2
Contract
signing
3
Contract
activation
4
Application
filling
1
Key features
Reduced complexity and lead time
Increased new sales
Competitive advantage due to advanced offering
Higher private customer satisfaction
Processing time
shortened from 24
hours to 10 minutes
© Swedbank 16
Digitalising our end-to-end lending process within mortgage, consumer and corporate lending
Swedbank and the Savings Banks started The Future Lending
Process in 2015 to ensure that we meet the consumer demands of
self-service and automation regardless of preferred channel
Agile process way of working
Close collaboration between many parts of the bank – over 150
people involved
Delivering on schedule and budget!
Baltic strategy more mature, mortgage process near
completion now focusing on corporate process
Swedish strategy on schedule
Centralise
processing
Automate
back-end
Digitalise
front-end
DELIVERIES 2017-2020 CONTINUING OUR JOURNEY
Consumer credits
Mortgage
approvals
Mortgage more
Mortgage new
Corporate credits
© Swedbank 17
Benefits of the Future Lending Process The move from manual to automated
BEFORE…
AFTER…
APPLICATION INTERNAL DATA
COLLECTION & CONTROLS
EXTERNAL DATA
COLLECTION & CONTROLS DECISION OFFER SIGNING
DISBURSEMENT
& E-ARCHIVING
APPLICATION INTERNAL DATA
COLLECTION & CONTROLS
EXTERNAL DATA
COLLECTION & CONTROLS DECISION OFFER SIGNING
DISBURSEMENT
& E-ARCHIVING
MANUAL AUTOMATED SEMI-AUTOMATED
Flexible
process
100%
automation
© Swedbank 18
The way forward
Continued delivery
of Future Lending
Process project
Channel
transformation
efforts
Partnership and
third party
collaboration
Creating relevant payment and commerce
solutions
Leif Karlsson, Head of Group Lending & Payments
1
9
© Swedbank 20
ENVIRONMENT
CUSTOMER
Adoption of
technology
Increase in payment
choices drives
expectations
Voice-based
interfaces
Demand of
control tools
New players enter the market
and can initiate a payment (and
access bank information)
Aggregation of services
creates new expectations
Scale and pricing
continues to be important
Consolidation of the
commerce value chain
Growing importance of user experience, e-commerce, aggregation services and the platform ecosystems
© Swedbank 21
Consumers gravitate towards the most convenient option with the best user experience
New form factor,
UX gaining
importance
Manual entry,
cumbersome
process
CARD NO.
Virtualised and
embedded
payments
Commerce are moving in
to new channels, platforms
and ecosystems
© Swedbank 22
Increasing payments availability Ensuring participation across multiple platforms and form factors
POS E-COMMERCE INTERNET OF
THINGS
SOCIAL
NETWORKS
EXTERNAL
WALLETS MESSAGING VOICE
© Swedbank 23
Enabling customers to set spend limits, activate alerts, provision and revoke consent… and more!
Allows consumers to view and
manage all digital locations
where their card credentials are
stored, incl. devices and wallets
Controls
Consumers may apply controls at the
wallet level, including new wallet types
such as platforms and ecosystems
Digital wallets
Consumers may apply controls to
individual devices and wearables
Internet of Things partner devices
Consumers may stop payment
to merchants
All merchants holding tokens 4512
© Swedbank 24
We are focusing on the customer experience
CARD DESIGN
DRAG & DROP
SCAN YOUR INVOICE
CONTACT-LESS PAYMENT
QUICK TRANSFER
PAYMENT REQUEST
QUICK BALANCE
© Swedbank 25
Consumer
Payments can
generate frequency
and support depth
FREQUENCY (how often you
meet)
DEPTH (how well you know
each other)
RELATIONSHIP
Payments is the most frequent activity a bank
has with its customers. Can be leveraged to drive
affinity but also to nudge the customer to a specific
behavior (e.g. using the app)
Payments can through its rich
data sets generate deep
insights into customers to
enable proactive PFM
Payments play an important role in the overall customer engagement…
© Swedbank 26
…and are critical in the open banking universe Creating “stickiness” and traffic to the Swedbank ecosystem
MONEY OUT MONEY IN
OTHER
SERVICES
SALARY
TAXES
DIVIDENDS
ETC.
DEBIT CARD
E-INVOICE &
DIRECT DEBIT
WEARABLES
EXTERNAL WALLET
CARD-ON-FILE
PRO-ACTIVE
OFFERING
PERSONAL FINANCIAL
MANAGEMENT 2.0 (RE-ACTIVE)
Swedbank
Bank account &
other internal
services
Opportunity
Swedbank maintains the
relationships with
consumers. Ability to use
third party services to
increase customer
satisfaction
Enabler
Having a strong PFM will
ensure customer
satisfaction
Enabler
Payments can create
“stickiness” for the
customer”
Enabler
Next best action /
pro-activeness
© Swedbank 27
Merchants: digitalisation and new customer behaviour drives change which forces merchants to transform
Physical point of sales merchants are undergoing a digital commerce transformation…
…creating complexity in acquiring the transactions as the channels converge
M-Com
E-Com
POS (Point of Sales)
M-Com E-Com
POS (Point of Sales)
PHYSICAL POINT
OF SALES E/M-COMMERCE ROUTED VIA PSP
DIRECT TO
ACQUIRER
Source: Swedbank internal analysis
The PayEx acquisition
gives us the possibility
to help our merchants
in the transformation
© Swedbank 28
Vertical and horizontal consolidation of commerce value chain increases PSP importance
Payments Service
Provider
E-shop
Provider
Third Party
Providers Processor
Retail
Finance &
Ledger
Services
Merchant
Payments Service
Provider
E-shop
Provider
Third Party
Providers Processor
Retail
Finance &
Ledger
Services
PSP
Merchant
CONSOLIDATION
Illustrative example of ongoing consolidation in the Commerce value chain
Payments are increasingly
becoming commodities, leading
to price pressure
Processors, Acquirers and Payment
Service Providers are integrating
both vertically and horizontally in
the commerce value chain Geographical expansion is
facilitated by limited capital
requirements and by a growing
number of standardised and
commoditised products and pan-
European regulations
A number of banks no longer act as
acquirers but focus on issuing
© Swedbank
20% 20%
65%
45%
40%
10%
60% The PayEx platform combined with our strong position in the card
acquiring business puts Swedbank PayEx in a unique position
relative peer banks and payment service providers
Strengthened position as 5th largest acquirer in Europe
Leverage consumer data gained from being 10th largest card issuer in Europe
True omni-channel provider supporting the retailer’s all sales-channels
29
PayEx strengthened the market leading position in payments in the Nordics and Baltic region
ACQUIRED
TRANSACTIONS
© Swedbank 30
New checkout leverages consumer data combined with individual consumer convenience
Identifies the
customer and
adapts his/hers
preferences
based on
historical usage
WHO
Presents the most
relevant payment
options based on
what is purchased
and the total
amount
WHAT
Knows and
adjusts to the
customer’s
preferences at
different times of
the month
WHEN
Recognises and
adjust to where
the customers
makes the
purchase
WHERE
Adapts to the
device the
customer is using
HOW
Providing a
seamless and
personalised
shopping
experience
© Swedbank 31
Swish is an instant payment service owned jointly by the major Swedish banks
6.5m private users
33m payments last
month
98% knows about
swish
68% uses swish
every month
81% finds swish
easy to use
www.getswish.se, 2018-08-01
Mobile bankID has been an important
enabler for Swish
The journey started with private transfers,
then moved into corporate payments
A large reason for why FinTechs have a
hard time entering the Swedish market
© Swedbank 32
Changing the payments landscape in the Baltics with SmartID – inspired by bankID
A safe and secure way to use
electronic identification
approved by Baltic banks
1.2m users in
total
17m transactions
last month
Winner of
BREAKTHROUGH OF
THE YEAR 2017
Winner of
SERVICE OF THE
YEAR 2017
Estonian Association of Information
Technology and Telecommunications
Lithuanian Industry Confederation
© Swedbank
Improving the customer experience, maintaining the relationship and creating new customer value
33
Improve core
payment offering
Provide products and services that
support the consumer along the
purchase journey in a consistent way
between payment options
Expand financing
offering
Ensure that products and services
provide long-term financial or strategic
value to Swedbank and focus on new
revenue streams to complement
transaction income
Leverage
Open
Banking
Enable third-
party digital
wallets
To remain competitive in the payment
context, Swedbank will leverage its strong
position to capture opportunities in the
pan-Nordic market. Partnerships and third
party providers will be leveraged to enrich
our current product features and to ensure
faster time-to-market
© Swedbank
Digitalisation and
automatisation of our
mortgage, consumer and
corporate lending provides
large potential to improve
customer experience,
loyalty, and efficiencies
Strong, established lending
and payments position that
closely binds our customer
relationships. Enhanced by
digital capabilities
Continuous initiatives and
investments to ensure
payment products and
services stay relevant. Protect
our market position and retain
economies of scale
© Swedbank
Q&A BIRGITTE BONNESEN
GROUP CEO
LEIF KARLSSON
HEAD OF GROUP LENDING
& PAYMENTS
GREGORI KARAMOUZIS
HEAD OF INVESTOR RELATIONS
© Swedbank
Swedbank’s approach
to IT and business
development
Theme 1
March 2018
Our customer
offering
Theme 2
May 2018
Channel
transformation
Theme 4
December 2018
Digitalisation of lending
process and digital
payment solutions
Theme 3
September 2018