Lecture Materials RETAIL BANKING - Madison, WI · Lecture Materials RETAIL BANKING Virginia Heyburn...
Transcript of Lecture Materials RETAIL BANKING - Madison, WI · Lecture Materials RETAIL BANKING Virginia Heyburn...
Lecture Materials
RETAIL BANKING
Virginia Heyburn Vice President, Strategic Pursuits
Fiserv [email protected]
Miami Beach, Florida 786-239-4898
August 8, 2017
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Vision 2020: Growing the Banking Franchise in a Digital World
Virginia HeyburnVP Strategy
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
2011
2016
Technology is Driving Industry Transformation
Source: Visual Capitalist, “The Largest Companies By Market Cap Over 15 Years,” August 2016*Top 5 By Market Cap
2001
2006
Tech Other
#1 #2 #3 #4 #5
$406B $272B $261B $260B
$446B
$406B
$383B $327B $273B
$277B $237B $228B
$365B
$293B
$376B
$582B $556B $452B $364B $359B
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© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Disruptors are Changing the Banking Landscape
Source: Instantly Brand Monitor in Cooperation with Statista, “Americans Trust Tech Firms More Than Banks for Finance,” June 2015*Original Question: “Please state for each firm you know whether your overall opinion of the provider of financial products is positive, neutral, negative.”
44%
37%
40%
36%
73% 71%
64% 57%
Banks Tech Firms
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Banks Have an Innovation Gap to Bridge
30%20% 19%
37%
22% 27%
44%31% 34%
106%
133%
118%
2011 2013 20140%
20%
40%
60%
80%
100%
120%
140%
Top 5 Banks Top 3 Carriers* Top 4 Payment Networks* Gang of 5
Consumer Perception of Innovation Brands of Innovators vs. Banks and Payment Networks
Source: Javelin Strategy & Research “2015: Gang of Five: Apple Pay vs. Android Pay vs. Samsung Pay vs. PayPal “Pay”?,” March 2015 n=5,878, 6,651, 3,200
Note: Networks are carriers are normalized for 5 firms for comparison
Innovation Gap
Note: Gang of Five consists of Apple, PayPal, Samsung, Google, and Amazon
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© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
1. Technology Innovation is transforming all industries,
including banking
2. Digital transformation is opening doors to new
competitors with a clear vision of ‘fast and simple”
3. Millennials are voicing new preferences and service
expectations shaped outside financial services
Key Takeaways
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
The Digital Triad
ONE Experience
Move Money
Mobile Now
Bank of Things
Five Game Changers in Banking
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© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Game Changer #1: The Digital Triad
We spent a lot of years training banking customers on our terminology:
“DDA, ACH, Routing number, PIN, Wire, Bill Pay”
This new generation of customers doesn’t care.
LoansDeposits Payments
Digital Strategy for an Always-On World
Money Service
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Consumers Value the Merits of Non-Banks
Sources: Accenture, Capgemini, Salesforce.com
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© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Unbanked by Choice is a New Phenomenon
1%
1%
2%
2%
6%
7%
8%
10%
15%
24%
25%
0% 20%
Banks Do Not Have Convenient Hours or Locations
Banks Don't Offer the Products or Services I Need
I Cannot Manage/Balance an Account
The Fees are Too High or Unpredictable
I Don't Like Dealing with Banks
Other
I Wouldn't Use an Account Enough
Banking History, Credit or ID Problems
Refused to Answer
Don't Need or Want an Account
Don't Have Enough Money
Most Important Reason for Not Having a Checking, Savings or Money Market Account
Source: The Federal Reserve System, “Consumers and Mobile Financial Services 2014,” March 2014
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Why Should New Entrants Matter to Banks?
Source: Accenture “2016 North America Consumer Digital Banking Survey - Banking Shaped By The Customer,” June 2016n=>4,000
87%of consumers will use their branches in the future – and want human interaction when they go there
46%of consumers are willing to bank using robo-advice in the future
45%of consumers say the top reason they would stay loyal is if their bank offers discounts on purchases of interest
11%of consumers left their bank in the past year – and consumer switching to virtual banks is at double-digit levels
The Branch is Alive and Well Value is Important
Robo-Advice is Welcomed Switching FIs is Not an Obstacle
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Seamless movement across touchpoints
One experience, multiple engagements
Game Changer #2: ONE Experience
Initiate
Continue
Finish
New: Chat/App/Voice/Augmented/Virtual Reality
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Transformed Branch
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© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Banks Must Innovate or Lose Profitable Accounts
595 611 634 624 613 579 581
171 173 178 183 189 196 200
0
100
200
300
400
500
600
700
800
900
2010 2011 2012 2013 2014 2015 2Q16
Num
ber
of A
ccou
nts
FDIC-Insured Credit Unions
Total U.S. Deposit Accounts (in Millions), 2010-2Q16
Source: FDIC: FFIEC Call Report 2Q16 and NCUA Call Report 2Q16
*May exclude Savings Institutions Prior to 2012
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Millennials to Inherit $59 Trillion in Personal Wealth
Source: Visual Capitalist, “How Affluent Millennials are Changing the Finance Industry,” December 2015
2030
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© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
1. Banks must focus on deposits, payments and loans as part
of a digital triad strategy or risk market share erosion
2. Millennials are ten times more likely to switch their financial
institution than older generations
3. Consumers are demanding a consistently “fast and simple”
experience across multiple touchpoints/channels.
Key Takeaways
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Game Changer #3: Move Money
whohow
much when
Sender’s Bank Receiver’s Bank
Sender Receiver
Payment Network
Invisible paymentsPayments appsInteroperable networks
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© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Today’s Payment Reality is Fragmented
People have numerouspayment relationships, but they manage them separately..
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Speed is the New Black
Relative size of words reflects the frequency with which the future of electronic billing and payment was described in one word by industry analysts from Aite Group, Celent, Forrester, IDC Financial Insights, Javelin Strategy & Research and Mercator Advisory Group.
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© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
New Players Proliferate
Consumers have increasing choices for all financial services.
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Large Tech Companies a Clear Threat in Money Movement
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© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Primary Bank No Longer the Top Preferred Mobile Wallet Provider
16%
13%
16%
19%
24%
20%
20%
25%
43%
22%
34%
16%
14%
17%
21%
31%
28%
25%
28%
45%
27%
42%
22%
25%
27%
29%
34%
34%
37%
48%
51%
56%
63%
MCX CurrentC
Starbucks
Microsoft
Android Pay
Apple Pay
American Express
MasterCard
Your Primary Bank
Visa
PayPal
0% 10% 20% 30% 40% 50% 60% 70%
2015
2014
2013
Likelihood of Choosing Company as a Mobile Wallet Provider
Source: JAVELIN, “What’s In Your Mobile Wallet?,” March 2016
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Game Changer #4: Mobile Now
“What do you want to do?”
becomes
“What can we do for you?”
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© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Who Will Own Financial Conversations?
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© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Game Changer #5: Bank of Things
Auto purchase
College choice
Car insurance
Home purchase
Hyper-competitive, hyper-connected
Network interoperability
Artificial Intelligence for personalized service
Bank creates customer routine
• Partner and collaborate
• Aggregate data with all partners
• Build interconnected network beyond traditional “bank-owned” channels innovation
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2014 | 2015 | 2016 | 2017
“The Internet of Things (IoT) describes the phenomenon
of everyday devices connecting to the Internet through
tiny embedded sensors and computing power.”
Accenture
The Internet of Things
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Ways to Defend and Succeed Against Non-FI Threats
Invest in Sustainable Innovation
Digital First
All Form Factors
Digital Sales
Consumers trust FIs more than non-FIs
Advantage FIs: established relationships with regulators
Lead in Customer Experience
Focus on Digital
Simple and convenient
Easy and always on
Zero tolerance for defects
Leverage Established Position of Trust
Build, Buy, Partner, Fund?
Build innovation teams
Choose WHERE to innovate
Innovate Faster
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© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
1. The payments landscape is transforming with new
technology capabilities
2. The biggest trend in payments is that payments are
becoming ‘invisible’.
3. Mobile is the most important customer touchpoint for
both transactions and sales
Key Takeaways
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
The Digital Triad
ONE Experience
Move Money
Mobile Now
Bank of Things
Five Game Changers in Banking
15
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Thought for the Day:
The only thing changing faster than technology is consumer
expectations
© 2017 Fiserv, Inc. or its affiliates. |CONFIDENTIAL – LIMITEDFORTUNE Magazine World's Most Admired Companies®
2014 | 2015 | 2016 | 2017
Thank You!