Oracle's Customer Centricity Strategy for Banks

Customer Centricity - Strategies to Attract and Reta in Customers

Lance TaySenior Director, Financials Services Global Business Unit

Kuala Lumpur, 24 Feb 2011

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The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decision. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

Safe Harbor Statement

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Lance TaySenior Director, Financial Services Global Business Unit [email protected]

• Lance Tay is the Senior Director for Banking across Asia Pacific in Oracle’s Financial Services Global Business Unit (FSGBU).

• In this role, Lance is responsible for providing de ep domain expertise to Oracle’s financial services customers across all of Oracle’s applications and technology products. Lance brings to this role a wealth of exp erience and valuable insight gained through over fifteen years of experience wor king with some of the region’s largest financial services companies. His domain ex pertise includes retail banking, wealth management, and trade finance. Lance has wor ked with major financial institutions in Australia, New Zealand, South East Asia, India, China, and S. Korea.

• Lance is considered a retail banking IT strategy th ought leader within the financial services sector and is a regular commentator in lea ding industry publications. He is often invited to speak at industry seminars about b reakthroughs in banking IT strategy.

• Prior to joining Oracle, Lance held management posi tions at The Boston Consulting Group, Accenture, and Cisco Systems. Lance also wo rked at Fidelity-NIS, and Procter & Gamble.

• Lance holds a MBA from Cornell University, and a Ba chelor of Science from the Southern University of New Hampshire. He has also lived in Sydney, Bangkok, Mumbai, and Geneva.

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• Leadership in Banking

• Create a Customer Centric Enterprise

• Results Achieved by Oracle Customers

Agenda

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Oracle inBanking

Did You Know?

10 of the top 10 Global banks use OracleApplications to run their business

15 of the top 20 Global banks use Oracle Applications to measure and manage their performance

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Scale Costs to Match Market Opportunity

“How can I improve cost efficiency ratios while providing greater value to our customers?”

“In the near to intermediate term, the industry is expected to continue to experience pressures on its net interest margin”

“How can my organization meet the increasing regula tory compliance demands?”

“IT spend on compliance will grow annually at 14.1% and reach $3.0 billion by 2006”

Compliance & Regulatory Pressures

Grow Business & Cross-Sell to Customers

“How can I streamline my business processes to grow wallet share and shorten time to market for new pro ducts and services?”

“The average cost to acquire a new customer is $3,500 in the US”

The Challenges We’re Hearing – Globally and Locally

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Grow Business & Cross-Sell to Customers

“How can I streamline my business processes to grow wallet share and shorten time to market for new pro ducts and services?”

Growth Challenge – Attracting & Retaining Customers

Annual Median Defection Rates (%)

US UKCanada France

14

4

2

14

0

12

10

8

6

4

16

2 Average Number of Products Per Household = 15

Average Number of Products at a Single Institution = 2

Source: Celent Communications

Defection rates are high while share of wallet remains low

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Customer Centricity – Strategy for Attracting & Retaining (Profitable) Customers

• “Universal Truths” In Successful Sales• Good service earns the right to sell

• Customer word-of-mouth is powerful

• Different customer segments have different definitions of good service and value

• New “Universal Truths”• Mobile Internet word-of-mouth is ALL powerful

• Customers DEMAND a consistent experience across all touch-points, 24x7

• A segment of ONE

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A Customer-Centric Enterprise empowers employees with customer dataand insight through end-to-end business processes to ensure the best decisions are made for both…

…at any customer moment of truth while providing a seamless customer experience .

…the company- and -

the customer…

A New Approach to Increasing GrowthBecome a Customer-Centric Enterprise

Customer

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Consultants, Analysts, and Bankers Agree !

Leaders Understand Link Between Service and Sales

(BCG – Global Retail Banking 2010)

Turning Customer Satisfaction Into Shareholder Value

(McKinsey – Rediscovering The Customer)

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Provide a seamless, unified customer experience for all customer interactionsregardless of internal organization

Transform customer data into actionable information by providing the right informationto the right person at the right time

Extend customer understanding throughoutthe enterprise thus enabling all functional areasto make informed, customer-based decisions

The Customer-Centric EnterpriseKey Imperatives

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Agenda

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Create a Customer Centric Enterprise

Deliver multi-channel campaign & offer management

Closed Loop Marketing for Banking

Only complete offer & campaign mgmt solution with built in analytics to measure & refine marketing programs

Requirement Oracle Capability The Oracle Difference

Provide a single source of truth for customer data

Only complete repository for data across the enterprise accessible by a hub & spoke model

Universal Customer Master for Banking

Drive intelligent customer interactions

Only end to end performance & profitability analytics in context of customer interactions

Pre-built Customer Analytics for Banking

Show a complete view of customer to customer agent

Only multi-channel sales, service, marketing and transaction solution pre-integrated with core banking

360 Degree Customer View Through Integrated Banking Sales & Service

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Need for Single View of Customers

Grow Business & Share of Customer Wallet

• Shift from product centric to customer centric view

• Improve the effectiveness of cross-sell and up-sell efforts

Provide Consistent, Differentiated Service

• Create consolidated, customer profile across channels and operational systems

• Make informed decisions during customer interactions

• Detect and manage customer events

Lower TCO• Centralize customer information

management• Automate error handling, account

setup & other administration costs

Manage Governance, Risk & Compliance

• Meet rules for corporate governance, e.g. Sarbanes-Oxley

• Address risk management provisions, such as BASEL II

• Comply with regulations such as USA PATRIOT Act, Gramm-Leach-Bliley Privacy Act, ACORD, MiFID

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Master Data Management Enables a Single View

• Creates and maintains a unique, complete and accurate customer information across the enterprise

• Distributes customer information to all operational applications just in time

• MDM enables organizations to:• Know your customers• Improve data quality• Utilize customer insight during all

customer interactions• Comply with privacy and regulatory

requirements• Reduce data management costs

…Enables a Single ViewOf Customers

Complete Master Data Management Solution…

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SynchronizeSynchronize

• Modify Customer Information

• Changes in any application are transmitted to master data hub

Propagate Updates

Propagate Updates

Execute Survivorship

Execute Survivorship

Update CustomerUpdate

Customer

• Cleanse Data• Determine

Survivorship• Merge Records• Cross-Reference

Customers

• Determine relevant systems

• Send new account information

• Publish updates into customer data hub from core and back office systems

• Respond to master customer changes

Data QualityServices

OAS10g

WebServices

IntegrationServices

Core Systems

3rd Party Vendors

ISVPartners

SiebelCRM

CustomerData Hub

OracleERP

Master Data Management for BankingProvide a Single Source of Truth for Customer Data

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The Value of Intelligent Interactions

• Better understanding of customer behavior and buying patterns

• Identify selling opportunities in real-time (critical for internet age)

• Target the right products to the right customers and the right time

• Understand customer value to move customers into more

profitable relationships

• Retain high-value customers

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Unique Value of Analytics Applications

• Over 4 years of development and market success

• THE leading Customer Analytics solution

• Hundreds of successful customers

• Broadest support of Siebel CRM versions

…with Banking SpecificAnalytic Applications

Leading Customer Analytics Solution…

• Extends insight from front office to back office with insight into entire business process

• Lowers TCO, Speeds Time To Value

• Enhances value of Front Office CRM investments

• Deeply integrated with CRM banking applications

• Integrated analytical insight into your CRM processes

• Pre-built ETL Maps/Data Integration, Dashboards & Reports

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Real-time DecisionsReal-time Decisions

• Interaction History• Customer Behavior• Segment Migration• Propensity to buy

ExecutiveExecutiveOperationalOperationalCustomerCustomer

• Performance Scorecards

• Operational Cost Analysis

• Bank Performance Analytics

• Line of Business Analytics

• Regional Analytics• Trends• KPI Monitoring

• Multi-channel Engine for Real Time Recommendations

• Retention Actions

Analytics ServerBI Dashboards

Databases

Data Warehouse

Pre-built Customer Analytics for BankingDrive Intelligent Customer Interactions

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Sales AnalyticsComplete Solution for Entire Sales Cycle

Sales AnalyticsAnalyze pipeline opportunities and forecasts to determine actions required to meet sales targets. Determine which products and customer segments generate the most revenue and how to effectively cross-sell and up-sell. Understand which competitors are faced most often and how to win against them.

Usage Accelerator Analytics OptionAdd-on to Sales Analytics empowers front line managers with the information needed to effectively manage their team’s usage. Removes the ambiguity and focuses users on the information they need to maintain.

…add Profitability Analytics for insight into customer and product profitability

Profitability AnalyticsOracle Financial Services Applications (OFSA) and Oracle Business Intelligence Enterprise Edition are now completely integrated, providing financial services organization with industry leading profitability analytics delivered using the industry leading Business Intelligence platform.

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Service AnalyticsComplete analysis of the business aspect of the services organization. Includes analysis of the call center and field service business to understand the true cost to serve in a complex service business

Service AnalyticsComplete Solution for Entire Service Lifecycle

…add Oracle Contact Center Telephony Analytics for complete insight

Contact Center TelephonyEnables the measuring and managing of multi-channel contact center operations, key business processes and activities by providing increased operational effectiveness through detailed staffing, headcount and scheduling analysis

Also provides increased business value through complete campaign and sales performance insight by agent and across customer, product, service and region.

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Marketing AnalyticsComplete Solution for Entire Marketing Organization

Provides Marketing Planning related information. The information is organized for different roles like Marketing Executive, Director, Finance Director. The dashboard also has a Sales Alignment page to allow Sales and Marketing Executives to co-ordinate activities

Campaign Analytics - Provides Campaign Results data by Offer, Segment, Agent performance. Manager can monitor a campaign scorecard and identify root causes for shortfalls in meeting predicted goals

Customer Analytics - Provides product affinity, market basket and next product purchased analysis. Provides demographic information and information on impact of customer behavior due to marketing activities.

Event Analytics - Provides Analytics related to management of trade shows, customer events etc. Marketing Events Analytics can show analysis of Event registrations, expenses on supplies by vendor, region, event etc., Event ROI analysis that is fully integrated with Marketing Planning Analytics.

Marketing Planning/Executive Analytics

Marketing Analytics

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The Need for Closed-loop Marketing

Consumers Demand a Richer and More Relevant Dialogu e

Under Pressure for Accountability, Alignment and Pr oven ROI from Marketing Investments

Expenditure is huge, results are unproven, processe s are inefficient• Where measurable, 20% of marketing spend is wasted3

It must be accountable, for every action taken and every dollar spent• Marketers cannot calculate ROI for 40-60% of spend3

Traditional (direct and above-the-line) marketing i s ‘not working’• Average response rates for traditional direct marketing activities just 2.6%1

‘Pray and spray’ marketing destroys relationships as well as brand value• Consumers see over 3,000 (direct/indirect) marketing messages each day. Over 60% cite over-

solicitation’ as a reason to defect.2

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• Open, flexible, business intelligence platform• Powerful descriptive and predictive analytics• Pre-built dashboards, personalized access

• Fact-based planning & budgeting• Enterprise calendar• Project and content management• Align and optimize spending

• Segmentation and targeting• Campaign design and execution• Targeted loyalty campaigns

• Events management• Invitation, registration, follow-up• Integrated customer-facing portal

• Multi-channel response capture• Collaborative lead management• Integrated ROI analytics

• Closed loop tracking• Role-based, real time analytics• Continuous learning

EventsManagement &

Execution

Response &Lead

Management

Customer

CampaignManagement

Customer & Business

Insight

MarketingReporting &

Analytics


Planning &Resource

Management

Plan

Manage

Measure

Understand

Execute

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• Best-in-class marketing solution that aligns and optimizes corporate and branch marketing

• Coordinated communications across channels and collaborative execution with branches and relationship managers

• Tightly integrated with channels including call center, branches, field, and partners for superior customer experience and closed-loop execution

…with Embedded Insight& Segmentation Tools

Complete Multi-Channel Marketing Solution…

• Complete end-to-end solution that links strategy and planning with execution and measurement

• Fusion of insight and action for accelerated campaign execution and intelligent offer recommendations

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AnalyzeAnalyze

• Define Customer Segments

• Slice & Dice Segmentation Data to Refine Queries

ExecuteExecuteCreateCreateSegmentSegment

• Design Multi-Stage Campaign

• Attach Offers to Campaigns

• Test Campaigns• Assign Channels

• Initiate Campaign Waves

• Monitor Campaign Progress

• Adjust Campaigns• Review Campaign

Calendar

• Review Campaign Effectiveness

• Monitor Results in Real-time

• Evaluate Offers• Compare Campaigns

Closed Loop Marketing for BankingDeliver Multi-Channel Campaign & Offer Management

On-BoardingAcquisition Retention

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360 Degree Customer View Through Integrated Sales, Service, CoreBanking

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Service Management

Service Management

• Real-time Balances• Account Details &

Transaction History• Contact & Opportunity

Management• Interaction History

Opening / FulfillmentOpening / Fulfillment

Guided SellingGuided Selling

Single View of CustomerSingle View of Customer

• Cross-Sell/Up-sell• Sales Offers• Needs Analysis• Product Catalog• Product Features /

Benefits

• Multi-product application processes

• Data capture• Document fulfillment• Account Funding

• Financial Transaction Support

• Common Service Issue Management

Web ServicesWeb ServicesWeb ServicesWeb Services

360 Degree Customer View Through Integrated Banking Sales & ServiceShow a Complete View of Customer to Customer Agent

Core SystemsCore SystemsCore SystemsCore SystemsAgent DesktopAgent DesktopAgent DesktopAgent Desktop

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Leads & Referrals Guided Selling Origination & Fulfil lment Maintenance Transactions

CampaignsOffersIncentive Tracking

Customer Centricity Strategy Requires Front, Middle, and Back-Office Solutions Working Together

Needs AnalysisTask User InterfaceCollaborative Sales

Service MasterProducts Master Customer Master Marketing Master

CRM Core Components

Deposit OriginationLending OriginationDocument Generation

CashboxesElectronic JournalStore & Forward

Self ServiceActivitiesService Management

Customer Data Integration

Channels

Functions

Branch Sales & Service

Call CenterLending /

Agency / Distr.Internet / Mobile Branch Teller

Financial Transaction EngineReal Time Decision Engine Rules EngineWorkflow Engine

Assignment & Routing Engine Product Configuration Engine

Consistent Customer Experience Across Channels

Core Banking / Product Processing

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Summary - Customer Centricity Strategy for Attracting & Retaining (Profitable) Customers

• Only complete repository for data across the enterprise accessible by a hub & spoke model

• Only end to end performance & profitability analytics in context of customer interactions



• Only complete offer & campaign management solution with built in analytics to measure & refine marketing programs

• Only multi-channel sales, service, marketing and transaction solution pre-integrated with core banking


360 Degree Customer View through Integrated Banking Sales & Service

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Agenda

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What Customers are Achieving

Oracle’s Siebel Finance is at the heart of Robeco Ba nk Belgium’s strategy to manage the life cycle of the customer r elationship. Account managers are managing 20% more customers ea ch using Siebel Finance.”

“Our Multi-channel Program delivered by PeopleSoft Enterprise CRM, enables every ABN AMRO Bank client to choose h ow and when they wish to communicate with us. This allows us to be trendsetters in our industry.”

“In the four years since the Siebel deployment, ave rage sales forCRM-enabled branches have increased by 71% for auto loans, 110% for mortgage lending, and 164% for credit card applications.”

“… we saw a 29% increase in the ratio of opportunities created to the number of cashier transactions processed. We also r ecorded a 13%increase over that period in the ratio of actual re ferrals to original approaches made to customers.”

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Industry Quotes

“ Oracle’s acquisitions of PeopleSoft and Siebel give it a more significant footprint in business intelligence (BI), analytic applications, and performance management.”

“ Oracle’s Siebel purchase should drive more value for customers through integrated business management applications, and deliverexisting Oracle customers with more sophisticated CRM functionality.”

“ Oracle has been kicking its game into high gear. With 22 acquisitions in 24 months, the longtime database kingpin and middleware applications player has gorged on new products and capabilities…The buying binge also have served to reinforce the company's commitment to amassing deep expertise in financial services-something not lost on clients in that industry.”

“ With a highly scalable, comprehensive solution, Oracle’s Siebel CRM provides best-of-breed marketing and sales tools… Let’s face it —Oracle understands the needs of FSIs at a broad level.”

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The Only Complete Banking Solution

PlatformPlatform

PeoplePeopleProcessesProcesses

PartnersPartners

CustomerResults

CustomerResults

Oracle’s Banking FootprintOracleOracle

ISV Partners

Corporate Administration

Customer Analytics

ChannelAnalytics

Marketing Analytics

Exec Analytics

Funds TransferPricing

Portal & Dashboards

Business ActivityMonitoring

Business ProcessAnalytics

Op Intelligence

HR Analytics

CustomerInsight

Performance Management

OperationalExcellence

AnalyticsPlatform

Consolidation Budgeting

Procurement

Profitability Mgmt

Fixed Assets

Incentive Comp

Product Hub Org Hierarchy Hub Accounting Hub Payments Hub

Master Data ManagementCustomer Data Hub

Rich Client F/WAJAX, Web 2.0

Systems Mgmt Web Services MgmtDirectory Services

Enterprise Content Mgmt

Database (Grid,Memory, Embed)

Web ServicesOrchestration (BPEL)

Identity Mgmt

J2EE Services, ESB and Rules Engine

Access Mgmt

Enterprise Technology

ProfitabilityAnalytics/RAPM

ACH

Credit Rating

POS

SWIFT

Fed Wire

OFAC

Market Feeds

Check Order

OtherSystems

Retail

Platform Teller Call Center

InternetBanking Kiosk EBPP

Private Wealth MgmtCommercial

SecurityTrading

DerivativePricing

CRM &Marketing

LeadMgmt

FinancialPlanning

Order EntryPlatform

On Demand

Customer Experience

Call Center

Deposits

Loans

Payments

Cards(Credit / Debit)Investments

Leasing

Payments

Deposits

TreasuryTradeFinance

AssetMgmt

SyndicatedLoans

StructuredDerivatives

Lock BoxNostroRecon

InvestorServices

Leasing Custody

Mortgages

Customer &BusinessInsight

Customer &BusinessInsight

Lifecycle ManagementSellingMarketing ServicingOriginating

External InterfacesExternal Interfaces

Projects

Risk Based Pricing

EconomicCapital/RAPM

Operational Risk

Market Risk

Credit Risk

ALM

SOX

RegulatoryReporting

Risk Based Decisioning

Risk Management

Governance, Risk & Compliance

Governance, Risk & Compliance

Compliance

BASEL II& 1A

AML

Human Capital Mgmt

Enterprise GL

CashMgmt

Real Estate

Savings Loans

Core BankingLedger

Reconcil-iation

Compliance& Limits

IntegrationMkt Data

PortfolioMgmt

TradeProcessing

Performance Mgmt

Balance & Positions

Fees & Commissions

Compensation

Clearing &Settlement

Core BankingLedger

TeamSelling

OrderMgmt

InternetBanking

ClientServicing

Product and Transaction Processors

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Oracle's Customer Centricity Strategy for Banks

Business

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