Evolving A Customer Centric Platform For Vietnamese Banks: Trends AND Strategies From Across The World

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Evolving A Customer Centric Platform For Vietnamese Banks

Trends AND Strategies From Across The World
Lance Tay
Senior Director, Financial Services Global Business Unit
Hanoi, 27 May 2010

Agenda
• Global Trends Banking

• Customer Centric Platform Strategies
• Roadmap for Success
• Oracle Value Proposition
© 2010 Oracle Corporation – Proprietary and Confidential 2

BankingVN-CustCentricPlatform-100527-LTay-v07
Challenges in Financial Services
2nd global banking crisis? “W” or “L” shaped recovery?
CHALLENGES IMPERATIVES
• Continued economic • Greece/EU debt Financial
uncertainty crisis, China Institutions
property bubble Needs To Be
• Increasing risk and Even More
regulatory • Basel 3, ICAAP, Nimble
requirements SEPA end-date
Spend less to get
• Intensified competitive • USAA1 enables more
innovation mobile-phone photo-
capture check Respond
• Less tolerance for deposit “immediately” to
slow restructuring and competition
post-merger benefits • Gartner2 predicts
realization 50% of post-merger Extract value
integrations will fail faster
• Increasing customer
dissatisfaction • Accelerated Serve to sell
customer defection 1. Bank Systems & Technology, Conz, 26 Jun 2009
2. Gartner, Moyer, 23 Jan 2009

The Challenges We’re Hearing
Grow Business & “How can I streamline my business processes to grow wallet
Cross-Sell to share and shorten time to market for new products and
services?”
Customers
“The average cost to acquire a new customer is $3,500 in the US” American Bankers Association
Compliance & “How can my organization meet the increasing

Regulatory Pressures regulatory compliance demands?”
“IT spend on compliance will grow annually at 14.1% and reach $3.0 billion by 2006” The Info Shop
Scale Costs to Match “How can I improve cost efficiency ratios while providing
Market Opportunity 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”
AM Best

The Customer Centric Platform Challenge
Retain, Acquire and Cross-Sell Customers, Product Innovation
Grow Business & “How can I streamline my business processes to grow wallet
Cross-Sell to share and shorten time to market for new products and
services?”
Customers
Forrester Trends : Retail Financial Services

Agenda


Customer Centric Platform Strategies
Meeting Customer Expectations
1. Delivery Channels
– Beyond traditional branch
Top 3 successful and ATM channels
business 2. Products Innovation
strategies – Blended deposit, loan,
payment, investment and
Critical for fast corporate offering
growing 3. Customer Relationship
economies such Management
as Vietnam – Integrating service with
sales, and core banking

1. Delivery Channels
Direct banking channels enablement is key
• Wider reach – 60% prefers to transact over the internet

• Lowest cost to serve – 10cents per transaction over mobile
Source: 2007 McKinsey survey of personal financial services in Vietnam

Vietnam Direct Banking Potential
Mobile banking channel emerging dominance
• 30m+ mobile subscribers

Internet Usage
Mobile Subscribers
25,000 25000
20,000 20000
Subscribers in 000s
Users in 000s
15,000 15000
10,000 10000
5,000 5000
0 0
2003 2004 2005 2006 2007 2008 2001 2002 2003 2004 2005 2006 2007
Year Year
Source: VNNIC Source: ICT Statistics / International

Telecommunication Union

2. Product Innovation
Increase agility - break-out from legacy core banking constraints
Legacy Core Banking Systems Modern Core Banking

Limitations Solutions
• Closed platform • Open platform
• Hardcoded offerings and processes - • Incorporating latest
Difficult to create new product products and service
variations and new products offerings in single
• Predominance of aging legacy “core”
systems requires companies to • Easy product
spend between 65% and 80% of IT reconfiguration - mix &
spend on system maintenance and match products to
steady state operations create new offerings
• Siloed infrastructure (often mirroring • Process driven
organization) creates redundant solutions
credit, deposit, lending and trading • Lower cost
applications and data environments maintenance

Modern Core Banking – Enable Consistent and
Superior Customer Experience
From a product centric to a customer centric business model

3. Customer Relationship Management
Delivering service to win and retain profitable customers
1 Concept Creation
Servicing & Product Design
6 Transacting
• Customer insight 2 & Planning
• Product & market analytics
• Customer maintenance • Product characteristics
• Product and usage reporting
• Contract/account maintenance • Product details
• Marketing/Segmentation analysis
• Financial transactions • Product pricing
• Concept refinement
• Payments & collections • Product bundling
• Customer escalations & claims • Product risk assessment
• Product delivery vehicle(s)
Acquisition,
On-boarding,
Retention
Account Origination /
5 New Business 3 Product Creation
• Product selection Campaign
• Application capture
4 Management
• Product sourcing
• Delivery vehicle setup/activation
• Decisioning
• Integrated marketing • Collateral/marketing materials creation
• Orchestrated fulfillment
• Discounting and promotions • Docs, processes, employee training
• Contract/account creation
• Sales execution
• Discounts and promotions
• Real-time offer generation
• Real-time up sell/cross sell
• Campaign effectiveness

The Evolution of CRM – From Mid to Front Office
Transact Analyze Engage
1990’s 2000’s 2010’s

Agenda


Roadmap for Success
3-Stage Recommendation For Vietnam
1. Implement a scalable • Reach out to rapidly

direct banking solution expanding market
2. Install a modern core • Rapidly offer new products

banking solution wanted by customers
3. Undertake a • Capture and retain

comprehensive CRM profitable customers
solution

1. Oracle FLEXCUBE Direct Banking
Scalable internet and mobile banking solution – out of the box
• Support for multiple delivery channels,

with a wide range of functionality. This
includes banking, bill payment and
presentment, online statements, account
registers, alerts, personalization,
account aggregation, and one-to-one
marketing
• Offer advanced services on mobile

communication devices
SMS • Expand business across geographies
• Address fraud and mitigate phishing
risks
• Rollout your 'Gen Y' strategies
effectively
• Lower customer acquisition and
servicing costs
Any Consumer Device • Offer benchmark internet banking and Any Core Banking
mobile banking services Systems

FLEXCUBE Direct Banking - True ‘Anywhere,
Anytime’
• Available across range of

devices – Mobile Phones, PDAs,
Smart Phones (iPhone,
WindowsMobile, Symbian)
• GPRS, EDGE, WiFi
• Supports mobile banking
through
– SMS
– Browser based (WAP 2.0, i-mode)
– Downloadable Java applications
• Secure end-to-end transaction
• User Interface managed by
application to suit individual
devices

FLEXCUBE Direct Banking (FCDB) – Application Map
Pre-built functional solutions, templates, and core integration
Delivery Channel Integration Layers Backend Systems
Internet PDA Mobile Online/ Batch Retail Banking
Retail Banking Store & Forward

Corporate Banking
Current & Savings Transfers &

Term Deposits Loans
Accounts Payments Other Legacy Systems
Orchestration
Bill Payment Standing Orders Customer Services Credit Cards
Credit Card System
Corporate Banking Message Translation
Current & Savings Term Deposits Loans Cash Management

Account Other Systems
Business Services
Integration
Authorization
Bulk Payments Trade Finance Customer Services CRM
Mandates
Synchronization
Investor Services ERP
MF Portfolio View MF Buy / Sell MF Switch / Redeem Customer Services Standardised XML
Interfaces Security
(Tokens, PKI, Adaptive)
Core Services ASCII, ISO 8583 Mobile Gateway

Administration Authentication Entitlements Multi Entity
Message Queues, Web
Services, TCP/IP, Reporting
Multi Branding Multi Lingual Multi Currency Security
EJB

Case Study
FCDB Case Study - Jibun Bankbook (Japan)

Jibun Bank – JV of KDDI and Bank of Tokyo-Mitsubishi UFJ
Top page after login Deposit/withdrawal details Monthly accounts Change in balance
Jibun
JibunBank
BankWins
Wins Screen change by clicking a tab
Awards for
Awards for
Innovation
Innovation&&
Quality
Quality
• •Asian
AsianBanker
Banker
Banking expression “naturally” expected by
Summit
SummitAward
Award
(2009)
mobile phone users
(2009)
• •Celent
Celent––Mobile
Mobile
Banking
Banking (2010)
(2010)

Case Study
Jibun Bankbook - Quick Account-Opening
Jibun Bankbook page Enter personal information

before opening an account It takes only
10-15 minutes
up to this
point
Use the built-in Within a week, a

camera to cash card will
photograph the be sent to home
driver’s license to complete the
and send it account-opening
directly process.
Data entry is minimized by

using the existing subscriber
information already
registered for the mobile
phone.
Easy quick account-opening process whenever & wherever

Case Study
Jibun Bankbook - Money Transfer Using A Mobile

Phone Number
Select a recipient from
the address book Enter an amount/message Transfer completed
Transfer process is completed, just like sending an email.

*The recipient receives a notification email when the money is transferred into
their account.

2. Oracle Flexcube Core Banking Solutions
Proven in VN, and designed for future-proofing
SOLUTIONS KEY FEATURES & BENEFITS

• Retail • Vietnam market pre-packaged customization
Banking • Engage distribution partners
• Corporate • Streamline mortgage processing
Banking • Enhance lending and leasing
• Leasing / HP • Standardize origination
• Islamic • Achieve economies of scale by centralizing
Banking trade finance operations in regional hubs
• SWIFT ready payments with support for SEPA
• Support innovative business models
• Gain better analytical and operational insight,
manage compliance
• Adapt and transform faster
• Improve inventory management
• Address change for business needs

FLEXCUBE Universal Banking – Functional Arch.
BPEL & SOA Foundation

3. Oracle CRM Solutions – Complete CRM
Transact, analyze, and engage
Siebel CRM Oracle CRM On Demand Oracle Social CRM
Integration (AIA)

Siebel 8 – Enterprise-class FSI CRM
Sales Marketing
• Task-Based User Interface • New Strategic Marketing Initiatives

• Haley Rules Engine Integration • Enhanced Budgeting and Financial
Management
• Advanced Sales Forecasting
• New Marketing Collateral and Asset Inventory
• Improved Territory Management
Management
• PRM Contract Enhancements
• Enhanced Loyalty Management Capabilities
• SOA: Partner Registration
• SOA: Personalized Web Offers, Response
Creation, Event Management
Service Self-Service
• Customer Facing Web Services
• Managed Services support
• Enhanced Store-and-Forward Messaging • Advanced Bill Presentment, Payment &
Analytics Capabilities
• SOA: Inventory Transactions, Entitlement
• Versioned Hierarchy
Checks, Asset and Warranty Registration
• Advanced Search for eService
• SOA: Asset Registration
Master Data Management
Customer Order Mgt
• Universal Data Quality Integration
• SOA: Catalog/Configurator
• Enhanced Data matching
• Privacy Management • SOA: Shopping Cart services
• Procedural Condition support
• SOA: CDI Data access

3+2+1 = CRM, Core Banking, and Channels Integration
Evolving A Customer Centric Platform
Cust Channels
CRM

Agenda


Oracle in Did You Know?
Banking
10 of the top 10 Global banks use Oracle

Applications to run their business*
23 of the Top 25 North American banks

use Oracle Applications to run their business**
15 of the Top 20 Global banks use Oracle

Applications to measure and manage their performance***
** Onesource
Onesource Public
Public Parent
Parent Commercial
Commercial Banks
Banks
** *Based
*Based on
on the
the annual
annual ranking
ranking by
by Tier
Tier 11 Capital
Capital performed
performed by
by the
the Banker
Banker Magazine
Magazine July
July 2004;
2004; Includes
Includes Financial,
Financial, Human
Human Capital
Capital and
and Customer
Customer Management
Management Applications
Applications
***
*** Based
Based on
on 2006
2006 Banker’s
Banker’s Almanac
Almanac Ranking
Ranking

Oracle’s Strategy
Open
Standards-Based
Architecture
More More More

Value, Less Choice, Flexibility,
Complexity Less Risk Less Cost

Oracle + Sun
Complete, Open, Integrated Systems
Integrated Approach
Complete, Integrated Product Stack
Business Benefits
Higher Quality of Service
Innovation Delivered Faster
Better Performance, Reliability,
Security
Lower Cost
Reduced Complexity
Single Point of Support Contact
Easier to Manage
Certified Configurations

Oracle
Oracle’s Banking Footprint ISV Partners
Governance, Lifecycle Management Customer &

Risk & Business
Marketing Selling Originating Servicing
Compliance Insight
Risk Based Retail Commercial Private Wealth Mgmt Customer External
Decisioning Insight Interfaces
Customer Experience Customer
Risk Based OFAC
Pricing Call Team Order Internet CRM & Lead Financial Analytics
Platform Teller Center Selling Mgmt Banking Marketing Mgmt Planning
Channel Check
Economic Internet Analytics
Capital/RAPM Kiosk EBPP Security Client Derivative Order Entry On Call Order
Banking Trading Servicing Pricing Platform Demand Center
Marketing Market
Product and Transaction Processors Analytics Feeds
Risk Deposits Savings Deposits Cash
Mgmt Loans Integration Performance Mgmt
Management Mkt Data Performance
Trade Management
Treasury Payments Balance & Positions
Operational Finance Portfolio Exec Analytics
Risk Loans Mortgages Mgmt
Asset Syndicated Structured Fees & Commissions
Mgmt Loans Derivatives Profitability
Market Risk Cards Compliance Analytics/RAPM
Investments (Credit / Debit) Compensation
Investor Nostro Lock Box & Limits
Services Recon Funds Transfer
Trade Clearing & Reconcil
Credit Risk Payments Leasing Core Banking
Ledger Leasing Custody Core Banking Pricing
Ledger Processing Settlement -iation
Operational
ALM Excellence
Master Data Management
Customer Data Hub Product Hub Org Hierarchy Hub Accounting Hub Payments Hub Op Intelligence Fed Wire
HR Analytics
Compliance Corporate Administration SWIFT
Enterprise GL Consolidation Budgeting Profitability Mgmt Incentive Comp Analytics

BASEL II Platform POS
& 1A
Human Capital Mgmt Projects Procurement Fixed Assets Real Estate Portal &
Credit
Dashboards Rating
AML
Business
Enterprise Technology Activity ACH
SOX Rich Client F/W Database (Grid, Enterprise Content Web Services J2EE Services, ESB Monitoring
AJAX, Web 2.0 Memory, Embed) Mgmt Orchestration (BPEL) and Rules Engine Other
Business Systems
Regulatory Process
Reporting Systems Mgmt Directory Services Web Services Mgmt Identity Mgmt Access Mgmt Analytics

Global and Local Partners
GLOBAL SYSTEM INTEGRATORS INDEPENDENT SOFTWARE VENDORS

Activplant Gelco OSIsoft, Inc.
Pavilion
ADP Honeywell POMS
Technologies
Aegis Analytical Image Solutions PHT Corp.
Premenos
ArisGlobal I-Many Inc.
"Templar"
Aspentech IMS Health Inc. Proscape
Business Objects SA Integic Relsys
Callidus Software Inc. Invensys Systems Rockwell
Camstar Systems, Inc. Franklin Group SAS Institute
Citect GE Fanuc Siemens
ClickCommerce invivodata Siperian

Kronos
Clinphone Group Ltd. Skura Corporation
Incorporated
Cognos Labware Spotfire
Manhattan
Concur Steeprock
Associates
CRF Health Manugistics Synygy, Inc.
Cyclone Commerce McKesson HBOC Tactician
Documentum MicroStrategy Trillium Software
Werum Software &

DrugLogic, Inc. Model N, Inc.
Systems
Emerson Process
MS Projects Winthrop Stewart
Management
EudraVigilance Open Text Corp

Oracle’s Differentiated Value Proposition

Summary
• Banking continues to develop and grow rapidly

• Banks in Vietnam need to implement a customer
centric platform
– Direct Banking
– Product Innovation
– Customer Relationship Management
• Oracle’s solutions enable competitive advantage
– Only multi-channel sales, service, marketing and transaction
solution pre-integrated with core banking
– Only open standards core banking solution enabling new
products, relationship pricing & consolidation of existing
systems
– Only service-oriented architecture with a banking-specific data
model and process library

The preceding 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 decisions.
The development, release, and timing of any
features or functionality described for Oracle’s
products remains at the sole discretion of Oracle.

Oracle’s Product Families
Applications Middleware Database
Server & Storage Systems

Lance Tay
Senior Director, Financial Services Global Business Unit
lance.tay@oracle.com
• 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 deep 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 experience and valuable insight gained
through over fifteen years of experience working with some of the region’s largest
financial services companies. His domain expertise includes retail banking, wealth
management, and trade finance. Lance has worked with major financial institutions in
Australia, New Zealand, South East Asia, India, China, and S. Korea.
• Lance is considered a retail banking IT strategy thought leader within the financial
services sector and is a regular commentator in leading industry publications. He is
often invited to speak at industry seminars about breakthroughs in banking IT strategy.
• Prior to joining Oracle, Lance held management positions at The Boston Consulting
Group, Accenture, and Cisco Systems. Lance also worked at Fidelity-NIS, and Procter &
Gamble.
• Lance holds a MBA from Cornell University, and a Bachelor of Science from the
Southern University of New Hampshire. He has also lived in Sydney, Bangkok, Mumbai,
and Geneva.


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Evolving A Customer Centric Platform For Vietnamese Banks

Hanoi, 27 May 2010

• Global Trends Banking

© 2010 Oracle Corporation – Proprietary and Confidential 2

© 2010 Oracle Corporation – Proprietary and Confidential 3

Compliance & “How can my organization meet the increasing

© 2010 Oracle Corporation – Proprietary and Confidential 4

Forrester Trends : Retail Financial Services

© 2010 Oracle Corporation – Proprietary and Confidential 5

• Global Trends Banking

© 2010 Oracle Corporation – Proprietary and Confidential 6

© 2010 Oracle Corporation – Proprietary and Confidential 7

• Wider reach – 60% prefers to transact over the internet

Source: 2007 McKinsey survey of personal financial services in Vietnam

© 2010 Oracle Corporation – Proprietary and Confidential 8

• 30m+ mobile subscribers

Source: VNNIC Source: ICT Statistics / International

© 2010 Oracle Corporation – Proprietary and Confidential 9

Legacy Core Banking Systems Modern Core Banking

© 2010 Oracle Corporation – Proprietary and Confidential 10

© 2010 Oracle Corporation – Proprietary and Confidential 11

© 2010 Oracle Corporation – Proprietary and Confidential 12

Transact Analyze Engage

1990’s 2000’s 2010’s

© 2010 Oracle Corporation – Proprietary and Confidential 13

• Global Trends Banking

© 2010 Oracle Corporation – Proprietary and Confidential 14

1. Implement a scalable • Reach out to rapidly

2. Install a modern core • Rapidly offer new products

3. Undertake a • Capture and retain

© 2010 Oracle Corporation – Proprietary and Confidential 15

• Support for multiple delivery channels,

• Offer advanced services on mobile

© 2010 Oracle Corporation – Proprietary and Confidential 16

• Available across range of

© 2010 Oracle Corporation – Proprietary and Confidential 17

Delivery Channel Integration Layers Backend Systems

Internet PDA Mobile Online/ Batch Retail Banking

Retail Banking Store & Forward

Current & Savings Transfers &

Corporate Banking Message Translation

Current & Savings Term Deposits Loans Cash Management

Core Services ASCII, ISO 8583 Mobile Gateway

© 2010 Oracle Corporation – Proprietary and Confidential 18

FCDB Case Study - Jibun Bankbook (Japan)

© 2010 Oracle Corporation – Proprietary and Confidential 19

Jibun Bankbook - Quick Account-Opening

Jibun Bankbook page Enter personal information

Use the built-in Within a week, a

Data entry is minimized by

Easy quick account-opening process whenever & wherever

© 2010 Oracle Corporation – Proprietary and Confidential 20

Jibun Bankbook - Money Transfer Using A Mobile

Transfer process is completed, just like sending an email.

© 2010 Oracle Corporation – Proprietary and Confidential 21

SOLUTIONS KEY FEATURES & BENEFITS

© 2010 Oracle Corporation – Proprietary and Confidential 22

© 2010 Oracle Corporation – Proprietary and Confidential 23

Siebel CRM Oracle CRM On Demand Oracle Social CRM

© 2010 Oracle Corporation – Proprietary and Confidential 24

• Task-Based User Interface • New Strategic Marketing Initiatives

© 2010 Oracle Corporation – Proprietary and Confidential 25