SlideShare ist ein Scribd-Unternehmen logo
1 von 44
Downloaden Sie, um offline zu lesen
International Summit
  of Cooperatives
   Cooperative banks at
   the cusp of a new era

   October 2012
Any use of this material without specific permission of McKinsey & Company is strictly prohibited
Copyright © 2012. All rights reserved
Five trends will provide the “crucibles” that will transform the banking
industry over the next decade

                          Banks will right-size and restructure their business model to
    Right-sizing the      remain profitable in the face of regulation that drives lower ROE
  1
    platform              and higher COE

    Revenues and          The distribution of the world’s banking profit and revenue
  2 profits shifting to   pools will shift dramatically toward emerging markets, where
    emerging markets      many more of the world’s largest banks will originate because of
                          their rapid market expansion

    Seamless multi-       Banks will have lean, seamless multichannel distribution
  3 channel customer      networks and differentiate on the basis of the customer
    experience            experience they offer by leveraging the rapidly evolving technology

                          Banks will battle with new non-bank entrants to “own” the
    New competitive       customer relationship and will operate in a more competitive
  4
    threats               environment

    Impact of big data    Banks will leverage the explosive growth of available data and
  5 on banking            computational capacity to improve marketing and operations
    products

                                                                               McKinsey & Company
                                                                                                         | 1
                                                                 Copyright © 2012. All rights reserved
Seven key questions emerging for cooperative banks

   1 How can cooperative banks exploit their focus on customer satisfaction to gain
     market share?

   2 Will cooperatives need to look for growth beyond their borders?

   3 How can the cooperatives’ branch networks preserve the advantage of proximity
     while remaining profitable?

   4 How can cooperative banks use their internet presence and social media to
     improve relationships with members?

   5 How can cooperatives retain their privileged relationships with members in the
     face of new non-bank competition?

   6 How can cooperative banks develop a common voice to better protect their
     interests during regulatory reform?

   7 In what ways can cooperatives best exploit their unique attributes to optimize their
     balance sheets?

                                                                                 McKinsey & Company
                                                                                                           | 2
                                                                   Copyright © 2012. All rights reserved
Contents




           Overview of key trends



           Detailed questions for coop banks




                                                             McKinsey & Company
                                                                                       | 3
                                               Copyright © 2012. All rights reserved
1 Banks will right size and restructure their business model to remain
  profitable in the face of regulation that drives lower ROE
  and higher COE
                         Context                                     Implications
                         ▪ Banks’ return on equity (ROE) will        ▪ Banks will need to reduce costs and
   Right-sizing the        be negatively impacted by new               allocate capital more strategically as
 1
   platform                regulations                                 they return to the traditional retail model
                           – Basel Ill will require higher             to remain profitable
                              capitalization, capital quality, and     – Banks will maximize capital efficiency
   Revenues and               liquidity                                   and limit capital-intensive operations
 2 profits shifting to
   emerging markets      ▪ Emerging markets will offer higher        ▪ Banks will need to dramatically cut
                           ROE than developed economies                costs and become significantly more
                         ▪ Capital will be scarcer worldwide,          efficient
   Seamless multi-         driving higher cost of equity (COE)       ▪ Banks’ physical distribution networks
 3 channel customer        – Due to an investment boom in              will involve fewer, leaner branches with
   experience                 emerging markets, an aging               varying formats adapted to specific
                              population, and a rebalancing            segments
                              toward consumption in China              – Branches in developed markets will be
                                                                         leaner, with fewer staff, and will perform
     New competitive                                                     an almost exclusive front-line function
 4
     threats                                                           – Banks will have fewer branches but
                                                                         more of them will be in mass-affluent
                                                                         areas
   Impact of big data
 5 on banking
   products


                                                                                                  McKinsey & Company
                                                                                                                            | 4
                                                                                    Copyright © 2012. All rights reserved
1 Return on equity will be negatively impacted by new                                                                                       ESTIMATE

   regulations – example of the 4 largest EU markets
      Retail banking ROE, percent




  Pre-                                             13.5                          13.6            6.6                 5.1
  regulation                                                                                                                      Calculated ROE is
                                                                                                                                  not risk-adjusted
  Basel III                                        -2.9                          -2.8            -2.1                -1.4         and therefore does
                                                                                                                                  not differentiate
                                                                                                                                  between regulations
  EU mortgage directive                     -0.4                          -0.4               -0.1                  -0.3           that are
                                                                                                                                  ▪ Risk-reducing (e.g.,
                                                                                                                                    Basel III) and
  EU payments                                                             -0.1               -0.1                  -0.1             therefore positively
                                            -0.2
  regulation (SEPA)                                                                                                                 impact risk-
                                                                                                                                    adjusted ROE
  EU investment                            -0.4                           -0.5              -0.4                  -0.1            ▪ Only reducing
  regulation (MiFID 2)                                                                                                              profitability and
                                                                                                                                    therefore have a
  Country-specific                                                     -2.8                 -0.3                  n/a2              negative impact on
                                           n/a2
  regulation1                                                                                                                       risk-adjusted ROE

  Post-regulation                          9.5                      7.0                    3.5                    3.1



1 Germany: taxes and levies; establishment of a fee-based advisory model; UK: ICB ring-fencing, FSA on PPI, living wills, account switching/portability,
  RDRs, taxes, and levies
2 Country-specific regulation in France and Italy has either been implemented already in 2010 or has only low impact, and therefore has not been
  modelled

SOURCE: McKinsey working papers on risk No. 36, Day of reckoning for European retail banking,                               McKinsey & Company
                                                                                                                                                      | 5
        July 2012                                                                                             Copyright © 2012. All rights reserved
1 Moreover, return on equity will be significantly higher                                                                              ESTIMATE

   in emerging markets than in developed markets                                                                                            ROE
                                                                                                                                            COE
 Comparison of banking industry return on equity (ROE) and cost of equity
 (COE) by region, not accounting for mitigating actions from banks in response
 to new regulation (simplified simulation), 2015                                                                         ▪   Even after
 Percent                                                                                                                     restructuring
                                                                                                                             and mitigating
            ROE forecasts include margin projections but no                                    19.5                          actions, ROE of
            mitigating actions in reaction to Basel III, Dodd-Frank                                                          banks from
                                                                                                                             developed
                                                                                                                             markets remains
                                                                        14.1
                                                                                                          13.1               far below that of
                                                                                                                             banks from
                                                                                                                             developing
               9.0                    9.0                   9.6                    9.4                                       markets
                                                   7.7
      6.7                   6.4                                                                                          ▪   COE will not be
                                                                                                                             much higher in
                                                                                                                             emerging
                                                                                                                             markets than in
                                                                                                                             developed
                                                                                                                             markets
   US                     Europe1               Other                  China                 Other emerging
                                                developed

1 COE based on Western Europe; ROE based on European quoted banks (about 90% from Western Europe)

                                                                                                                        McKinsey & Company
SOURCE: Reuters; Datastream; Federal Reserve Bank; Global Insight; McKinsey Global Financial Initiative                                           | 6
                                                                                                          Copyright © 2012. All rights reserved
Residential
 1 In addition, cost of equity will increase because demand                                                                               real estate
   for capital will outstrip the supply of savings in the                                                                                 Infrastructure
   coming years                                                                                                                           Other productive
                                                                                                                                          investment
   Global investment and savings
   USD Trillions, constant 2005 prices and exchange rates                                                             ▪ There will be a
                                                                                                                        USD 2 trillion shortfall in
                                                                                                                        savings in 2030, due to
                                                         24                 22                                          – Increased demand for
                                                                                                                          capital fuelled by an
                                                          5                                                               investment boom in
                                                                                      USD 2 trillion                      emerging markets
                                                          4                           savings                           – Limited savings due to
                                                                                      shortfall will                      population aging and a
                                                                                      result in                           rebalancing toward
                                                                                      higher COE                          consumption in China
                                 10.7                                                                                 ▪ In addition, investors no
                                    2.1                  15                                                             longer see banks as safe
                               1.6                                                                                      assets and demand
           4.5
        0.8 0.7                                                                                                         higher risk premium
                                   7.0                                                         2
        3.1                                                                                                           ▪ As a result, the cost of
                                                                                                                        equity will be higher
           1981                  2008               2030               2030 global 2030
                                                                       savings     shortfall


SOURCE: Economist Intelligence Unit; Global Insight; Oxford Economics; World Development Indicators of the World Bank;           McKinsey & Company
        McKinsey Global Institute Capital Supply & Demand Model; McKinsey Global Economic Growth Database
                                                                                                                                                           | 7
                                                                                                                   Copyright © 2012. All rights reserved
1 Consequently, banks in the developed world need to carry out                                                             ESTIMATE

   dramatic cost reductions to move to sustainable levels of ROE1

     Banks need to reduce cost-to-income ratio in years to
     come
     Cost-to-income ratio
     Percent
     100                                                                                     Total cost reduction by
                                                                                             region to offset ROE gap
                                                                                             Percent2
       75
                                                                                             Europe                                  26
       50
                                                                                             USA                             20
                                                                           Target cost-to-
       25
                                                                           income: ~42%
                                                                                             Japan                     14

         0
         2000 2002 2004 2006 2008 2010 2012 2014 2016

1 Based on the assumption of flat revenues and no inflation for the 2010-2015 period
2 Percentage calculated as cost reduction over estimated total regional operating costs

                                                                                                           McKinsey & Company
SOURCE: McKinsey Global Banking Practice; McKinsey Global Banking Pools                                                              | 8
                                                                                             Copyright © 2012. All rights reserved
1 To remain profitable, banks will restructure to focus                                                                            Impact of Basel III
                                                                                                                                        None           Low
   more on retail banking and less on capital markets                                                                                   Medium         High
      The impact of Basel III on banks’ business lines

                                                       Corporate      Capital
     Regulatory requirements            Retail         banking        markets         Rationale
                    Capital ratio                                                     All products will be affected by reduction of available
                    and                                                               capital
                    deductions1
                                                                                      Capital market products will be most affected by market
                    Market risk
                    framework                                                         risk (particularly OTC derivatives and cash products)
       Capital
       require-
       ments                                                                          OTC derivatives will be significantly affected by CCR
                    Counterparty
                    credit risk                                                       increase; retail and corporate banking will only be
                                                                                      indirectly affected via cross-selling
                                                                                      All products with low-risk weight – like capital market
                    Leverage
                    ratio                                                             products – will mostly be affected by leverage ratio
                                                                                      measures
                                                                                      All short-term funded products – like capital markets
                    LCR                                                               products – will be affected (only relevant for cross-selling)
       Liquidity
       and
       funding                                                                        Consumer finance products and claims toward FIs face an
                    NSFR                                                              increase in LT funding due to classification as “illiquid”



       Overall



1 Different effects for individual segments might arise depending on bank’s capital allocation

                                                                                                                            McKinsey & Company
SOURCE: McKinsey analysis                                                                                                                             | 9
                                                                                                              Copyright © 2012. All rights reserved
1 Furthermore, cost cutting will occur through decrease in branch
   density and staffing levels

          Decrease in branch density
          Bank branches per million inhabitants

                 475                           -26%
                                      350
                                                                 With peaks of 30-40% in some countries


                2010                 2015

          Decrease in staffing levels
          Average FTEs per bank branch

                  10                           -50%
                                                            ▪   Fewer FTEs needed as low-value-added
                                      4-5                       activities move to remote channels
                                                            ▪   The mix of people will change

                2010                 2015

                                                                                                   McKinsey & Company
SOURCE: McKinsey European consumer and Banking Research and Multichannel Survey                                              | 10
                                                                                     Copyright © 2012. All rights reserved
1 Nonetheless, lower staffing levels must translate into more value-added
   activities at the branch, such as sales and advice to customers

                 Branch staff time spent per activity1
                 Total staff time normalized so that brick-and-mortar equals 100

                                                    100
                 Sales and advice                   20                    78
                 Customer service                   10                                                 -49%
                                                                          29                51
                 Teller service                     30
                                                                           8
                                                                          16                30
                 Back-office                        30                    10            5
                 Other                                                    15                     7 3
                                                    10                                  6
                                             Brick-and-mortar       Online adopters   Direct first
                 Percentage of                     20%                    37%             59%
                 staff time spent on
                 sales and advice


                 Online banking                   0-10%                   15-30%        60-80%
                 usage


1 Includes management, training, and other

                                                                                                     McKinsey & Company
SOURCE: McKinsey European Retail Banking Multichannel Survey 2010; EFMA                                                        | 11
                                                                                       Copyright © 2012. All rights reserved
2 The world’s banking profit and revenue pools will shift dramatically
  toward emerging markets

                           Context                                  Implications

       Right-sizing the    ▪ Growth will remain slow in             ▪ Revenue pools will shift to emerging
   1                         developed economies                      markets
       platform
                             – Advanced economies are                 – Emerging markets will represent 50% of
                               deleveraging, are plagued by high        world banking revenue in 2020 (up from
                               unemployment and public debt, and        34% in 2010), with more than 60% of
     Revenues and
                               are struggling to put their fiscal       revenue growth in banking coming from
   2 profits shifting to
                               houses in order                          emerging markets
     emerging markets
                           ▪ Banks will have to compete for
                             market share on a global scale
                             where emerging markets’ players
     Seamless multi-
                             are driving banking growth
   3 channel customer
     experience            ▪ In emerging markets, increasing
                             financial depth and rapid GDP
                             growth will drive banking growth

       New competitive
                           ▪ 2.5 billion adults do not use formal
   4                         financial services today, and the
       threats
                             rapidly growing middle classes are
                             driving internal consumption up

     Impact of big data
   5 on banking
     products



                                                                                              McKinsey & Company
                                                                                                                        | 12
                                                                                Copyright © 2012. All rights reserved
2 The fiscal tightening required to reduce public debt levels will slow
   growth in developed countries
                                                                                       Fiscal tightening required in 2010-2020 to meet the Euro con-
       Total government debt, pre- and post-crisis (USD)                               vergence criteria of government debt of 60% of GDP by 2030
                                                                          Percentage
               X   More than 50% increase            2008    2012                      Percentage of GDP
                                                                          of GDP
                                                            169
       Japan                                                        207       23                                                              13.41

                                                     113                                                                                                 15.5
       Greece                                                 184             63
                                                95                                                                                   10.6
       United States                                  125                     31
                                                 106                                                         4.9
       Italy                                       119                        12
                                      72                                                                                 7.5
       Portugal                                      117                      63
                                44
       Ireland                                                               159                                                              13.5
                                                     115
                                      68
       France                                                                 31                                   6.0
                                            89
                                      67
       Germany                             82                                 22                           4.4
                               40
       Spain                           77                                     93                                               9.4

       United                   41
                                      74                                      78                                                     10.4
       Kingdom
                                 50
       Canada                         70                                      39                       4.0


                                                                                                   Average adjustment required for G20 countries

1 Japan’s target for fiscal adjustment is set at 80% of GDP
Note: Countries are assumed to undergo a gradual transition in their primary balance in 2010-2020 and maintain a constant primary balance after 2020

                                                                                                                               McKinsey & Company
SOURCE: International Monetary Fund; McKinsey Global Institute; IHS Global Insight; McKinsey analysis                                                    | 13
                                                                                                                 Copyright © 2012. All rights reserved
2 Banks in emerging and developed markets will have                                                                            ESTIMATE

   to compete for market share on a global scale

       World, relative size of banking revenues after risk cost to nominal GDP
       Percentage of global GDP                                                     Historical data
                                                                                    Base case forecast
                                                                                                            ▪ After 40 years of
                                      Crisis in                                                               steady growth in
      6.0%
                                      Southeast                                                               global banking
      5.5%                            Asia                                                                    revenue relative to
                                                                                                              GDP, our McKinsey
      5.0%                                                                                                    Global Financial
      4.5%                                                                                                    Initiative base case
                                                                                                              forecast predicts
      4.0%                                                 Dot-com                                            – Flattening trend
      3.5%
                                                           bubble and   Financial                             – No recovery to pre-
                                                           burst        crisis                                   crisis level over the
                                          Mexico
      3.0%                                                                                                       next decade
                                          crisis
      2.5%                                                                      Banking has                 ▪ This, combined with
                      1987:                                                     entered an era of             stagnant economic
      2.0%            Black                                                     slower growth                 growth, implies that
                      Monday                                                                                  banks won’t be able to
      1.5%
                                                                                                              grow with the market.
      1.0%                                 History                                  Forecast                  To grow, they will
                                                                                                              have to compete for
      0.5%                                                                                                    market share
        0%
          1980                 1990                     2000             2010                    2020


                                                                                                                McKinsey & Company
SOURCE: McKinsey Global Financial Initiative; Thomson Reuters                                                                             | 14
                                                                                                  Copyright © 2012. All rights reserved
2 In emerging markets, increasing financial depth will drive banking
   growth                                                            ESTIMATE

                    Financial depth1, YE 2010
                    Percentage of regional GDP

                    United States                                                                                                     462
        Developed




                    Japan                                                                                                            457

                    Western Europe                                                                                        400

                    Other developed                                                                                    388

                    China                                                                         280

                    India                                                               209
        Emerging




                    Middle East & Africa                                            190

                    Other Asia                                                    168

                    Latin America                                           148

                    CEE & CIS2                                             142



1 Calculated total regional debt and equity outstanding divided by regional GDP
2 Central and Eastern Europe and Commonwealth of Independent States

                                                                                                                      McKinsey & Company
SOURCE: McKinsey Global Institute, Mapping Capital Markets 2011; McKinsey Global Finance Initiative                                             | 15
                                                                                                        Copyright © 2012. All rights reserved
2 In emerging markets, growth will be more than twice as fast as
   developed economies, adding more than 160 million middle-class
   households by 2020
                                              Equivalent
   Evolution of world real GDP                annual real       Evolution of households income
   by region                                  growth from       distribution in emerging markets1
   Real 2005 USD Trillions                    2010 to 2020      Millions of households
                    Emerging countries        Percent
                    Developed countries

                  19.3        70.5                                                      1,206
                                                                                                    ▪ There will be more
                  11.1                                          Household      1,084                   than 160 million new
                                                                                         306           middle-class
                              26.2                   5.7%       income         139
      51.2         8.2                                          ≥ USD 25,000                           households in
                                                                                                       emerging countries,
      15.1                                                                                             which is more than
                                                                                                       the current total
                                                                Household                              number of house-
                                                                income         945       900           holds in the US
                              44.3                   2.1%       < USD 25,000                        ▪ This rising middle
      36.1
                                                                                                       class will rapidly
                                                                                                       drive up demand for
                                                                                                       financial products

    2010        2010-20 2020                                                   2011     2020
                growth



1 Income categories defined per annual income in USD PPP

                                                                                                        McKinsey & Company
SOURCE: IHS Global Insight; Global Insight; McKinsey analysis                                                                     | 16
                                                                                          Copyright © 2012. All rights reserved
2 Nearly 2.5 billion people are still “unbanked” in                                                                Percentage of total adult
                                                                                                                    population that is financially
   emerging markets, representing a huge business                                                                   excluded
   opportunity for banks

          Adult population not using formal financial services
          Millions
          East Asia                                                  876                                                     59

          South Asia                                                                  612                                    58

          Sub-Saharan Africa                                                                326                              80

          Latin America                                                                           250                        65
          Central Asia and
                                                                                                    193                      49
          Eastern Europe
          Arab states                                                                                      136               67

          High-income OECD                                                                                  60                8

          Total                                                                                             2,453            53


                                                                                                                      McKinsey & Company
SOURCE: Chaia et al., Half the world is unbanked, Financial Access Initiative, 2009                                                             | 17
                                                                                                        Copyright © 2012. All rights reserved
2 Consequently, banks’ revenue pools will shift to emerging markets


   Revenue pool after risk costs1                                                         Origin of absolute change in revenue pool
   USD Trillions, 2010-2020                                                               USD Trillions, 2010-2020
                                                                   Emerging
   Percent                                                                                Percent
                100% = 3.1                          6.9            markets                            100% = 3.8
                                                                   will                                                                    More than
   Emerging




               Other                                               represent                                                               60% of
   markets




                                    22               28                                                                                    revenue
               emerging                                            50% of                  Other emerging                  32
                                                                   world                                                                   growth in
               China                12                             banking                                                                 banking
               Other                                               revenue                                                                 will come
                                    14               21
               developed2                                          in 2020                                                                 from
                                                                                           China                           29
                                                                                                                                           emerging
   Developed




                                                     11                                                                                    markets
               US                   25
   markets




                                                                                           Other developed2                 8
                                                     23
                                                                                           US                              20
               Western
                                    26
               Europe                                18
                                                                                           Western Europe                  11

                                  2010             2020                                                                2010-20


1 Banking revenue after risk costs = net interest income + net fees and commissions - risk costs (to account for losses on delinquent loans; meant to
  capture “normalized” loan loss provisions)
2 Includes Australia, Canada, South Korea, and Japan

                                                                                                                            McKinsey & Company
SOURCE: McKinsey Global Banking Pools                                                                                                                   | 18
                                                                                                              Copyright © 2012. All rights reserved
3 Banks will have lean, seamless multichannel distribution networks


                         Context                                   Implications

     Right-sizing the    ▪ Consumers are using multiple            ▪ Simpler banking transactions and sales
 1                         channels to seek information,             will mainly take place online and on
     platform
                           receive advice and support, and           mobile devices
                           purchase products                         – The vast majority of financial
                           – Customers will increasingly demand        transactions will take place on the
   Revenues and
                             consistent, continuous service            internet and on mobile devices
 2 profits shifting to
                             across multiple channels (mobile,       – For example, mobile banking is growing
   emerging markets
                             internet, social media, phone/video       rapidly and transforming the payments
                             calls, and branches)                      industry
   Seamless multi-
                           – They will expect more customized      ▪ Branches will focus more and more on
                             marketing and individualized            providing advice and handling complex
 3 channel customer
                             products                                transactions and sales
   experience
                         ▪ Low trust and satisfaction in the         – Sales and advice for simple products will
                           banking system have made                    increasingly take place outside the
                           customers less loyal, increasing            branch
     New competitive       switching and spreading
 4
     threats               behaviours



   Impact of big data
 5 on banking
   products



                                                                                                McKinsey & Company
                                                                                                                          | 19
                                                                                  Copyright © 2012. All rights reserved
3 Customers are using multiple channels to seek information,           EXAMPLE
                                                            Percentage of respondents
   receive advice and support, and purchase products
                           Channel                               Quoting          Purchase                 Channel                           Purchase         Servicing1
    Insurer
   example

                                Channel                                                                       Channel
                                                                                                     43%                                                                    53%
                               switching                                                                     switching


                                                             Internet to agent/                                                          Internet to agent/
                                                                                                     14%                                                                    1%
                                                             in person                                                                   in person
                                                             Call centre to agent/
                                                                                                     10%                                 Call centre to agent               4%
                                                             in person
                                                             Agent to internet/                                                          Agent to internet/
                                                                                                     5%                                                                     31%
                                                             call centre                                                                 call centre
                                                             Internet to call                                                            Internet to call




                                                                                                                          Intra-direct
                                              Intra-direct




                                                                                                     13%                                                                    2%
                                                             centre                                                                      centre
                                                             Call centre to                                                              Call centre to
                                                                                                     1%                                                                     15%
                                                             internet                                                                    internet

                              Pure agent/                                                                   Pure agent/
      Bank                                                                                           38%                                                                    31%
                               in person                                                                     in person

                                  Pure                                                                         Pure
                                                                                                     15%                                                                    13%
                                internet                                                                     internet

                                Pure call                                                                    Pure call
                                                                                                     4%                                                                     3%
                                 centre                                                                       centre

1 Includes portfolio valuation/new deposit/arbitration/changes in policy clauses and personal data

                                                                                                                                                  McKinsey & Company
SOURCE: 2012 McKinsey insurance multichannel excellence initiative – Customer behaviour survey                                                                              | 20
                                                                                                                                    Copyright © 2012. All rights reserved
3 Moreover, online banking usage will continue to rise in tandem with
   internet usage
    Online banking usage1

    Percent, 2009
     80
                                                                                                                                   Netherlands
     70                                                                                                                      I       Finland     Sweden
                                                                                                                                     Denmark
                                                                                                                                          Norway
     60
                                                                                                                     3-5 years
                                                                                                                                 Canada      Self first
     50                                                                         nd                              Switzerland               Luxembourg
                                                                                                                                   US
                                                                             tre
                                                                          et                                          Belgium             UK
                                                                       ark                                                                     Japan
                                                                  ll m
     40                                                        era           7-10 years                   II        France          Germany
                                                             Ov                                                                    Australia
                                                                                                                                              Multi-
                                                                                 Online     Spain                                             Channel
     30                                                                                             Ireland
                                             10-15 years        III              adaptors                         Austria           South Korea
                                                                                                              Slovenia
     20                                                                               Poland             Czech
               Brick-                                       Brazil         Portugal
               and-                                     Middle                                           Republic
                            IV                                              Italy           Hungary
               mortar                         Argentina East
     10                     Colombia                  Russia
                                          Mexico
               India     China                                              Greece Macedonia
       0                                  Turkey                           Bulgaria
           0     5     10            20      25     30     35         40    45      50      55      60         65     70      75     80     85     90     95
                                                    Romania            Serbia                                                              Internet usage1
                                                                                                                                             Percent, 2009


1 Percentage of individuals who used the internet/online banking in the past 3 months

                                                                                                                                    McKinsey & Company
SOURCE: McKinsey Multichannel Survey (2010)                                                                                                                   | 21
                                                                                                                      Copyright © 2012. All rights reserved
3 In addition, low trust and satisfaction in the banking system have
   increased switching and spreading behaviours
                                           Trust in the banking1 system                         … as has satisfaction with
                                           has decreased …                                      banking services
                                           Percentage of respondents                            Percentage of respondents
  ▪   Decreasing trust and                                                                      neutral or satisfied
                                                   54                                              96            94
      satisfaction in the                                                                                                       84
      banking system                                             28
                                                                                14
  ▪   Perceived risk leading
      to money switching
      and spreading                            Strongly      A little bit Not                     1998         2005           2009
                                               (worse)                    (unchanged)
  ▪   Sharp increase of
      online usage –                       Consumers increased switching and spreading behaviours
      information gathering
      and shopping – loss of               Withdrawals, Deposits, EUR Billions, Netherlands                                        Deposit

      “contact” with brands                                                                                                        Withdrawal
                                             50
  ▪   Decreasing loyalty
      and increasing
      product unbundling                       0


                                            -50
                                              Jan 1998                                                                         Jun 2009
1 Results from German market research launched in December 2009 (sample of 1,056 individuals)

                                                                                                                   McKinsey & Company
SOURCE: BdB; Ipso; GfK Eurisko Finance 2009; CDJ Survey 2010                                                                                 | 22
                                                                                                     Copyright © 2012. All rights reserved
3 Customers will favour digital channels for                                                                       Branch only
                                                                                                                    Multichannel
   simple transactions
                                                                                                                    Digital only

    Evolution of client distribution preferences
    Percentage of clients

               Complex/large                 Support/                       Transactions/               Simple/small
               sales                         complaints                     info requests               ticket sales

    100%                                                                             0 1                                 5
                             10
                                                           20
                                                                              30                                         25
                                                                                                            40
                  50                            50


                             70                            50
                                                                              40      99

                                                                                                            50           70
                  45                            45

                                                           30                 30
                             20
                   5                             5                                                          10

                 2010      2015               2010        2015               2010   2015                  2010         2015


                                                                                                          McKinsey & Company
SOURCE: McKinsey European Consumer and Banking Research and Multichannel Survey                                                     | 23
                                                                                            Copyright © 2012. All rights reserved
3 For example, mobile banking is growing rapidly and transforming the
   payments industry

  Mobile banking usage statistics, global 2005-2015E                           Gross value of mobile payment transactions
  Percent                        Never             Monthly       Daily         USD Billions
                                 Few times         Weekly
                                 a year
                                                                                                                                     110


                                                                38
                                              50
                            58                                                                      CAGR = 119%
            71
                                                                                                                           60
                                                                19

                                              18
                            15                                  17
                                                                                                                30
            11                                14
                            12                                  17
            9                                 13                                                     10
                            11                                                     2          5
                 7                                              10
        2                   4                  5

        2005              2010               2011             2015               2008      2009     2010      2011        2012       2013



SOURCE: Forrester; 2012 World Retail Banking Report survey of 41 banks; Finalta/EFMA Multichannel                  McKinsey & Company
                                                                                                                                             | 24
        Survey 2008; IE Market Research Corporation; McKinsey analysis                               Copyright © 2012. All rights reserved
3 Bank branches will focus more on complex transactions as                                                            Direct channels1
                                                                                                                       Call centre
   more interactions move to direct channels                                                                           Agents/brokers
      European average                                                                                                 Branches

  Product purchasing

                   Current sales breakdown by channel                       Expected sales breakdown by channel
                   2010, percentage of sales                                2015E, percentage of respondents

 Current                                                        4                                    3
                                       84                           9 100             53                          43                100
 accounts                                                   3                                        1


 Savings                                                                                    3
                                   77                  25       16    100        38                          59                     100
 accounts                                                                                   1


 Investments                       78                    7 4 11 100                   58                 11 3          28           100



 Mortgages                          80                      11 4 4 100                     72                     13 5 10 100


 Consumer
 finance                          73                   8 6 12 100               32         13    8                47                100
 products


1 Internet, ATM, mobile

                                                                                                          McKinsey & Company
SOURCE: Efma online survey of 150+ European banks, December 2010                                                                    | 25
                                                                                            Copyright © 2012. All rights reserved
4 Banks will battle with new non-bank entrants to “own” the customer
  relationship

                         Context                                   Implications

     Right-sizing the    ▪ Non-bank players are infringing on      ▪ Banks will maintain ownership of the
 1                         lucrative niches previously               customer relationship by strategically
     platform
                           dominated by integrated banks             adjusting their business model to better
                           – Remote payments, new currencies,        fight new entrants
                              B2B payments, and e-invoicing will     – Majority of revenues come from owning
   Revenues and               transform the payment industry           the relationship and taking on risk within
 2 profits shifting to
                           – In market segments such as                the value chain
   emerging markets
                              lending, bank accounts and           ▪ New integrator tools that disinter-
                              transactions, protection and           mediate services and commoditize
                              insurance, and deposits and            products threaten banks’ ownership
   Seamless multi-            investments                            of the relationship
 3 channel customer
   experience
                         ▪ Additional players leveraging
                           existing infrastructures or new
                           business models will infringe on
                           the banks’ traditional playing field
     New competitive       – Direct banks and insurers are
 4
     threats                  rapidly growing among young,
                              wealthy, and educated consumers
                           – Retailers are expanding their
                              offerings of financial products
   Impact of big data
                           – Telecommunications firms are
 5 on banking
                              entering financial services
   products



                                                                                                McKinsey & Company
                                                                                                                          | 26
                                                                                  Copyright © 2012. All rights reserved
4 Non-bank players are emerging and infringing on lucrative niches
  previously dominated by integrated banks
  New products and services offered by new players


  Find the best prices



  Aggregate and
  optimize management
  of personal finances


  Make peer-to-peer
  payments



  Make mobile
  payments



  Protect against fraud



             ▪ New non-bank players are emerging in parallel with industry leaders thanks to innovative
                 new technologies or business models or by taking advantage of regulatory changes
             ▪   New players often occupy specialized but lucrative niches, thereby threatening markets
                 previously dominated by larger players

                                                                                                     McKinsey & Company
                                                                                                                               | 27
                                                                                       Copyright © 2012. All rights reserved
4 Examples of non-bank players that infringe on traditional banking
   market segments
        Global retail banking revenue after risk costs1 by main revenue segment, and examples of non-bank
        players that infringe on each segment

        2010                                                     Specialty lenders


                  Telecoms



                                                              Lending
                                                              USD ~1,200 billion
            Technology                                                                                                          Insurers
            companies                     Bank account
                                          and                                         Protection and
                                                           Banking
                                          transactions     products                   insurance
                                          USD ~500 billion                            USD ~50 billion

                                                                Deposits and
                                                                investments
                    Retailers                                   USD ~430 billion



                                                Postal services                       Specialized private
                                                                                       banking players


1 Banking revenue after risk costs = net interest income + net fees and commissions - risk costs (to account for losses on delinquent loans, meant
  to capture “normalized” loan loss provisions)
                                                                                                                            McKinsey & Company
SOURCE: McKinsey Global Banking Pools                                                                                                                 | 28
                                                                                                              Copyright © 2012. All rights reserved
4 Banks’ payments businesses are particularly encroached on
   by non-bank players                                      Traditional payments area




   Traditional
   payments             Consumer      Payment        Issuer       Network        Acquirer      Acceptance           Merchant
   businesses           services      device                                                   device               services


                       Information-   Mobile POS                                               Mobile POS         Information-
    Consumer card      based          payments and                                             payments and       based
    transactions       business       acceptance                                               acceptance         business
                       models                                                                                     models


                                                       Remote payments and new currencies
    Other
    consumer
    electronic


                                                       Remote payments and new currencies

    Deposits



                                                       B2B payments and e-invoicing
    Business
    payments




                                                                                                      McKinsey & Company
SOURCE: McKinsey Payments Practice                                                                                              | 29
                                                                                        Copyright © 2012. All rights reserved
4 Consequently, winning the battle to own the relationship with
  customers will be crucial for banks…


                Have                         Know and
             customers’                      understand
                trust                        customers
                                                                                 Owning the
                                                                                 relationship
                            Owning the                                           with
 Be customers’ trusted      relationship      Collect data and                   customers
 partner to increase                          understand customers               will be crucial
 loyalty and receptive-                       to tailor the offering to          to propose
 ness to new products                         their preferences and              new products
                                              needs                              and services
                            Be visible to                                        and thus to
                            customers                                            capture value


                   Be the prime interface with whom
                   customers interact to have their
                   attention and be visible to them


                                                                                McKinsey & Company
                                                                                                          | 30
                                                                  Copyright © 2012. All rights reserved
4 … because the majority of revenues come from owning                                                                              EXAMPLE OF THE US
                                                                                                                                    PAYMENTS INDUSTRY
   the relationship and taking on risk within the value chain
                                                                                                                                        Segments that own the
                                                                                                                                        relationship and take on risk
                                              Payments industry value chain
                                               Transaction         Acquirer                                Issuer            Payment
                                                                                      Network1
                                               acquirer1           processor1                              processor1        instrument issuer1

                       Credit
  Card-based           Debit

                       Prepaid
                       ACH

  Non-card             Wire
  electronic
                       Money transfer

                       Book transfer
                       Cash                                                                                n/a
  Paper-based
                       Cheque

  Deposits and         DDA                                                                      n/a
  instruments          ATM                                      n/a
  Other                                                                                                    n/a

1 Acquirer: financial institution that has the account with the payee (merchant or biller) to receive payments. Acquirer processor: operations functions for
  the acquirer. Network: institutional clearing and settlement. Issuer processor: operations functions for the issuer. Issuer: financial institution that has an
  account with the payor (consumer, buyer, etc.)

                                                                                                                                 McKinsey & Company
SOURCE: McKinsey US Payments Map, Release Q4-2011                                                                                                           | 31
                                                                                                                   Copyright © 2012. All rights reserved
5 Banks will leverage the explosive growth of available data and of
  computational capacity to improve marketing and operations

                         Context                                    Implications

     Right-sizing the    ▪ Technology enables leveraging of         ▪ Banks will adjust their business models
 1                         big data through explosive growth          to leverage the explosive growth of
     platform
                           of available data and computational        available data and computational
                           capacity                                   capacity to improve management,
                         ▪ Leveraging big data can translate          decision making, and operations
   Revenues and
                           into improved decision making,             – Banks will invest in analytical software to
 2 profits shifting to
                           management, and operations for               take advantage of the information they
   emerging markets
                           financial services institutions              handle (e.g., buying patterns, financial
                           – Big data has high value potential in       information)

   Seamless multi-
                             financial services                       – Banks will better understand their
                                                                        customers (profitability, levers of value
 3 channel customer
                                                                        and influence, potential), remember their
   experience
                                                                        preferences, and define more granular
                                                                        customer micro-segments

     New competitive
 4
     threats



   Impact of big data
 5 on banking
   products



                                                                                                 McKinsey & Company
                                                                                                                           | 32
                                                                                   Copyright © 2012. All rights reserved
5 The explosive growth of available data and of computational capacity
   enables businesses to leverage big data

  Data generated worldwide                                                         Computational capacity of the world’s fastest computers

  Exabytes (= 1 billion gigabytes)                                                 FLOPS1 2, log scale
                                                                   35,000             16
    All the information stored                                                     1E+19          Today’s fastest computers
    inside the US Library of                                                                      are more than 10 trillion times
    Congress amounts to                                                            1E+17
                                                                                                  faster than those in 1960
    <0.00025 exabytes                                                              1E+15
                                                                                   1E+13
                                                                                   1E+11
                                                    7,900                           1E+9
                                                                                    1E+7
        50             110               1,300
                                                                                    1E+5
      2000            2005               2010       2015            2020               1960 61 70 73 80 85 90 97 2000 09 10 2011


          Available data will be characterized by its scale, distribution, diversity, and timeliness

          ▪   Scale: data sets will be massive, >1 petabyte (1 million gigabytes) in size, and built to be easily scaled up
          ▪   Distribution: data will come from and be distributed both within and outside the organization
          ▪   Diversity: data will be semi-structured, unstructured, or a combination of different data types
          ▪   Timeliness: data will be captured and analyzed in real time, allowing for immediate response


1 Floating-point operations per second
2 Rmax FLOPS

SOURCE: IDC Digital universe study 2011 and 2010; Hilbert and López, “The world’s technological capacity to store, communicate,     McKinsey & Company
         and compute information,” Science, 2011; www.vetta.org; McKinsey analysis; McKinsey Global Institute
                                                                                                                                                              | 33
                                                                                                                      Copyright © 2012. All rights reserved
5 The financial services sector is likely to be in the best                                                                           Bubble size denotes
                                                                                                                                       relative size of GDP
   position to leverage big data

                                          Moderate value potential         Moderate value potential        High value potential        High value potential
                                          Low ease of capture              High ease of capture            Low ease of capture         High ease of capture

             High
                                                                       Utilities       Healthcare
                                                                                       providers Financial services and insurance
                                                               Natural
                                                               resources
                                                                                            Information1

                                                                                                 Computer and electronic products
Big                                          Manufacturing
                                                                                                 Transport and warehousing
data                                    Professional services
                                                                                                     Real estate and rental
ease of
capture                                                         Management
                          Construction                          of companies                           Wholesale trade
index
                           Admin, support,                                          Accommodation and food
                           and waste management                                    Retail trade
                                                   Other services

                                                                      Educational services
                                                                                                                        Government
             Low                                                      Arts and entertainment
                    Low                                                                                                                                 High
                                                                     Big data value potential index2


1 Information includes software and internet companies
2 Determined by industry average of transaction intensity, amount of data per firm, variability in performance, customer and supplier intensity,
  and turbulence

                                                                                                                              McKinsey & Company
SOURCE: McKinsey analysis                                                                                                                               | 34
                                                                                                                Copyright © 2012. All rights reserved
5 By leveraging big data, banks will better understand their customers,
   improve modeling, and guide decision making

       Predictive modeling                                                   Social network mapping
        Typical applications:                                                 Typical applications: identify
        estimate customer churn;                                              key purchase influencers;
        develop the “next best                                                quantify shifts in sentiments
        offer” for up-sell/cross-sell;
        estimate risk

       Neural networks                                                       Visualization tools
        Typical applications:                                                 Typical applications:
        detect fraud; perform                                                 visualize risk; understand
        diagnostics                                                           correlations



                      ▪   Computational capacity for real-time use has grown from
                          0.004B MIPS1 to >6,000B MIPS over the past 20 years
                      ▪   Business analytics software spend in 2009 was USD 26.1 billion
                          and is expected to grow at a 7.6% CAGR through 2014

1 MIPS = 1 million instructions per second. By comparison, modern desktop/laptop computers have processors with ~20,000 MIPS

                                                                                                                      McKinsey & Company
SOURCE: McKinsey Global Institute analysis                                                                                                      | 35
                                                                                                        Copyright © 2012. All rights reserved
Contents




           Overview of key trends



           Detailed questions for coop banks




                                                             McKinsey & Company
                                                                                       | 36
                                               Copyright © 2012. All rights reserved
1 How can cooperative banks exploit their focus on customer satisfaction
  to gain market share?
Context                      Questions to ponder
▪ As public banks              What dimensions of customer satisfaction are of greatest importance to your members?
  face pressure to cut
                               How does your cooperative understand the specific irritants for customers and their main
  costs, consumer            A
                               grievances with competitors (e.g., executive compensation and bonuses, large public bailouts to
  satisfaction
                               banks, hidden fees, questionable mortgage approval standards)?
  initiatives are often
  delayed                      Which coop-specific attributes or values could be leveraged to address consumers’
▪ Cooperatives also          B
                               dissatisfaction? Which criticisms can the cooperative model address? How strongly does the
  need to cut costs,           cooperative model appeal to your consumers now? What is the promise to members and how
  but they have the            can your coop make them feel like true owners?
  flexibility to sacrifice
  short-term returns           How should your cooperative prioritize new investments related to customer satisfaction
                             C vs. your current portfolio of initiatives? How can your coop ensure that consumers translate
▪ This flexibility could       their dissatisfaction with public banks into actions in your favour?
  be used as a
  competitive                    How can your cooperative leverage your branch network and workforce, provide better
  advantage in               D
                                 customer services, and further differentiate your coop from traditional banks?
  today’s
  environment                  How is it possible to ensure that your values and system resonate distinctly with
                               members as some public banks begin to resemble coops in their marketing and
                             E
                               actions? How will public banks respond to criticism and adjust their models? Will they start
                               encroaching on the cooperative model and, if so, how should your cooperative respond?

                               What changes to your business model or image would attract new members? How can
                             F the image and message be made clear and consistent throughout your organization? How can
                               your coop ensure its image is distinct enough to differentiate it from competitors?



                                                                                                          McKinsey & Company
                                                                                                                                    | 37
                                                                                            Copyright © 2012. All rights reserved
2 Will cooperatives need to look for growth beyond their borders ?
Context                      Questions to ponder
▪ Cooperatives must              In what ways would your members benefit from international expansion (e.g., scale or
    develop a view on        A   market access)? How would the benefits of seizing rapid growth opportunities in emerging
    how globalization will       markets percolate down to your individual members in the long term?
    affect their current         What capabilities does your coop have that will help it to capture the benefits that an
    activities                   expansion into new markets would provide? What capital and flexibility is required? How
                             B
▪   Banks and coops              can your coop ensure the support of members in such expansions? How would you ensure your
    must decide whether          coop has the required management knowhow or go about acquiring it?
    to expand abroad or          What opportunities exist related to your current member base in which to invest talents
    focus resources and          and capabilities to better match your members’ interests? For instance, how can your coop
    management locally       C
                                 invest to improve customer service, grab market share from competitors, and/or expand your
▪   Cooperatives,                offering to non-financial products?
    usually local, must          Given competitors’ expansion initiatives, how will your cooperative’s decision to expand
    assess if their home         or not affect the future competitive landscape? How will competitors who venture abroad
    market is saturated      D
                                 gain a competitive advantage by leveraging economies of scale and by arbitraging labour costs
    and whether                  to optimize their back-office operations?
    international
                                 How can your coop ensure all relevant and available entry strategies are explored? For
    expansion is
                                 instance, will your coop form alliances with other small local cooperatives? How can it follow
    desirable                E
                                 corporate members with international activities into new markets? How can it make a targeted
▪   Staying on the               push in a new market by leveraging high-performing business units?
    sidelines of the
                                 How will the ability to attract top talent and create career opportunities for key personnel
    global market may
                                 be affected by decisions? Will the best talent in banking be interested in local players or will
    put coops at a           F
                                 they aim for global organizations? What steps can your cooperative take to attract talent in
    strategic
                                 either scenario?
    disadvantage
                                 How will the cooperative sector be able to maintain its global market share in banking
                                 over the next decades as economic activity shifts to emerging markets? How will
                             G
                                 cooperative banks maintain their current share of global banking revenue, or will the bulk of the
                                 rapid growth in emerging countries be captured by public banks?

                                                                                                            McKinsey & Company
                                                                                                                                      | 38
                                                                                              Copyright © 2012. All rights reserved
3 How can cooperatives’ branch networks preserve the advantage of
  proximity while remaining profitable?
Context                       Questions to ponder
▪ Virtualization                What are the alternatives to the reduction of your coop’s physical footprint to remain
    reduces the number          profitable? How can your coop’s network be made leaner? How can incentives be found to
    of branch visits          A
                                attract customers to the physical branches and then retain them? While competitors view their
▪   Thus, physical              branches as an avenue to cut costs, how can your coop use its as revenue generators?
    networks become
    less central to the         How can your coop transform local branches from a fading channel to a competitive
    client relationship         advantage? How can the geographical proximity of your branch network give your cooperative
▪   An oversupply of          B a significant advantage over rivals and be used to engage members, even as more and more
    branches will put           transactions and sales take place online? How can your coop capitalize on competitors’
    pressure on all             withdrawal from the physical space to strengthen the relationship with your customers?
    financial institutions,
    especially coops            How could your branches become knowledge centres that provide truly personalized
                                financial advice and planning? How will providing expert financial advice and support
▪   2 options to consider     C
                                encourage local members to enter your branches? What potential exits for attracting a larger
    – Resize or                 member base by providing these services?
        restructure the
        network                 How could your branches expand their offerings to adjacent products and services that
    – Find a new role           your members desire? How can your coop find and fill some of the gaps left by the shrinking
        for the branches      D of the welfare state? Could your cooperative expand its offering to non-financial products and
                                make branches or stores the local centres of cooperative activity (e.g., let lawyers use space to
                                offer legal advice to members)? What new member needs could be addressed?

                                How could potential synergies be unlocked within your coop’s current operations? How
                              E large an impact will these synergies have on the value of new and existing offerings? Can these
                                synergies significantly reduce the risk involved in providing a new offering?



                                                                                                            McKinsey & Company
                                                                                                                                      | 39
                                                                                              Copyright © 2012. All rights reserved
Mc kinsey on cooperatives   cooperative banks at the cusp of a new era
Mc kinsey on cooperatives   cooperative banks at the cusp of a new era
Mc kinsey on cooperatives   cooperative banks at the cusp of a new era
Mc kinsey on cooperatives   cooperative banks at the cusp of a new era

Weitere ähnliche Inhalte

Was ist angesagt?

Real Estate Finance 301: Raising Capital in Today’s Economy – Strategies and ...
Real Estate Finance 301: Raising Capital in Today’s Economy – Strategies and ...Real Estate Finance 301: Raising Capital in Today’s Economy – Strategies and ...
Real Estate Finance 301: Raising Capital in Today’s Economy – Strategies and ...Virtual ULI
 
Swedbank CMD Catrin Fransson
Swedbank CMD Catrin FranssonSwedbank CMD Catrin Fransson
Swedbank CMD Catrin FranssonSwedbank
 
BancAnalysts Association of Boston 25th Annual Fall Bank Conference
	BancAnalysts Association of Boston 25th Annual Fall Bank Conference	BancAnalysts Association of Boston 25th Annual Fall Bank Conference
BancAnalysts Association of Boston 25th Annual Fall Bank ConferenceQuarterlyEarningsReports3
 
JPMorgan Chase Conference Call on Acquisition of Bear Stearns
JPMorgan Chase Conference Call on Acquisition of Bear StearnsJPMorgan Chase Conference Call on Acquisition of Bear Stearns
JPMorgan Chase Conference Call on Acquisition of Bear Stearnsfinance2
 
Technology and Innovation in Financial Services Scenarios
Technology and Innovation in Financial Services ScenariosTechnology and Innovation in Financial Services Scenarios
Technology and Innovation in Financial Services ScenariosWorldEconomicForumDavos
 
Death of a Salesman: Account Acquisition in a New Environment
Death of a Salesman: Account Acquisition in a New Environment Death of a Salesman: Account Acquisition in a New Environment
Death of a Salesman: Account Acquisition in a New Environment Magnify Analytic Solutions
 
REIT Preferred Securities Potential Default Risk
REIT Preferred Securities Potential Default RiskREIT Preferred Securities Potential Default Risk
REIT Preferred Securities Potential Default RiskForward Management
 
20% of members may be eligible for home refinance under HARP 2.0! (Webinar Sl...
20% of members may be eligible for home refinance under HARP 2.0! (Webinar Sl...20% of members may be eligible for home refinance under HARP 2.0! (Webinar Sl...
20% of members may be eligible for home refinance under HARP 2.0! (Webinar Sl...NAFCU Services Corporation
 
Pokerstrategy - NOAH12 San Francisco
Pokerstrategy - NOAH12 San FranciscoPokerstrategy - NOAH12 San Francisco
Pokerstrategy - NOAH12 San FranciscoNOAH Advisors
 
Key Banc Conference Final[1]
Key Banc Conference Final[1]Key Banc Conference Final[1]
Key Banc Conference Final[1]BSTRINGE
 
Rural banking turnaround
Rural banking turnaroundRural banking turnaround
Rural banking turnaroundSushant Midha
 
Bank Payment Obligation (BPO) articles published by GTNews
Bank Payment Obligation (BPO) articles published by GTNewsBank Payment Obligation (BPO) articles published by GTNews
Bank Payment Obligation (BPO) articles published by GTNewsSWIFT
 
wesco_2001AR
wesco_2001ARwesco_2001AR
wesco_2001ARfinance34
 
Metric issue-19-april
Metric issue-19-aprilMetric issue-19-april
Metric issue-19-aprilrohiniuppal
 
metlife Sterne, Agee & Leach Financial Services Symposium Presentation (repl...
metlife 	Sterne, Agee & Leach Financial Services Symposium Presentation (repl...metlife 	Sterne, Agee & Leach Financial Services Symposium Presentation (repl...
metlife Sterne, Agee & Leach Financial Services Symposium Presentation (repl...finance5
 

Was ist angesagt? (17)

Real Estate Finance 301: Raising Capital in Today’s Economy – Strategies and ...
Real Estate Finance 301: Raising Capital in Today’s Economy – Strategies and ...Real Estate Finance 301: Raising Capital in Today’s Economy – Strategies and ...
Real Estate Finance 301: Raising Capital in Today’s Economy – Strategies and ...
 
Swedbank CMD Catrin Fransson
Swedbank CMD Catrin FranssonSwedbank CMD Catrin Fransson
Swedbank CMD Catrin Fransson
 
BancAnalysts Association of Boston 25th Annual Fall Bank Conference
	BancAnalysts Association of Boston 25th Annual Fall Bank Conference	BancAnalysts Association of Boston 25th Annual Fall Bank Conference
BancAnalysts Association of Boston 25th Annual Fall Bank Conference
 
JPMorgan Chase Conference Call on Acquisition of Bear Stearns
JPMorgan Chase Conference Call on Acquisition of Bear StearnsJPMorgan Chase Conference Call on Acquisition of Bear Stearns
JPMorgan Chase Conference Call on Acquisition of Bear Stearns
 
Technology and Innovation in Financial Services Scenarios
Technology and Innovation in Financial Services ScenariosTechnology and Innovation in Financial Services Scenarios
Technology and Innovation in Financial Services Scenarios
 
Death of a Salesman: Account Acquisition in a New Environment
Death of a Salesman: Account Acquisition in a New Environment Death of a Salesman: Account Acquisition in a New Environment
Death of a Salesman: Account Acquisition in a New Environment
 
REIT Preferred Securities Potential Default Risk
REIT Preferred Securities Potential Default RiskREIT Preferred Securities Potential Default Risk
REIT Preferred Securities Potential Default Risk
 
Rural Banking Model
Rural Banking ModelRural Banking Model
Rural Banking Model
 
20% of members may be eligible for home refinance under HARP 2.0! (Webinar Sl...
20% of members may be eligible for home refinance under HARP 2.0! (Webinar Sl...20% of members may be eligible for home refinance under HARP 2.0! (Webinar Sl...
20% of members may be eligible for home refinance under HARP 2.0! (Webinar Sl...
 
Pokerstrategy - NOAH12 San Francisco
Pokerstrategy - NOAH12 San FranciscoPokerstrategy - NOAH12 San Francisco
Pokerstrategy - NOAH12 San Francisco
 
Key Banc Conference Final[1]
Key Banc Conference Final[1]Key Banc Conference Final[1]
Key Banc Conference Final[1]
 
Rural banking turnaround
Rural banking turnaroundRural banking turnaround
Rural banking turnaround
 
Bank Payment Obligation (BPO) articles published by GTNews
Bank Payment Obligation (BPO) articles published by GTNewsBank Payment Obligation (BPO) articles published by GTNews
Bank Payment Obligation (BPO) articles published by GTNews
 
wesco_2001AR
wesco_2001ARwesco_2001AR
wesco_2001AR
 
RMPG Learning Series CRM Workshop Day 3
RMPG Learning Series CRM Workshop Day 3RMPG Learning Series CRM Workshop Day 3
RMPG Learning Series CRM Workshop Day 3
 
Metric issue-19-april
Metric issue-19-aprilMetric issue-19-april
Metric issue-19-april
 
metlife Sterne, Agee & Leach Financial Services Symposium Presentation (repl...
metlife 	Sterne, Agee & Leach Financial Services Symposium Presentation (repl...metlife 	Sterne, Agee & Leach Financial Services Symposium Presentation (repl...
metlife Sterne, Agee & Leach Financial Services Symposium Presentation (repl...
 

Andere mochten auch

The Green Solution-Optimizing productivity of bi-substate microalgae cultures
The Green Solution-Optimizing productivity of bi-substate microalgae culturesThe Green Solution-Optimizing productivity of bi-substate microalgae cultures
The Green Solution-Optimizing productivity of bi-substate microalgae culturesMaggie Leng
 
73% of Credit Unions Have Died but There’s More Opportunity Than Ever
73% of Credit Unions Have Died but There’s More Opportunity Than Ever73% of Credit Unions Have Died but There’s More Opportunity Than Ever
73% of Credit Unions Have Died but There’s More Opportunity Than EverBloomCU
 
5 Most Dangerous Trends Facing Credit Unions
5 Most Dangerous Trends Facing Credit Unions5 Most Dangerous Trends Facing Credit Unions
5 Most Dangerous Trends Facing Credit UnionsStephen Jones
 
2016 Imperative to Help You Win in the Age of the Customer
2016 Imperative to Help You Win in the Age of the Customer2016 Imperative to Help You Win in the Age of the Customer
2016 Imperative to Help You Win in the Age of the CustomerSFIMA
 
Cooperative Federal Annual meeting 2013.03 presentation
Cooperative Federal Annual meeting   2013.03 presentationCooperative Federal Annual meeting   2013.03 presentation
Cooperative Federal Annual meeting 2013.03 presentationrachelgreene
 
Credit Union Biz Analyzer Portfolio 2010 Version 2
Credit Union Biz Analyzer Portfolio 2010 Version 2Credit Union Biz Analyzer Portfolio 2010 Version 2
Credit Union Biz Analyzer Portfolio 2010 Version 2Anup Halder
 
Webinar: The Lending Opportunity of a Generation, March 9, 2016
Webinar: The Lending Opportunity of a Generation, March 9, 2016Webinar: The Lending Opportunity of a Generation, March 9, 2016
Webinar: The Lending Opportunity of a Generation, March 9, 2016project-equity
 
Leveraging Lean Thinking In Credit Unions: A Randolph-Brooks Federal Credit U...
Leveraging Lean Thinking In Credit Unions: A Randolph-Brooks Federal Credit U...Leveraging Lean Thinking In Credit Unions: A Randolph-Brooks Federal Credit U...
Leveraging Lean Thinking In Credit Unions: A Randolph-Brooks Federal Credit U...Guidon Performance Solutions
 
Growth Strategies for Credit Unions
Growth Strategies for Credit UnionsGrowth Strategies for Credit Unions
Growth Strategies for Credit Unionsdenisewymore
 
Baker Hill Advisor for Relationship Lending Overview
Baker Hill Advisor for Relationship Lending OverviewBaker Hill Advisor for Relationship Lending Overview
Baker Hill Advisor for Relationship Lending OverviewBaker Hill
 
Banking and Lending in the US: A Market Overview
Banking and Lending in the US: A Market OverviewBanking and Lending in the US: A Market Overview
Banking and Lending in the US: A Market OverviewThomvest Ventures
 
Loans and advances
Loans and advancesLoans and advances
Loans and advancesPankaj Baid
 

Andere mochten auch (17)

The Green Solution-Optimizing productivity of bi-substate microalgae cultures
The Green Solution-Optimizing productivity of bi-substate microalgae culturesThe Green Solution-Optimizing productivity of bi-substate microalgae cultures
The Green Solution-Optimizing productivity of bi-substate microalgae cultures
 
73% of Credit Unions Have Died but There’s More Opportunity Than Ever
73% of Credit Unions Have Died but There’s More Opportunity Than Ever73% of Credit Unions Have Died but There’s More Opportunity Than Ever
73% of Credit Unions Have Died but There’s More Opportunity Than Ever
 
5 Most Dangerous Trends Facing Credit Unions
5 Most Dangerous Trends Facing Credit Unions5 Most Dangerous Trends Facing Credit Unions
5 Most Dangerous Trends Facing Credit Unions
 
2016 Imperative to Help You Win in the Age of the Customer
2016 Imperative to Help You Win in the Age of the Customer2016 Imperative to Help You Win in the Age of the Customer
2016 Imperative to Help You Win in the Age of the Customer
 
Cooperative Federal Annual meeting 2013.03 presentation
Cooperative Federal Annual meeting   2013.03 presentationCooperative Federal Annual meeting   2013.03 presentation
Cooperative Federal Annual meeting 2013.03 presentation
 
Credit Union Biz Analyzer Portfolio 2010 Version 2
Credit Union Biz Analyzer Portfolio 2010 Version 2Credit Union Biz Analyzer Portfolio 2010 Version 2
Credit Union Biz Analyzer Portfolio 2010 Version 2
 
The Road Ahead For Credit Unions
The Road Ahead For Credit UnionsThe Road Ahead For Credit Unions
The Road Ahead For Credit Unions
 
Webinar: The Lending Opportunity of a Generation, March 9, 2016
Webinar: The Lending Opportunity of a Generation, March 9, 2016Webinar: The Lending Opportunity of a Generation, March 9, 2016
Webinar: The Lending Opportunity of a Generation, March 9, 2016
 
BBS Projects List
BBS Projects ListBBS Projects List
BBS Projects List
 
Leveraging Lean Thinking In Credit Unions: A Randolph-Brooks Federal Credit U...
Leveraging Lean Thinking In Credit Unions: A Randolph-Brooks Federal Credit U...Leveraging Lean Thinking In Credit Unions: A Randolph-Brooks Federal Credit U...
Leveraging Lean Thinking In Credit Unions: A Randolph-Brooks Federal Credit U...
 
How are credit unions staying competitive?
How are credit unions staying competitive?How are credit unions staying competitive?
How are credit unions staying competitive?
 
Growth Strategies for Credit Unions
Growth Strategies for Credit UnionsGrowth Strategies for Credit Unions
Growth Strategies for Credit Unions
 
Baker Hill Advisor for Relationship Lending Overview
Baker Hill Advisor for Relationship Lending OverviewBaker Hill Advisor for Relationship Lending Overview
Baker Hill Advisor for Relationship Lending Overview
 
Credit union overview
Credit union overviewCredit union overview
Credit union overview
 
loans and advances in iob
loans and advances in iobloans and advances in iob
loans and advances in iob
 
Banking and Lending in the US: A Market Overview
Banking and Lending in the US: A Market OverviewBanking and Lending in the US: A Market Overview
Banking and Lending in the US: A Market Overview
 
Loans and advances
Loans and advancesLoans and advances
Loans and advances
 

Ähnlich wie Mc kinsey on cooperatives cooperative banks at the cusp of a new era

Mc kinsey on cooperatives the retail coop's guide to industry trends
Mc kinsey on cooperatives   the retail coop's guide to industry trendsMc kinsey on cooperatives   the retail coop's guide to industry trends
Mc kinsey on cooperatives the retail coop's guide to industry trendsInformaEuropa
 
Swim or Sink: Essential Insights for Staying Afloat in the Banking Market Place
Swim or Sink: Essential Insights for Staying Afloat in the Banking Market PlaceSwim or Sink: Essential Insights for Staying Afloat in the Banking Market Place
Swim or Sink: Essential Insights for Staying Afloat in the Banking Market PlaceCatherine Lynch
 
From Complexity To Client Centricity
From Complexity To Client CentricityFrom Complexity To Client Centricity
From Complexity To Client Centricityhubert_laird
 
Analysis of NPA management at Canara Bank
Analysis of NPA management at Canara BankAnalysis of NPA management at Canara Bank
Analysis of NPA management at Canara BankPurushottam Karna,FRM
 
26882112 Basel Ii Concept Implication
26882112 Basel Ii Concept Implication26882112 Basel Ii Concept Implication
26882112 Basel Ii Concept ImplicationGOEL'S WORLD
 
Nigerian banking: the way forward
Nigerian banking: the way forwardNigerian banking: the way forward
Nigerian banking: the way forwardefiole
 
10 Key Trends From the Banking Trenches
10 Key Trends From the Banking Trenches10 Key Trends From the Banking Trenches
10 Key Trends From the Banking TrenchesBackbase
 
Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...
Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...
Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...Resurgent India
 
Banking redefined: disruption, transformation and the next generation bank
Banking redefined: disruption, transformation and the next generation bankBanking redefined: disruption, transformation and the next generation bank
Banking redefined: disruption, transformation and the next generation bankPauline Mura
 
4239 Misys Bank Fusion Presentation
4239 Misys Bank Fusion Presentation4239 Misys Bank Fusion Presentation
4239 Misys Bank Fusion Presentationsudha_20
 
Q1 2009 Earning Report of Citizens Banking Corp.
Q1 2009 Earning Report of Citizens Banking Corp.Q1 2009 Earning Report of Citizens Banking Corp.
Q1 2009 Earning Report of Citizens Banking Corp.earningreport earningreport
 
STRATEGY ANALYSIS OF RBL BANK LTD
STRATEGY ANALYSIS OF RBL BANK LTDSTRATEGY ANALYSIS OF RBL BANK LTD
STRATEGY ANALYSIS OF RBL BANK LTDRamakrishna Namburi
 
Building the investment bank of the future_PRINT READY_High Resolution
Building the investment bank of the future_PRINT READY_High ResolutionBuilding the investment bank of the future_PRINT READY_High Resolution
Building the investment bank of the future_PRINT READY_High ResolutionKarl Meekings
 
Channel strategy, v1, 2011
Channel strategy, v1, 2011Channel strategy, v1, 2011
Channel strategy, v1, 2011Kevin Chetty
 
Micro finanza rating, presentation, rbap 2012
Micro finanza rating, presentation, rbap 2012Micro finanza rating, presentation, rbap 2012
Micro finanza rating, presentation, rbap 2012RBAPAT54
 
Javelin's Research on Bank Switching in 2012: Giants Banks at Risk
Javelin's Research on Bank Switching in 2012: Giants Banks at RiskJavelin's Research on Bank Switching in 2012: Giants Banks at Risk
Javelin's Research on Bank Switching in 2012: Giants Banks at RiskJavelin Strategy & Research
 
Idg banking vietnam2010 customercentricplatform-100527-l-tay-v07
Idg banking vietnam2010 customercentricplatform-100527-l-tay-v07Idg banking vietnam2010 customercentricplatform-100527-l-tay-v07
Idg banking vietnam2010 customercentricplatform-100527-l-tay-v07lance slides
 
Adrian Blundell-Wignall, OECD: "An optimal bank structure?"
Adrian Blundell-Wignall, OECD: "An optimal bank structure?"Adrian Blundell-Wignall, OECD: "An optimal bank structure?"
Adrian Blundell-Wignall, OECD: "An optimal bank structure?"Global Utmaning
 
Value of transforming Core Banking System "CBS"
Value of transforming Core Banking System "CBS"Value of transforming Core Banking System "CBS"
Value of transforming Core Banking System "CBS"Nidal Bashaireh
 

Ähnlich wie Mc kinsey on cooperatives cooperative banks at the cusp of a new era (20)

Mc kinsey on cooperatives the retail coop's guide to industry trends
Mc kinsey on cooperatives   the retail coop's guide to industry trendsMc kinsey on cooperatives   the retail coop's guide to industry trends
Mc kinsey on cooperatives the retail coop's guide to industry trends
 
Swim or Sink: Essential Insights for Staying Afloat in the Banking Market Place
Swim or Sink: Essential Insights for Staying Afloat in the Banking Market PlaceSwim or Sink: Essential Insights for Staying Afloat in the Banking Market Place
Swim or Sink: Essential Insights for Staying Afloat in the Banking Market Place
 
From Complexity To Client Centricity
From Complexity To Client CentricityFrom Complexity To Client Centricity
From Complexity To Client Centricity
 
Analysis of NPA management at Canara Bank
Analysis of NPA management at Canara BankAnalysis of NPA management at Canara Bank
Analysis of NPA management at Canara Bank
 
26882112 Basel Ii Concept Implication
26882112 Basel Ii Concept Implication26882112 Basel Ii Concept Implication
26882112 Basel Ii Concept Implication
 
Nigerian banking: the way forward
Nigerian banking: the way forwardNigerian banking: the way forward
Nigerian banking: the way forward
 
10 Key Trends From the Banking Trenches
10 Key Trends From the Banking Trenches10 Key Trends From the Banking Trenches
10 Key Trends From the Banking Trenches
 
Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...
Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...
Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...
 
Banking redefined: disruption, transformation and the next generation bank
Banking redefined: disruption, transformation and the next generation bankBanking redefined: disruption, transformation and the next generation bank
Banking redefined: disruption, transformation and the next generation bank
 
4239 Misys Bank Fusion Presentation
4239 Misys Bank Fusion Presentation4239 Misys Bank Fusion Presentation
4239 Misys Bank Fusion Presentation
 
Q1 2009 Earning Report of Citizens Banking Corp.
Q1 2009 Earning Report of Citizens Banking Corp.Q1 2009 Earning Report of Citizens Banking Corp.
Q1 2009 Earning Report of Citizens Banking Corp.
 
STRATEGY ANALYSIS OF RBL BANK LTD
STRATEGY ANALYSIS OF RBL BANK LTDSTRATEGY ANALYSIS OF RBL BANK LTD
STRATEGY ANALYSIS OF RBL BANK LTD
 
Basel standards
Basel standardsBasel standards
Basel standards
 
Building the investment bank of the future_PRINT READY_High Resolution
Building the investment bank of the future_PRINT READY_High ResolutionBuilding the investment bank of the future_PRINT READY_High Resolution
Building the investment bank of the future_PRINT READY_High Resolution
 
Channel strategy, v1, 2011
Channel strategy, v1, 2011Channel strategy, v1, 2011
Channel strategy, v1, 2011
 
Micro finanza rating, presentation, rbap 2012
Micro finanza rating, presentation, rbap 2012Micro finanza rating, presentation, rbap 2012
Micro finanza rating, presentation, rbap 2012
 
Javelin's Research on Bank Switching in 2012: Giants Banks at Risk
Javelin's Research on Bank Switching in 2012: Giants Banks at RiskJavelin's Research on Bank Switching in 2012: Giants Banks at Risk
Javelin's Research on Bank Switching in 2012: Giants Banks at Risk
 
Idg banking vietnam2010 customercentricplatform-100527-l-tay-v07
Idg banking vietnam2010 customercentricplatform-100527-l-tay-v07Idg banking vietnam2010 customercentricplatform-100527-l-tay-v07
Idg banking vietnam2010 customercentricplatform-100527-l-tay-v07
 
Adrian Blundell-Wignall, OECD: "An optimal bank structure?"
Adrian Blundell-Wignall, OECD: "An optimal bank structure?"Adrian Blundell-Wignall, OECD: "An optimal bank structure?"
Adrian Blundell-Wignall, OECD: "An optimal bank structure?"
 
Value of transforming Core Banking System "CBS"
Value of transforming Core Banking System "CBS"Value of transforming Core Banking System "CBS"
Value of transforming Core Banking System "CBS"
 

Mehr von InformaEuropa

Le popolari riescono ad aumentare i prestiti controllando i rischi (g. de lu...
Le popolari riescono ad aumentare i prestiti controllando i rischi  (g. de lu...Le popolari riescono ad aumentare i prestiti controllando i rischi  (g. de lu...
Le popolari riescono ad aumentare i prestiti controllando i rischi (g. de lu...InformaEuropa
 
Carlo borzaga part 2 en
Carlo borzaga part 2 enCarlo borzaga part 2 en
Carlo borzaga part 2 enInformaEuropa
 
Carlo borzaga part 1 en
Carlo borzaga part 1 enCarlo borzaga part 1 en
Carlo borzaga part 1 enInformaEuropa
 
Svend erik sorensen en
Svend erik sorensen enSvend erik sorensen en
Svend erik sorensen enInformaEuropa
 
Pw c – cartographie et grands enjeux du monde coopératif agricole à l’échelle...
Pw c – cartographie et grands enjeux du monde coopératif agricole à l’échelle...Pw c – cartographie et grands enjeux du monde coopératif agricole à l’échelle...
Pw c – cartographie et grands enjeux du monde coopératif agricole à l’échelle...InformaEuropa
 
Mc kinsey on cooperatives improving cooperatives’ agility
Mc kinsey on cooperatives   improving cooperatives’ agilityMc kinsey on cooperatives   improving cooperatives’ agility
Mc kinsey on cooperatives improving cooperatives’ agilityInformaEuropa
 
Mc kinsey on cooperatives how cooperatives grow
Mc kinsey on cooperatives   how cooperatives growMc kinsey on cooperatives   how cooperatives grow
Mc kinsey on cooperatives how cooperatives growInformaEuropa
 
Mc kinsey on cooperatives five trends and their implications for agricultur...
Mc kinsey on cooperatives   five trends and their implications for agricultur...Mc kinsey on cooperatives   five trends and their implications for agricultur...
Mc kinsey on cooperatives five trends and their implications for agricultur...InformaEuropa
 
Mc kinsey – achieving the full potential of cooperative organizations
Mc kinsey  – achieving the full potential of cooperative organizationsMc kinsey  – achieving the full potential of cooperative organizations
Mc kinsey – achieving the full potential of cooperative organizationsInformaEuropa
 
Irecus – impact socio économique des coopératives dans le monde
Irecus – impact socio économique des coopératives dans le mondeIrecus – impact socio économique des coopératives dans le monde
Irecus – impact socio économique des coopératives dans le mondeInformaEuropa
 
Ipsos uqam – the world’s perception of cooperatives
Ipsos uqam – the world’s perception of cooperativesIpsos uqam – the world’s perception of cooperatives
Ipsos uqam – the world’s perception of cooperativesInformaEuropa
 
Ernst and young la gouvernance éclairée des coopératives
Ernst and young    la gouvernance éclairée des coopérativesErnst and young    la gouvernance éclairée des coopératives
Ernst and young la gouvernance éclairée des coopérativesInformaEuropa
 
Deloitte strategies in cooperative financing and capitalisation
Deloitte   strategies in cooperative financing and capitalisationDeloitte   strategies in cooperative financing and capitalisation
Deloitte strategies in cooperative financing and capitalisationInformaEuropa
 
Yasmina lemzeri, mireille jaeger et jean noël ory (1)
Yasmina lemzeri, mireille jaeger et jean noël ory (1)Yasmina lemzeri, mireille jaeger et jean noël ory (1)
Yasmina lemzeri, mireille jaeger et jean noël ory (1)InformaEuropa
 

Mehr von InformaEuropa (20)

Le popolari riescono ad aumentare i prestiti controllando i rischi (g. de lu...
Le popolari riescono ad aumentare i prestiti controllando i rischi  (g. de lu...Le popolari riescono ad aumentare i prestiti controllando i rischi  (g. de lu...
Le popolari riescono ad aumentare i prestiti controllando i rischi (g. de lu...
 
Michel lafleur en
Michel lafleur enMichel lafleur en
Michel lafleur en
 
Mario albert en
Mario albert enMario albert en
Mario albert en
 
éRic lamarque en
éRic lamarque enéRic lamarque en
éRic lamarque en
 
David moroney en
David moroney enDavid moroney en
David moroney en
 
Carlo borzaga part 2 en
Carlo borzaga part 2 enCarlo borzaga part 2 en
Carlo borzaga part 2 en
 
Carlo borzaga part 1 en
Carlo borzaga part 1 enCarlo borzaga part 1 en
Carlo borzaga part 1 en
 
Arnold kuijpers en
Arnold kuijpers enArnold kuijpers en
Arnold kuijpers en
 
Svend erik sorensen en
Svend erik sorensen enSvend erik sorensen en
Svend erik sorensen en
 
Pw c – cartographie et grands enjeux du monde coopératif agricole à l’échelle...
Pw c – cartographie et grands enjeux du monde coopératif agricole à l’échelle...Pw c – cartographie et grands enjeux du monde coopératif agricole à l’échelle...
Pw c – cartographie et grands enjeux du monde coopératif agricole à l’échelle...
 
Mc kinsey on cooperatives improving cooperatives’ agility
Mc kinsey on cooperatives   improving cooperatives’ agilityMc kinsey on cooperatives   improving cooperatives’ agility
Mc kinsey on cooperatives improving cooperatives’ agility
 
Mc kinsey on cooperatives how cooperatives grow
Mc kinsey on cooperatives   how cooperatives growMc kinsey on cooperatives   how cooperatives grow
Mc kinsey on cooperatives how cooperatives grow
 
Mc kinsey on cooperatives five trends and their implications for agricultur...
Mc kinsey on cooperatives   five trends and their implications for agricultur...Mc kinsey on cooperatives   five trends and their implications for agricultur...
Mc kinsey on cooperatives five trends and their implications for agricultur...
 
Mc kinsey – achieving the full potential of cooperative organizations
Mc kinsey  – achieving the full potential of cooperative organizationsMc kinsey  – achieving the full potential of cooperative organizations
Mc kinsey – achieving the full potential of cooperative organizations
 
Irecus – impact socio économique des coopératives dans le monde
Irecus – impact socio économique des coopératives dans le mondeIrecus – impact socio économique des coopératives dans le monde
Irecus – impact socio économique des coopératives dans le monde
 
Ipsos uqam – the world’s perception of cooperatives
Ipsos uqam – the world’s perception of cooperativesIpsos uqam – the world’s perception of cooperatives
Ipsos uqam – the world’s perception of cooperatives
 
Ernst and young la gouvernance éclairée des coopératives
Ernst and young    la gouvernance éclairée des coopérativesErnst and young    la gouvernance éclairée des coopératives
Ernst and young la gouvernance éclairée des coopératives
 
Deloitte strategies in cooperative financing and capitalisation
Deloitte   strategies in cooperative financing and capitalisationDeloitte   strategies in cooperative financing and capitalisation
Deloitte strategies in cooperative financing and capitalisation
 
Sudha kornginnaya
Sudha kornginnayaSudha kornginnaya
Sudha kornginnaya
 
Yasmina lemzeri, mireille jaeger et jean noël ory (1)
Yasmina lemzeri, mireille jaeger et jean noël ory (1)Yasmina lemzeri, mireille jaeger et jean noël ory (1)
Yasmina lemzeri, mireille jaeger et jean noël ory (1)
 

Mc kinsey on cooperatives cooperative banks at the cusp of a new era

  • 1. International Summit of Cooperatives Cooperative banks at the cusp of a new era October 2012 Any use of this material without specific permission of McKinsey & Company is strictly prohibited Copyright © 2012. All rights reserved
  • 2. Five trends will provide the “crucibles” that will transform the banking industry over the next decade Banks will right-size and restructure their business model to Right-sizing the remain profitable in the face of regulation that drives lower ROE 1 platform and higher COE Revenues and The distribution of the world’s banking profit and revenue 2 profits shifting to pools will shift dramatically toward emerging markets, where emerging markets many more of the world’s largest banks will originate because of their rapid market expansion Seamless multi- Banks will have lean, seamless multichannel distribution 3 channel customer networks and differentiate on the basis of the customer experience experience they offer by leveraging the rapidly evolving technology Banks will battle with new non-bank entrants to “own” the New competitive customer relationship and will operate in a more competitive 4 threats environment Impact of big data Banks will leverage the explosive growth of available data and 5 on banking computational capacity to improve marketing and operations products McKinsey & Company | 1 Copyright © 2012. All rights reserved
  • 3. Seven key questions emerging for cooperative banks 1 How can cooperative banks exploit their focus on customer satisfaction to gain market share? 2 Will cooperatives need to look for growth beyond their borders? 3 How can the cooperatives’ branch networks preserve the advantage of proximity while remaining profitable? 4 How can cooperative banks use their internet presence and social media to improve relationships with members? 5 How can cooperatives retain their privileged relationships with members in the face of new non-bank competition? 6 How can cooperative banks develop a common voice to better protect their interests during regulatory reform? 7 In what ways can cooperatives best exploit their unique attributes to optimize their balance sheets? McKinsey & Company | 2 Copyright © 2012. All rights reserved
  • 4. Contents Overview of key trends Detailed questions for coop banks McKinsey & Company | 3 Copyright © 2012. All rights reserved
  • 5. 1 Banks will right size and restructure their business model to remain profitable in the face of regulation that drives lower ROE and higher COE Context Implications ▪ Banks’ return on equity (ROE) will ▪ Banks will need to reduce costs and Right-sizing the be negatively impacted by new allocate capital more strategically as 1 platform regulations they return to the traditional retail model – Basel Ill will require higher to remain profitable capitalization, capital quality, and – Banks will maximize capital efficiency Revenues and liquidity and limit capital-intensive operations 2 profits shifting to emerging markets ▪ Emerging markets will offer higher ▪ Banks will need to dramatically cut ROE than developed economies costs and become significantly more ▪ Capital will be scarcer worldwide, efficient Seamless multi- driving higher cost of equity (COE) ▪ Banks’ physical distribution networks 3 channel customer – Due to an investment boom in will involve fewer, leaner branches with experience emerging markets, an aging varying formats adapted to specific population, and a rebalancing segments toward consumption in China – Branches in developed markets will be leaner, with fewer staff, and will perform New competitive an almost exclusive front-line function 4 threats – Banks will have fewer branches but more of them will be in mass-affluent areas Impact of big data 5 on banking products McKinsey & Company | 4 Copyright © 2012. All rights reserved
  • 6. 1 Return on equity will be negatively impacted by new ESTIMATE regulations – example of the 4 largest EU markets Retail banking ROE, percent Pre- 13.5 13.6 6.6 5.1 regulation Calculated ROE is not risk-adjusted Basel III -2.9 -2.8 -2.1 -1.4 and therefore does not differentiate between regulations EU mortgage directive -0.4 -0.4 -0.1 -0.3 that are ▪ Risk-reducing (e.g., Basel III) and EU payments -0.1 -0.1 -0.1 therefore positively -0.2 regulation (SEPA) impact risk- adjusted ROE EU investment -0.4 -0.5 -0.4 -0.1 ▪ Only reducing regulation (MiFID 2) profitability and therefore have a Country-specific -2.8 -0.3 n/a2 negative impact on n/a2 regulation1 risk-adjusted ROE Post-regulation 9.5 7.0 3.5 3.1 1 Germany: taxes and levies; establishment of a fee-based advisory model; UK: ICB ring-fencing, FSA on PPI, living wills, account switching/portability, RDRs, taxes, and levies 2 Country-specific regulation in France and Italy has either been implemented already in 2010 or has only low impact, and therefore has not been modelled SOURCE: McKinsey working papers on risk No. 36, Day of reckoning for European retail banking, McKinsey & Company | 5 July 2012 Copyright © 2012. All rights reserved
  • 7. 1 Moreover, return on equity will be significantly higher ESTIMATE in emerging markets than in developed markets ROE COE Comparison of banking industry return on equity (ROE) and cost of equity (COE) by region, not accounting for mitigating actions from banks in response to new regulation (simplified simulation), 2015 ▪ Even after Percent restructuring and mitigating ROE forecasts include margin projections but no 19.5 actions, ROE of mitigating actions in reaction to Basel III, Dodd-Frank banks from developed markets remains 14.1 13.1 far below that of banks from developing 9.0 9.0 9.6 9.4 markets 7.7 6.7 6.4 ▪ COE will not be much higher in emerging markets than in developed markets US Europe1 Other China Other emerging developed 1 COE based on Western Europe; ROE based on European quoted banks (about 90% from Western Europe) McKinsey & Company SOURCE: Reuters; Datastream; Federal Reserve Bank; Global Insight; McKinsey Global Financial Initiative | 6 Copyright © 2012. All rights reserved
  • 8. Residential 1 In addition, cost of equity will increase because demand real estate for capital will outstrip the supply of savings in the Infrastructure coming years Other productive investment Global investment and savings USD Trillions, constant 2005 prices and exchange rates ▪ There will be a USD 2 trillion shortfall in savings in 2030, due to 24 22 – Increased demand for capital fuelled by an 5 investment boom in USD 2 trillion emerging markets 4 savings – Limited savings due to shortfall will population aging and a result in rebalancing toward higher COE consumption in China 10.7 ▪ In addition, investors no 2.1 15 longer see banks as safe 1.6 assets and demand 4.5 0.8 0.7 higher risk premium 7.0 2 3.1 ▪ As a result, the cost of equity will be higher 1981 2008 2030 2030 global 2030 savings shortfall SOURCE: Economist Intelligence Unit; Global Insight; Oxford Economics; World Development Indicators of the World Bank; McKinsey & Company McKinsey Global Institute Capital Supply & Demand Model; McKinsey Global Economic Growth Database | 7 Copyright © 2012. All rights reserved
  • 9. 1 Consequently, banks in the developed world need to carry out ESTIMATE dramatic cost reductions to move to sustainable levels of ROE1 Banks need to reduce cost-to-income ratio in years to come Cost-to-income ratio Percent 100 Total cost reduction by region to offset ROE gap Percent2 75 Europe 26 50 USA 20 Target cost-to- 25 income: ~42% Japan 14 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 1 Based on the assumption of flat revenues and no inflation for the 2010-2015 period 2 Percentage calculated as cost reduction over estimated total regional operating costs McKinsey & Company SOURCE: McKinsey Global Banking Practice; McKinsey Global Banking Pools | 8 Copyright © 2012. All rights reserved
  • 10. 1 To remain profitable, banks will restructure to focus Impact of Basel III None Low more on retail banking and less on capital markets Medium High The impact of Basel III on banks’ business lines Corporate Capital Regulatory requirements Retail banking markets Rationale Capital ratio All products will be affected by reduction of available and capital deductions1 Capital market products will be most affected by market Market risk framework risk (particularly OTC derivatives and cash products) Capital require- ments OTC derivatives will be significantly affected by CCR Counterparty credit risk increase; retail and corporate banking will only be indirectly affected via cross-selling All products with low-risk weight – like capital market Leverage ratio products – will mostly be affected by leverage ratio measures All short-term funded products – like capital markets LCR products – will be affected (only relevant for cross-selling) Liquidity and funding Consumer finance products and claims toward FIs face an NSFR increase in LT funding due to classification as “illiquid” Overall 1 Different effects for individual segments might arise depending on bank’s capital allocation McKinsey & Company SOURCE: McKinsey analysis | 9 Copyright © 2012. All rights reserved
  • 11. 1 Furthermore, cost cutting will occur through decrease in branch density and staffing levels Decrease in branch density Bank branches per million inhabitants 475 -26% 350 With peaks of 30-40% in some countries 2010 2015 Decrease in staffing levels Average FTEs per bank branch 10 -50% ▪ Fewer FTEs needed as low-value-added 4-5 activities move to remote channels ▪ The mix of people will change 2010 2015 McKinsey & Company SOURCE: McKinsey European consumer and Banking Research and Multichannel Survey | 10 Copyright © 2012. All rights reserved
  • 12. 1 Nonetheless, lower staffing levels must translate into more value-added activities at the branch, such as sales and advice to customers Branch staff time spent per activity1 Total staff time normalized so that brick-and-mortar equals 100 100 Sales and advice 20 78 Customer service 10 -49% 29 51 Teller service 30 8 16 30 Back-office 30 10 5 Other 15 7 3 10 6 Brick-and-mortar Online adopters Direct first Percentage of 20% 37% 59% staff time spent on sales and advice Online banking 0-10% 15-30% 60-80% usage 1 Includes management, training, and other McKinsey & Company SOURCE: McKinsey European Retail Banking Multichannel Survey 2010; EFMA | 11 Copyright © 2012. All rights reserved
  • 13. 2 The world’s banking profit and revenue pools will shift dramatically toward emerging markets Context Implications Right-sizing the ▪ Growth will remain slow in ▪ Revenue pools will shift to emerging 1 developed economies markets platform – Advanced economies are – Emerging markets will represent 50% of deleveraging, are plagued by high world banking revenue in 2020 (up from unemployment and public debt, and 34% in 2010), with more than 60% of Revenues and are struggling to put their fiscal revenue growth in banking coming from 2 profits shifting to houses in order emerging markets emerging markets ▪ Banks will have to compete for market share on a global scale where emerging markets’ players Seamless multi- are driving banking growth 3 channel customer experience ▪ In emerging markets, increasing financial depth and rapid GDP growth will drive banking growth New competitive ▪ 2.5 billion adults do not use formal 4 financial services today, and the threats rapidly growing middle classes are driving internal consumption up Impact of big data 5 on banking products McKinsey & Company | 12 Copyright © 2012. All rights reserved
  • 14. 2 The fiscal tightening required to reduce public debt levels will slow growth in developed countries Fiscal tightening required in 2010-2020 to meet the Euro con- Total government debt, pre- and post-crisis (USD) vergence criteria of government debt of 60% of GDP by 2030 Percentage X More than 50% increase 2008 2012 Percentage of GDP of GDP 169 Japan 207 23 13.41 113 15.5 Greece 184 63 95 10.6 United States 125 31 106 4.9 Italy 119 12 72 7.5 Portugal 117 63 44 Ireland 159 13.5 115 68 France 31 6.0 89 67 Germany 82 22 4.4 40 Spain 77 93 9.4 United 41 74 78 10.4 Kingdom 50 Canada 70 39 4.0 Average adjustment required for G20 countries 1 Japan’s target for fiscal adjustment is set at 80% of GDP Note: Countries are assumed to undergo a gradual transition in their primary balance in 2010-2020 and maintain a constant primary balance after 2020 McKinsey & Company SOURCE: International Monetary Fund; McKinsey Global Institute; IHS Global Insight; McKinsey analysis | 13 Copyright © 2012. All rights reserved
  • 15. 2 Banks in emerging and developed markets will have ESTIMATE to compete for market share on a global scale World, relative size of banking revenues after risk cost to nominal GDP Percentage of global GDP Historical data Base case forecast ▪ After 40 years of Crisis in steady growth in 6.0% Southeast global banking 5.5% Asia revenue relative to GDP, our McKinsey 5.0% Global Financial 4.5% Initiative base case forecast predicts 4.0% Dot-com – Flattening trend 3.5% bubble and Financial – No recovery to pre- burst crisis crisis level over the Mexico 3.0% next decade crisis 2.5% Banking has ▪ This, combined with 1987: entered an era of stagnant economic 2.0% Black slower growth growth, implies that Monday banks won’t be able to 1.5% grow with the market. 1.0% History Forecast To grow, they will have to compete for 0.5% market share 0% 1980 1990 2000 2010 2020 McKinsey & Company SOURCE: McKinsey Global Financial Initiative; Thomson Reuters | 14 Copyright © 2012. All rights reserved
  • 16. 2 In emerging markets, increasing financial depth will drive banking growth ESTIMATE Financial depth1, YE 2010 Percentage of regional GDP United States 462 Developed Japan 457 Western Europe 400 Other developed 388 China 280 India 209 Emerging Middle East & Africa 190 Other Asia 168 Latin America 148 CEE & CIS2 142 1 Calculated total regional debt and equity outstanding divided by regional GDP 2 Central and Eastern Europe and Commonwealth of Independent States McKinsey & Company SOURCE: McKinsey Global Institute, Mapping Capital Markets 2011; McKinsey Global Finance Initiative | 15 Copyright © 2012. All rights reserved
  • 17. 2 In emerging markets, growth will be more than twice as fast as developed economies, adding more than 160 million middle-class households by 2020 Equivalent Evolution of world real GDP annual real Evolution of households income by region growth from distribution in emerging markets1 Real 2005 USD Trillions 2010 to 2020 Millions of households Emerging countries Percent Developed countries 19.3 70.5 1,206 ▪ There will be more 11.1 Household 1,084 than 160 million new 306 middle-class 26.2 5.7% income 139 51.2 8.2 ≥ USD 25,000 households in emerging countries, 15.1 which is more than the current total Household number of house- income 945 900 holds in the US 44.3 2.1% < USD 25,000 ▪ This rising middle 36.1 class will rapidly drive up demand for financial products 2010 2010-20 2020 2011 2020 growth 1 Income categories defined per annual income in USD PPP McKinsey & Company SOURCE: IHS Global Insight; Global Insight; McKinsey analysis | 16 Copyright © 2012. All rights reserved
  • 18. 2 Nearly 2.5 billion people are still “unbanked” in Percentage of total adult population that is financially emerging markets, representing a huge business excluded opportunity for banks Adult population not using formal financial services Millions East Asia 876 59 South Asia 612 58 Sub-Saharan Africa 326 80 Latin America 250 65 Central Asia and 193 49 Eastern Europe Arab states 136 67 High-income OECD 60 8 Total 2,453 53 McKinsey & Company SOURCE: Chaia et al., Half the world is unbanked, Financial Access Initiative, 2009 | 17 Copyright © 2012. All rights reserved
  • 19. 2 Consequently, banks’ revenue pools will shift to emerging markets Revenue pool after risk costs1 Origin of absolute change in revenue pool USD Trillions, 2010-2020 USD Trillions, 2010-2020 Emerging Percent Percent 100% = 3.1 6.9 markets 100% = 3.8 will More than Emerging Other represent 60% of markets 22 28 revenue emerging 50% of Other emerging 32 world growth in China 12 banking banking Other revenue will come 14 21 developed2 in 2020 from China 29 emerging Developed 11 markets US 25 markets Other developed2 8 23 US 20 Western 26 Europe 18 Western Europe 11 2010 2020 2010-20 1 Banking revenue after risk costs = net interest income + net fees and commissions - risk costs (to account for losses on delinquent loans; meant to capture “normalized” loan loss provisions) 2 Includes Australia, Canada, South Korea, and Japan McKinsey & Company SOURCE: McKinsey Global Banking Pools | 18 Copyright © 2012. All rights reserved
  • 20. 3 Banks will have lean, seamless multichannel distribution networks Context Implications Right-sizing the ▪ Consumers are using multiple ▪ Simpler banking transactions and sales 1 channels to seek information, will mainly take place online and on platform receive advice and support, and mobile devices purchase products – The vast majority of financial – Customers will increasingly demand transactions will take place on the Revenues and consistent, continuous service internet and on mobile devices 2 profits shifting to across multiple channels (mobile, – For example, mobile banking is growing emerging markets internet, social media, phone/video rapidly and transforming the payments calls, and branches) industry Seamless multi- – They will expect more customized ▪ Branches will focus more and more on marketing and individualized providing advice and handling complex 3 channel customer products transactions and sales experience ▪ Low trust and satisfaction in the – Sales and advice for simple products will banking system have made increasingly take place outside the customers less loyal, increasing branch New competitive switching and spreading 4 threats behaviours Impact of big data 5 on banking products McKinsey & Company | 19 Copyright © 2012. All rights reserved
  • 21. 3 Customers are using multiple channels to seek information, EXAMPLE Percentage of respondents receive advice and support, and purchase products Channel Quoting Purchase Channel Purchase Servicing1 Insurer example Channel Channel 43% 53% switching switching Internet to agent/ Internet to agent/ 14% 1% in person in person Call centre to agent/ 10% Call centre to agent 4% in person Agent to internet/ Agent to internet/ 5% 31% call centre call centre Internet to call Internet to call Intra-direct Intra-direct 13% 2% centre centre Call centre to Call centre to 1% 15% internet internet Pure agent/ Pure agent/ Bank 38% 31% in person in person Pure Pure 15% 13% internet internet Pure call Pure call 4% 3% centre centre 1 Includes portfolio valuation/new deposit/arbitration/changes in policy clauses and personal data McKinsey & Company SOURCE: 2012 McKinsey insurance multichannel excellence initiative – Customer behaviour survey | 20 Copyright © 2012. All rights reserved
  • 22. 3 Moreover, online banking usage will continue to rise in tandem with internet usage Online banking usage1 Percent, 2009 80 Netherlands 70 I Finland Sweden Denmark Norway 60 3-5 years Canada Self first 50 nd Switzerland Luxembourg US tre et Belgium UK ark Japan ll m 40 era 7-10 years II France Germany Ov Australia Multi- Online Spain Channel 30 Ireland 10-15 years III adaptors Austria South Korea Slovenia 20 Poland Czech Brick- Brazil Portugal and- Middle Republic IV Italy Hungary mortar Argentina East 10 Colombia Russia Mexico India China Greece Macedonia 0 Turkey Bulgaria 0 5 10 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 Romania Serbia Internet usage1 Percent, 2009 1 Percentage of individuals who used the internet/online banking in the past 3 months McKinsey & Company SOURCE: McKinsey Multichannel Survey (2010) | 21 Copyright © 2012. All rights reserved
  • 23. 3 In addition, low trust and satisfaction in the banking system have increased switching and spreading behaviours Trust in the banking1 system … as has satisfaction with has decreased … banking services Percentage of respondents Percentage of respondents ▪ Decreasing trust and neutral or satisfied 54 96 94 satisfaction in the 84 banking system 28 14 ▪ Perceived risk leading to money switching and spreading Strongly A little bit Not 1998 2005 2009 (worse) (unchanged) ▪ Sharp increase of online usage – Consumers increased switching and spreading behaviours information gathering and shopping – loss of Withdrawals, Deposits, EUR Billions, Netherlands Deposit “contact” with brands Withdrawal 50 ▪ Decreasing loyalty and increasing product unbundling 0 -50 Jan 1998 Jun 2009 1 Results from German market research launched in December 2009 (sample of 1,056 individuals) McKinsey & Company SOURCE: BdB; Ipso; GfK Eurisko Finance 2009; CDJ Survey 2010 | 22 Copyright © 2012. All rights reserved
  • 24. 3 Customers will favour digital channels for Branch only Multichannel simple transactions Digital only Evolution of client distribution preferences Percentage of clients Complex/large Support/ Transactions/ Simple/small sales complaints info requests ticket sales 100% 0 1 5 10 20 30 25 40 50 50 70 50 40 99 50 70 45 45 30 30 20 5 5 10 2010 2015 2010 2015 2010 2015 2010 2015 McKinsey & Company SOURCE: McKinsey European Consumer and Banking Research and Multichannel Survey | 23 Copyright © 2012. All rights reserved
  • 25. 3 For example, mobile banking is growing rapidly and transforming the payments industry Mobile banking usage statistics, global 2005-2015E Gross value of mobile payment transactions Percent Never Monthly Daily USD Billions Few times Weekly a year 110 38 50 58 CAGR = 119% 71 60 19 18 15 17 30 11 14 12 17 9 13 10 11 2 5 7 10 2 4 5 2005 2010 2011 2015 2008 2009 2010 2011 2012 2013 SOURCE: Forrester; 2012 World Retail Banking Report survey of 41 banks; Finalta/EFMA Multichannel McKinsey & Company | 24 Survey 2008; IE Market Research Corporation; McKinsey analysis Copyright © 2012. All rights reserved
  • 26. 3 Bank branches will focus more on complex transactions as Direct channels1 Call centre more interactions move to direct channels Agents/brokers European average Branches Product purchasing Current sales breakdown by channel Expected sales breakdown by channel 2010, percentage of sales 2015E, percentage of respondents Current 4 3 84 9 100 53 43 100 accounts 3 1 Savings 3 77 25 16 100 38 59 100 accounts 1 Investments 78 7 4 11 100 58 11 3 28 100 Mortgages 80 11 4 4 100 72 13 5 10 100 Consumer finance 73 8 6 12 100 32 13 8 47 100 products 1 Internet, ATM, mobile McKinsey & Company SOURCE: Efma online survey of 150+ European banks, December 2010 | 25 Copyright © 2012. All rights reserved
  • 27. 4 Banks will battle with new non-bank entrants to “own” the customer relationship Context Implications Right-sizing the ▪ Non-bank players are infringing on ▪ Banks will maintain ownership of the 1 lucrative niches previously customer relationship by strategically platform dominated by integrated banks adjusting their business model to better – Remote payments, new currencies, fight new entrants B2B payments, and e-invoicing will – Majority of revenues come from owning Revenues and transform the payment industry the relationship and taking on risk within 2 profits shifting to – In market segments such as the value chain emerging markets lending, bank accounts and ▪ New integrator tools that disinter- transactions, protection and mediate services and commoditize insurance, and deposits and products threaten banks’ ownership Seamless multi- investments of the relationship 3 channel customer experience ▪ Additional players leveraging existing infrastructures or new business models will infringe on the banks’ traditional playing field New competitive – Direct banks and insurers are 4 threats rapidly growing among young, wealthy, and educated consumers – Retailers are expanding their offerings of financial products Impact of big data – Telecommunications firms are 5 on banking entering financial services products McKinsey & Company | 26 Copyright © 2012. All rights reserved
  • 28. 4 Non-bank players are emerging and infringing on lucrative niches previously dominated by integrated banks New products and services offered by new players Find the best prices Aggregate and optimize management of personal finances Make peer-to-peer payments Make mobile payments Protect against fraud ▪ New non-bank players are emerging in parallel with industry leaders thanks to innovative new technologies or business models or by taking advantage of regulatory changes ▪ New players often occupy specialized but lucrative niches, thereby threatening markets previously dominated by larger players McKinsey & Company | 27 Copyright © 2012. All rights reserved
  • 29. 4 Examples of non-bank players that infringe on traditional banking market segments Global retail banking revenue after risk costs1 by main revenue segment, and examples of non-bank players that infringe on each segment 2010 Specialty lenders Telecoms Lending USD ~1,200 billion Technology Insurers companies Bank account and Protection and Banking transactions products insurance USD ~500 billion USD ~50 billion Deposits and investments Retailers USD ~430 billion Postal services Specialized private banking players 1 Banking revenue after risk costs = net interest income + net fees and commissions - risk costs (to account for losses on delinquent loans, meant to capture “normalized” loan loss provisions) McKinsey & Company SOURCE: McKinsey Global Banking Pools | 28 Copyright © 2012. All rights reserved
  • 30. 4 Banks’ payments businesses are particularly encroached on by non-bank players Traditional payments area Traditional payments Consumer Payment Issuer Network Acquirer Acceptance Merchant businesses services device device services Information- Mobile POS Mobile POS Information- Consumer card based payments and payments and based transactions business acceptance acceptance business models models Remote payments and new currencies Other consumer electronic Remote payments and new currencies Deposits B2B payments and e-invoicing Business payments McKinsey & Company SOURCE: McKinsey Payments Practice | 29 Copyright © 2012. All rights reserved
  • 31. 4 Consequently, winning the battle to own the relationship with customers will be crucial for banks… Have Know and customers’ understand trust customers Owning the relationship Owning the with Be customers’ trusted relationship Collect data and customers partner to increase understand customers will be crucial loyalty and receptive- to tailor the offering to to propose ness to new products their preferences and new products needs and services Be visible to and thus to customers capture value Be the prime interface with whom customers interact to have their attention and be visible to them McKinsey & Company | 30 Copyright © 2012. All rights reserved
  • 32. 4 … because the majority of revenues come from owning EXAMPLE OF THE US PAYMENTS INDUSTRY the relationship and taking on risk within the value chain Segments that own the relationship and take on risk Payments industry value chain Transaction Acquirer Issuer Payment Network1 acquirer1 processor1 processor1 instrument issuer1 Credit Card-based Debit Prepaid ACH Non-card Wire electronic Money transfer Book transfer Cash n/a Paper-based Cheque Deposits and DDA n/a instruments ATM n/a Other n/a 1 Acquirer: financial institution that has the account with the payee (merchant or biller) to receive payments. Acquirer processor: operations functions for the acquirer. Network: institutional clearing and settlement. Issuer processor: operations functions for the issuer. Issuer: financial institution that has an account with the payor (consumer, buyer, etc.) McKinsey & Company SOURCE: McKinsey US Payments Map, Release Q4-2011 | 31 Copyright © 2012. All rights reserved
  • 33. 5 Banks will leverage the explosive growth of available data and of computational capacity to improve marketing and operations Context Implications Right-sizing the ▪ Technology enables leveraging of ▪ Banks will adjust their business models 1 big data through explosive growth to leverage the explosive growth of platform of available data and computational available data and computational capacity capacity to improve management, ▪ Leveraging big data can translate decision making, and operations Revenues and into improved decision making, – Banks will invest in analytical software to 2 profits shifting to management, and operations for take advantage of the information they emerging markets financial services institutions handle (e.g., buying patterns, financial – Big data has high value potential in information) Seamless multi- financial services – Banks will better understand their customers (profitability, levers of value 3 channel customer and influence, potential), remember their experience preferences, and define more granular customer micro-segments New competitive 4 threats Impact of big data 5 on banking products McKinsey & Company | 32 Copyright © 2012. All rights reserved
  • 34. 5 The explosive growth of available data and of computational capacity enables businesses to leverage big data Data generated worldwide Computational capacity of the world’s fastest computers Exabytes (= 1 billion gigabytes) FLOPS1 2, log scale 35,000 16 All the information stored 1E+19 Today’s fastest computers inside the US Library of are more than 10 trillion times Congress amounts to 1E+17 faster than those in 1960 <0.00025 exabytes 1E+15 1E+13 1E+11 7,900 1E+9 1E+7 50 110 1,300 1E+5 2000 2005 2010 2015 2020 1960 61 70 73 80 85 90 97 2000 09 10 2011 Available data will be characterized by its scale, distribution, diversity, and timeliness ▪ Scale: data sets will be massive, >1 petabyte (1 million gigabytes) in size, and built to be easily scaled up ▪ Distribution: data will come from and be distributed both within and outside the organization ▪ Diversity: data will be semi-structured, unstructured, or a combination of different data types ▪ Timeliness: data will be captured and analyzed in real time, allowing for immediate response 1 Floating-point operations per second 2 Rmax FLOPS SOURCE: IDC Digital universe study 2011 and 2010; Hilbert and López, “The world’s technological capacity to store, communicate, McKinsey & Company and compute information,” Science, 2011; www.vetta.org; McKinsey analysis; McKinsey Global Institute | 33 Copyright © 2012. All rights reserved
  • 35. 5 The financial services sector is likely to be in the best Bubble size denotes relative size of GDP position to leverage big data Moderate value potential Moderate value potential High value potential High value potential Low ease of capture High ease of capture Low ease of capture High ease of capture High Utilities Healthcare providers Financial services and insurance Natural resources Information1 Computer and electronic products Big Manufacturing Transport and warehousing data Professional services Real estate and rental ease of capture Management Construction of companies Wholesale trade index Admin, support, Accommodation and food and waste management Retail trade Other services Educational services Government Low Arts and entertainment Low High Big data value potential index2 1 Information includes software and internet companies 2 Determined by industry average of transaction intensity, amount of data per firm, variability in performance, customer and supplier intensity, and turbulence McKinsey & Company SOURCE: McKinsey analysis | 34 Copyright © 2012. All rights reserved
  • 36. 5 By leveraging big data, banks will better understand their customers, improve modeling, and guide decision making Predictive modeling Social network mapping Typical applications: Typical applications: identify estimate customer churn; key purchase influencers; develop the “next best quantify shifts in sentiments offer” for up-sell/cross-sell; estimate risk Neural networks Visualization tools Typical applications: Typical applications: detect fraud; perform visualize risk; understand diagnostics correlations ▪ Computational capacity for real-time use has grown from 0.004B MIPS1 to >6,000B MIPS over the past 20 years ▪ Business analytics software spend in 2009 was USD 26.1 billion and is expected to grow at a 7.6% CAGR through 2014 1 MIPS = 1 million instructions per second. By comparison, modern desktop/laptop computers have processors with ~20,000 MIPS McKinsey & Company SOURCE: McKinsey Global Institute analysis | 35 Copyright © 2012. All rights reserved
  • 37. Contents Overview of key trends Detailed questions for coop banks McKinsey & Company | 36 Copyright © 2012. All rights reserved
  • 38. 1 How can cooperative banks exploit their focus on customer satisfaction to gain market share? Context Questions to ponder ▪ As public banks What dimensions of customer satisfaction are of greatest importance to your members? face pressure to cut How does your cooperative understand the specific irritants for customers and their main costs, consumer A grievances with competitors (e.g., executive compensation and bonuses, large public bailouts to satisfaction banks, hidden fees, questionable mortgage approval standards)? initiatives are often delayed Which coop-specific attributes or values could be leveraged to address consumers’ ▪ Cooperatives also B dissatisfaction? Which criticisms can the cooperative model address? How strongly does the need to cut costs, cooperative model appeal to your consumers now? What is the promise to members and how but they have the can your coop make them feel like true owners? flexibility to sacrifice short-term returns How should your cooperative prioritize new investments related to customer satisfaction C vs. your current portfolio of initiatives? How can your coop ensure that consumers translate ▪ This flexibility could their dissatisfaction with public banks into actions in your favour? be used as a competitive How can your cooperative leverage your branch network and workforce, provide better advantage in D customer services, and further differentiate your coop from traditional banks? today’s environment How is it possible to ensure that your values and system resonate distinctly with members as some public banks begin to resemble coops in their marketing and E actions? How will public banks respond to criticism and adjust their models? Will they start encroaching on the cooperative model and, if so, how should your cooperative respond? What changes to your business model or image would attract new members? How can F the image and message be made clear and consistent throughout your organization? How can your coop ensure its image is distinct enough to differentiate it from competitors? McKinsey & Company | 37 Copyright © 2012. All rights reserved
  • 39. 2 Will cooperatives need to look for growth beyond their borders ? Context Questions to ponder ▪ Cooperatives must In what ways would your members benefit from international expansion (e.g., scale or develop a view on A market access)? How would the benefits of seizing rapid growth opportunities in emerging how globalization will markets percolate down to your individual members in the long term? affect their current What capabilities does your coop have that will help it to capture the benefits that an activities expansion into new markets would provide? What capital and flexibility is required? How B ▪ Banks and coops can your coop ensure the support of members in such expansions? How would you ensure your must decide whether coop has the required management knowhow or go about acquiring it? to expand abroad or What opportunities exist related to your current member base in which to invest talents focus resources and and capabilities to better match your members’ interests? For instance, how can your coop management locally C invest to improve customer service, grab market share from competitors, and/or expand your ▪ Cooperatives, offering to non-financial products? usually local, must Given competitors’ expansion initiatives, how will your cooperative’s decision to expand assess if their home or not affect the future competitive landscape? How will competitors who venture abroad market is saturated D gain a competitive advantage by leveraging economies of scale and by arbitraging labour costs and whether to optimize their back-office operations? international How can your coop ensure all relevant and available entry strategies are explored? For expansion is instance, will your coop form alliances with other small local cooperatives? How can it follow desirable E corporate members with international activities into new markets? How can it make a targeted ▪ Staying on the push in a new market by leveraging high-performing business units? sidelines of the How will the ability to attract top talent and create career opportunities for key personnel global market may be affected by decisions? Will the best talent in banking be interested in local players or will put coops at a F they aim for global organizations? What steps can your cooperative take to attract talent in strategic either scenario? disadvantage How will the cooperative sector be able to maintain its global market share in banking over the next decades as economic activity shifts to emerging markets? How will G cooperative banks maintain their current share of global banking revenue, or will the bulk of the rapid growth in emerging countries be captured by public banks? McKinsey & Company | 38 Copyright © 2012. All rights reserved
  • 40. 3 How can cooperatives’ branch networks preserve the advantage of proximity while remaining profitable? Context Questions to ponder ▪ Virtualization What are the alternatives to the reduction of your coop’s physical footprint to remain reduces the number profitable? How can your coop’s network be made leaner? How can incentives be found to of branch visits A attract customers to the physical branches and then retain them? While competitors view their ▪ Thus, physical branches as an avenue to cut costs, how can your coop use its as revenue generators? networks become less central to the How can your coop transform local branches from a fading channel to a competitive client relationship advantage? How can the geographical proximity of your branch network give your cooperative ▪ An oversupply of B a significant advantage over rivals and be used to engage members, even as more and more branches will put transactions and sales take place online? How can your coop capitalize on competitors’ pressure on all withdrawal from the physical space to strengthen the relationship with your customers? financial institutions, especially coops How could your branches become knowledge centres that provide truly personalized financial advice and planning? How will providing expert financial advice and support ▪ 2 options to consider C encourage local members to enter your branches? What potential exits for attracting a larger – Resize or member base by providing these services? restructure the network How could your branches expand their offerings to adjacent products and services that – Find a new role your members desire? How can your coop find and fill some of the gaps left by the shrinking for the branches D of the welfare state? Could your cooperative expand its offering to non-financial products and make branches or stores the local centres of cooperative activity (e.g., let lawyers use space to offer legal advice to members)? What new member needs could be addressed? How could potential synergies be unlocked within your coop’s current operations? How E large an impact will these synergies have on the value of new and existing offerings? Can these synergies significantly reduce the risk involved in providing a new offering? McKinsey & Company | 39 Copyright © 2012. All rights reserved