Title: Personal Financial Services
1Personal Financial Services - Achieving growth
Peter Hawkins Head of Personal Financial
Services 18 July 2000
2Todays agenda
Specialisation and growth 1) Product
businesses 2) New customer businesses 3) Tomor
rows growth
31) Specialist product businesses
- Cards
- Mortgages
- Funds Management and Insurance
- anz.com
-
4In November 1997 we separated product from
distribution
- It has delivered
- Higher profits/ lower costs
- Strong individual product businesses
- Doubled sales
- 200,000 more customers
- Increased share of wallet
- More recently, customer segmentation was overlaid
on distribution
5Financial performance
Income
Profit
m
Net Interest Margin (LHS)
Non Interest Income (RHS)
Provisioning
m
Costs
Cost to Assets (RHS)
Cost to Income (LHS)
Actual Credit Costs
Economic Credit Costs
6Cards
Share of Personal Profit
Key Initiatives and Strategy
- Continue to improve and leverage QTV programs
- Build leadership in e-commerce acquiring and
other high growth merchant acquiring segments - Implement common operating platform (Vision Plus)
in Australia and New Zealand - Acquisition through cross-sell to other Personal
customers - Leverage acquisition of EFTPOS New Zealand
Cards Growth AUS NZ Cardholders
(m) 2.0 0.3 Cards Issued (plastics) 2.9 0.4 Outsta
ndings (b) 2.4 0.3
(Growth) 35 12
7Mortgages
Market Share
Share of Personal Profit
Apr-00
Key Initiatives and Strategy
New Sales by Origination Source 1H 2000
- Leading products
- Broad distribution
- Active database marketing campaigns
- Cost management
- 4 account processing systems into 1
- 4 processing centres into 2
- 24 reduction in cost/asset ratio (1st half)
- 28 annual increase in Auto Approval rate
- Funding flexibility
Origin 14
ANZ Network 63
Third Party Introducers 23
ANZ Branded
8Mortgages
Channel Comparison
New Lending Mortgage Margins
Origin
TPMI
ANZ Network
Drawdowns ()
Drawdowns ()
- Cross sell of third party mortgages has been
effective - 86 customers have an ANZ deposit account
- 51 have an ANZ credit card
Average Loan Life EVA
Index 100
9Funds Management
Funds under Management
Share of Personal Profit
m
15000
10000
5000
0
Mar-99
Sep-99
Mar-00
Total Retail FUM inc Gateway
Total Retail Wholesale FUM
- Strategy
- Leverage bank distribution strengths/customers
- Optimise products and features
- Reposition Asset Management
- Leverage off universal a/c and targeted marketing
to grow IFA channel
- Ranking
- Assirt Retail FUM 7
- Assirt Retail Inflow 10
- New experienced management team in place
10anz.com
Active Users
Internet Banking Signups
Internet Banking
Phone Banking
Internet Banking Users of Total Relationships
Internet Transactions ( of Total)
Source Ord Minnett and Roy Morgan Research
11anz.com
Online Applications - Credit Cards
Internet Banking Customers
Number of Products
myanz.com
Lending
Deposit
Profit
Attrition
Balance
Balance
- Their share portfolio via ANZs My Portfolio
service - Sport news
- Search engine
- Weather
- Favourite links
- Travel information
- Their ANZ account balances
- Australian and overseas news
- Stock prices, market wrap and watchlist
- Horoscopes
- Entertainment news
- ANZ products and financial tools
ANZ ETrade
12myanz.com
13The separation of product from distribution has
driven strong performance across products while
increasing the network effectiveness
Index
142) New customer businesses
- Wealth Management
- Small Business
- General Banking
15We are now moving from a product/ distribution
focus to product and customer focus
3 Product Businesses
3 Customer Businesses
anz.com
Cards
Mortgages
Wealth Management
Small Business
General Banking
Funds Management
Personal eCommerce
- Creation of three customer businesses
- wealth management
- small business
- general banking
- Keeping strong product monolines
- operational efficiency
- functional expertise
- third party distribution
- Drive to market leadership for anz.com
Small Business
Wealth Management
General Banking
16Develop a Wealth Management offer that will truly
differentiate us
Share of Personal Profit
- Strategy
- Schwab-like offer, but with higher level of
lending - extensive third party offering for FM I, in
addition to proprietary FM product - heavily bricks-and-clicks
- underpinned by Universal Account CMA
- offers customers choice from a menu of options
- advice
- product
- value
Share of High Net Worth Customers
CBA
Westpac
ANZ
NAB
St George
Source Roy Morgan Research
17Recapture Small Business market share
Share of Personal Profit
- Strategy
- Make separate Business Unit for focus
- end-to-end product and service delivery with
control over all levers of business - full relationship-based offer with
segment-specific products - develop third-party originator channel
- coalesce small business e-Commerce
- integrated seamless offering across relationship,
branches, call centres, internet - 50,000 customers already online (20)
Small Business Share of Debt
Source Greenwich Associates
18A General Banking business focused on continuing
to improve productivity and the customer
experience
- Strategy
- optimise sales and service delivery for general
banking customers - formation of unit with accountability for
infrastructure supporting majority of customers - control over both distribution and transaction
products creates single responsibility for
customer experience and migration to
self-serviced channels - leverage information analytics capabilities for
sales efficiency
Share of Personal Profit
Share of Mass Customers
Branch Activity
CBA
WBC
NAB
ANZ
St George
Branch Withdrawals (m)
No. A/cs (m)
Transactions per A/C
193) Tomorrows growth
20The CRM capabilities we are building deliver a
comprehensive, end-to-end revolution of the
customer experience and relationship
- Create a seamless customer experience across
channels, products, service and sales - Recreate relationship management by providing
insightful customer information at all touch
points - Change the selling paradigm when theyre in
your space, be ready to sell - Focus proactive selling through rich profiling
- Align credit and pricing decisions to the risk,
behavioural, and value profile of the customer - Deliver straight through processing to both
improve service levels and reduce costs
Our Objectives
21The customer database provides a mature data
warehouse environment
- established 1996
- group-wide coverage
- comprehensive customer and product data
- customer profitability
22Campaign management provides comprehensive data
analysis and modelling
- continuous marketing capability
- Valex campaign management tool
- multiple daily targeted campaigns
- trigger events
23The customer decisioning engine provides central
customer management capability
- Strata software decision engine
- sophisticated models to
- profile customers
- predict behaviour
- create actionable decisions
24Customer value drives how the customer base is
segmented and managed
- Examples of customer initiatives
- propensity of buy models to target offers to best
prospects - attrition risk predictors to get in early if good
customers look shaky - target offers of better sales and service to
qualifying customers
25Enterprise factory operations support
differentiated selling and servicing by customer
segment
- Examples of operational decisions
- make better credit assessments, for a new card,
or transaction authorisation - replace a one size fits all approach to
collections with a segmented approach
26Customers are afforded multiple access channels
and managed to maximise relationship value
- Sales and Service Platform
- browser based
- Getronics
- multi-channel
- Processing efficiencies and enhanced customer
experience
27This is a substantial program which will deliver
end-to-end transformation
- reengineering and automating servicing and credit
fulfilment processes - total capital investment in excess of 200
million - deployment of over 100 million in improved
infrastructure to deliver a paperless environment - communications bandwidth to branches
- specialist peripherals such as scanners
- high performance workstations at all touchpoints
- windows 2000
- middleware
- payback of about 2 years
- sales uplift of 5 in business case
- other organisations have experienced up to 25
uplift - implementation begins November 2000, completed by
end 2001
28Summary Personal Financial Services
- Specialist Product Businesses well established
- Customer Businesses being elevated
- Capabilities being built to drive tomorrows
growth