Альфа (англ) лучшее решение

Page 1

Cup Moscow 2014

Strategy for Setting Up the Middle Class

BusinessDucks Kulish Alina Kazankova Evgenia Lisienkova Tatiana Kiseleva Natalia


Business Ducks

Strategy review

Client Portfolio

Our customer-centric strategy includes knowing the customers, looking out for them and rewarding them Developing client segmentation

Our strategy

According to AS IS analysis we propose strategy aspects which aim to improve 4 major Key Performance Indicators

Services

Products

New and developed products New and developed services Marketing campaign

AS IS

3 strategy aspects aim to

Results

Appendix

Build loyalty and activity of existing clients

& Attract new clients

Key performance indicators Products:

AlfaBank current income sources:     

Major trends:  According to BCG, commission income is the potential accelerator of bank income growth  Passives are the most profitable channel for Alfa  Loans due to current crisis in Russia become more and more risky for bank

Channels

“Business Life” Package “Smart investor” Package “People like YOU“ “Sudden” Package Deposits

Services:  Personal Advisory Online Tool  Personal Manager  Cross Border Banking

Marketing:  Bank as investor  Book of Marvels  Law Agencies Support  Assets Management Seminars  P.O.S  Salary Cards  Online marketing

Affluent and MassAffluent Share in AlfaBank Portfolio

Financial products per client

Active clients in Affluent and MassAffluent sectors

up to 55% 2014

2017 +1 product

2014

2017 more 10%

2014

2017 up to 80

Client Loyalty Index 2014

2017


Business Ducks

Strategy review

Mass-affluent

massaff.>2.5 М р. affluent >20М р.

Client Portfolio

Services

Products

Channels

Client in 2017 *

Results

Appendix

Affluent

Young professionals (Looking to simplify their lives)

Used to be mass

Established professionals & families (Assuming more Responsibilities)

Prefer online channels

Interested in mortgage and car loans, saving for children’s education. May share aggregated bank account for the whole family Ivolvment into overall expenditure, its monitoring and adjustment.

Prefer face-to-face communication with personal manager

Pre-retirees (Planning for Retirement)

Interested in investment, need some online advice

Prefer to buy from recognized and trusted entities. Look for advice. Are ready to start saving significant share of income for secure and provided post-retirement life.

Ready to invest free assets into postretirement life, need personal advisor

Retirees (Preserve Wealth)

Need to preserve weatlh and split the budget carefully

Generally are prone to preserve wealth, rather than to grow assets. Tend to consolidate assets in one bank. Care about legacy. Require consultancy about managing finance or new products.

May be interested in investments

Suddens (got sudden sum of money and no idea what to do with it)

Have defined, expense items (eg. credit debt, flat renewal, travelling)

Lack of the knowledge and experience concerning investments. Human contacts to consult regarding asset/wealth management. Usually it takes around 1 year to decide how to spend sudden money.

Bankers’ wives (are mostly households)

Cashback shopping, health &beauty events

Manage finaces according to husbands advice. Cannot invest effectively, but spend effectively. May involve husband into class ivents thus prompt them to cooperate with a bank more.

Due to busy life-style they value products that simplify life. Tech savvy and tend to be self directed. High useage of investment & credit products.

Used to be massaffluent

Have more opportunities to invest but no tool/bank for that

Enjoy private clubs and events for socialite

Clients 2017 were segmented according to their preferences, needs and income so as to step away from product pushing and strive to understand the current needs of each customer based on his/her individual circumstances * BAI Executive report (march 2014) Engaging and retaining Mass Affluent Customers


Strategy review

Business Ducks

Client Portfolio

Services **

Mass-affluent

Somewhat conservative October 2011

July 2010

Before 2008

0%

Very conservative

Cross Border Banking (collaboration with banks in countries of customer’s interest) Forecast (2017)

Now

< 500000 euro

Treatmen t

Prestige

Business Trip

10,80% 10,10% 4,50% 1,20% Children Life

Residenc e

Purchase Purpose

Real Estate market changes in 2017: 1. Demographic changes create new market niches (Africa, Asia, South America). 2. Major players from developing countries. Construction Volume 28% 72%

Real Estate Cost 38,10%

28,50%

18,40%

500000 - 1,5 - 3 mln 3 - 10 mln 1,5 mln euro euro euro

Important for (Mass) Affluent: • Best tax treatment • Prestigious location • Proximity to banks with private assets

5,60% > 10 mln euro

Main directions** according to costs: Bulgaria, Thailand, Turkey, Greece, Spain, Portugal, Montenegro so on.

India, China, Indonesia, Mexico, Russia, USA and Canada Others

3. Environmental standard’s role going up. 4. Real estate role as in investment tool going up. Opportunities

39,80%

Investma nts

42,40% 33,60%

Vacation

70,80%

Development of the market Investment tool, trl $ into new directions will let 101,7 63,9 Alfa-bank easily open new branches and foreign partners. Perspective: main cross bank 2014 2020 in Russia.

«Banking the (Mass) Affluent»

Technologies

Moderate

Appendix

 Big Data - information about client, his financial position, transactions to develop suitable financial portfolio and support manager knowledge base.

Best practices

Very aggressive Somewhat aggressive

50%

No professional

Face-to-

help 1. Affluent prefer face-toFace 22% relationship 40% Consultations 34% face meetings with an advisor On-line 38% 66% 2. Affluent need guidance Advisor handle communica for me tion Manager recommends investment programs, 100% Deccumulation based on clients’ needs, Stage Clients 50% financial position, Accumulation expenditure, interests. Stage Clients 0% 3. Strong correlation between the age of Option of choosing a personal manager based on advisors and their client’s preferences to ensure closer relationships clients. <30 30-39 40-49 50-59 60+ All

Risk tolerance 100%

Results

Services are based on

Personal Manager

1. Recommendations of possible investment or credit programs, based on client’s assets and sphere of interest

3. Visualization of likely outcomes helps clients realize what impact of these investment on their well-being

Channels

Affluent

Personal Advisory Tool *

2. Mass affluent are rather risk-averse

Products

 Omni-channels – assets management online using mobile app or site, without visiting band departments.  Wealth Management –aspects of personal manager working process.  Everyday bank – forecasting aspects of personal advisory tool.

* Personal Advisory Tool Interface (Offer client to Invest or buy product «People like YOU»)

Strategy, degree of engagement in host countries are based on adapting for market forecasting 2017. Alfa Bank useless (strategy perspectives): 1. 750000 R per month withdrawal ATM; 2. Dual currency conversation; 3. Work only with $ and euro; 4. Do not have foreign bank partners; 5. Divisions only in USA, UK and Netherlands; 6. Card may be blocked abroad. All risks are bore by the customer.

One Year CB program completed: Equity

69% 2014

2015

2014

2015

Efficiency

5%

** See full analytical resources in Appendix

Services aim to support clients wherever he is whatever he wants maintaining his loyalty and attracting new clients.


Strategy review

Business Ducks

Mass-affluent “Business Life” package* 1. 2. 3.

Mass-affluent values his time due to busy job. But he wants to be involved into financial decision making. He wants to use Innovative tools allowing visualization and appreciates rich digital experience.

According to BCG commission income is the potential accelerator of bank income growth

Main features which summarize mass-affluent needs: ➔ ➔ ➔ ➔

Client Portfolio

1. 2.

750K cash limit Standard/Gold credit cards Deposits in 3 currencies Online-consultant

3.

Sudden package

Results

Appendix

Usablility Improvement

“Smart investor” package* Main features which give affluent as much financial freedom as possible: ➔ ➔ ➔ ➔ ➔ ➔

1.25M cash limit Gold/Platinum credit card Deposits in 5 currencies Personal manager Private events Partners’ bonuses

Affluent deposits are the most profitable line of Alfa-bank business. Lower deposit rates attract more Affluent Rank

Based on Big Data customer segments analytics “People like YOU” suggests potentially beneficial proposals concerming: investment, real estate, assets storage, stock market.

6 months

Channels

Deposits**

“People like YOU”

transfer

Products

Affluent

He wants to be as close to VIPstatus as possible. Not ready to spend efforts to understand product himself. That’s why appreciates consultancy from personal qualified manager.

Subscription product “People like YOU” accumulates information about people with similar income, occupation and interests.

Inheritance

Services

Bank

1 PromSvyazBank

Omni-channels NFC Voice management Big Data - personal analytics Remote control of manager online

Deposit rate Min deposit (rub) 11,6% 5M

2

MDM-bank

11,5%

30K

3

Alfa-bank

11,0%

3M

Bank wants to accelerate clients’ financial decision-making process:

Opening an individual account

3 months

Development of investment plan

?

BANK’S TARGET

➔ ➔ ➔ ➔

Personal investor Personal manager (for Affluent) Investment seminars (for Mass-affluent) Alfa-bank “Basic” package

*see full package description in Appendix **see full deposit comparison in Appendix

Aim of new and advanced products is to maintain a competitive advantage over other banks and raise Alfa-Banks’ commission income.


Strategy review

Business Ducks

Client Portfolio

Services

Products

German share portfolio

Affluent Growth

↑20,3%

Corporations

Banks Inst agents

57%

27% 4%

Foreign Other

↑16,95%

3%

86

• Are traceable through law agencies • Depend on death and divorce rates

Common source of sudden wealth: • Inheritance • A divorce or lawsuit settlement • Lottery winnings • Sale of a business Death Rate

New clients

14,00

2015

13,00

2016

2017

20 000

Divorce Rate

81

80

 (Mass) Affluent  Offline

Law Agencies Support

“Karaoke ” friends Friend under same circumstanc es Introduced tax consultant

Assets Management Seminars

School friends

Manageme nt company Introduced lawyer

1. «Suddenly rich» lacks human contacts and participating communities 2. 70% of «suddenly rich» going to broke within a year of a windfall

10 000 Аffluent

Мass Аffluent

Appendix

 Choose  Choose

POS

1. Major products for Affluent and Mass-Affluent: ➔

Сars over 2M rub

Mortgage

Gold/Platinum credit cards

Online marketing Alfa-Bank online marketing campaign is alloted for entire real segment and is targeted to products rather than to potential customer

2017

Additional program of private events attracting new customers on the basis of the physical channel (magazines, personal envelopes)/ Growth of current clients loyalty.

2017

More new clients, more active current clients.

 (Mass) Affluent  Offline

12,00

Spending spare time by Affluent 33

2014

↑30,9%

2014

Mass Affluent Growth

Case information example of the banks personal investments in physical distributions (TV, magazines). Increased clients’ confidence in bank’s invest professionalism.

5,50 5,00 4,50 4,00

2017

Коллекуион ирование

2014

Individuals

Affluent Growth

Same interests

Клубные встречи

41%

Show others your investment

43%

Отдых

19%

Book of Marvels

Aim of visiting private events

Путешеств ия

6%

 Affluent  Offline

Bank as Investor

Results

Upgraded

New  (Mass) Affluent  Offline

Channels **

3. Consecutive seminars for people who are interested in assets management/investment or taxation 4. Establish reliable relations with clients

2. In P.O.S for affluent there is a point to focus on auto 3. Contracts with auto-dealers may make it cheaper for client to buy a car

 (Mass) Affluent  Choose

Salary cards

1. Due to Federation Council’s law Russians can choose wages bank themselves Willingness to change since 2015. salary bank 2. Part of wealthy employees are ready to switch bank to more comfortable in everyday needs

1. BIG DATA fulfills the necessity in extending segmentation, customising advertising to client’s needs

. 2.Contracts with Google and Yandex may represent personalised programmes according to client’s search

Are Don't ready to want to switch switch 39% 61%

3. Alfa-bank is ready to take into account personal client’s needs (not corporate’s ones like before).

Affluent and Mass-Affluent clients do rarely trust banners, so marketing strategy consist mostly from physical channels, simultaneously personalizing online tools.


Business Ducks

Strategy review

Road Map

Client Portfolio

Services

Products

Channels

Results *

Appendix

Results by 2017 Cost of Product Range Optimization

50K Rub

Cost of Service Optimization

50k Rub 60K per manager

Cost of Marketing Campaign Optimization

180K Rub 3k Rub per event

Total Affluent

74 694

Total Mass Affluent

230 000

Operational Income (Mass)Affluent

4 115 M Rub per month

Active clients in (Mass)Affluent sectors

61%

Total active affluent income

4921 M Rub

(Mass)Affluent Share in Alfa-Bank Portfolio

at least 54%

* See full calculations in Appendix, slides “Results. Income” and “Results. Costs”


Curriculum Vitae

Business Ducks

Teammates - Ducks

HSE, Business Informatics, 4th year student  Google Business Case Competition 2014, Finalist  Championship AlfaSparta, November 2014, Semi-finalist

HSE, Business Informatics, 4th year student  Championship AlfaSparta, November 2014, Winner

HSE, Business Informatics, 4th year student  Google Business Case Competition 2014, Finalist  Championship AlfaSparta, November 2014, Semi-finalist

HSE, Business Informatics, 4th year student  Competition «CIMA Global Business Challenge 2013» Russia, Finalist  Business competition «CIMA Global Business Challenge 2014» Russia, 3d runner up


Appendix. Slide «Services».

Business Ducks

Additional Information Price category Low

I II

LowMiddle MiddleHigh High

III IV

Resources Personal Advisory Tool:

Residential Average price, euro

Countries

40-100 thousand

Bulgaria, Thailand, Turkey

100-250 thousand

Germany, Greece, Spain, Latvia, Finland, Montenegro, Czech Republic

250-500 thousand

Cyprus, Portugal, Croatia

500 th - 1,5 mln

 Deloitte. The Mass Affluent Market Changed Perspectives

2500

2000

1500

1000

500

0 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 (2) (3) (4) (1) (2) (3) (4) (1) (2) (3) (4) (1) (2)

 Spectrem Group research overview: Today’s affluent investors: insights and opportunities  Accenture. The “Greater” Wealth Transfer: Capitalizing on the Intergenerational Shift in Wealth

Cross Border Banking

United Kingdom, Italy, USA, France

Number of housing purchases abroad by Russian habitants

Personal Manager:

Now

Forecast 2017

 Analytical report Tranio.Ru: The most popular countries and regions for housing (2014)  Analytical report Traino.Ru: Value of real estate, russian investments into foreign housing (2014)  Importace for (Mass) Affluent report Traino.ru (2014)

 Main tendencies and forecasting of real estate market for 10 years by Tranio.Ru (2014)  Private capital is on going up for real estate budget in Russia (2014)

Making Cross-Border Banking Work for Africa  Cross-Border Banking An Accenture Study of Cross-Border Mergers & Acquisitions in Banking By Bruce Kiene, David W. Helin and Brad Eckerd  Alfabank.ru


Appendix. Slide «Products».

Business Ducks

Comparison of possible Deposits in Russian Banks according to Banki.ru

Bank Промсвязьбанк

Deposit Премиальный процент

Rate 11,6%

Min Sum 5000000

Term 3 года

Income 8322176

МДМ Банк МДМ Банк

Лидер МДМ – Доходный (в конце срока)

11,5% 11,35%

30000 1500000

3 года 2 года

8193417 6810000

Альфа-Банк Альфа-Банк Росбанк

Победа Премия 150 лет надежности

11% 11% 11%

3000000 3000000 4000000

3 года 3 года 3 года

7777544 6600000 6600000

Промсвязьбанк

Премиальный процент (мультивалютный)

10,9%

5000000

3 года

7736378

МДМ Банк

МДМ – Доходный (ежемесячно)

10,6%

1500000

2 года

7449146

МДМ Банк

МДМ – Пенсионный

10,6%

1500000

2 года

7449146

Россельхозбанк

Золотой (в конце срока)

10,6%

10000000

3 года

6360000


Business Ducks

Appendix. Slide «Products».


Business Ducks

Appendix. Slide «Products».


Appendix. Slide «Channels».

Business Ducks

Main Calculations

Resources

Bank as Investor Index

Book of Marvels

Affluent

Mass Affluent

Active clients

135 000

600 000

Active clients in investment activities Percentage of covered client interest investment by bank Client attracted into investment activities Total growth

101 520

376 800

27%

27%

27 410, 4

101 736

20,3%

16,9%

Index

Affluent

Active clients

135 000

Passive clients

≈ 87 000

Interested in private events Interested in investment

Noruma Research Institute. Marketing for Newly Wealthy Clients Marketing

2016

2017

1 010 000,00

1 020 100,00

1 030 301,00

Mass Affluent

5 050 000,00

5 100 500,00

5 151 505,00

5,00%

10,00%

15,00%

623,57

1 212,92

1 770,89

2 240,52

4 380,98

6 431,31

New Mass Affluent Clients**

Death/Divorce Rates 2011

2012

2013

2014

2015

2016

2017

Death Rate

13,50

13,30

13,20

13,10

13,00

12,90

12,80

Divorce Rate

4,50

4,50

4,60

4,70

4,80

4,91

5,01

*Percent of Law Agencies, with which bank has established relationships **Assuming, 70% of Law Agencies' clients become bank's clients

Russian Federation Federal State Statistics Service

30,9%

Affluent Law Agency Net Coverage* New Affluent Clients**

Channels for Suddens

40 167, 9

Total growth

Seattle Business Washington's Affluent are Happy and Spending Again Market Wired Researches

70 470

Law Agencies 2015

Channels for (Mass) Affluent

Rambler Finance «Богатые тоже платят» (2014) Российская газета «Смена банка владельцами зарплатных карт»


Appendix. Slide «Results». Costs.

Business Ducks

Strategy aspects

Cost

Comment

“Business Life” Package “Smart investor” Package “Sudden” Package

0

Depends only on Bank

“People like YOU“

50K

App Optimization cost. Big Data already exists – so, Is free

Deposits optimization

0

Depends only on Bank

Personal Advisory Online Tool

50K

App Optimization cost. Big Data already exists – so, Is free

Personal Manager

60K*450

Managers Salary * 450 managers

Cross Border Banking

?

Depends on partnership

Bank as investor

60K per month

Cost of column in journal or time in investment TV programmed. If online website – only salary of journalist and of advisor

Book of Marvels

3000\event

Price of one event * N of events

Law Agencies Support

?

Depends on partnership

Assets Management Seminars

10К\seminar * 12 = 120K

Cost of professional per seminar * N seminars a year

P.O.S optimization

0

Depends on partnership

Salary Cards optimization

0

Depends only on Bank

Online marketing

0

Big Data and Online Marketing campaign already exist. Only cost of integration.


Appendix. Slide «Results». Income.

Business Ducks

Main Calculations Growth in clients

Main Results  Operational Income per month: 7 017 M

Salary Projects

30% of clients

 Current Operational Income from Affluent: 2 834,9 M per month

POS + Mortgage

20% of clients

 Operational Income 2017 from Affluent: 4 115 M per month

Other Channels

50% of clients

 Parts of Active Clients is rising from 51% to 61% according to new

Other Channels

strategy, so Total Active Affluent income is 4 921 M per month  Total Operational Income 2017: 9 120 M per month

Bank as Investor + Book of Marvels Affluent

33 788 (as they can be the same from both channels)

 Current Affluent/Mass Affluent percentage: 40%

Bank as Investor Mass Affluent

101 736

 Total percentage in 2017 according to new strategy: 54% (54, 1%)

Law Agencies Affluent

3 559

Law Agencies. Mass Affluent

12 810

Total Affluent

37 347

Total Mass Affluent

12 810

Total Sum Total Affluent

74 694

Total Mass Affluent

230 000

Total Affluent Income

727 M Rub per month

Total Mass Affluent Income

553 M Rub per Month


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