Росбанк (англ) лучшее решение

Cosmos

TOWARDS BUSINESS: TOWARDS BUSINESS: ENTREPRENEURS SEGMENT MARKET SHARE EXPANSION STRATEGY ENTREPRENEURS SEGMENT MARKET SHARE EXPANSION STRATEGY

Petr Gnatyuk

Tatiana Suslova

Valery Danilik

Nikita Trofimov

Moscow State University of International relations

Moscow State University of International relations

Gubkin Russian State University of Oil and Gas

Moscow State University of International relations

ppp@gmail.com

tatyana.sus93@gmail.com

valery.danilik@gmail.com

5264305@gmail.com

+7(916)6677555

+7(915)3975725

+7(985)1841889

+7(903)5264305

Working experience Financial Analyst, Societe General, Rosbank, Capital Market & Investment Banking Case Championships: Semifinal at the VII Championship Changellenge Cup Russia-2014.

Working experience: internship at the Marketing Department at SAP CIS in Moscow.

Working experience: Team Assistant, McKinsey&Company

Working experience: Analyst at Joint-Stock Bank "Project Financing Bank“.

Case Championships: Semifinal at the VII Championship Changellenge Cup Russia-2014

Case Championships: Semifinal at the VII Championship Changellenge Cup Russia-2014

Case Championships: - 2nd place at KPMG and Bolshoi Theatre competition - Final at Alfa Bank Championship.

Forecasts

Audience

Channels

Anchor Products

Operating Efficiency

Bundled Services

Loyalty

Summary

MSE segment being oriented on transactional services is gaining momentum with the support of the Government which will result in 42,1% share of Russian GDP in 2017 +4% p.a.

42,1%

100

Cash management

7

37,5%

Payments Securities services

25

Trade

27 41

13% 35% 23%

30% 2014

2017F

Change in share of MSE in Russian GDP

Wholesale revenue

Investment banking

Lending and Capital Deposits markets

Transaction banking

Wholesale banking revenue breakdown, %

Due to unfavorable macroclimate in Russia and increasing pressure on Russian large companies MSE is going to be the main driver of GDP in 2017 •

Source: Federal State Statistics Service data, Team analysis

Transactional revenues account for 40% of the world’s banking industry in 2013 and would be make up 80% in 2017 3

Forecasts

Audience

Channels

Anchor Products

Operating Efficiency

Bundled Services

Loyalty

Summary

Rosbank should focus on transactional services in Trade Industry to gain maximum income from MSE segment Other Manufacturing

15.680 17.654

Small

Credits

9

Real estate 11

Deposits

58 Trade 11

+13% 2013 18.831

11

Construction

Transactions

21% 36% 57%

2017F

MSE Total revenue breakdown by industry

Trade industry needs for banking products*

23.461

Micro +25%

Dynamics of Revenue by MSE segments

Micro business in Russia is likely to grow almost two times faster than Small enterprises by Total revenue until 2017

•

Source: Federal State Statistics Service data, Team analysis

Trade industry is the most mass and perspective segment for banking services, as it accounts for 58% in terms of Total Revenues.

In order to gain substantial profit from trade industry with the focus on mass services, Rosbank should concentrate on the developing of transactional services

*Appendix 1

44

Forecasts

Audience

Channels

Anchor Products

Operating Efficiency

Bundled Services

Loyalty

Summary

Usage of media platforms will help Rosbank to catch up on the lag and attract 4,100 clients per year until 2017 to effectively manage business to find out new partners

The percentage of entrepreneurs using Internet and social media in business

4,100

Partnership

• Mass media announcements • Discussions of news • Government news and events

to advertise business; to find out news about market 33-44 Years old

to learn bonuses from banks and government.

Using

• Special publics for MSE • Reviews of latest business technologies • for searching partners

82%

Not using

18% 86%

Advisory

Measures

Raiffeisen Uralsib Alfabank 2% 7% 3% 17%

VTB

71%

Sberbank References of credits to SME by Banks in web – No Rosbank here Source: «OPORA Rossii» research 2013

• Publishing Success Stories • Platform for searching partners

• Using publics of business events to find out potential clients • Using pages for identifying needs

• comments of Rosbank analysts to the latest bills • Publishing Success Stories • Using pages for publishing the bank news and events

4,100 every year 5

Forecasts

Audience

Anchor Products

Channels

Operating Efficiency

Bundled Services

Loyalty

Summary

«Successful Start» integrated with bundled services provide the opportunity for Rosbank to penetrate extremely prospective market and attract 25,500 new clients by 2017 As franchise market grows steadily +45,1% p.a.

«Successful Start» rates & terms are more favorable for entrepreneurs going in line with Settlement & Cash services

111.624

76.515 25.194

2013 2016F 2017F Franchise market growth rate

-1.0%

-2.5%

from Interest Rate

from Settlement & Cash services

Lower collateral requirements

partnership

Only a few banks provide such service

«Proof of Concept» *Pilot Project…

Rosbank

1

Raiffeisen

1

Vokbank

1

Sberbank

67

Number of franchise partners

In Moscow and in the Krasnodar Region in 2015

• Long-term relationship • Low risk clients • Transaction income

Source: Russian Franchise Association report 2013, team analysis, Appendix 3

& 25,500 New Clients

Experienced entrepreneur • Need settlement & cash • Want to expand

Fresh-entrepreneur • Want to start a business • Need money &consulting 6

Forecasts

Audience

Channels

Anchor Products

Operating Efficiency

Bundled Services

Loyalty

Summary

Adding entrepreneurs' funds to the operating accounts takes them to much time and efforts.

Notice of departure service is to reduce waiting 6 times from 30 minutes to 5 minutes for encashment.

How does it work?

Solution – Notice of departure Online-bank (mobile app)

A client needs to add some money to the operating account

Customer Manager (SMS)

ONCE a week… an average client visits the bank to add money to the account and has to queue

New function in mobile app

96 years less…

A client goes to the bank with cash A client has to queue

Encashment is too expensive Queues are so long

our clients will spend in queues in 2014

A client can send SMS to a Customer Manager in order to inform him

30 min in a queue several times a month •

Result

Source: Team Public Option Poll among MSE entrepreneurs and analysis

Trustful relations… between the bank and a client

5 min for encashment 77

Forecasts

Audience

Anchor Products

Channels

Operating Efficiency

Bundled Services

Loyalty

Summary

«Basic» and «Premium» packages with specially integrated brand-new anchor products for Micro and Small segments will increase an average products usage per client to 4.4x and double the annual profit from one customer by 2017 “Basic” Package

Brand-new Anchor Products  Franchising

1. Settlement & Cash services

Operating efficiency

3. Dedicated Client Manager

 Notice of Departure

Micro

100,5 +102%

49,8

50 0

“Premium” Package

Specific Field -> Specific Products Specific products requirement by field

1. Settlement & Cash services

Manufacturing: - Machinery loans - Expo participation loan

3. Dedicated Client Manager

Trade: - Commercial vehicle loan - Import insurance

4. Saving products

Agriculture: - Machinery and warehouse loan - ST and LT support loan

2. Online Banking & Remote services

•

150 100

2. Online Banking & Remote services

Small

200

5. Payroll services

Source: Team analysis; Roland Berger Strategy Consultants research on SME

Services: - SME project finance loan - Women entrepreneur loan

1

2

2,5

3

4

4,5

5

6

7

Increase in income per client depending on the number of products consumed +1,0% -1,5%

-1,0%

98,5%

99,0%

Discount

-1,5% 100,0%

Price

98,5% Settlement Cash

Payroll

Saving products Possible discounts and extras on Service Rates if bought bundled

88

Forecasts

Audience

Channels

Anchor Products

Operating Efficiency

Bundled Services

Loyalty

Summary

Loyalty strategies of the bank will help to decrease the percentage of clients who leave bank by 5% and the percentage of clients who become inactive by 10% 1. Management of relations between clients: Client A has problems with the Business

Bank (Manager) as a Mediator helps business to find each other and makes clients loyal

20.835

Inactive Client B has resources to resolve this problem

Active

176.515

115.927 25%

10%

81.423

75%

2. Training programs ⃰ for micro and small businesses in the bank’s business centers: The life-cycle of the client relations with bank

13 business centers

20 business centers

1.Activation 2.Dormacy 3.Renewal 4.Retention

3. Relationship/access to a bank Customer Manager.

• • • • •

90% Clients 2014 New clients Leavers Clients 2017 Total clients base with the impact of Loyalty Management

As a result of conducting loyalty programs the percentage of clients who leave bank will leave by 5% and the percentage of clients who become inactive by 10%

Giving advice on business topics Financial, law and tax consultations Preparing a client’s financial statements Private meetings with clients Analysis of business experience of clients

Sources: Rosbank reports and official sites; IFC Advisory Services - Customer Management in SME Banking A Best-in-Class Guide – 2010;

25% 15%

10% 5%

2014

2017F

Clients who become inactive Clients who leave the bank

*Appendix 4

99

Forecasts

Audience

Channels

Anchor Products

Operating Efficiency

Bundled Services

Summary

Loyalty

Brand-new Anchor Products integrated with original Service Packages and innovative clients attraction channels are to increase Rosbank share in «Entrepreneurs» segment to 5,5% in terms of revenues and to 4,5% in terms of clients 200 150

100,5

100

49,8

50

+102%

0 1

2

2,5

3

4

4,5

5

6

7

Increase in income per client depending on the number of products consumed

20.835

An average products consumption per client from new Bundled services

Total Income per client increases twice

+65% p.a.

18.335.705

Segment-Oriented Loyalty Measures together with the Anchor Product and basic Rosbank services is to double Total Clients Base by 2017 Clients 2017

to 176,5k

Total clients base with the impact of Loyalty Management •

+25,5K New Clients

Settlement & cash + 9,1k

100,5k

176.515

81.423

New clients Leavers

Franchising in line with Bundled Services is the brandnew anchor product with the impact by 2017 of

Package

4.4x

115.927

Clients 2014

Loans +16,5k

Source: Federal State Statistics Service data, Team analysis, Appendix 2

2,4% 4.067.895

2,8% 5,5%

97,6%

97,2% 94,5%

2014 2017F Total revenue

4,5%

2014 2017F Market share by revenue

95,5% 2014 2017F Market share by clients

10 10

Appendix 1 Micro

Small

Settlement and cash services

+

++

Bundled services

++

+

Financing

++

Saving products

Products requirement by segment

Manufacturing

Trade

Agriculture

Services

Non-working capital financing

++

+

++

+

++

Leasing

++

+

++

+

+

++

++

+

++

+

Trade finance

-

+

Provide delay of payment of principal debt and interest

Payroll programs

+

++

Saving products

++

++

+

++

Import factoring

-

-

Conversion operations

+

+

-

++

小ash-management

-

-

Documentary operations

++

+

-

+

Leasing

+

+

Import factoring

-

-

-

+

Factoring

-

-

小ash-management

-

++

-

+

Banking services for private persons (employees)

+

+

Factoring

-

++

+

+

Risk Management products

+

+

-

++

Risk management products

+

++

Online Banking & Remote services

++

++

Online Banking & Remote Services

++

++

+

++

Specific products requirement by field

++ In great demand + In demand - Not in demand

11

Appendix 2

2014 2015F 2016F 2017F Change 2014-2017 CAGR, 2014-17 Micro(IND) Micro(LEG) Small Total Micro(IND)Micro(LEGl)Small Total Micro(IND)Micro(LEGl)Small Total Micro(IND)Micro(LEG) Small Total Number of clients 12740 57564 11119 81423 15288 77711,4 11674,95 104674,4 18345,6 104910,4 12258,7 135514,7 22014,72 141629,0265 12871,6324 176515,38 217% Yield per customer, %/month 7,47 3,38 4,43 4,16 8,964 4,563 4,6515 5,22 10,7568 6,16005 4,884075 6,67 12,90816 8,3160675 5,12827875 8,66 208% Revenue 1142013,6 2334795,84 591086 4067895 1644500 4255165 651672,4 6551337 2368079 7755039 718468,8 10841587 3410034 14133558,53 792111,825 18335705 451% 103,87596 Clients 2014 2015F 2016F 2017F Our share 2,8% 3,3% 3,8% 4,5% Micro(IND) 0,5% 0,6% 0,7% 0,9% Micro(LEG) 3% 4,1% 5,4% 7,1% Small 4,7% 5,0% 5,3% 5,5%

21% 20% 46%

Revenue Our share Micro(IND) Micro(LEG) Small

2014 2,4% 0,8% 2% 4%

2015F 2016F 2017F 2,9% 3,9% 5,5% 1,0% 1,4% 1,9% 3% 6% 10% 4% 4% 5%

12

Appendix 3 Franchise Retail Services Food others Total (LE)

New franshise (LE) Franchise with loans necessity (LE)

Annual growth

2012

2013

2014

2015

2016

2017

57%

8600

13502

21198

33281

52251

82035

14%

4600

5244

5978

6815

7769

8857

16%

2800

3248

3768

4371

5070

5881

30%

4000

5200

6760

8788

11424

14852

20000

27194

37704

53255

76515

111624

91 624 54 974

Settlement & cash services necessity with Rosbank (LE)

9 098

LE using bundled services (Loans&Settlement and Cash)

4 947

Source:

13

Appendix 4 The bank’s strategy to indicate and manage clients who is going to leave the bank or become inactive: Segmentation of clients who become inactive or is going to leave the bank:

The bank’s offers and activities are classified in accordance with the status of a client:

Reactive offers (client has decided to leave) the bank:

Performing Clients who do not show signs of credit deterioration Watch Clients who require attention even if payments are still regular; Delinquent Clients in default and typically taken over by collections and recovery functions.

• Analysis of portfolios; • Analysis of competitors´ offers; • Analysis of a client’s banking experience; • Access to new services and bonuses; • Activities of Customer Manager.

Proactive campaigns (before a client decides to leave): • Management of relations between clients; • Activities of Customer manager; • Training programs; • subsequent monitoring of customer activities; • analysis of competitors´ offers, .

Training programs in business centers in order to inform clients to the bank products and services and develop their financial loyalty: Training programs

Content

Lectures, workshops

- Presentations of consultants, business couchers, and partners; - At times in partnership with third parties: universities, nonprofits; - Interactive finance and management presentations.

Seminars

- Lectures are combined with break-out group sessions to share best practices among the SMEs (Success Stories); - Seminars to train SME managers in the areas of HR, Marketing, Finance, Operations, and Personal Productivity Skills.

Consultations

Advice and guidance through business clubs or through partnership with business mentors and coaches.

Source: IFC Advisory Services - The SME Banking Knowledge Guide - 2010; IFC Advisory Services - Customer Management in SME Banking A Best-in-Class Guide – 2012.

14

Proof of concept Pilot project

Appendix 5

To select the location of the pilot project we have analyzed all the regions of Russia according to 3 parameters: • • •

State support for MESs The growth rate of the franchise business Representation in the region Rosbank City

Investment Rate

We have also analyzed the representation of franchise business in these regions

Types of franchises Rosbank branches

Government support for MSE

1 – Moscow

A1

>90

1,255 mln rub

2 - Krasnodarskiy Krai

13

800 mln rub

3 - Tyumen region

A1 3B1

8

400 mln rub

4 - The Republic of Tatarstan

A1

9

1,800 mln rub

5 - Chelyabinsk region

2B

7

500 mln rub

The most profitable region for the launch of the project is Moscow and Krasnodar region

Non-food retail Equipement Clothes, shoes, accessoires Entertainment Parfumery and cosmetics Gifts/Souvenirs Public catering Coffee/Tea Fast food Food retail

Manufecturing Equipement Services Real Estate Self-development

Krasnoda r Tatarstan Tumen 8

2

5

15 7

10 4

12 4

13 6

9 13

2 2

6 12 10

1 10 12

4 9 6

4

2

4 5

2 6

2 2

Total 90 69 48 The most prospective strategy for pilot strategy is to penetrate Krasnadar market with franchise partners in the non-food sector (clothes, shoes) and public catering (coffee-tea) Source

federal portal of MSE; Expert RA Rating Agency