HP Financial Services Competing Through Value Disciplines – A Customer’s Perspective Eng Chuan PUAY Director of Enterprise Sales Southeast Asia Region May 2006 ©2005 Hewlett-Packard Development Company, L.P The information contained herein is subject to change without notice HP Confide ntial HP in Asia Pacific & J apan Korea 1984 Asia Pacific & J apan • • • • • • • • 40,000 employees 157 offices 640 service centers 26 solution centers 10 manufacturing sites R&D locations HP Labs facilities 40,000 enterprise & commercial channel partners J apan 1963 China 1985 Taiwan 1970 Southeast Asia • • • • • Philippines Thailand Vietnam Malaysia Indonesia 1995 1989 1996 1972 1996 India 1989 Hong Kong 1979 Asia emerging countries • • • • Pakistan Bangladesh Sri Lanka Cambodia Brunei Nepal Maldives Laos Singapore, 1970 APJ HQ Australia 1967 Copyright ©2003 HP corporate presentation All rights reserved New Zealand 1967 HP Key Customers: INDIA KOREA Bank Of India – Co mpre he ns ive Outs o urc ing S BI – Infras truc ture & Outs o urc ing Bank Of Baro da – IT trans fo rmatio n CHINA KOREA Ko re a De ve lo pme nt Bank inte rnatio nal ro llo ut Ko o kmin Bank – CRM, De bt Mg mt S ys te m S hinhan Bank, Wo o ri Bank, KRX INDIA UCO Bank – Co re banking re plac e me nt CHINA Bank o f S hang hai OTHERS Citic Ka Wah Bank Bank Mandiri Bank Ce ntral As ia S ing apo re S to c k Exc hang e Citibank in As ia Pac ific ING in As ia Pac ific China Life – DCC SOUTH EAST ASIA HuaXia Co mme rc ial Bank China Co ns truc tio n Bank – Fro nt-e nd S ys te ms , S o ftware S o lutio ns SOUTH PACIFIC S hang hai Pudo ng De ve lo pme nt Bank – Ris k Manag e me nt Othe rs : S he nzhe n S to c k Exc hang e s , Ag ric ulture Bank Of China, PICC, Ping An Ins uranc e , China Banking Re g ulato ry Co mmis s io n, Bank o f Co mmunic atio ns and o the rs Global Trends in Banking Services Cost increase Ageing technology More sophisticated products requires newer systems Serving new market requires better infrastructure Extending new capabilities Difficulty to keep up with new market or products Shorter time-to-market due to greater competition Limited system functionalities and resources to support business needs Back office consolidation Back office hubs in Asia to take advantage of lower cost of labour Better technology infrastructure in Asia conducive for global consolidation Global Trends in Banking Services Merger and acquisition Industry consolidation for economies of scale Market liberalization weeds out weaker players Global economy through WTO Outsourcing of non-core business Global banks are outsourcing back office operation to Asia Asia banks are outsourcing non core activities Variable cost versus fixed cost model Impetus for Change – Value Competition • Banks today compete by focusing on value disciplines Customer Intimacy Customer Intimacy Product differentiation Cost leadership • Single view of a customer • Customer segmentation • Relationship management Value discipline Cost leadership Product differentiation PUSH • Structure products for retail customer • Broader product portfolio PULL • Electronic invoice presentment and payment • Teller productivity • Backoffice hubbing Copyright ©2003 HP corporate presentation All rights reserved • Technology innovation Winning on Customer Intimacy More granular customer segments • Citibank bank – Citigold banking • Standard Chartered Bank – Priority banking • Lady credit card, platinium credit cards Cosy modern branch layout Better infrastructure • Coffee in a branch – Starbuck • Branch Investment officer • Wireless technology • Internet banking/wireless banking • Improved call centre • Back office consolidation IT Implication : Embark on CRM related project such Datawarehouse/BI, Customer segmentation, core and branch system upgrade, IP call centres etc Copyright ©2003 HP corporate presentation All rights reserved Winning on Product Innovation More sophisticated retail products • • • • Investment link savings account – structured product Home loan Savings account Asian wide debit cards Product transfer from foreign banks Very niche products for high net worth Better infrastructure • Highly specialised private banks • Non-investment grade bond specialist • Even broader product portfolio • Electronic Invoice Presentment and Payment • Global execution IT Implication : Embark on new treasury systems, EIPP portals, enterprise wide systems integration, functionality enhancement to support new products etc Copyright ©2003 HP corporate presentation All rights reserved Winning on Cost Leadership Consolidation of call centres Better infrastructure • Regional and global call centre • Outsourcing of call centre services • Call centre technology upgrade • Measurement on cost to serve • Branch network rationalization • IT selective outsourcing Consolidation of back office operation • Relocating back office to Asian countries • Tax incentives from local government IT Implication : Embark on IP call centres, global network re-design, business process automation, IT outsourcing etc Copyright ©2003 HP corporate presentation All rights reserved Are Asian Banks rising to the challenge? • What is your core competency? • Where is • What is your market segment? your value proposition? Pro duc t Inno vatio n Co s t Le ade rs hip Cus to me r Intimac y A c o uple o f c as e s tudy Copyright ©2003 HP corporate presentation All rights reserved 10 Bank of Baroda - End-to-End Transformation Fourth large s t s tate -owne d bank, 2800 branche s nationwide , pre s e nce in 21 countrie s and m ore than 30 m illion cus tom e rs The HP difference • Comprehensive solutions offering including next generation Core Banking solutions and Openbank to drive fundamental change within the bank for competitive advantage • Domain experience and track record of expertise in integrating and managing large projects for timely and cost effective deployment of applications • Strong alliance with leading ISVs on a global and regional basis Business needs HP solution Business benefits Realignment of business processes through leveraging of IT implementation • Provide domestic and international customers and partners with worldclass products and services 24x7 • Provide customers with a One View, anytime, anywhere access capability • Compliance with regulatory requirements • Unification of disparate systems • Increase process and employee productivity • Robust, scalable network and infrastructure Technology enabled business transformation through: Simplicity • • • • Deliver unified portal based IT infrastructure for domestic and international operations Integrate and deploy over 40 leading ISV applications, including core banking solution Implementation and management of enterprise-wide SOA for multichannel banking, CRM, global treasury, data warehousing, HR and risk/performance management • Design, build, manage data- centers with DR solutions • Design, deploy, manage network implementation • 360 degree view of customer Customer Intimacy • Single sign-on capability for employees and customers Agility • Faster reporting and decision Cost capability making Leadership • Scalability and robustness Value • Compliance through better risk Product Innovation management • Improved productivity • Competitive edge through world-class customer service 11 Bank of Shanghai One of the fas te s t growing com m e rcial bank with fore ign s take s including HS BC, 200 branche s nationwide s e rving about 18 m illion cus tom e rs The HP difference • Strategic IT partnership approach with single point of contact • Complete range of services inc custom development, support and finance • Understanding Bank’s aspirations and flexibly addressing them Business needs HP solution Business benefits • Business • Systems Simplicity • Unified view of customers • Project Management of the agility and operational efficiency in core banking • Expanded delivery channels to enable introduction of new products • Increased profitability • Managed risk through operational excellence Integration of products and services including Temenos Core Banking application migration and contract • year IT operations service for ASP ‘Finance Lab’ • Comprehensive,integrated products and services Customer Intimacy delivered quickly and easily Agility • Management of risk thru operational excellence Cost delivery channels • New Leadership Value • Product quality • Product lifecycle mgmt Product Innovation • Focused customer service • Increased profitability of products and customers 12 Foreign Banks’ Investment in China’s growing retail banking market Product Innovation Shorten the learning curve through global partnering 13 Pro file o f the Winne r In our view the winner needs to excel in at least one of the value disciplines but be on par with the industry on the other areas 14 Thank Yo u ... CHINA Bank o f S hang hai OTHERS Citic Ka Wah Bank Bank Mandiri Bank Ce ntral As ia S ing apo re S to c k Exc hang e Citibank in As ia Pac ific ING in As ia Pac ific China Life – DCC SOUTH EAST ASIA... India 1989 Hong Kong 1979 Asia emerging countries • • • • Pakistan Bangladesh Sri Lanka Cambodia Brunei Nepal Maldives Laos Singapore, 1970 APJ HQ Australia 1967 Copyright ©20 03 HP corporate... locations HP Labs facilities 40,000 enterprise & commercial channel partners J apan 19 63 China 1985 Taiwan 1970 Southeast Asia • • • • • Philippines Thailand Vietnam Malaysia Indonesia 1995 1989 1996