Strategies to improve operational efficiency in retail banking as presented at the Asian Banker Summit 2012 by Verint.

1. Increasing competitiveness and
cost efficiency through effective
enterprise-wide optimisation and
automation
Simon Angove, SVP & GM
Verint, Retail Financial Services
Asian Banker Summit
Bangkok, April 26, 2012
1

2. Emerging Asia lags global banks in efficiency
Figure: Emerging Asia bank Banks vs Global Banks:
SE Asian versus global banks cost-income ratios (2010)
Avg. 2010 Cost/Income Ratios
0.70
0.66
0.60 0.63
0.57
0.50
0.51
0.40
0.30
0.20
0.10
0.00
Philippines Indonesia Thailand Big 5 Global
Banks
Source: FT Banker Database, Verint Consulting, Asian bank financial statements
2

3. Operational efficiency a top priority
Figure: Asian bank executives top priorities for 2012
Increase revenues
Raise efficiency
Achieve or maintain regulatory compliance
Increase customer satisfaction
Cut costs
Improve supplier relationships
0 0.5 1 1.5 2 2.5 3 3.5 4
Source: Ovum 2012
3

4. Efficiency matters but so does service
Figure: reasons for leaving a bank
Quality of Service 55%
Ease of Use 51%
Fees 50%
Interest Rates 49%
Quality of Advice 45%
Accessibility/Convenience 45%
ATM Locations 39%
Product Availability 36%
Branch/Bank Locations 36%
Personal Relationship 35%
Brand Image 27%
Rewards/Loyalty Programs 24%
Peer Recommendations 19%
Source: 2011 Retail Banking Voice of the Customer Survey, Capgemini, 2011
4

5. Many strategies to improve efficiency
Channel Process
migration simplification
Branch network
rationalisation
Digitize paper-
Branch open based work
Branch hours review
automation Role
optimisation
Staffing
Customer optimisation
self-service Portfolio
simplification
Vendor Workforce
rationalisation flexibility
Price
optimisation Lean
structure
5

6. Branch labour is largest operating expense
Most operating expense Labour cost is largest
is in branches
Operating Cost Breakdown for a Typical Community
operating expense
Bank
Other
Overhead 4%
5%
ATM, Call Center,
Online
6%
Labour expense
Marketing
47%
15% Branch Network Other expense
50% 53%
Operations
20%
Source: Selected Asian bank financial data
6

7. Workforce optimization (WFO) strategies
Accurately scheduling branch staff to handle forecast workload while
meeting service and sales goals and reducing unproductive time
1. Forecast Demand
5. Analyze
and Improve
2. Calculate
Staffing Needs
Workforce
optimisation
process
4. Monitor 3. Schedule
Performance Employees
7

8. WFO #1: Reduce excess staffing capacity
Accurate workforce planning approaches can identify up to 20%
over-staffing relative to forecast workload and service levels
180
Figure: staffing needs versus actual staffing
160
Over-staffing Under-staffing
140
Percent Correct Staffing
120
100
80
60
40
20
0
Branch A Branch B Branch C Branch D Branch E Branch F Branch G Branch H Region
Source: Verint Consulting, disguised client data
8

9. WFO #2: Leverage all forms of staff flexibility
Use part-time staff to match customer traffic and reduce idle time
Full-time staffing: 56 hours Part-time staffing: 24 hours
6 6
4 4
Staff
Staff
2 2
0 Open Lunch Close 0 Open Lunch Close
Leverage 5 kinds of staff flexibility to maximize productive time
Flex
Hours Different Work Blend Work
Between
Worked in a Shift Start Different Between
Roles
Week and End Locations Bank
(Universal
(Part-Time) Times (Float Pool) Departments
Banker)
9

10. WFO #3: Maximise staff productive time
Productivity assessments can identify unproductive tasks and poor
handling times by role in the branch
Figure: Sales role customer facing time Figure: Detailed activity breakdown
Alpha Bank 47.49% 52.51%
Industry 63.65% 36.35%
0% 20% 40% 60% 80% 100%
Client-Facing Time Non-Client-Facing Time
Source: Verint Consulting, disguised client data
10

11. WFO #4: Make smart use of branch automation
Teller cash automation can accelerate cash handling times by 40%
while delivering faster customer service and heightened security
Figure: staff savingsfrombranch Cashteller cash recyclers
Staff Savings per Teller from Automation
1600
1400 1483 1468 1443
1383
1298
1200
1159
1000
Branches
981
800
730
600
521
400
321
200
173 38
88 17 6 1
0
> 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 1.2 1.3 1.4 1.5
Headcount Savings per Branch
Source: Verint Consulting, disguised client data
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12. Global leader in actionable intelligence
12

13. Broad banking solution portfolio
Multi-channel workforce optimisation engineered for financial services
Workforce
Management
Desktop and Video Customer
Process Analytics Traffic Analytics
Speech & Text IP, TDM,
Analytics and Screen
Recording
Enterprise Quality
Feedback Monitoring
Management
Performance
Management eLearning
and Coaching
Enterprise-wide
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14. Verint clients have strong cost-income ratios
SE Asian Banks vs Global Banks:
Figure: all banks versus Verint clients cost-income ratios (2010)
Avg. 2010 Cost/Income Ratios
0.70
0.66
0.60 0.63
0.57
0.50
0.51
0.44
0.40
0.30
0.20
0.10
0.00
Philippines Indonesia Thailand Big 5 Global Verint APAC
Banks Clients
Source: FT Banker Database, Verint Consulting, Asian bank financial statements
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