1. Chappuis Halder & Cie
Digital in Private Banking
3rd of April, 2014 Daniel Corrales dcorrales@chappuishalder.com
Patrick Bucquet pbucquet@chappuishalder.com
Stéphane Eyraud seyraud@chappuishalder.com

2. Introduction
2
"The next big thing is digitalisation”
There are more wealthy people on Facebook,
Google+, and other networks than anywhere, and
what if they begin getting investment advice
through those channels?
-- Jürg Zeltner
CEO, UBS Weatlh Management
September 16th 2013

3. Agenda
 Paradigm shifts driven by the introduction of digital strategies
 Leads to explore in Digital Private Banking
 Our value proposition
3

4. The Banking industry is going through major changes, and banks are
more and more challenged by new entrants
4
Data is the real
value, not
commission
…
Next Gen
Banking
Banking is a
service, product-
agnostic
Regulation is no
longer a barrier
UX is key to provide a
service focusing on one
use, bank-agnostic
Governance bodies favor
financial inclusion, easing
new entrants into the
industry
There is a strong pressure on
commissions, banking business is now
about customer data use
800 million users
(e-commerce)
8,5 million users,
40% of Kenyan
adults
1% of Whole Foods
transactions after 1
month (US)

5. Alibaba is now one of the biggest financial service providers in the
world, and is ready to launch a real bank
300 million users of Alipay
(online payment) – 80 million
transactions par day
190 million users of Alipay
Wallet
Yu’e Bao is the biggest funds
(125 million customers, $90 Mds
AUM)
Zhao Cai Bao finances SME,
based on a P2P model
Chinese banking
regulator allowed
Alibaba to launch
MYBank, a privately
owned bank
5

6. Customers are now surrounded by new technologies and new devices
transforming the way to interact with each others
6
Devices
Social media
Platforms

7. The web has now changed to become the “web of users”, users are
much more trusting their peers than the brands
7
The wealthy tend to be part of connected digital communities who share their
ideas and opinions
2/3 of users are trusting their peers, 1/6 are trusting the brands

8.  I want to be able to send
feedback to my bank so it can
improve my service
 I am expecting personal
interactions with representatives
and a customized interface
 I want my bank to be able to fit
to my specific banking usage
(personalized offers, “pay as
you bank”, personal savings &
budget management)
 I want to get access to my
personal information and my
banking services whenever I
want and wherever I am (multi-
devices), with a real time update
 I need to understand my bank to
make my life simpler
 I need a simplified interface that
fits to the device I use
 I want my bank to be present in
my day to day online social
environment
 I want to benefit from my social
network(expertise,
recommendation, etc.)
 I want to share banking services
with my community
Digital Era
Digital UX
The digitalization of day-to-day life brings customer’s new expectations,
which are much more user experience oriented than service based
Loyal
Smart
Co-
construction
Always on
Personal
Simple &
design
Social
Gamification
 I want my bank to give me the
tools to take my own decisions
based on my analysis
 I want to get access to the best
expertise from my bank when
needed
 I want to get concrete benefits of
my relationship with my bank
(coupons, promotions, gift, etc.)
 I want to use existing or new
services with fun
8
Different aspects of best-in-class attributes in digital banking

9. Agenda
 Paradigm shifts driven by the introduction of digital strategies - examples
 Leads to explore in Digital Private Banking
 Our value proposition
9

10. Rational:
> Being first-mover to create
a competitive advantage
> Being different from
competitors
> Start local then move to
other market
New technologies open up incredible opportunity to build a new business
model in private banking
10
1
Private
Banking
New
generation
Basic digital
offer
2
3
Improved
digital offer
New Business
Model
> Standard offer
> e-banking, online
presence
> Different web and mobile offer
> Focus on smartphone use
> M-banking
> Big Data: analytics clients and prospects
> Costumed digital offers
> Introduce now products and innovating
services
> Refocus on UX (User eXperience):
useful, intuitive, fun and easy
Split zone:
> New technologies reach mass market
> New digital standards, coming from other sectors,
are deeply changing private banking and customer
experience
> Banks are not anymore the only providers of
banking services (P2P lending, etc.)
> Banks propose other services than banking
services
Traditional banking
services
Today’s challenge is to reinforce market position, be a first-mover and capture new markets

11. Level 1 : Product-Centric
Level 2: Service-Centric
Level 3 : Client-Centric  Online client servicing
includes advices and support
to financial planning
 Sales team can rely on
efficient tools (on tablet, etc.)
 Personalized offers are
pushed to the client (direct
marketing) using all client’s
data available (big data)
 RM could be contacted by
different means (IM, video,
etc.)
 Online client servicing is
mainly focusing on reporting
 Client have real time access
(market data, alerts)
 Pricers and simulators are
available online and can be
used by the client on his own
 E-workflow / paperless processes
 General information pushed to clients
 Marketing documentation available
onsite
-DigitalMaturityoftheBank+
- Value Added Services +
11
Trading platform is a
Client tailor-made tool
Banks transferred
services online (e-PB)
Client & Bank relations
are integrated
The digitalization of Private Banking is on-going, moving from a product-centric
approach to a client-centric approach, but without any major ruptures

12. Becoming Client-Centric is the final objective, but previous phases are
mandatory to deploy Enablers
12
Client Centricity must be limited to increase
the number of touch points…
… Which means changes to be deployed on
the different layers of the organization
Provide tools to RM to be
able to face the
customers with the same
tools they have at home
Review the role of the RM
Review IT to support e-
processes, e-offer and e-
customers
Design specific offer for
digital channels, and do
not add a channel for the
same offers
CRM
IT
Offer
Adapt Front-to-Back
processes to manage
digital channels
Process

13. Technology is now a “brain-amplifier”, providing users with many
analytic tools, actually intermediating the banks
13
The wealthy are more technology enabled than ever before

14. There is an ongoing polarization in Private Banking, and Digital could
increase market segmentation
14
HNWI segment is declining in favor of Mass
Affluent and UHNWI…
… and Digital just adds another risk
UHNWI
Mass Affluent
FAMILY OFFICE
HNWI
≈13 MILLION CLIENTS
$30 MILLION
$1 M – $5 M
≈344 MILLION CLIENTS
≈167 000
CLIENTS
$0.5 M – $1 M
RETAIL BANKS
 Digitalization along with an always more bounding
regulation makes private banks less attractive to UHNWI.
They will seek more customization by joining family offices
 92% of HNWI considering internet and digital technology
to be a major source of ongoing wealth generation and
planning to increase their usage
 With Digitalization “mass affluent” will not be willing to pay
extra fees for services they can perform themself online.
At the same time retail banks improve and customize their
services to attract “mass affluent clients”
 The “HNWI” market will get smaller and competition will
increase and become always more international
Source: Horizons bancaires, 2009

15. 15
Digital enablers are now an opportunity for Private Banks not only
to Improve but also to Innovate
 Operational efficiency
(e-process to reduce
cost)
 Anti-Fraud
 Addressable
market
 UX segmentation
 New business
model
Improve Innovate

16. 16
Digital enablers could support Improvement (operational efficiency)
Improve authentication
Simplify data collection
(KYC)
Second factor authentication + Voice
recognition + Behaviometrics (behavioral
biometrics) monitoring
Collect data electronically every year, avoid
to send paper to customers to streamline
client profile update
Source: Behaviosec Source: Jumio

17. Digital enablers could support Innovation
17
Address new markets Propose different UX Develop new business model
Become a trusted market
place, connecting people and
service providers
Enlarge addressable markets
thank to new digital channels:
target mass affluent segment /
liaise with future HNWI
Adapt services to
expectations, get ready for
Young HNWI expectations

18. Private Banking business model is changing, pushed by new
entrants
18
+ PRODUCTS
+ SERVICES
+ PEERS
+ CONTENT
Inspiring concept in Private Banking
A financial community helping people /
corporate to get funded
A social network, where users can follow best
practices / advice from others
An aggregation of data assessed based on
quality and relevant to user’s objectives
CUSTOMER
A new approach to help people to achieve
their financial needs, with an understandable
approach, step-by-step

19. Becoming A PLACE TO BE, Private Banks could increase trust and
security and provide A TRUSTED PLACE, built on 5 main blocks
19
Private Banking = “Trusted Finance Amplifier”
(much more than mere finance)
Protection
Empowerment
Guiding & Education
Social Intimacy

20. Using the UX as a corner stone, CH&Cie already identified potential
innovations for Private Banking
20
 Reporting
 Alerts
 Aggregators
 Financial Goals / Simulators
 P2P comparison
 Nudge Marketing / “levels” to
guide and educate users
Automate Improve Innovate
Protection
Empowerment
Guiding & Education
Loyalty / Rewards
Social
Intimacy
 Direct contact with RM on any
medias
 Information collection and
analysis on customers
 Services for entrepreneur “CFO
in a pocket”
 E-Trading
 Access to experts and reports
 Ranking of external advisors
 Market trends
 Consolidation of reports / data
etc.
 Alerts on market changes  E-Vault
 Stronger authentication
 E-Reputation management
 Validation of comments and
sharing between users
 Concierge  Specific discounts based on
customer habits
 Partnership with top players :
UBER, AirBnB for villas, etc.
 Access to expertise online  Crowdfunding
 Currency transfer between
customers
 P2P advisory
 Collective intelligence

21. To benefit from the digital opportunities, Private Banks must change
their way of working
Leverage on technology enablers to keep ahead of the game
21
Borrow ideas across the world to trigger innovation
"The next big thing is digitalisation: there are more wealthy people on Facebook,
Google+, and other networks than anywhere, and what if they begin getting investment
advice through those channels."
-- Jürg Zeltner
Focus on uses, get into the life of the users
Don’t think only about Finance, user’s life is much bigger!

22. Agenda
 Paradigm shifts driven by the introduction of digital strategies – examples
 Leads to explore in Digital Private Banking
 Our value proposition
22

23. Framework for digital strategy thinking
Wealth presentation
Advisory Smart push
Investments and financial
services
Customized offer
Security and data
protection
Full availabilitySocial Networks
4 5 6
7 8 9
Transaction services
1 2 3
A comprehensive digital offer has different functional blocks. They are customized to changes
according to clients’ needs. Each of the following blocks should be carefully thought to build a
consistent and suitable offer.
*Note: This is a non exhaustive list
23

24. Kick-Boost-Launch ApproachMethodologyDeliverables
Define the approach
Transparency
Blueprint
Line up the different players
Realize
Establish a roadmap
1 2 3
KICK BOOST LAUNCH
Objective:
– Understand the commercial
strategy
– Validate digital as a catalyst
Workshop/brainstorming for each block with
CH&Cie experts
Bank
context
Expertise
Market
insights
Objective:
– Understanding of « best practices »
and main features of digital banking
Stakeholders involved
Objective:
– Identify and structure an opportunity to
kick of an realize the vision
– Formalize the roadmap for digital
strategy
 Project perimeter: proposed value,
components of the offer, customer
experience, etc.
 Prerequisite and action plan
 Common vision shared
 Different level of maturity of
stakeholders
 Roadmap and key steps – 3 years
 Description of main projects (1
slide per project + budget)
 Define kept operational blocks
 Different storyline with stakeholders
in order to share / validate / improve
Small teamTop management
24

25. Chappuis Halder & Cie is a Financial Services consulting firm,
bringing ideas and delivering solutions across the globe
25
Chappuis Halder & Cie is a consulting company specializing in Financial Services. We have
expanded geographically from our origins in Geneva, now serving clients in all of the major financial centres
across the globe. Our main focus is on 4 business areas: Retail & Private Banking, Corporate & Investment
Banking, Insurance, and Commodity Trading.
CH&Cie expertise is anchored in the deep sector and functional knowledge of our consultants; all of us
have a financial services background, and know the sector inside out. Because we do nothing else, and we
operate across the globe, we are able to bring a rich seam of best practice ideas and benchmarking data to
our clients.
London
Hong Kong
Singapore
Genève
New York
Montreal
Paris