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CAIB 34 th Conference

CAIB 34 th Conference. Defining the Market Space. Defining the Market Space. Theme of this conference “ Defining the Market Space” Parochial, Regional or Global? Sub themes – Day 1 “The Platform for Regional Growth & Expansion”

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CAIB 34 th Conference

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  1. CAIB 34th Conference Defining the Market Space HIPNET Inc. herb@hip-net.com 416 562-7229

  2. Defining the Market Space • Theme of this conference “ Defining the Market Space” • Parochial, Regional or Global? • Sub themes – • Day 1 “The Platform for Regional Growth & Expansion” • Day 2 “Beyond CSME: Carving out our space in the Global Financial Services Market” • This presentation “Regionally Connected: Payment systems that talk to each other” HIPNET Inc. herb@hip-net.com 416 562-7229

  3. From the Indigenous Bank’s Perspective • Where are we coming from? • Where are we now? • Where are we going? • Competition • Product Development & Innovation • Technology • Customer Service/needs HIPNET Inc. herb@hip-net.com 416 562-7229

  4. Where are we coming from?COMPETITION • Regional landscape dominated by: • RBTT, BNS, First Caribbean • Republic & NCB • OECS Eastern Caribbean member states • Indigenous Banks • Credit Unions • Money Market Brokers HIPNET Inc. herb@hip-net.com 416 562-7229

  5. Where are we coming from?COMPETITION Cont’d • Branch Networks – Bricks and Mortar DOMINATE • Advantages: • Face to Face • Seemingly personalized service “ know the manager” • Cultural satisfaction – No need to change HIPNET Inc. herb@hip-net.com 416 562-7229

  6. Where are we coming from?COMPETITION Cont’d • Disadvantages of Physical Delivery Channel • Ineffective for every day banking – Long line-ups • Inconvenient – Customers physically travel to branch • Inefficient – Expensive for day to day services • Discourages Electronic Channel Migration HIPNET Inc. herb@hip-net.com 416 562-7229

  7. Where are we coming from?Product Development • INSIDE OUT APPROACH! • Little innovation – Loans, Mortgages, Deposits • Wealth management delivered separately and under developed • Insurance separated • Money Market Brokers separated HIPNET Inc. herb@hip-net.com 416 562-7229

  8. Where are we coming from?Technology • Minimal investment • Disparate applications and architecture • Undeveloped networks • Electronic Banking non existent except for ABMs extension of branch network • Local clearing systems – Jets (Ja.), Linx (T&T), Cariss (Bar.) • 7-14 days clearing • Poor cash management products – Overdraft facilities to manage cash flow “ Expensive” HIPNET Inc. herb@hip-net.com 416 562-7229

  9. Where are we coming from?Customer Service • Decentralized - Branch only • Call centre acts as a telephone operator – transfer call to branch • Customer complained but no choice – same level of service • No reason to evaluate customer needs – “ Take what is offered, not offer what is needed” HIPNET Inc. herb@hip-net.com 416 562-7229

  10. Where are we today? • Big changes in the last 5 years • Offering 1st world banking products • Outside in Focus - Focus on customer needs • BOJ implemented ACH2 • Convert paper cheques to electronic • Next step cheque truncation • Only the image returned to banks and customers HIPNET Inc. herb@hip-net.com 416 562-7229

  11. Where are we today?Competition • Canadian banks return to the Region • RBC, CIBC, BNS (never left but now ramped up services) • Heavy investment in integrated technology • Focused on regional/international expansion • Raise the bar high HIPNET Inc. herb@hip-net.com 416 562-7229

  12. Where are we today?Competition Cont’d. • Republic & NCB need to concentrate on their expansion strategy • Is there still time to expand regionally? • How? – Acquisition, Mergers, Collaboration (White label) • Do they have the technology? $$$? • Do they have the will and leadership? • OECS, Indigenous Banks, Credit Unions • Merge, Collaborate, Partners ( Non-Bank) • Potential Capital Adequacy re CB supervision due to Patriot Act. HIPNET Inc. herb@hip-net.com 416 562-7229

  13. Where are we today?Product Development • Electronic Banking and Channel Migration is KEY • Funds Flow Management for: B-B, B-G, B-C, G-G, G-C, C-C • Funds Flow is the lifeblood of the GDP and hence Banking • Every payment drives a receivable • Supply Chain Collection Systems • Innovative Products (Corporate drives Retail): • Corporate payroll leads to Payroll loans, Bill payments, Investments, Savings, Cards; Dr., Cr., Loyalty HIPNET Inc. herb@hip-net.com 416 562-7229

  14. Where are we today?Product Development Cont’d. • Wealth Management as part of Cash Management • Merchant loans – lend future receivables • The channel becomes the driver of product innovation • Government collections and payment products • Mitigate fraud and increase efficiency HIPNET Inc. herb@hip-net.com 416 562-7229

  15. Where are we today?Technology • Banks and near banks upgrading applications and architecture • Governments automating clearing systems • Same day clearing • No more float for banks • Local switches are in advance stages of development but still disparate HIPNET Inc. herb@hip-net.com 416 562-7229

  16. Where are we today?Technology Cont’d. • Touch points are ubiquitous and shared • ABM for cash. But why? Expensive • POS dominating touch points; Merchants and card-holders • Wireless POS: Restaurants, distributors and increase security • Call centre: Electronic activation and resolve queries • IVR: View balance and bill payments HIPNET Inc. herb@hip-net.com 416 562-7229

  17. Where are we today?Technology Cont’d. • Sophisticated Card Applications with switch built in • Common standard - Open standards technology for easy connectivity • Still no one switch on top of Local switches • Opportunity! HIPNET Inc. herb@hip-net.com 416 562-7229

  18. Where are we today?Customer Service • Call Centre is the hub for all channels & daily activities • Branches deliver added value services: Mortgages, Wealth Management, Insurance • Understanding customer complaints lead to needs • CEO chairs customer complaint committee • Bundle products around cards: Dr., Cr., Loyalty, Affinity, Gift & Co-branded cards • Use bundled pricing to drive channel migration HIPNET Inc. herb@hip-net.com 416 562-7229

  19. Where are we going? • Industry Consolidation • Economies of scale = Market share = cost efficiencies • Self Service 24/7 • End to end electronic technology • Customize Products for strategic customers • Funds Flow management dominates • SME – closer cultural association • Remittances – high share of GDP • Government – relationship & technology dependent • Bank the cash society – 40-100% of GDP HIPNET Inc. herb@hip-net.com 416 562-7229

  20. Where are we going?Competition • International Players – Canadian Banks • Who will bank the Government? • New banks emerging from the Wealth Management side – JMMB/Intercommercial Bank • Credit Unions & Indigenous banks • Sell products and manage store front only • Outsource back office (IT & Ops.) to managed service provider • Non regulated entities that provide value add • Telecom; Digicel, C&W • Network Providers: Cirrus & Plus • Technology Companies • Global Brands: Visa, MasterCard HIPNET Inc. herb@hip-net.com 416 562-7229

  21. Where are we going?Product Development • All products developed around cards; Dr., Cr., Loyalty, etc • Fungible products to suit needs – B-B, B-G, B-C, G-G, G-C, C-C • Enticement pricing • Bring investment get X% off loans • Bring mortgage or car loan get insurance coverage • Life Cycle Banking • Young educated upward mobile • SME • White Label products • Own the customer & storefront by providing the brand HIPNET Inc. herb@hip-net.com 416 562-7229

  22. Where are we going?Technology • Not a barrier anymore • Key is to ensure openness and not proprietary • Ensure global technology standards for • Touch points, Networks, Applications, Data Base and Security • More banks deploying managed services by outsourcing their IT and Operations departments • The CELL PHONE becomes the convergence of all touch points in the hand of every individual • There are more cell phones than there are POS & ABMs • Cash society all have cell phones HIPNET Inc. herb@hip-net.com 416 562-7229

  23. Where are we going?Customer Service • Customers – Real Kings and Queens • Cell phones simplify the delivery channel – authentication, settlement, convenience and flexibility • Cards and cell phones become the personalized market intelligence tools • Skills in analysing market needs • Debit/cash market • SMEs • Remittances • Existing long term relationships HIPNET Inc. herb@hip-net.com 416 562-7229

  24. What are the alternatives for Indigenous Banks and Credit Unions? • Much more collaboration • Separate storefronts to protect brand • Innovative product development is KEY • Know your customer needs • Share IT and back office processes outsourced to common provider • Control the DEBIT market regionally and internationally for all your customers • Canadian banks cannot do this by themselves; through Visa • Hire skill set with sales, marketing and psychology • The behavioural science HIPNET Inc. herb@hip-net.com 416 562-7229

  25. What are the alternatives for Indigenous Banks and Credit Unions? • Follow your customers where they go • Regionally – Travel ( Pleasure and Business ) • Internationally – Travel, Remittances, • Link with network provider or Telecommunications company • Share database so as to provide unique products • Link with Visa or MasterCard for Credit • Share revenue with middlemen • Form Technology company to implement a Regional Switch that links all local switches HIPNET Inc. herb@hip-net.com 416 562-7229

  26. Closing Message • The Caribbean Landscape is closing fast • Do your analysis • Be decisive • Smaller institutions cannot go it alone • Build a people culture of managing continuous change • Focus on the cash society • Focus on controlling electronic payments • Provide fee base income HIPNET Inc. herb@hip-net.com 416 562-7229

  27. The Winners • Those institutions who are astute at managing change, day by day, hour by hour • Those institutions that place more value on their Human Capital than on processes and technology • Need a CHAMPION! • The CEO, MD • Sanctioned by the board HIPNET Inc. herb@hip-net.com 416 562-7229

  28. Are you ready? A Global Mindset • WE ARE! HIPNET Inc. THANKYOU FOR YOUR ATTENTION HIPNET Inc. herb@hip-net.com 416 562-7229

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