Six Challenges Facing Banks

1. Six Challenges Facing Banks Presented by: Amir Hameed IP Telephony Practice Leader

2. Enhance the Franchise Increase Revenue Reduce Cost Enablement Mitigate Risk Financial Services IndustryWhat is Everyone After?

3. Focus on FSAvaya’s Financial Services Practice • Understand the Vertical • What are key industry trends? • What are perceived opportunities & risks? • What are ‘hot’ issues in the vertical market? • Enhance the Portfolio • What do FS customers need to be successful? • Are there opportunities to adjust or expand Avaya’s portfolio of solutions? • Facilitate Communication Externally • Frame Avaya solutions in business terms • Help customers achieve their business goals • Help Avaya earn the right to be a ’trusted partner’ • Facilitate Communication Internally • Aggregate customer requests • Prioritize vertical requirements • Help drive the concept-to-market process

4. As Ranked by Fortune Magazine* Avaya Presence in Top US Bank Call Centers * www.fortune.com/fortune/subs/fortune500/customranking Categorized by Fortune as ‘commercial banks’ - Apr-2005

5. As Ranked by Fortune Magazine* Avaya Presence in Top US P&C Insurance Call Centers * www.fortune.com/fortune/subs/fortune500/customranking Categorized by Fortune as ‘insurance: P&C (mutual) and “insurance: P&C (stock) - Apr-2005

6. Business Goals Global Banks • Business Trends • Channel Optimization • Channel integration • Differentiation Strategies • Up-sell, cross-sell • Customer retention “Avaya focused on the business problem, and then on full delivery fromsolution design to deployment”

7. Business Goals Global Banks • IT Hot Buttons • Efficiency • Drive down complexity • Effectiveness • Innovation • Building block strategy “Avaya focused on the business problem, and then on full delivery fromsolution design to deployment”

8. TrendsSix Challenges Facing Banks 1 Become a Distribution Expert Optimize your Distribution Channels Integrate your Distribution Channels Embrace a Differentiation Strategy Measure & Analyze Progress Delight Your Customer 2 3 4 5 6

9. Channel Strategy Cross-Selling: “The Holy Grail” “Wells Fargo reckons that the average American household has 16 different financial products. The bank supplies just 4.3 to its average customer. "On a scale of 1 to 100," says Mr Kovacevich, "we're only at 20-25." Only 11% of banking customers buy insurance from the company. Even though Wells Fargo issues more mortgages than anyone else in the United States, only 16% of its customers have a mortgage with the bank. On the other hand, Wells Fargo sees its own customers as a great growth opportunity--better than opening new branches or buying other big banks, as its rivals are doing. Mr Kovacevich says that 80% of the bank's growth comes from selling additional products to existing customers. The cost of selling to someone already on the books, he says, is one-tenth that of attracting a new customer .” “Trust Me, I’m a Banker” April-2004

10. Vertical SolutionsA Crazy Idea – Right? On Demand Branch-based Agents Inbound customer contacts can be routed to branch-based personnel according to skill set, availability or prior contact history On Demand Contact Center Agent Contact Center-based agents can provide expertise and overflow for branch-based customer service personnel voice Interactionmanagement self-service email converged network proactive contact On DemandResident Expert Personnel at other locations can be leveraged as expert resources web

11. Business Goals Global Banks • Goals • Originally... Automate routine inquiries • Ultimately... Front-end all calls and route them using IVR technology • Return dollars to the business after 15 months • Estimated savings for 2006: $8m • Benefits: end-to-end tracking of calls

12. Business Goals Global Banks

13. Best PracticesShrink Attrition, Grow Retention Profile US regional bank with 1200 branches in seven states. Goals • ‘Get better faster’ • Eliminate the ‘I never hear from my banker’ complaint • Identify ‘at risk’ customers • Focus on ‘on-boarding’ of customers

14. Best PracticesShrink Attrition, Grow Retention Philosophy Focus on…. • Improved service & customer satisfactionwhich leads to • Retention of customerswhich leads to • The right to ask for additional businesswhich leads to • Deepening of our relations with themwhich leads to • Increase in Revenues

15. Best PracticesShrink Attrition, Grow Retention Source: Gartner Group

16. Sales ManagementEnabling Your Workforce Segments Mobile/ Remote “Mobile Revenue Generators” Mobility Bank Executives Regional Managers In-Branch Consultants Fixed Branch Managers Tellers High Low Transaction Margins

17. Best Practice #1 The Extended Contact Center Breaking down infrastructure barriers and more tightly integrating the contact center with the rest of your business

18. IVR & Speech Applications Messaging Conferencing Reporting Reporting Reporting Reporting Reporting Reporting Reporting Management and Administration Management and Administration Management and Administration Management and Administration Management and Administration Inbound Voice Outbound Dialer Management and Administration Management and Administration E-Mail Web Quality Monitoring and Recording Quality Monitoring and Recording Quality Monitoring and Recording Quality Monitoring and Recording Quality Monitoring and Recording Recording CRM Applications CRM Applications CRM Applications CRM Applications CRM Applications Yesterday’s Call CentersIsolated and fragmented applications Inconsistent Customer Experiences Higher Total Cost of Ownership Lower Business Productivity

19. PSTN PSTN PSTN PSTN ISP IP WAN PSTN The New Operating ModelConverged Networks, Consolidated Servers, and Extended Operations Small Office, Home Office, Telecommuter Agents Media Gateway Messaging Remote Offices 8700 Media Media Gateway Contact Center Reporting Call Accounting Offshore/Nearshore Offices and/or Call Centers Regional Offices/Contact Center Multi-Media IVR Systems Management CTI Media Gateway Media Gateway

20. Case StudyThe Case of the Empty Office Large US Insurance Company • Value Created • Tens of $millions identified as cost of “not answering” • Consistent company brand image • Efficient blending of contact center to support local offices • Increased agent productivity • Teamwork across offices & HQ • Lower TCO, Enhanced network “Avaya focused on the business problem, and then on full delivery fromsolution design to deployment”

21. Best Practice #2 Creating the customer moment of truth Contact center matchmaking: right customer, right action, every time

22. Riding the Contact Center Waves Internet Boom One-to-one, multimedia Effectiveness Focus Customers As Assets Early Call Center Customer satisfaction Best PracticeContact Centers Balance efficiency/effectiveness Leverage skills everywhere Enhance customer experiences Efficient Call Center Skills, CTI, Agent productivity Efficiency Focus Customers As Transactions Post-Internet Trough Cost savings, fewer agents, outsourcing Help Desk Handle calls quicker 1970 1980 1990 2000 2010

23. HIGH CUSTOMER VALUE LOW AGENT SKILLS REQURIED HIGHLY SKILLED NEW HIRE Six Sigma Customer Segmentation StrategyLeveraging different resources for different customers Provide Each Customer with the Appropriate Service Most Valuable Customers Loyalty programs Personal Account Managers Skilled Sales Agents Automate Transactions and Proactive Contact “Growth Potential” Customers Cross-sell, up-sell Skilled Agents Automate for customer convenience Least Profitable Customers Efficient Service Automation AUTOMATION POTENTIAL PROACTIVE CONTACT EFFICIENCY

24. Flatten-Consolidate-Extend Systemize-Globalize Differentiate Six SigmaGetting to Differentiation COMMUNICATIONS INFRASTRUCTURE CUSTOMER STRATEGIES AGENT UTILIZATION Business Impact: Savings Revenue Retention Loyalty Differentiate Differentiate Differentiate Systemize - Globalize Systemize - Globalize Systemize - Globalize Flatten – Consolidate - Extend Flatten – Consolidate - Extend Flatten – Consolidate - Extend Impact Impact Impact Business as Usual Technology Continuum

25. Channel Strategy Differentiating

26. Best Practice #3 Building your brand through effectiveself-service Striking the balance of self service with live service to improve the customer experience equation

27. Agents $5-$6 Offshore Agents $2-$3 Touch-tone System $0.25-$0.5 Speech Self Service BenefitsIncreased Capabilities, Lower Cost, Higher Satisfaction Speech Applications $0.5-$0.9 service complexity cost per call

28. Interactive Response The Expanding Role of Speech • Replaces live agent support • Extends service support to 24x7x365 • More responsive and personalized service • Automates simple, repetitive requests • Account balances, Order or claim status • Automation of more complex transactions • Change of address, IT help desk password resets • Alpha/numeric structures, stock symbols • Secure voice print identification • Natural language call routing • Automation of internal business processes • Employee self service, trouble ticket reporting • Automation of demand chain / distribution • Inventory, availability and price checks, regular re-orders • Automation of proactive outbound contact • Product recalls • Purchases ready for pickup • Payment verification

29. Case StudyDriving Revenues & Improving Customer Responsiveness • Value Created • Speech enablement of 15-20% of incoming calls • 20% improvement in self service call completion rate • Over $469,300 annual savings • Increased up-sell, cross-sell • Improved agent retention “(Agents) are more fulfilled and helping people that need to be helped instead of dealing with things like address changes or membership renewals. And we are able to provide a better level of service." Joe Alessi, vice president of marketing and IT

30. Intelligent CommunicationsWhat is Your Strategy to Delight Your Customers? • Speed of Transactions? • Personalized Service? • Pro-Active Contact? • Price? • Product Depth & Breadth? • Some of the Above • All of the Above • None of the Above Regardless…. Banks seek a high velocity business with productive employees

31. Intelligent CommunicationsEnhanced Customer Interactions Self-Service “Kiosks” • Customer can look for specific bank-related products or services via a web-enabled IP phone. • “Click-to-call” capability can be configured to connect the customer with bank associates in a contact center. • Direct Frequently Asked Questions to a speech enabled IVR for virtual agent response. • Reduce time devoted by branch staff to routine Q&A. • Enable introduction of new products and services. • Request a callback or email for more information.

32. Self-Service Kiosk with Video Softphone Click to video conference with an “expert” • Example • Customer browses Mortgage page, clicks on icon for a video conference, Avaya finds appropriate and available resource • Expert could be in the Contact Center or in another branch • Other service examples: loan originations, investment services, credit card applications.

33. Increasing Revenues, Improving ResponsivenessYou want them to be pleased they called……. 1 Answers the call Laura Jones, please! 2 Can be transferred to ANY number • Internal • Office extension • Pilot number • External: Local, Long distance, Cell, Pager, Overseas 3 Transfers the call

34. Contact Centers Collaboration Unified Communication Telephony Mobility & Softphone Conferencing Voice Messaging Email Instant Messaging Managing Complexity

35. Web Conference App Sharing Whiteboard Directory Chat Services-orientedArchitecture Web Services Converged Communications-Enabled Enterprise Collaboration SSA SCM CRM ERP Business Process Managing ComplexityComm. Applications: A Collaborative Framework Video Team Room Systems Document Mgt Electronic Mail Calendars Video Bridge DistributedApps Streaming Phone Book Ad-hocAudio Conf Converged Collaboration Workflow Voice Mail WebCam Social Networking Messaging Audio OperatorManagedAudio Conf Portals email Instant Conf Multimodal Sessions fax Availability Ad-hoc Audio Conf Migration to IP as underlying network Presence IM

36. Presentation Title: Six Challenges Facing Banks Presented By: Amir Hameed IP Telephony Practice Leader