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