Globálny pohľad: Technologické trendy formujúce

budúcnosť finančných služieb

Michal Kopanič, Partner Deloitte

2 | Copyright © 2016 Deloitte Development LLC. All rights reserved.2 | Copyright © 2016 Deloitte Development LLC. All rights reserved.

than in the entire history of humanity.

I N T H E L A S T T W O Y E A R S W E ’ V E S E E N

createdM O R E D ATA

nine times

3 | Copyright © 2016 Deloitte Development LLC. All rights reserved.3 | Copyright © 2016 Deloitte Development LLC. All rights reserved.

And business needs to change as well.

People havechanged

World of Insurance

Individualization of insurance

Most customers continue to buy insuranceas assets owners but increased assetsconnectivity and knowledge about behavioroffer insurers much more insights aboutempirical factors that drive risks, resulting inpricing and coverage personalization.

1

Insurance as Portfolio

Customer is still measured on very granularlevel thanks to insights but requires coverageonly for the limited time (e.g. only whenundertaking risk or activity).

2

Off-the-shelf Insurance

Personal assets policies becomestandardized to the point that consumerscan buy them off-the shelves. This will happenwhen risks are homogeneous; driven byautomation and asset sharing.

3

Insurance as Utility

Insurance becomes commoditized but notattached to the owner because customerowns only a small portion of risk while sharingeconomy proliferates.

4

CEE insurers have already taken steps to face the digital challenges

U B I D R I V I N G A P P

After successful deployment in

Slovenia, The insurer launched

usage-based insurance also in

Croatia.

The app has 50-100k installations

on Android only.

TRIGLAV”Boosts!” FinTech initiative

launched to realize strategic

leadership goals of the group

• Talent, efforts pooling both

externally and internally from

the firm

• Disruptive startups incubation

& capital support

€ 2 M 2 0 1 7 - 2 0 2 0

EUROINS

€ 4 5 M V C & 2 0 2 0 D I G I T A L I Z A T I O N

PZU set-up Witelo tech

investment fund with

committed minimum €45M

funding and ”PZU Lab”

(collaborates with tech

accelerators).

In addition the giant aims to

rollout the complete digital

operations model by 2020. E.g.:

• Product personalization

• 360 customer view

• Multichannel & paperless

customer service

PZU

~ € 2 5 M i n t h e 2 0 2 0 A g e n d a

”Genesis” is the group’s

digitization project including:

• AI- and Robotics-driven

automation

• Apps development e.g.

Claims mgmt., Sales

• IoT-enabled insurance

and customers integration

• Blockchain use cases

VIG

€ 7 5 M u n t i l 2 0 2 0

Committed €75M on its

digital transformation by

2020.

Example investment areas:

• Innovation culture set-

up efforts

• Customer experience

continuous digitization

• Operations digital

transformation

• Conscious „digital bets”

that may pay off in future

• Adjustments to firm’s

organizational structure

UNIQAHave your client done everything they could to be ready as well?

Sources: Deloitte analysis of Companies’ websites; Additionally: Telematicnews.info, play.gogle.com, itunes.apple.com, amodo.eu, Euroins: xprimm.com, VIG: wyborcza.biz, PZU: rp.pl, witelofind.com.

B I G B A N G T R A N S F O R M A T I O N S

T A C T I C A L M O V E M E N T S

Market development scenarios, shaped by technology trends

1 2

3 4

Insurance as Portfolio

Insurance asUtility

Off-the-shelf Insurance

Individualization of Insurance

USAGE BASEDDriven by: Episodic

consumption of insurance

GRANULARDriven by: Granularization of risk units; unpooling of risks

ASSET OWNERSHIP BASED

0Status quo today

COMMODITIZEDDriven by: Commoditization of risk

Banking world

R E A L current accounts investigated

thoroughly by Deloitte proprietary framework

based on customer research.

R E A L insights, without vague truisms.

14

+8k

826

38

3

6

238

10

136Customerssurveyed

Covered markets

Functionalities benchmarked

Digital channels

Customerjourneysteps

Mystery shopper

researchers

Assessed FinTechs

Assessed banks

“Digital banking” become

mainstream… really?!

Average occurrence of the word “digital" in annual reports of the

20 biggest European banks grew from average 1 in 2011 up to

55 in 2016. Interestingly, vast majority of banks considers itself a

leader... .

… from “digital maturity” point of view

EMEA market is highly diversified…

15Note: To achieve comparable data, country averages are based on the results of the top 5 biggest banks in given market in terms of assets.Countries within the 4 categories are in alphabetical order – the position of the flag within the group does not imply the score against other countries from the same group.

ES

ZA

PL FI

NO

FR BGCZ HR

LT

SE

DKBE

SK

NL

RO

AT

UK

EE

RS

HU LUIT LV

IS

SISA

JO LB

IE IL

AE

TRCH

RU

Digital

champions

Digital

latecomers

Digital

adopters

Digital

smart followers

KW

QA

DE

SK

16

Market pressure

on the banking sector

Digital champions offer a wide range of functionalities

relevant for customers and a compelling User Experience

FinTechs as challengers of

status quo

Banking sectors which will not live up to

market pressure will face competition not

only from other countries, but also

FinTechs

Foreign Digital champions as

attackers

Digital champions will compete for highly

demanding clients fueled by

implementation of PSD2

A

B

High

High

Low

Low

Dig

ital

Ban

kin

g M

atu

rity

CZ

NO ES

FI

PL

CHFR

RU

TRAT

ZA

BG SK

DK EE DE

IS LU NL

SE UK

BE HR HU

IE IL

IT

LV

LTRO

RS SI

B

A A

No maturity with no pressure

The battle for customer is fought in five fields...

Disruptive change requires disruptive response

17

Connectivity Digitization Experience

InnovationData InsightsExponentials

Although there is a clear age digitalization path…

Disruptive change requires disruptive response

18

0%

5%

10%

15%

20%

25%

30%

35%

40%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70%

1Q15

1Q15 1Q15

1Q15

1Q15

1Q15

1Q16

1Q17

1Q16

1Q16

1Q17

1Q17

1Q17

1Q17 1Q17

1Q16

1Q161Q16

Mobile

bankin

g

Internet banking

R2=0,94

Digital

natives

switching

from internet

banking to

mobile

% of customers active in channel

65+55-64

45-54

35-44

25-34

<24

CE Bank example

Source: Deloitte past project experience and analysis

Current digital natives will account for >60% of population by 2035

… there is still 43% of traditional customers

Disruptive change requires disruptive response

19

Source: Deloitte past project experience and analysis

OMNICHANNEL

CARDS ONLY

BRANCH ONLY

DIGITAL ONLY

43% of traditional

customers

39%

18% 9%

34%

Customer segment by channel usage (SK)

Migration of clients to digital channels is gaining momentum,

changing the model and nature of f2f contact…

Disruptive change requires disruptive response

20

Branches share in total transactions – retail

banking

Mobile banking in total transactions – retail

banking

Source: Alior Bank, UBS Evidence Lab

50%

2015

60%

40%

-8%

2020F2017

2020F

+29%

2017

46%

27%13%

2015

-9%

32%42%

26%

2020F20172015

2015 2017

5%

40%+52%

2020F

20%

Slovakia

EMEA

Omni-channel customers are becoming the most profitable…

Disruptive change requires disruptive response

211. Number of customers indicating the qualities „Has a wide branch network”, „Has good internet banking” , „Has good mobile banking” „You can easily get something done in the call center” as important or very important in an ideal bank

2. At least 1 login in a month; mobile customers are younger – ~30% are below 25

Source: Deloitte project experience

320 294 223 178 165 139 160

+100%+94%

Channel usage:

47%

0

7%1 channel

3%

2 channels

15%

4 channels

47%

3 channels

18%

~50% of customers expect their bank

to be omnichannel

Number of channels indicated as important1

% customers

Omnichannel customers are the most profitable

Average revenue per customer

EUR / year

3 2 2 2 1 1 1

OMNICHANNEL DIGITAL ONLY BRANCH

ONLY

Internet2

Branch

Mobile2

Importance of sales in remote channels is growing, strongly

focusing on lending

Disruptive change requires disruptive response

22CE region includes: Czech Republic, Slovakia & Hungary. SEE region includes: Romania, Bulgaria, Croatia, Serbia, Albania, Bosnia and Hercegowina, Kosowo. CIS includes: Russia, Belarus, Ukraine.

Source: Deloitte analysis based on: internal benchmarks, Finalta, data from public report by Bain & Company

18%

82%4 331

3%

97%

6 882

1%

1 936

2 342

82%

99%

18%

88%

12%

2 8352 853

38%

62%

70%

30%

565

8%

92%

602495

98%82%

2%18%

549

77%

4 174

6%

5 046

23%

94%Credit card

(income, M EUR)

Cash loan

(income, M EUR)

CE

2015 2020

SEE

2015 2020

CIS

2016 2020

Remote channels

Traditional channels

The battle for customer is fought in five fields…

Disruptive change requires disruptive response

23

Digital sales

increase

Differentiated channel

preferences

Demand for

Omnichannel

Leveraging

technology

Evolving f2f

contacts’ role

Biometrics, Fintechs,

Roboadvisory and

Chatbots across

channels

Growing number of

digital interactions

should be monetized

by increased sales

Banks have to invest

in coherent customer

experience in all

channels

More advisory and

assistance, less

service and

transactions

Customer preferences

varies and can not be

simply explained by

demographics

Pace of technological invention drives the change in the industry

Disruptive change requires disruptive response

24

FinTechsRoboadvisory/digital investing

Biometrics Chatbots

Biometrics is becoming a common and safe solution for identifying customers, especially in digital channels

Roboadvisory may be a distinguishing feature in the Affluent segment and support for advisors in deepening relationships with clients

Banks, thanks to cooperation with FinTechs, will be able to expand their competences in digital channels

Chatbots using artificial intelligence are improving the way of communication with bank and can be an alternative to handling simple transactions by call centre

Thank you