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内容

How a Foreign Outsourcing Processor/Technology company to help Chinese Bank for winning a new battlefield on consumer loan market

Prepared by: Kelvin Tai 第一资讯的好处

The China consumer loan market expect to have a exponential growth from 90000 billion in 2011 to 210,000 billion in 2015, where credit card and personal loan would have more rapid growth than others like mortgage loan and car loan

Notes: consumer finance loan refers to medical treatment/durable goods/travel/home renovation/education fund which are mostly non secure short-term loan

With the research done by BCG, compared with other loan product, the competitive advantage of 5 major bank in China do not have enjoy the significant edge over other small and medium size banks.

Notes: consumer finance loan refers to medical treatment/durable goods/travel/home renovation/education fund which are mostly non secure short-term loan

This leads to:

— The battlefield will shift from mortgage loan market to consumer loan market ie credit card/consumer loan

— The correct strategy on target customer segment with niched differentiated service/product to customer, the small and medium size can win this battlefield

Implications to the Bank

-- The Small and Medium size bank should focus on niche market with specific target customer who are those <35 yrs and those between >35 yrs old and <49 yrs old with total investable wealth > RMB 500,000…

— The future financial needs for those would be on Home renovation Health and Medical Travelling

Implications to the Bank

-- From the BCG research, the customer expect the bank to improve on faster application process, more and easy to use repayment channels, attractive loyalty program

— Improvement needs to be made on Simplified and fast turnaround application and underwriting process as well as to

how to do the pre-approval. Improve the After-Sales quality Reduce the interest rate charged while to charge more on handling fee.

Implications to the Bank

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内容How a Foreign Outsourcing Processor/Technology company to help Chinese Bank的好处

-- Lesson learnt on why Foreign outsourcing processor fails to acquire and maintain the outsourcing services with the Chinese Banks. Below would use First Data China...

“Forces” Strategy Response to the “Forces”

A. “Product Mix mismatch Bank’s need and strategy”

Helping the bank to do transformation to enable the business

B. “Too focus on Technical Capability without helping the transformation of the Bank”

Understand the needs of bank from business perspective and adjust the service offering mix

C. “Inflexible and costly charging scheme” Charging on demand and growth with bank business

-- How the Foreign processor/Technology company should adjust their solution package offered to the S & M bank for helping them to implement the transformation…take First Data Flagship Product, VisionPlus, as illustration

“Focus” Solution Initiatives

1. Enhance the product to interface with other website /smart phone app, like Foursquare or 街旁 , to do the coupon/merchant marketing push message.

2. Deploy the data warehouse solution for S&M bank, for analyze the customer behavior and effectiveness of marketing and loyalty program.

3. VisionPlus, has the optional Loyalty module, but it is not an their standard base module. Need to include this as base offering.

1. VisionPlus has a extensive and comprehensive Fee charging flexibility. But it is too complex and difficult to configure even though it is parameter based.

2. Skill and knowledge transfer as well as Business Analyst assistance to make sure a time to market fee charging scheme

1. For some of the S&M banks, channel integration and interface is key for their product differentiated service for supplement the branch network.

2. The solution should have/develop their interface readiness to accept third party payment gateway.

1. Support for batch application processing and pre-approval loan/credit card.

A. Loyalty programAnd Merchant promotion

B. Shift to Fee based revenue

C. Ease of Repayment

D. Simplified Application And underwriting process

-- Foreign processor should help the small – medium size of Chinese Bank to do the transformation to win the battlefield on consumer loan finance

NEW REVENUE GROWTH ENEIGN & CROSS SALES

AGILE & PROACTIVE MARKETINGBank’s investment breakeven

1) Simplified Application processing with batch volume of pre-approval accounts

Competency Centres

Bank’s Harvest Stage

3) Use of Data miningfor launching more targetedLoyalty programs

2) Develop more Loyalty program / customersVolume aggregation

StandardBase

System

11

22

33

Turkey Solution

StandardisedCheap

ExtendableBest Value

Value => Economies of ScaleEconomies of SkillGo to Market “Agility”

4) More Agile and integrated with third party vendor for Merchant promotion and ease of repayment

Years

1st year

2nd year

5) Use of Specialized system for Fraud Detection system to control the credit risk

-- Focus on helping the Small and Medium size bank to develop the differentiated product and service to the card/loan clients

Simplified Application And underwriting process

• Leverage the existing saving/debit card holder to cross sales the credit card with pre-approval cards or loan to speed up the application and underwriting process without increasing the credit exposure

• Use of Pre-defined credit scoring for specific customer segment for pre-approval• Simplify the underwriting requirement and documentation required.

Loyalty programAnd Merchant promotion

• More attractive Loyalty points reward program and merchant promotion:– Customize the different loyalty program to different customer segment– Proactive Merchant promotion by using more integrated channel

Ease of Repayment

• Develop more repayment channel by partnering with other third party payment gateway, eg 支付寶 /財付通 /易拉卡 . This will be extremely important for the S&M bank to supplement the physical branch network.

Key Focus:

Shift to Fee based revenue

• More flexible Fee charging scheme to shift the revenue base from interest to fee based.

Credit Card with Saving function

Installment loan

Data Warehouse

Loyalty Management

Innovative interface with Smartphone/Web based service provider to increase the customer loyalty and merchant promotion

Card Issuing Strategy for differentiated segment and product

Fee based charging scheme

-- How is the solution offering mix to help S&M bank for differentiated product and service to customer to achieve the differentiated service and product in consumer finance

Business Consulting

Product Interface

Differentiated Product and Service to cardholder

Training

Standard SolutionStandard Solution

Credit card issuing management

Multi-language support

Base collection module

Base letter module

Base scoring module

Authorization ISO8583 interface

Card embossing interface

Statement printing interface

Core banking system interface

Internet banking interface

Phone banking interface

Call center interface

SMS server interface

Technical /Business parameter Training for new client

Innovative Product

Innovative Channel

Document Reference1.BCG The Dragon Wants to Spend_Aug_20112.Foursequare - http://en.wikipedia.org/wiki/Foursquare_(website)3.街旁与诺基亚合作推 NFC 签到 或使签到类 LBS 服务更精准 http://cn.technode.com/archives/tag/%E8%A1%97%E6%97%81/