Bank Of Nova Scotia · TSX:BNS
Bank Of Nova Scotia — Scotiabank — Investor Day (February 2017)
105 slides from Bank Of Nova Scotia's investor day presentation, Feb 2, 2017
Slide 1: Scotiabank Digital Banking Update
Scotiabank Digital Banking Update February 2, 2017
Slide 2: Digital Banking Update
Digital Banking Update JAKE LAWRENCE Senior Vice President, Investor Relations
Slide 3: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements Our public communications often include oral or written failure of third parties to comply with their obligations to the Bank to public infrastructure, such as transportation, communication, forward-looking statements. Statements of this type are included
Slide 4: Strategic Agenda
Strategic Agenda BRIAN PORTER President and Chief Executive Officer
Slide 5: Strategic agenda
Strategic agenda Structural Cost Transformation Digital Leadership Transformation Customer Business Mix Focus Alignment Strong Risk Culture Why We believe every customer has the right We Bank: to become better off Shift to become more CUSTOMER-FOCUSED Culture: and PERFORMANCE-ORIENTED 2
Slide 6: Culture Leadership Innovation Partnerships
Culture Leadership Innovation Partnerships 3
Slide 7: Looking back, shifting our culture
Looking back, shifting our culture has been the most important effort that we have undertaken to build an even better Bank. 4
Slide 8: Culture Leadership Innovation Partnerships
Culture Leadership Innovation Partnerships 5
Slide 9: Closing
Closing When it comes to digital banking, we are positioning ourselves to lead 6
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Slide 11: Momentum of our Digital Transformation
Momentum of our Digital Transformation IGNACIO “NACHO” JAMES DESCHAMPS O’SULLIVAN Group Head, International Banking Group Head, and Digital Transformation Canadian Banking
Slide 12: Culture Alignment
CULTURE ALIGNMENT 2
Slide 13: Digital transformation strategy
Digital transformation strategy ALIGNMENT TECHNOLOGY MODERNIZATION CULTURE & TALENT CUSTOMER EXPERIENCE OPERATIONAL EFFICIENCY 3
Slide 14: Setting the context
Setting the context Convenience simplicity PERSONALIZATION 4
Slide 15: Customers more likely to be delighted by mobile
Experiencing digital 30 % more likely Customers are to be delighted by mobile transactions compared to their experience in branches Bain´s 2015 Customer Satisfaction Global survey 5
Slide 16: Digital transformation strategy
Digital transformation strategy ALIGNMENT TECHNOLOGY MODERNIZATION CULTURE & TALENT CUSTOMER EXPERIENCE OPERATIONAL EFFICIENCY 6
Slide 17: Customer experience driven
Customer experience driven CUSTOMER EXPERIENCE CUSTOMER DIGITAL MOBILE FIRST DIGITAL OMNI-CHANNEL EXPERIENCE MARKETING DESIGN ADOPTION DISTRIBUTION SYSTEM AND SALES 7
Slide 18: Operational efficiency
Operational efficiency OPERATIONAL EFFICIENCY Streamline Drive more Leverage processes and customer activity our scale operations through digital channels Reduce structural Deploy costs new technologies 8
Slide 19: Alignment
Alignment ALIGNMENT DIGITAL DIGITAL BANKING BANKING CANADA CHILE RETAIL RETAIL Leadership and tone at the top TECHNOLOGY TECHNOLOGY BANKING BANKING Business led; customer-focused DEDICATED Local innovation; DIGITAL BANKING ORGANIZATION connected internationally DIGITAL BANKING DIGITAL BANKING
Slide 20: Innovation partnership ecosystem
Innovation partnership ALIGNMENT ecosystem FINTECHS ACADEMIC VENTURE PARTNERSHIPS CAPITALISTS 10
Slide 21: Technology modernization
Technology modernization TECHNOLOGY MODERNIZATION Platform New Cloud-based Data & modernization technologies architecture analytics 11
Slide 22: Culture & talent
Culture & talent CULTURE & TALENT CUSTOMER MORE TALENT AGILE PERFORMANCE CO-CREATION ORIENTED CULTURAL TRANSFORMATION 12
Slide 23: Digital vision: medium term
Digital vision: medium term CUSTOMER DIGITAL ADOPTION DIGITAL IN-BRANCH FINANCIAL EXPERIENCE BY OUR CUSTOMERS RETAIL SALES TRANSACTIONS A leader At least At least Less than in our five key markets (measured by NPS) 70 % 50 % 10 % WILL IMPROVE ALL-BANK PRODUCTIVITY RATIO 13
Slide 24: Culture momentum leader
Alignment Culture momentum LEADER 14
Slide 25: Financial Considerations
Financial Considerations SEAN McGUCKIN Group Head and Chief Financial Officer
Slide 26: Expected benefits
Expected benefits Customer Operational Experience Efficiency Structural Cost Transformation All Bank productivity ratio of 50% or better by 2021 2
Slide 27: Technology spend
Technology spend Ongoing Scotiabank efficiencies and aspires to be a Supported by re-prioritizing digital leader in technology spend investments to fund our 5 key of $2.6 billion technology spending markets growth 3
Slide 28: Digital spend
Digital spend Digital investment of $425 million in 2017 and ~ $1.3 billion over Type the next three years Geography 55% 50% 50% 45% Technology Canada Digital Capabilities Pacific Alliance 4
Slide 29: Summary
Summary Increased confidence in all-Bank medium-term objectives of 5-10% EPS growth and 14%+ ROE 5
Slide 30: Driving Customer Experience
Driving Customer Experience MIGUEL UCCELLI CEO and Country Head of Scotiabank Peru
Slide 31: Pacific Alliance
Pacific Alliance Equivalent to the world’s tenth largest economy 225 million people; median age of 30 Low banking penetration 2
Slide 32: Putting the voice of the customer at the centre
Putting the voice of the customer at the centre of everything we do ECONOMIC STRONG VALUE CUSTOMER CREATION CULTURE SIMPLE AND BEHAVIOURAL EASY TO CHANGE UNDERSTAND GLOBAL EMPLOYEE CUSTOMER CONSISTENT ENGAGEMENT ADVOCACY APPROACH 3
Slide 33: TH O IS ur IS C A NO is T m S or x
THO ISurISC A NOisTmSor x SSyYsS teTm IMePtLhY E anAa sc M, SCoOreR E 4
Slide 34: Scotiabank's Customer Experience
IN N E R LOOP Scotiabank’s Actively listening in real time to our customers Customer Post-interaction survey Customer call-backs Experience Coaching and teamwork Front-end technology (Cx) System H U D D LE Empowering front-line to act and escalate issues OU T E R LOOP Identifying root causes, priori
Slide 35: Creating a sustainable competitive edge
Creating a sustainable competitive edge Drive a culture of Empower employees with customer advocacy digital-driven tools Empower employees to manage customer Leverage data and analytics feedback and correct Cx issues 6
Slide 36: Proven economic value
Proven economic value Promoters are worth more than detractors 222 22 Refer more 2.2X 37 Stay longer 63 Buy more 100 Proven economic value Detractor Promoter 7
Slide 37: Successful implementation in Peru
Successful implementation in Peru Customer satisfaction Juntos por Strategy Scotiabank Cx as Peru´s el cliente/ launch strategic te escucha System priority Club FANS New strategy Implemented Behavioral Pledge to listen Installed our own and winning NPS as key change programs to the voice of comprehe
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Slide 39: Cx System is driving culture change and customer-focus
Cx System is driving culture change and customer-focus 10
Slide 40: Pivoting Retail Distribution Strategy to Digital
Pivoting Retail Distribution Strategy to Digital JAMES McPHEDRAN Executive Vice President, Canadian Banking
Slide 41: Digital context
Digital context 4% -7% 42% CAGR in CAGR in CAGR in mobile total transactions branch transactions transactions CLEAR CASE FOR CHANGE TOWARD DIGITAL 2
Slide 42: Embracing the digital mindset
Embracing the digital mindset New digital talent Bankers and Mobile first, technologists omni by design co-creating 3
Slide 43: What digital means to our retail strategy
What digital means to our retail strategy Advancing the Transforming digital customer our physical experience network • digital sales • simplify presence • Cx System • reduce cost 4
Slide 44: Digital customer experience
Digital customer experience Case study JUNE 2015 DECEMBER 2015 OCTOBER 2016 First Rapid Lab Established digital Launched organization Digital Factory 1 12 20+ Lab Labs Labs 5
Slide 45: Digital customer experience
Digital customer experience DAY-TO-DAY BANKING CREDIT CARDS SMALL BUSINESS DIGITAL X-SELL 15 days 7 days no digital capability fulfilled in minutes 5 minutes 2 minutes 20 minutes EXCELLENT DIGITAL CUSTOMER EXPERIENCE IS THE DRIVER FOR AGGRESSIVE SALES GROWTH 6
Slide 46: Digital customer experience: 2016 results
Digital customer experience 2016 results Digital sales Mobile banking Digital sales functionality* functionality* results 1 ST PLACE 1 ST PLACE >50% GROWTH from previous year * 2016 Forrester Canadian benchmark 7
Slide 47: Network transformation
Network transformation Customer experience Simplification • Meaningful conversations • De-layered management structure • Digital coaches • Digitized processes • Coaching and sales leadership • Improved employee experience 8
Slide 48: Network changes are significant
Network changes FLEXIBLE FORMATS are significant DISCIPLINED SALES AND ADVICE FOCUS OPTIMIZED TRANSACTION FOOTPRINT MIGRATION REDUCED DIGITAL STAFFING ADOPTION 9
Slide 49: A different implementation approach
“ It allowed me to focus A different more on coaching and spending more time with my customers, and that implementation has been awesome.” BRANCH MANAGER approach “ This change is revolutionary for our branch.” Creating CUSTOMER SERVICE REPRESENTATIVE meaningful “ New digital capability gives us the
Slide 50: Takeaways
Takeaways Advancing customer Digital is an enabler experience for our retail strategy Digital focus drives dynamic change across all channels Strong organizational alignment 11
Slide 51: Gaining Digital Traction in the Pacific Alliance
Gaining Digital Traction in the Pacific Alliance FRANCISCO SARDÓN CEO and Country Head of Scotiabank Chile
Slide 52: Driving digital sales
Driving digital sales CUSTOMER EXPERIENCE + CUSTOMER DATA AND ANALYTICS + SIMPLIFIED PROCESSES 2
Slide 53: Colpatria – leveraging digital marketing and social media
Colpatria – leveraging digital marketing and social media 75% # 32 MORE PROSPECTS IN THE WORLD AS A RESULT OF 1,000 SAVINGS ACCOUNTS THROUGH 3
Slide 54: Mexico's new online/mobile platform
Mexico’s new online/mobile platform DRIVING30 % TRANSACTION GROWTH 4
Slide 55: Scotiabank Chile: growing digital sales
Scotiabank Chile: growing digital sales TERM DEPOSITS PERSONAL LOANS 52% 62% 71% 15% Q1 2015 Q1 2016 Q1 2017 Q1 2017 % of unit sold % of unit sold FROM 20-30 MINUTES BRANCH SALES TO <2 MINUTES ONLINE SALES 5
Slide 56: Chile's digital momentum
Chile’s digital momentum Aligned goals – Customer specific Simplified branch offers processes and digital DIGITALLY SAVVY CONSUMER 6
Slide 57: Optimizing pricing in Chile
Optimizing PERSONAL LOAN pricing in Chile VOLUME GROWTH +20% 2015 2016 AVERAGE SPREAD +32 bps 7
Slide 58: Growing market share in Chile
Growing market share in Chile MARKET SHARE - RETAIL LOANS MARKET SHARE - CORE DEPOSITS RETAIL BANKING ALL BANK +160 to +170 to bps 7.8% bps 5.5% 2014 2016 2014 2016 8
Slide 59: Summary
Summary Work closely with Canada We have laid a digital to accelerate progress foundation in the Pacific Alliance region Better serve customers in the Pacific Alliance region 50% digital sales goal 9
Slide 60: Brenda Rideout
BRENDA RIDEOUT Chief Marketing, Information and Strategy Officer
Slide 61: Canada's leading digital bank
Canada’s leading digital bank Over Over Over 2 Million 34 Billion $ $ 2.5 Billion Clients in Deposits in AUM 90% 99% Digital Transactions are Onboarding Self-Serve 2
Slide 62: Our hard work is paying off
Our hard work is paying off 63 Industry 20 50% Multi-Product 1.4% Client 50% New Clients 37% Higher New Client 63 Net Promoter Clients Attrition* Via Referral Savings Balances Score (NPS) *Multi-product Clients 3
Slide 63: We're evolving the Client experience
We’re evolving the Client experience Action Insightful Seamless Contextual Pro-active Oriented 4
Slide 64: Our competitive advantage
Our competitive advantage Operational Client Offer Strong Excellence Economic Value Experience Low-Cost to Clients Leader Model 5
Slide 65: Changing landscape
Changing landscape Innovating with Scotiabank, Tangerine will deliver an even better client experience 6
Slide 66: Tangerine Forward Banking
Tangerine” Forward Banking”
Slide 67: Technology & Architecture Platform
Technology & Architecture Platform KYLE MCNAMARA MICHAEL ZERBS EVP and Co-Head, EVP and Co-Head, Information Technology, Information Technology, Business Systems Enterprise Technology
Slide 68: Strategic focus for technology
Strategic focus for technology Modernize our Leverage our platform to accelerate data, scale and value delivery Velocity Leverage partnerships Increase day-to-day efficiency Foundation and safeguard the bank 2
Slide 69: Our technology strategy is well aligned
Our technology strategy is well aligned Digital Technology Operations Banking 3
Slide 70: Foundation
Foundation Increase day-to-day efficiency and safeguard the Bank 4
Slide 71: Simplifying and driving efficiencies
Simplifying and driving efficiencies Foundation Create a more Generate Simplify & modern significant de-layer IT organization cost savings 5
Slide 72: Safeguard the Bank through robust cyber-security
Safeguard the Bank through Foundation robust cyber-security 1 Protect Example: Leveraging behavioural analytics to 2 Detect assess global user activity in support of data loss prevention 3 Respond 6
Slide 73: Velocity
Velocity Modernize our platform to accelerate customer delivery 7
Slide 74: Modernizing our platform
Modernizing our platform Velocity Our core banking systems are proven, reliable and protected Chequing Credit Investment Retail Mortgages Others & Deposits Cards Products Loans 8
Slide 75: Modernizing our platform
Modernizing our platform Velocity Today each customer Contact Mobile channel interacts Branch Mobile Online Centre ABMs Sales Force with those systems separately, as they were added one-by-one Chequing Credit Investment Retail Mortgages Others & Deposits Cards Products Loans 9
Slide 76: Micro-services enable speed and stability
Micro-services enable Velocity speed and stability Continuously evolve Contact Mobile customer channels Branch Mobile Online Centre ABMs Sales Force without changing the back end Micro-services Layer Core banking system (Ex. Money Movement, Customer Profile Management, Authentication) updates withou
Slide 77: Building micro-services in the cloud enables...
Building micro-services in Velocity the cloud enables... • Automation & reusability • Standardization • Faster time-to-market Contact Mobile Branch Mobile Online Centre ABMs Sales Force • Iterative development Micro-services Layer (Ex. Money Movement, Customer Profile Management, Authentication) 11
Slide 78: Speed to market for us and our partners
Speed to market for us Velocity and our partners Contact Mobile Branch Mobile Online Centre ABMs Sales Force Micro-services Layer (Ex. Money Movement, Customer Profile Management, Authentication) Cloud and Open API strategy enables banking anywhere Chequing Credit Investment Retail Mortgages Others
Slide 79: Leverage
Leverage Leverage our data, scale, and partnerships 13
Slide 80: The bank of the future is defined by data
The bank of the Leverage future is defined by data “Know me, wow me, make it easy for me…” 14
Slide 81: Building an Enterprise Data Lake
Building an Enterprise Data Lake Leverage Monthly data ingestion = 10x data collected in first 184 years Account & Partnership Data Transaction Data Enterprise Data Lake Customer Information & Interactions Data Third Party Data 15
Slide 82: Customer 360
Customer 360: Leverage Delivering the personalization Real-Time customers demand Decision Processing Real-Time Insight & Intent Generation Account & Partnership Data Transaction Data Enterprise Data Lake Customer Information Third Party Data & Interactions Data 16
Slide 83: Building out a rich partner ecosystem
Building out a Leverage rich partner ecosystem 17
Slide 84: Academic partnerships
Academic partnerships Leverage QUEEN’S U of T OCAD Scotiabank Centre for ScotiabankDisruptive Scotiabank Design Thinking Customer Analytics Technologies Venture Research Studio October 2015 March 2016 September 2016 January 2017 January 2016 September 2016 December 2016 SAINT MARY’S WESTERN CREATIVE
Slide 85: Incubating and partnering with start-ups
Incubating and partnering Leverage with start-ups 19
Slide 86: Wrap-up
Wrap-up Foundation Velocity Leverage 20
Slide 87: Building up the Digital Banking Organization
Building up the Digital Banking Organization SHAWN ROSE PAMELA HILBORN Executive Vice President, Vice President, Digital Banking Design Lead
Slide 88: Purpose of Digital Banking Organization
Purpose of Digital Banking Organization We are leading the Bank’s digital transformation across our network 2
Slide 89: Digital Banking is a customer play
Digital Banking is a customer play. To support this, we need to incrementally become a design-led software organization 3
Slide 90: Digital Factories in 5 countries
Digital Factories in 5 countries COLOMBIA CANADA CENTRE WITH SPECIALISTS CHILE MEXICO PERU 4
Slide 91: Introducing our local leaders
Introducing our local leaders 5
Slide 92: Communities of Practice
Communities of Practice We created Communities of Practice between specialists in every country Members are bound together by a common skill sector expertise – what keeps them together is a shared passion for their craft DESIGN ENGINEERING ANALYTICS DIGITAL PRODUCT AGILE MARKETING 6
Slide 93: Designing a better customer experience
Designing a better customer experience DESIGN THINKING: DISCOVERY EXPLORATION PRODUCT & INSIGHTS & DESIGN IMPLEMENTATION design strategy solution design delivery PROTOTYPE, PROTOTYPE, TEST, ITERATE TEST, ITERATE 7
Slide 94: What does agility enable us to do?
What does agility enable us to do? LESS WASTE TRANSPARENCY REDUCED RISK Work not wasted Prioritization is an Collaboration leads to when priorities change informed process realistic deliverables Increased flexibility More transparency Smaller and more and ability to and better visibility frequent re
Slide 95: Designing a better customer experience
Designing a better customer experience DESIGN INSIGHTS & PROTOTYPING: 9
Slide 96: Changing with our customers by personalization
Changing with our customers by personalization Predictive data & intelligence Fraud prediction Travel notification Customized offers Dynamic content Social media data 10
Slide 97: To enable our customers to be better off, we must learn from them
To enable our customers to be better off, we must learn from them 11
Slide 98: What does success look like?
What does success look like? Customers Employees Primary stay with us, and will stay at customer will refer us the Bank growth 12
Slide 99: Creative spaces to support collaboration and idea generation
Creative spaces to support collaboration and idea generation 13
Slide 100: Helping our people to be successful
Helping our people to be successful RECRUITING RE-RECRUITING 14
Slide 101: We drive the digital transformation
We drive the digital transformation BIAS TO BUSINESS ACTION DRIVEN TEST & OPENNESS AGILE LEARN TO CHANGE MENTALITY APPROACH SMALL DESIGN CAPABILITIES EMPOWERED THINKING TO BUILD TEAMS 15
Slide 102: Strategic Partnerships for Innovation
Strategic Partnerships for Innovation SHAWN ROSE Executive Vice President, Digital Banking
Slide 103: Introducing our panel
3 Introducing our panel 1. Justin LaFayette Managing Partner, Georgian Partners 2. David Arana Founder & CEO, Konfío 1 2 3. Michael R. King Associate Professor, Ivey Business School & Co-director, Scotiabank Digital Banking Lab 4. Dubie Cunningham 3 4 VP, Innovation, Digital Banking, Scotiabank 2
Slide 104: Closing Remarks
Closing Remarks IGNACIO “NACHO” DESCHAMPS Group Head, International Banking and Digital Transformation
Slide 105: Becoming a leader in digital banking
Becoming a leader in digital banking Redesigning Lowering cost the customer structure Listening & experience Transforming responding to our culture our customers Innovating Attracting locally and diverse deploying in leadership our 5 key & talent markets 2