Firstrand Limited · JSE:FSR
Firstrand — UBS 19th Annual Financial Services Conference 2016
27 slides from Firstrand's conference presentation, Oct 13, 2016
Slide 1: Big Data in banking
Big Data in banking UBS 19th Annual Financial Services Conference: The technology frontier
Slide 2: Content
Content The evolution of Retail and Commercial Banking Big data enablers Modern Credit, Marketing, Financial Crime, CVM and Operations Key challenges and what’s next UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 2
Slide 3: Content
Content The evolution of Retail and Commercial Banking Big data enablers Modern Credit, Marketing, Financial Crime, CVM and Operations Key challenges and what’s next UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 3
Slide 4: The evolution of Retail/Commercial Banking
The evolution of Retail/Commercial Banking Branch Online Judgmental Automated Scoring Product Customer UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 4
Slide 5: Evolution from branch to e-channels
Evolution from branch to e-channels Number of interactions Millions 4 500 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 0 2010 2011 2012 2013 2014 2015 2016 Online Mobile App ATM POS Branch UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 5
Slide 6: Evolution from judgemental to automated credit
Evolution – from judgemental to automated credit % Gini for 100 ‘banked’ customers, 90 non-banked much lower 80 70 60 50 40 30 20 10 0 1999 2001 2003 2005 2007 2009 2011 2013 2015 Judgemental decisions Accuracy UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 6
Slide 7: Evolution from product centric to customer centric view
Evolution from product centric to customer centric view Customers on CIS* (%) Number of customer documents on Documentum** (Million) 99.5 95 375 300 260 220 200 Individual Juristic 2012 2013 2014 2015 2016 Customer information management has been Customer and product records have been centralised ce
Slide 8: Content
Content The evolution of Retail and Commercial Banking Big Data enablers Modern Credit, Marketing, Financial Crime, CVM and Operations Key challenges and what’s next UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 8
Slide 9: Big Data enablers
Big Data enablers Comprehensive Enterprise data single view of warehouse/lake customer Big Data Operational decision making Analytical capability UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 9
Slide 10: Comprehensive single view of customer
Comprehensive single view of customer FirstRand Citizen UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 10
Slide 11: Enterprise Data Warehouse/Lake
Enterprise Data Warehouse/Lake Marketing Financial Risk & Sales Crime CVM Operations UBS 19Bank First National th Annual – a division ofFinancial Services FirstRand Bank Limited. Conference An Authorised Financial Services and|Credit 13Provider October 2016 | slide no. 11 (NCRCP20).
Slide 12: More sophisticated analytical capabilities required to extract value
More sophisticated analytical capabilities required to extract value SIMPLE STATISTICAL MORE ADVANCED EXPERT SYSTEMS MODELS METHODS Decision Trees Logistic Regressions Neural Networks Random Forest Σ UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 12
Slide 13: Operationalising decisions
Operationalising decisions “Analytics without decisions is meaningless” Channels Branch Mobile Online ATM Actions App Ability to deliver Integration layer Big Data Analytical Decisions Decisions into production systems is key CAMS IDS ILP Estimates CIS Customer and Product Systems DATA STREAMS UBS 1
Slide 14: Content
Content The evolution of Retail and Commercial Banking Big Data enablers Modern Credit, Marketing, Financial Crime, CVM and Operations Key challenges and what’s next UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 14
Slide 15: Big Data use cases
Big Data use cases Marketing Financial Risk CVM Operations and Sales crime UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 15
Slide 16: Big Data use cases - Risk
Big Data use cases - Risk Risk • Enhanced Credit Models • Integrated view across products, channels, enablers • Sophisticated behavioural analysis • Augmented/Derived characteristics • Risk appetite – optimised at every level • ICAAP models • Regulatory Risk/Compliance & Market Conduct • Insurance U
Slide 17: Big Data use cases – Marketing and Sales
Big Data use cases – Marketing and Sales Marketing and Sales • Facilitated by integrated view of customer across products/ accounts/ transactions/ channels and external data • Needs-based modelling across borrow, transact, deposit and insure • Behaviour-based propensity modelling at product level •
Slide 18: Digital 'Big-3' platform instrumental in sales growth
Digital ‘Big-3’ platform instrumental in sales growth 2 500 000 2 000 000 Borrow 1 500 000 Transact 1 000 000 Investment 500 000 Insurance 0 FY13 FY14 FY15 FY16 UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 18
Slide 19: Big Data use cases – Financial crime
Big Data use cases – Financial crime Financial crime • Money-laundering risk modelling pioneered use of Big Data analytics platforms and combination models • Fraud modelling combining product, channel, geography, sector and device behavioural information • Network analysis used for complex investiga
Slide 20: Big Data use cases - CVM
Big Data use cases - CVM CVM • Customer profitability modelling allows customer-level decisioning and strategy guidance across levels • Retention modelling retains good customers • Pricing optimisation across multiple dimensions • Rewards designed to influence customer behaviour UBS 19th Annual Fina
Slide 21: CVM – Deep understanding of profitability
CVM – Deep understanding of profitability Million Monthly profit per risk grade 45 40 35 30 25 20 15 10 5 0 Low risk Risk grade High risk NIACC Cost of capital Tax Opex TTC imp UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 21
Slide 22: Big Data use cases - Operations
Big Data use cases - Operations Operations • Operational implementation has taken place to automate a wide range of credit, marketing, sales, fraud, record keeping, validation and other tasks • Call-centres and collections large focus for efficiency and effectiveness optimisation • Major focus for c
Slide 23: Modern operations – Contactability is one of many key drivers of efficiency
Modern operations – Contactability is one of many key drivers of efficiency 01 Relevant 05 Contact Best Time To Contact 02 Aim is to contact the right customer using the right method at Contact CONTACTABILITY Method the right time with the 04 right message Contact NPV: TBC language/ message Contact
Slide 24: Content
Content The evolution of Retail and Commercial Banking Big Data enablers Modern Credit, Marketing, Financial Crime, CVM and Operations Key challenges and what’s next UBS 19th Annual Financial Services Conference | 13 October 2016 | slide no. 24
Slide 25: The modern FI requires new infrastructure and skills
The modern FI requires new infrastructure and skills FROM TO • Integrated customer approach and • Silo product approach and systems systems • Overnight batch • Real-time streaming • BI people, IT developers, DB • Data scientists, architects, engineers administrators • Combined data-analytic platform
Slide 26: What's next
What’s next Intelligent agents - robo-advisors, service and sales agents GAAF (Google, Apple, Amazon & Facebook) & others entering financial services Integrated Financial services (Lend, Deposit/Invest, Transact, Insure, Telco, …) UBS 19th Annual Financial Services Conference | 13 October 2016 | sli
Slide 27: Thank you
- Thank you
FirstRand — UBS 19th Annual Financial Services Conference 2016 on 6ix