Natwest Group Plc · LSE:NWG
Natwest — Investor Day (June 2019)
40 slides from Natwest's investor day presentation, Jun 24, 2019
Slide 1: Technology & Innovation Seminar
Technology & Innovation Seminar 24th June 2019
Slide 2: Your presenters
Your presenters Simon McNamara, Chief Administrative Officer • Appointed Chief Administrative Officer in September 2013 • Prior to joining RBS, was Chief Information Officer (CIO) of Standard Chartered Bank Consumer Bank (Singapore), responsible for developing and implementing the Group Technology a
Slide 3: Agenda
Agenda Transformation and Innovation overview – Simon McNamara Financial highlights – Christine McPherson Our Innovation agenda – Kevin Hanley Key messages and Q&A – Simon McNamara 3
Slide 4: Transformation and Innovation overview
Transformation and Innovation overview Simon McNamara Chief Administrative Officer 4
Slide 5: We are transforming the bank to better serve our 19m customers
We are transforming the bank to better serve our 19m customers A technology platform that’s secure, resilient SECURE SIMPLE and responds at Customer journeys that speed to changing are digitally enabled and environments feel effortless Innovative products, An integrated digital experiences, bank, us
Slide 6: We continue to invest over £1bn a year while substantially reducing expenses
We continue to invest over £1bn a year in the business while substantially reducing expenses… Other Expenses ….with an increasing 1 £m focus on Digital and 10,000 Innovation 9,000 26% Reduction in mandatory 8,000 and non-ring fenced bank investment 7,000 6,000 16% Increase in discretionary, 3 2014 2
Slide 7: Delivering a resilient, simplified, well controlled platform
SECURE Delivering a resilient, simplified, well controlled platform, improved employee engagement, lower run costs, higher levels of change 2014 2018 Progress 2020+ Technology critical 1 Radically reduce low 312 13 ↓96% incidents 1 criticality incidents Major technology issues 19 3 ↓84% Continued re
Slide 8: Relentless focus on keeping customers and the bank safe and secure
With a relentless focus on keeping our customers and the SECURE bank safe and secure Loss of value to external DDoS attacks, customer 1 fraud impact • 2018 industry up by 16% • 2018 no customer impact • 2018 RBS down by 12% despite significant increase Fraud DDoS in attacks since 2014 Attacks Securi
Slide 9: Intelligent use of Cloud to bring simplification and cost savings
And an intelligent use of Cloud to bring simplification SIMPLE and cost savings Traditional infrastructure 2,500 Internal cloud Computer estate (# of applications) 2,300 External cloud Mainframe A simplified, 2,100 flexible 1,900 technology 1,600 platform - quick to deploy and simple to maintain 201
Slide 10: Simplified technology estate and meeting regulatory requirements
Enabling us to deliver a simplified technology estate and SIMPLE meet demanding regulatory requirements Finance ledger Payroll system Ambit Workday (HR system) Core Murex New mobile (Leasing system) New Bankline Payments (Treasury platform Engine system) 2016 2017 2018 2019 Weekend pre positioning2
Slide 11: Giving our people tools to collaborate and connect digitally
SIMPLE And give our people the tools to collaborate and connect digitally - saving costs, increasing engagement Branch Communications Upgraded networks and infrastructure Mobility Zoom video and audio Wi-Fi in 100% of conferencing branches Virtual desktop work Collaboration from any location Voice b
Slide 12: Customer journeys digitally enhanced and made to feel effortless
Customer journeys digitally enhanced and made to SIMPLE feel effortless Paperless Mortgage Account Opening 215k applications >50% commercial Simplify in FY’18 customer accounts opened within 5 days Lower cost Lending Bankline Mobile and better Automate transformation Bankline now in a customer Pre-a
Slide 13: Transformation of our core platform enables transformation of core services
MODERN The transformation of our core platform enables us to transform our core services No need to re-platform Customers A modular approach to the provision of services and capability Fin Techs FinTechs Delivering for our customers on our own and with partners Digital Interface A customer base of 1
Slide 14: A partner of choice for Open Banking and APIs
MODERN A partner of choice for Open Banking and APIs Open Banking opens up a new world RBS, Ulster & NatWest are 3 of the top 5 ranked banks for API quality 1 We have 289 operational external APIs… …5 customer propositions in use, 12 in the pipeline We’re a partner of choice for FinTech and BigTech
Slide 15: Responsibly maximising the power of data
MODERN Responsibly maximising the power of data Analytics Risk Insights Culture Efficiency Customer Reducing risk centred through innovation e.g. enhanced Supporting over MiMo and Bó Established data quality Availability, 9.5m customer bank-wide and lineage accuracy and decisions a day Data Academy
Slide 16: 24x7 personal assistant
24x7 personal assistant 16
Slide 17: Financial highlights
Financial highlights Christine McPherson Finance Director, Services & Functions 17
Slide 18: Key Messages
Key Messages 1 ~30% bankwide reduction in Other Expenses since 2014 Built digital-first journeys designed around the customer which also 2 support cost reduction and improvements in control Since 2016, our investments have supported ~20% reduction in 3 Property & Technology costs 4 We take a prudent
Slide 19: We continue to invest over £1bn a year while substantially reducing expenses
We continue to invest over £1bn a year in the business while substantially reducing expenses... ….with an increasing 1 £m Other Expenses focus on Digital and 10,000 Innovation 9,000 26% Reduction in mandatory 8,000 and non-ring fenced bank investment 7,000 6,000 16% Increase in discretionary, 3 2014
Slide 20: Our investment has enabled us to serve customers better and reduce costs
Our Investment has enabled us to serve our customers better and reduce costs No. of FTE ~20% 1 We have driven tangible cost £0.6bn reduction in our franchises through £0.5bn our investments in: Personal Banking Staff Costs1 • Digital: 2016 2018 2020 No. of FTE • Process simplification: and ~20% • Fr
Slide 21: We take a conservative approach to capitalising investment spend
We take a conservative approach to capitalising investment spend Notes to the Accounts : Intangible Assets 2018 Goodwill Other(1) Total Cost £m £m £m At 1 January 2018 18,039 2,259 20,298 Currency translation and other adjustments 77 9 86 Acquisition of subsidiaries 48 2 50 • Net Additions/Charge fo
Slide 22: Our Innovation agenda
Our Innovation agenda Kevin Hanley Director of Innovation 22
Slide 23: We have a strong set of innovation assets
We have a strong set of innovation assets INNOVATION Innovation Forum Research Innovation Fund Scouting Pipeline & Delivery Tech Advisory Open Experience Board Technology & Engineering Innovation Committee 23
Slide 24: And have established a rich Innovation Ecosystem
And have established a rich Innovation Ecosystem INNOVATION Collaboration - Google - Microsoft - Semantic Machines - SpendLabs Partnerships - Singularity - Tech City - Ripple - Enterprise - Soul Customer Investment - Facebook University Ethereum - onelogin Alliance Machines Experience - Capital Ente
Slide 25: Our innovation is driving real customer impact
Our innovation is driving real customer impact INNOVATION We measure We measure how We track the innovation many opportunities financial and capability and the are developed to the reputational number of early point of benefit benefits that come stage opportunities delivery and the pace from innovat
Slide 26: Delivering innovative solutions for customers now
And we are delivering innovative solutions for INNOVATION customers …. now A digital SME banking proposition Invoice & payments 24x7 personal automation on one assistant platform Capturing Payments and encouraging trade CurrencyPay™ A simple, secure and streamlined internal payment platform Business
Slide 27: Mettle: The business account that helps you get ahead
Mettle: The business account that helps you get ahead today and plan for tomorrow ✓ Free small business account ✓ Application in minutes ✓ Create, send, track and chase invoices when they are due ✓ Expenses made simple ✓ Capture receipts and categorise transactions for bookkeeping ✓ Track bills and
Slide 28: Helping businesses and communities thrive
Anywhere and anyhow Accept payment in person, online and by phone Helping Get your money fast Next working day settlements businesses and All in one place communities Tools and integrations for your business thrive Simple sign up Take card payments and use the NatWest Tyl Straightforward contracts p
Slide 29: Invoice & payments automation on one platform
Invoice & payments automation on one platform 29
Slide 30: Taking Control
Taking Control WHAT A new digital only bank account that helps people do money better WHY Based on a well-researched, tested and customer co-created 40 percent of working-age adults in the UK proposition, with tangible functional and emotional benefits — that’s just under 17 million people — have le
Slide 31: Delivering innovative solutions for customers now
And we are delivering innovative solutions for INNOVATION customers …. now A digital SME banking proposition Invoice & payments 24x7 personal automation on one assistant platform Capturing Payments and encouraging trade CurrencyPay™ A simple, secure and streamlined internal payment platform Business
Slide 32: Key messages and Q&A
Key messages and Q&A Simon McNamara Chief Administrative Officer 32
Slide 33: Conclusion: Myth vs Reality
Conclusion Myth Reality “You will need to replace your A wholesale replacement of our core banking platform is core platform in the future” not needed. We will continue to simplify and reduce our core platform by replacing standalone components “You have a huge legacy After 5 years of significant in
Slide 34: Key Messages
Key Messages 1 Our technology investment has delivered a highly resilient and agile platform, safe, secure and fit for the future We are using data, APIs and innovation to better meet the needs of our 2 extensive customer base and drive revenue We are spending less on mandatory investment and are ta
Slide 35: Q&A
Q&A 35
Slide 36: Legal Notices
Legal Notices The targets, expectations and trends discussed in this presentation represent RBSG management’s current expectations and are subject to change, including as a result of the factors described in the “Risk Factors” section on pages 253 to 263 of the RBSG 2018 Annual Report and Accounts.
Slide 37: Appendix Slides
Appendix Slides 37
Slide 38: UK Personal Banking: strong digital offering while optimising branch network
In UK Personal Banking we have built a strong digital offering whilst optimising our branch network 2014 2019 • 97% transactions and enquiries through self Mobile Banking and service channels • 20% of everyday banking tasks Online banking • AI bot Cora answering ~500k queries per month Branch Networ
Slide 39: Commercial & Private Banking transforming and digitising key customer journeys
Commercial & Private Banking is focused on transforming and digitising key customer journeys and simplification 2014 2019 • 90% customer journeys self-served online • 30% of commercial accounts opened digitally, Digitisation & • <50% of RM time spent with customers over 50% within 5 days Channel Exp
Slide 40: Transforming the NatWest Markets business through increasing automation
We continue to transform the NatWest Markets business through increasing automation 2014 2019 • Digital products enhancements; FXmicropay made accessible to customers on SAP • No distinct service model for high volume Commerce Cloud flow activity vs. high value solutions activity Strong electron