The Changing Face of Consumer Banking Exceeding Expectations

The Changing Face of Consumer Banking – Exceeding Expectations and Managing the Risks Igniting Transformational Change Presenter: Sheree Martin, General Manager – Marketing & Service Delivery The 39 th AGM and Conference of the Presentation to the NCBCaribbean Board of Directors Association of Bankers July 28, 2011 November 15, 2012 Montego Bay Convention Centre Sheree Martin

Presentation Outline • A Brief Look Back • Today and Tomorrow’s Regulatory Environment • The Bank’s Reality • Three Insights from the “New” Banking Consumer National Commercial Bank Jamaica Limited

Weak supervision, inadequate capital and liquidity requirements have been highlighted as reasons for the 2008 global financial crisis…. Regional Impact To large extent, the trends in the Caribbean have mirrored those in the developed markets as institutions aim to meet the requirements for regulators and satisfy the increasing demands of customers. Since then…some strategic U-turns, ripping up plans for growth as balance sheets are re-structured and focus turns to core markets, improved asset performance and increased productivity. National Commercial Bank Jamaica Limited

Regulators maintain close and increased watch on the sector with several objectives in mind…… Sovereign Safety/ Absorption Institutional Risk Mitigation Consumer Protection Industry Transparency Macro-economic support Anti-Money Laundering National Commercial Bank Jamaica Limited

Competition has intensified amongst players and increasingly includes others outside the financial industry • Payments landscape’s continued exposure to significant disruption • Co-operative arrangements and collaborations between players in and outside the sector • Switching costs as a barrier is being eroded • Direct channels required more and more to increase their revenue contribution National Commercial Bank Jamaica Limited

Besides increased regulation and competition – re-structuring, amalgamation, and integration of new systems, processes, services and resources are being pursued Adopting cross-industry best practices: keeping an open outlook towards imbibing best practices from others: telecoms, automobile and retail. Leveraging technology to optimize operating cost efficiency Data Analytics – analyzing tons of data to better understand customer needs, ramp up cross sales metrics and increase customer retention National Commercial Bank Jamaica Limited

Driving cost efficiency while expanding market share will provide customer value and shareholder value #/ % Processes are the lifeblood of banking and differentiates a performing bank from a non-performing one. MARKET SHARE With the current level of operational integration, a single process could cut across business units, functions, products, channels and so son. This is important in measuring efficiency and profitability – unless processes are fully integrated it is not possible to assess their results in totality. COST OF CUSTOMER ACQUISITION & MAINTENANCE $ National Commercial Bank Jamaica Limited

What does the “NEW” banking customer want? “Value my time” “Give me access on my terms” “Win my loyalty” “Be upfront and transparent” “Ensure value for money” “Keep my money safe” “Engage me on my interests” “Be socially conscious” National Commercial Bank Jamaica Limited

Channel Agnosticity – valuing customer time, money, access and security “If you had a billion dollars in private equity to invest in a bank today, would you deploy branches in the same way an established bank with $1 billion in assets has them deployed today? ” ATM Mobile Banking IVR Internet Banking Retail Branches “What sort of channel mix would you build into a brand new banking model today? ” Call Centre Tablet Apps The single biggest threat is the changing distribution model National Commercial Bank Jamaica Limited

Customer Engagement understanding how customers wish to be engaged – through what channels and media; banks must communicate well and align with customer lifestyles A “segment of one” - take into account important factors which define the identity of a customer from a financial perspective such as demography, ethnicity, risk profile, usage behaviour, channel preferences, likes, dislikes, feedback, etc. . National Commercial Bank Jamaica Limited

Marketing 3. 0 _ Being Socially Conscious Will Create Brand Advocates and Win Customer Loyalty Marketing 1. 0 Marketing 2. 0 Marketing 3. 0 Product Centric Marketing Consumer Centric Marketing Values Driven Marketing How Companies See the Customer Mass Buyer with Physical Needs Smarter Customer with Heart & Mind Whole Human with Mind, Heart & Spirit Key Marketing Concept Product Development Differentiation Values Corporate Mission, Vision & Values National Commercial Bank Jamaica Limited

The Three Insights • Channel Agnosticity – To remain relevant today, think about how a customer will access our product or service…. deliver those products and services securely and cost effectively, whenever and wherever customers require…. • Customer Engagement – Understand respect the voice of the customer…. be prepared to engage openly and transparently based on where the customer is listening, collaborating and sharing…get and use the data…. • Being Socially Conscious – Winning loyalty involves not just excellent service and innovative products…. determine if your brand represents social values. National Commercial Bank Jamaica Limited

Sheree Martin martinsa@jncb. com National Commercial Bank Jamaica Limited