1. Developing Alternative Distribution Channels in the Bulgarian Banking Sector
Create an integrated, customer focused, alternative way of customer servicing and business development
October 2013

2. Alternative Distribution Channels: Definition
New Integrated Services
BRANCH
KIOSK
- Automated
Integration
- e-Applications
- e-Payments
- Deposits
- Withdraws
- Automated
banking
- e-Applications
- Information
- Sales
- Remote assistance
- Promotions
PHONE
BANKING
MOBILE BANING
- IVR
- Call Canter
- Information
- Transfers
- Sales
- Banking Support
- Transfers
- Information
- Sales
- Alerts
ATM
INTERNET BANKING
- Withdraws
- Deposits
- Transfers
- Information
- Sales
- Utility Payments
e-B2B
- Distributed
Electronic Services
- Multilink Transfers
- Business Network Services
- Customer Programmes
- Remote Transfers
- Multiple Accounts
- Information
- Sales
- Alerts
- e-Applications

3. The importance of Alternative Distribution Channel (ADC) services
Role
For the client
For the bank
The role of ADC is to create and maintain a friendly, convenient and engaging banking experience
24hr, Online, real-time access to the Bank
Access through the majority of “touch-points” customers use (PC, ATM, Mobile, Tablets, phone, social media, etc.)
Adding value added services to contribute to customer satisfaction & retention (e.g. SMS alerts, location based services, B2B etc.)
ADC services are a strategic asset from a customer perspective as Bank customers are becoming more demanding from their overall banking experience
The majority is banking with more than one institution
They demand more “power”, control, transparency & quality of service
The new generation is used to instant and free services
ADC services are a strategic asset for the Bank, in order to implement a common multichannel strategy aiming to enable the delivery of an integrated set of services to customers while at the same time achieve cost efficiencies and increased revenue streams.

4. √ ~ ADC in Bulgarian Banks / Service Offering Postbank
Services Comparison
Bank
E-Banking
M-Banking
Phone Banking
ATM
Postbank √ ~
Unicredit Bulbank
DSK
Reiffeisen
UBB
FIB
~ M-banking partial services

5. √ ADC in Bulgarian Banks / Organization UBB FIB Reiffeisen
Services Comparison
Bank
ADC
Combined
Business & Operations
Business
Part
Operations Part
Fragmented
UBB √
FIB
Reiffeisen
Unicredit Bulbank
DSK
Postbank

6. Proposed Model Overview: Centralization of Services and Coordination
Centralisation
Alternative Distribution Channel unit, should be responsible for all channels and electronic services offered by the Bank (e/m-Banking, Phone Banking, ATMs channels as well as B2B services) across customer segments (Retail, SBB, Corporate etc.)
The centralized unit should be responsible for driving the design of innovative electronic services and solutions and also for the:
Design, Business Development and Support of electronic products and services (banking and non-banking)
Management of the Bank’ online presence and digital marketing actions
Promotion of electronic products and services of the Bank across available media

7. Proposed Model Overview: Centralization of Services and Coordination
Centralisation
Principles
Centralization of the ownership and accountability across electronic channels and services will:
control in a seamless manner a common multichannel strategy aiming to enable the delivery of an integrated set of services to customers while at the same time achieve cost efficiencies and increased revenue streams for the Bank.
ensure the proper adaptation of internet service capabilities, providing customers integrated management of their bank relationships and transactions.
facilitate the offering of combined packages of products and services (bundling)
aggregate the monitoring of technological and operational developments and electronic behavior trends aiming to adopt effective solutions which improve service quality and reduce transaction costs
create value by providing B2B services (i.e. e-payments, floorplan schema, e-marketplace, e-catalogue, e-auctions and e-invoicing bundling)
establish an in-house expert center benefiting from economies of scale created in both resources and operations management

8. Towards an Integrated Approach
How
Alternative Channels Integration
Integrate all existing alternative channels under a unique business unit
ATMs, APSs, e-banking, m-banking, Phone-banking/Call Center to be integrated into a new Alternative Distribution Channels business unit
The new unit to define & implement the ADC business strategy targeting the increase of the customers’ transactions through the bank’s alternative channels and the reduction of the transactions costs to the bank’s benefit
The new unit to share a common already existing infrastructure, which will evolve in sync for all channels following the “develop once, use many” approach, hence achieving economies of scale.

9. New ADC structure enabling unified Commercial, Operational and Support approach
Functions
Unified
Services
Commercial
Operational
Support

10. The three core functions
Desired ADC model
The three core functions

11. Integrated on one line level Coordinated functions
The target operating model should be based on centralization and consolidation of business and support functions, across channels
New Structure
Integrated on one line level
Coordinated functions

12. Steps to achieve ADC integration
Potential Options
for an effective
ADC unit
Option 1: ADC under OTO
Headed by an experienced executive having experience and overall responsibility of the ADC section
Strategy definition and implementation emanating from the unit itself; development of ADC is the main reason of its existence, not a side-show
Close and effective cooperation with Network Division and the branches but also “healthy competition” in place
Vertical integration of the unit’s functions in the sense that business development, customers support and daily operations are provided by the ADC own resources
Revenues of the ADC unit calculated at VBM level they practically impact branches’ P&L
Improvement of Operational efficiency trough close cooperation with the rests of OTO units will ensure improved customer experience
Option 2: ADC under Network Division
The ADC section acts complementary to the branches and supports branches targets; branches constitute a major part of the ADC strategy.
Revenues of the ADC services calculated at VBM level they practically impact branches’ P&L
Option 3: ADC Unit as another Division
Headed by an experienced executive participating at ExCo level

13. Benefits of the ADC integration
Key Opportunities
Exploit sales potential of online channels
Considerations - start to build capabilities to drive sales and leads from online banking, including:
Reviewing public website to ensure all product pages have a clear call-to-action, with multi-channel options
Consider building promotional capabilities within online banking to drive leads
Implement simple information gathering / online ‘application’ forms to track demand
For high propensity products, consider developing more functional application processes
For those products where a signature is required, optimize the online / offline completion model
Creation of an Integrated Business Model for increasing payments through the use of ADC (i.e. Utility Payments, Transfers, etc.)
ATM profitability improvement through increasing the services provided and improving the location setup and management
Improve Sales of products by using new techniques of presenting sales opportunities while the customer performs specific transactions within the Bank in ADC (for example Finalta Case Study – please see next page)

14. Benefits of the ADC integration
Finalta Case Study

15. e-Services Branding bank’s Distinctive & New Integrated
bank’s Branding Proposals:
Digital Banking
bank Direct
bank Digital
bank Dynamic
bank 24/7
bank Online
bank.Net
bank Everywhere
bank #1 PrimeBanking
Bank2
BankMall
iBank
iTransact
All-In-One-Bank
Bank4U
MyBank
BankNonStop
UniverasalBank
UniversalBanking
e-Banker
e-Prime
e-Touch
e-Standard
e-Dynamic
e-International
e-PersonalBanking
e-Everywhere
bank’s
Distinctive
&
New
Integrated
e-Services Image
Other Banks’ Branding Examples:
| DSK - DSK Direct | FIB - My Fibank & Virtual Branch | Bulbank - Bulbank Online | Raiffeisen - Raiffeisen ONLINE | | UBB - UBB Internet Banking | CITY Bank - Bank online | VTB - VTB24 | ING - ING Online |

16. Key Success Factors
Integrated Alternative Distribution Channels
Aiming centralized and coordinated efforts in a e-service for clients
Top management commitment in order to support the effort and facilitate to overcome resistance to change.
New organizational structure that will support the integration and business development and increase the bank’s penetration rates to the individual, SB and Corporate customers segments.
Staffing with an adequate number of experienced employees.
Clear Alternative Channels strategy definition and implementation.
Effective cooperation of the involved BUs; Network, Consumer and IT Divisions contribution towards the integration of the Alternative Channels is considered important.
ADC revenues and cost allocation to the service recipients (bank’s BUs) through an allocation model that will support sales efforts, improve productivity and increase customer service levels

17. THANK YOU!