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Financial Services - Banking Transforming Banking Strategic choices for winning in the digital economy 1 Transforming Banking A World of Infinite Possibilities BUILDING THE BANK OF THE FUTURE New technology is transforming how we bank. It’s fundamentally challenging the traditional banking role. But it’s also opening up a world full of infinite possibilities. The boundaries of traditional retail banking value chains are becoming blurred, with online retailers, communities, marketplaces, and platforms having access to large customer and supplier networks. Breakthrough technology trends are shaping the digital economy and driving an unmatched era of digital innovation. A whole range of factors is causing banks to reimagine existing business models. Only 6% Of financial services organizations can personalize marketing by using deep insight into customer preferences, behavior, and sentiment, such as on social media Source: SAP benchmarking 45% Of banks believe monitoring borrower behavior to anticipate and respond to default risk is the biggest opportunity for Big Data to improve performance in guarding against loan defaults Five Key Technology Trends DELIVERING UNPRECEDENTED BUSINESS INNOVATION We are living in an unmatched era of innovation, where breakthrough technologies have matured and are delivering radical change. 1 2 3 Hyperconnectivity Today’s customers and businesses are socially connected and in charge. Banks are responding with highly interactive communications and new, engaging products and services. Supercomputing Large-scale in-memory computing is enabling massive simplification of processes and is providing the ability to anticipate customers’ needs and assess risks in the moment. Cloud computing Cloud computing offers banks the opportunity to rapidly deliver new business models and technologies while reducing costs and freeing up valuable resources for innovation. 4 5 Smarter world As intelligent, always-connected devices become commonplace, banks can take advantage with smarter banking products that reshape value chains and redefine how banking is conducted. Cybersecurity To protect against fraud and other cyberattacks, technologies like multifactor authentication, biometrics, contextual analysis, location-based intelligence, and behavioral analytics are becoming increasingly important. Source: "Retail Banks and Big Data: Big Data as the key to better risk management,” Economist Intelligence Unit, 2014. LEARN MORE Get an in-depth look at the future of banking in the digital economy with our complimentary thought leadership report. https://goo.gl/K0USN9 Hear how our customers see banking evolve in the digital economy. https://goo.gl/MuVxV6 Note: All sources cited as “SAP benchmarking” are based on our research with customers through our benchmarking program and/or other direct interactions with customers. 2 3 Transforming Banking Reimagining Banking Five Characteristics of a Digital Bank THREE COMPONENTS OF DIGITIZATION BUILDING THE FOUNDATION FOR SUCCESS ONE: A DIGITAL CORE At SAP, we believe the bank of the future needs to reimagine itself in three key areas: What is the DNA of a digital bank? Based on our insights, we believe there are five fundamental characteristics that define the bank of the future. Simplify and standardize core banking processes By developing a digital core that combines transaction processing and analytics, banks can reduce time to market, standardize product development procedures, orchestrate end-to-end processes, and integrate them with customer channels and third parties. Reimagining business models Traditional business models are no longer sustainable. We see retail banks reevaluating their customer engagement strategies, networks, digital capabilities, and data insights to find new, real-time ways of delivering the products and services that customers want. . Reimagining business processes Direct interaction with customers and the ability to execute the majority of processes in the moment will fundamentally change how banks operate. Examples of this include robo-advisors, cashless payments, instant lending, and digital marketing. Effective workforce engagement Collaborative business networks A digital core As a result, they can deliver faster, more proactive responses to customers, accelerate product delivery, collaborate more effectively with suppliers and partners, and improve employee productivity. TWO: SEAMLESS CUSTOMER SERVICE Mastery of Big Data Reimagining work With simpler, streamlined processes, automation, and instant information, banks can eliminate manual work and invest in improving skill sets, moving employees to higher-value activities that deliver greater returns for the bank and its customers. Seamless customer service Simple, in-the-moment, personalized experiences The bank of the future brings together marketing, sales, banking services, and commercial operations processes, enabling the entire customer experience to be digitalized regardless of the channel that is used. In addition, it has a 360-degree view of customers and employs sophisticated predictive analytics to deliver personalized offers and provide live interaction over any channel and device. 75% 10 minutes Reduction in time to market for new products Time needed to open a mobile account, down 64% See how Adarsh Credit has decreased its dependency on physical branch infrastructure while reducing operational costs by 30%. http://goo.gl/fTgmRV Source: Commonwealth Bank of Australia Business Transformation Study, 2013. https://goo.gl/gqHRwe Watch our videos to see how the bank of the future will be a bank of one. https://goo.gl/N8dt5g 4 LEARN MORE Discover why individual attention is important to Liane https://goo.gl/HjuoKC Find out why being connected is vital for Kirtland https://goo.gl/glH2JO 5 The Journey to the Bank of the Future Get In Touch THREE: EFFECTIVE WORKFORCE ENGAGEMENT FIVE: MASTERY OF BIG DATA SUCCESSFULLY UNDERTAKING DIGITAL TRANSFORMATION LET’S TALK ABOUT HOW WE CAN HELP YOU Improve total productivity Reimagining work enables banks to substantially increase productivity and improve decision making, by using smart applications to provide employees with live transaction processing and easy access to the right information on any device. The currency of the digital economy Big Data offers banks unprecedented opportunities to analyze massive amounts of internal and external data in the moment and apply the insights gained across the entire value chain. To take advantage of the opportunities provided by the digital economy, traditional banks have to transform themselves. But it is a major undertaking that impacts people, processes, and technology throughout the organization. Contact us through our web site below and we’ll arrange an introductory meeting to discuss your requirements. By mastering Big Data as well as operational and predictive analytics, banks can optimize the customer experience with tailored, context-aware offerings. They can use internal and external data assets to make better and faster decisions, and improve the overall reporting of finance and compliance. At SAP, we not only have a vision of what the digital bank of the future will look like, we also have the solutions that can help you make the transformation and digitize your end-to-end business. Why not talk with us about your priorities and how we can help you address them? At the same time, banks can manage the entire workforce lifecycle in one place, including recruiting, onboarding, performance, compensation, and learning. FOUR: COLLABORATIVE BUSINESS NETWORKS Leverage relationships with suppliers and partners Building an ecosystem of customers, suppliers, advisors, and partners is a prerequisite for success in the digital economy. Knowing this, successful banks are using established business networks to extend their processes beyond the four walls of the business. As a result, banks can open up countless new ways for optimizing the business, simplifying processes, reducing cost, and providing the agility required in a fast-changing digital world. Visit our Web site: http://goo.gl/iequXv Follow us on: D!: http://goo.gl/tPhGa6 Facebook: https://goo.gl/y5k74t Twitter: https://goo.gl/aT2eDo YouTube: https://goo.gl/Tw6ehA SCN: http://goo.gl/IKiJQH Expanding business processes to encompass partners, suppliers, advisors, and customers reduces manual effort, improves collaboration, accelerates transaction processing, enforces compliance, and raises productivity. 6 LEARN MORE LEARN MORE Learn how the Ariba Network helped one financial services provider create a simple and seamless procurement process. https://goo.gl/LMpdHs Watch Falk Rieker, global head of the banking industry business unit at SAP, discuss how leading banks are reevaluating their business models and processes to remain relevant and competitive in the new digital economy. https://goo.gl/SJFMfY 7 www.sap.com/contactsap © 2016 SAP SE or an SAP affiliate company. All rights reserved. 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