Future of banking & customer pathways. Shona McMahon

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1 Future of banking & customer pathways Shona McMahon

2 Macro environment: Most banks will need to embark on fundamental transformation McKinsey Macro economic Counter factors Slow growth Low interest rates Digitisation New regulation Productivity Viability balance sheet Reorientation business model (customer + digital) Future is deep connections with the customer

3 V U C A 3

4 Fundamental business reorientation is recommended. 4 McKinsey, 2016

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6 Westpac s channel improvements are driven by the customer 6 We are in the Age of the Customer. and customers are showing a strong preference to engage with us digitally 24 7 Speed Ease Transparency Vocal Queues are a major cause of detraction 70% of Kiwis 33% increase in mobile logins Online txns have increased by 61% overall (last 5 years) The upside is Cx and Value..with human assistance and Best Bankers the critical glue for transformation Digital Sales doubled in last 2 years (Finalta, AU/NZ)

7 Westpac Self serve channels: Making banking a better experience with ease, convenience & speed 7 Westpac One and mobile app ATM Phone banking Business Online Customer driven channel improvements (technical) supported by our people and customer knowledge Confidence > 55 years customer group

8 Self serve customer research (> 55 years speed date): Security is a top concern 8 Happy to use technology if shown and educated how to do it. Prefer using a printed step by step guide over videos to learn Security is a major concern when it comes to depositing money at ATM Unhappy because they don t understand how to use the self serve channels and are asked to do so with little or no knowledge. Staff awareness and confidence plays a huge part Education some willing to embrace, but show me! I am not that generation. Someone to show me (more than once!)

9 9 Banking Tech: Australia and New Zealand banks among most digitally innovative in the world, Forrester, 2016 Video ANZ, BNZ, CommBank and Westpac Aust. already offer video banking services at the branch, helping customers reach a remotely located expert. Mobile money withdrawal Westpac and CommBank in Australia use mobile banking apps, which include Touch ID authentication, to let customers get money from an ATM using their mobile phone. Personal Financial Management innovation Kiwibank offers a digital money management service called heaps. Westpac has partnered with US startup Moven to launch CashNav

10 The History of Digital Personal Assistants 1988

11 The History of Personal Assistants 1997

12 The History of Personal Assistants 1997

13 The History of Digital Personal Assistants 2011

14 The History of Digital Personal Assistants 2011

15 Search: Movie Artificial Intelligence + main character

16 The History of VA

17 April, 2016

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20 20 Web based software voice detection: To respond to simpler customers queries, quicker RBS and NatWest and SEB banks deploying VA for AI driven customer service Luvo - can understand human diction at 90%

21 21 Other Tech: Artificial intelligence allowing rapid future evolvement AI set of techniques / research, codes and platforms which are coming to life as VA and chatbots: - computer based learning to perform tasks normally requiring human intelligence eg: visual perception, speech recognition, decision-making and translation between languages. Digital Wallets take your cell phone not your wallet Virtual reality in consumer space (not banking) we ve used for L&D and prototyping branch layouts

22 Video: Automated Teller Assist (ATA) at ATMs is low maturity globally. Aimed at increasing Cx 22

23 23 P2P lending: Varying commentaries but most say low risk to banks P2P Payments - making payments frictionless eg pay $4.50 for coffee. Acorns wealth management app P2P Lending attacks on bank s lending continue but attracting customers to unknown brands means survival hard.

24 What s possible The rise of invisible AI Netflix Google Maps Same experience just better All together now Aggregation of data with a conversational interface Real time language translation Let s talk feelings Real time sentiment analysis via video and audio EI?? Emotional intelligence having a true conversation Manipulating emotions for an outcome

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