Business & Technology Solutions & Services (BTSS) Enabling the vision Michael Coomer 31 July 2003 Group Executive, Business & Technology Solutions & Services
BTSS is Westpac s core service provider BTSS BCB Operations Technology Strategic Sourcing Corporate Services A Superior Customer Experience WIB/TSY Wealth NZ/PB Support Services 2 Market Update - July 2003
BTSS manages 45% of Westpac s expense base Westpac Expense Base BTSS Managed Expense Outsourced Functions BTSS Expense Base Retained Functions Outsourced Expense Base Retained Expense Base Cheque Processing Property Technology Operations & Telecom Corporate Services Support Services Strategic Sourcing Operations Mortgage Processing Information Technology 3 Market Update - July 2003
BTSS is a key contributor to Ask Once Customer Satisfaction Composition 100% 100% Industry related 20% 10% Relationship management 20% Product sales Drivers of Customer Experience Bank related 40% 70% After sales service Experience related 40% Our focus 4 Market Update - July 2003
BTSS is focusing on 4 key objectives Enhance the customer experience to achieve No.1 ranking by 2005 Significantly improve our operational efficiency at a unit cost level to achieve an overall expense reduction profile to 2006 Build a high performance culture focused on Customer Service Optimise capital usage by reducing our operating risk & risk leverage profiles 5 Market Update - July 2003
What we said last year Three Major Initiatives Underpin This Work Great Customer Experience Customer Alignment End-to-end alignment of performance metrics Customer Connection Simplified and consistent processes Customer Enablement Better data management and analytic capabilities 5 Westpac Investor Update 2002 - David Morgan Next steps Maintain our focus on Lending processes Customer & corporate data management and analytics Further analyse other critical business processes Report on progress Westpac Investor Update 2002 - David Morgan 9 6 Market Update - July 2003
What have we done? Three Major Initiatives Underpin This Work Customer Alignment End-to-end alignment of of performance metrics Great Customer Customer Connection Experience Simplified and consistent processes Customer Enablement Better data management and analytic capabilities Westpac Investor Update 2002 - - David Morgan Align Program: An integrated program to align the people processes and behaviours to the customer experience, further enabling a high performance culture. 5 5 Results Results Redeployment framework delivered Training, Learning & Development toolkit delivered Standardised change management deployed Trained 70 change management practitioners Objective setting & management performance (KPIs) delivered and being deployed for 2003 objectives 7 Market Update - July 2003
What have we done? Three Major Initiatives Underpin This Work Great Customer Experience Key Objectives: Customer Alignment End-to-end alignment of of performance metrics Customer Connection Simplified and consistent processes Customer Enablement Better data management and analytic capabilities 5 5 FY2003 to deliver end-end capabilities within SME market segment FY2004 to roll-out SME capabilities across all channels and segments Key Focus: - Improve customer retention rates - Provides increased sales opportunities - Improves lead and campaign management Westpac Investor Update 2002 - - David Morgan Reach Program: A cross product, cross geography, end-to-end Sales & Information Management reengineering program Early Results Installation of major infrastructure completed ahead of schedule Pilot launched over a month ago in the SME segment Encouraging pilot results: - Leads converted to opportunity - 78% - Cross sell - 23% - Contact to sale - 8% - Lead actioning rate - 93% 8 Market Update - July 2003
Reach - significant enhancement in CRM Customer Experience Delivery Channels Delivery Channels Advertising & PR Direct Mail Financial Advisers Rel ship Managers Call Centre Branch Website Internet email ATM Banking SMS IVR Siebel 7 Desktop Westpac Leads (RO Campaign Management Engine) Data Warehouse/ Superdome (incl. Predictive Marketing Mart) Source Systems 9 Market Update - July 2003
What have we done? Three Major Initiatives Underpin This Work Great Customer Experience Key Objectives: Customer Alignment End-to-end alignment of of performance metrics Customer Connection Simplified and consistent processes Customer Enablement Better data management and analytic capabilities Improve customer experience to drive growth 5 5 Reduce cost through operational efficiencies Improve asset quality via credit decisioning capabilities Westpac Investor Update 2002 - - David Morgan Pinnacle Program: An integrated program to reengineer lending and credit processes on an end-to-end basis across the bank. Early Results Easier on-line loan application for business customers Instant quotes for businesses looking to fund an insurance premium On-line application for credit card limit increases, with most approvals within 24 hrs Automation of frequently used business loan documentation Automation of the overdraft payment decision process considering the customer credit score and full customer relationship First release of customer focused collections solutions 10 Market Update - July 2003
What else have we done? Completed deployment of Broadband network to Branches in Australia and New Zealand. Completed deployment of One Bank Platform (32bit PC) in New Zealand Branches and have rolled out to one third of Australian Branches. Supported continued growth in Internet Banking - Number of value transactions via Internet now equals Branches - Serving 300,000 customers per day and growing - Maintaining highest level of Customer satisfaction [1] of the major Banks and equal to Bendigo Bank Source: [1] Regular Internet users, ACNielsen.Consult Australian Internet User Survey #13, December 2002 (overall n=24,693) Satisfied & Very Satisfied Customers 11 Market Update - July 2003
Our staff are committed to change 10.00 Staff Morale Index 9.00 8.00 7.81 7.92 7.74 7.00 7.03 6.96 7.24 7.26 7.69 7.37 7.44 7.59 6.00 5.00 4.00 FEB'02 MAR'02 APR'02 MAY'02 JUN'02 JUL'02 AUG'02 SEP'02 OCT'02 NOV'02 DEC'02 MAR'03 12 Market Update - July 2003
Shift in Information Technology expenditure $1 of IT Spend (2-3 Years Past) $1 of IT Spend Today Illustrative Strategic Change Projects Discretionary Change Non-Discretionary Business Change Non-Discretionary IT Maintenance Base Operating Costs Strategic Change Projects Discretionary Change Non-Discretionary Business Change Non-Discretionary IT Maintenance Base Operating Costs 13 Market Update - July 2003
Significant aggregate benefit flat expenses Outsourced Expense 1 Retained Expense $M Baseline with 4% p.a. expense growth $M Baseline with 4% p.a. expense growth BTSS Target BTSS Target 2003 2004 2005 2006 2003 2004 2005 2006 Our productivity initiatives absorb both underlying expense growth and the forecast business volume growth to create headroom for customer facing initiatives Note:1. Includes IBMGSA (IT), EDS (Mortgage), UPSL( Cheque), Investa (Property) 14 Market Update - July 2003
Going forward Strong project alignment to business needs and customer experience strategy Operational efficiencies achieved supporting cost shift by: Assisting absorb underlying expense growth, and Enabling targeted project reinvestment Set to leverage off standardised PC and Broadband platforms 15 Market Update - July 2003
Questions 16 Market Update - July 2003
Disclaimer The material contained in this presentation is intended to be general background information on Westpac Banking Corporation and its activities as at 31 July 2003. The information is supplied in summary form and is therefore not necessarily complete. Also, it is not intended that it be relied upon as advice to investors or potential investors, who should consider seeking independent professional advice depending upon their specific investment objectives, financial situation or particular needs. 17 Market Update - July 2003