PRESENTED BY
G H U S GUNARATNE (13426-2)
01
Table of Contents
01
Introduction
02
Visionary Statement for Strategic Plan 2019/2023
02
Environmental Analysis
03
Macro Environment / Micro Environment / Competitive Forces
04
Customer Centricity
06
Digital Transformation
07
Mitigating Cyber risk
08
Reimaging Workforce
09
FINTECHdevelopments
11
Identify the strategic Customer
11
Strategic Capabilities of the Bank
12
SWOT Analysis
12
Strategic Purpose
13
Conceptual structure for strategic planning development
14
Align with / Vision / Mission / Corporate values
15
Business ethics / Corporate Governance / CSR
15
Strategy Building
16—
Organizational Culture / Strategic Business Units
16——-
Responding to competitor threats
Strategic Direction / Innovation
INTRODUCTION
For banks globally, next 5 years could be a pivotal year in accelerating the transformation into more strategically focused, technologically modern, and operationally agile financial institutions, so that they may remain dominant in a rapidly evolving ecosystem. When we consider the Peoples Bank, our bank also need to rationalize our way move up in the ladder while maintaining sustainable profit growth.
This metamorphosis is far from easy as most banks grapple with multiple challenges exist in operating environment : complex and diverging regulations, legacy systems, disruptive models and technologies, new competitors, well focused customer centric models for core business and, last but not least, an often restive customer base with ever-higher expectations. This proposed strategic plan for the period of 2019-2023 has been prepared after analyzing the above aspects.
VISIONARY STATEMENT FOR STRATEGIC PLAN 2019-2023
“Most Preferred & Aspiring Contributor for a Better Financial Life”
ENVIRONMENT ANALYSIS
Macro Environment / Micro Environment / Competitive Forces
In this outlook we explore the challenges most banks face in balancing the need to restructure their foundations for the long-term with finding near-term growth. Banks needs identifying six macro& micro themes that should be critical for next 5 years. They can be summarized as follows
Customer centricity
Digital Transformation
Mitigating cyber risk
Reimagining the workforce.
Fintech developments
Customer centricity
Although banking has undoubtedly improved in many ways in the last couple of decades, most financial organizations have not gone through the customer-centric transformation that other industries have undergone. We have to address this aspect to face the pressure created by external environment.
Human factor is now moving away from the service. Bank needs deep data analysis and new methods for the cost efficient experimentation to provide high level of customer centricity.
Also banks have to pay very keen attentions to create this customer centricity in the context of over millions of open sources applications available to substitute most of the banking services provided by the conventional bankers, specially payment systems.
Also with widespread technology disruption, banks may even risk losing control over customer experience. Of course many banks, global and local, large and small, have changed their market and customer strategies to face the new strategic customer who uses banking services within next five years in order to create this customer centricity.
Long-term sustainable growth in the banking industry seems only possible with a radical departure from a sales- and product-obsessed mindset to one of genuine customer centricity, and further rationalization of strategies to target the right markets, customer segments, and solutions.
1199661564075HOW TECHNOLOGY DISTRUPT TOCREATE CUSTOMER CENTRICITY IN FUTURE TRADITIONAL BANKING
Source:
The challenge is to create an optimal customer journey that makes every step and touch point in the customer life-cycle streamlined, efficient, personalized and consistent. Banks need to rethink their customer journeys inside out by understanding customer pain points, identifying opportunities to delight the customer in ways that separate them from the crowd.
Digital Transformation
Digital transformation is the application of digital technologies to fundamentally impact all aspects of business and society. Customer experience, business agility and efficiency are the primary goals that drive organizations to undergo digital transformation.
Worldwide spending on digital transformation technologies (hardware, software, and services) can be experienced and in Sri Lanka as well. Digital-transformation investments are meant to help them overtake their competition through differentiation.
As per the survey done by Grant Thornton with the participation of 150 CEOs in the world, it is believed that level of investment on digitalization is already leaving a mark. Forty-six percent think half of their revenue will be influenced by digital by 2020, according to analyst Forrester. The World Economic Forum suggests the value of digital transformation for both society and industry could reach $100 trillion by 2025.
The digital trend is exacerbated in the generation Z-customer market, which perceives physical banks to be largely superfluous. As reveled through a study found that the banking industry is at the highest risk of disruption, with 73% of respondents reporting that they would be more excited about a new financial offering from tech giants such as Google, Apple, Amazon, Paypal or Square than from their own traditional bank.
Most of the younger generation is tech-savvy customer segment where need very fast responses to the banking needs without waiting much more time to complete a banking transaction.
Every customer is a digital consumer by default – using digital technology in many ways and speeds. The varying speed and needs of customers have impacted various sectors and services differently. The banking sector is no different. Be it corporate, retail or small business banking, the tech-savvy customer now demands premium, seamless experiences across all platforms and channels and also next generation business powered by APIs
People’s Bank also make every steps to provide this digital experience to the customer base at the every customer contact points much as possible to retain them within the peoples bank concurrent with digitalization of the back office functions.
cyber risk
New and potentially disruptive innovations, privacy concerns about data protection (data breach by 3rd party internal staff ,loss of backups) , new types of financial crimes such as Account takeover, identity compromise, fraudulent transactions are just a handful of fraud trends that financial institutions need to be on the lookout for.
Every day fraudsters are using new surfaces for attack, developing new methods of attacks, increasing complexity of attacks, lack of cyber security talent has created new challengers for financial institutions.
ATTACK SURFACES HAVE BEEN CHANGED
CORE ONLINE
1109296218782
When we imagine who is affected through type of actions, banks come first in the list because banks process great extent of personal data through their systems. This may include name, physical address, email address, identification number, location data, online identities, credit card number etc
This situation become more worst where bank lacks in capability to gather data across the entity and providing centralized alerting, not having vulnerability management programmes in practice, storing information on risk in too many places and cannot be gathered and integrated effectively.
Reimagining the workforce.
By neglecting digital workforce transformation, companies are failing to build the capabilities that they will need to succeed in an era of digital disruption
an organization can take to digitize its people-related processes in order to build a workforce that is highly agile, innovative, and engaged – factors that will enable the organization to create value for its customers, partners, and for its own employees. In an effort to battle digital disruptors, many companies have focused business transformation efforts on IT and business processes. Too often, however, they neglect their greatest asset: people. Technology solutions along are not the only answer to transforming the workforce.
In order to understand how organizations are approaching digital workforce transformation. We have to understand three key capabilities of digital business agility. They are hyperawareness, informed decision-making, and fast execution. These are three foundational capabilities that organizations must build in their workforces in order to compete successfully in a digital era.
Furthermore, workforce transformation requires sustained commitment from leadership. “Transformation is more than a summation of digital solutions. “Digital transformation is rewriting the rules of business and will require a workforce that is appropriately equipped to work with the speed and agility that this level of change will demand. This requires leadership and commitment from the management.
Fintech developments
Another huge new competitive factor is the encroachment of tech firms into finance.
Fintech or else Financial technological developments is a another macro environmental factors that bank needs to pay attention in future years. fintech, which originally referred to computer technology applied to the back office of banks or trading firms, now describes a broad variety of technological interventions into personal and commercial finance.
According to EY’s Fintech Adoption Index, one-third of consumers utilize at least two or more fintech services and those consumers are also increasingly aware of fintech as a part of their daily lives. Unforeseen threat is day by day these applications take over the conventional banking functions
Also new competitive factor is the encroachment of non finance field companies come in to finance activities. Many predict that the bank of the future will arise at one or more of its tech giants, such as Google, Apple, Face book or Amazon (GAFA). They already offer payment solutions e.g. Dialog telecom easy cash ect. ,Amazon Pay and Google Pay with massive customer bases—Amazon claims an active user base of some 250 million around the world. ApplePay had 127 million users worldwide at the end of 2017, and has been cutting deals with banks.
965850280800
Identifying the strategic customer
Day by day customers are taking more control of the relationship. By way of Change these bank frequently, experiencing products from more than one bank.
Retail banking now transitioning to a mobile centric. Number of most types of common transactions performed inside bank branches declined from opening bank accounts to making deposits and resolving problems
There is still a place for the branch but what happens inside is changing. Customers do not visit branches as often “because people do much more of their day to day banking without banks.
Long-term sustainable growth in the banking industry seems only possible with a radical departure from a sales- and product-obsessed mindset to one of genuine customer centricity, and further rationalization of strategies to target the right markets, customer segments, and solutions.
Most of the younger generation is tech-savvy customer segment where they need very fast responses to the banking needs without waiting much more time to complete a banking transaction. Banks readiness to cater those requirements will grab business opportunities of that segment.
Also mobile centric culture is creating in the world. A research done by KPCB, On internet trends– May 27, 2015 has revealed that 1% of people consult their mobile device for ideas while completing a task. Generation-Z check their phones more than 157 times per day. 78% of teenagers are spending more than two hours every day using their Smartphone.
People spend significantly more time accessing information on smart phones and tablets than desktop computers. 45% use personal smart phones for work purposes. Therefore we have to think about the future customers may mobile centric customer base.
STRATEGIC CAPABILITY OF THE BANK
S Over one trillion assets base
Over 16 million customer accounts
State owned bank
Over 735 branches
Availability of different channel to cater banking needs of the customers
Over 1000 automated teller machines for 24 x 7 transactions
Over 80 EB units & 100 SB units to inculcate digital experience
Over 8000 experienced staff base
Birth to maturity product portfolio
W Lack of central systems to visible overall picture
Government policies which hinder quick decision making
Lack of central alerting systems
Manual processes
Lack of digitalization knowledge
O Forefront in the SBU & EBU initiatives in the banking sector
PB is a strong brand among general public
Opportunity to expand outside the country
Enterprise Sri Lanka government initiatives to canvass loans
Target market change due to Self Banking Units
Government digitalization orientation
T Lack of customer centricity
Cyber security risk
Fintech developments
Technological and non finance companies entry to banking functions
Open source applications and apps gradually take our business
Crypto currencies trends in the world
Block chain developments
SWOT analysis / Resources and competences
STRATEGIC PURPOSE
Conceptual frame work for strategic plan development
VISION
MISSION
VALUES
VALUES
VALUES
VALUES
KEY
FOCUS AREA
KEY
FOCUS
AREA
KEY
FOCUS AREA
KEY
FOCUS
AREA
ORGANIZATIONAL GOAL
ORGANIZATIONAL GOAL
ORGANIZATIONAL GOAL
ORGANIZATIONAL GOAL
ORGANIZATIONAL GOAL
ORGANIZATIONAL GOAL
ORGANIZATIONAL GOAL
ORGANIZATIONAL GOAL
ORGANIZATIONAL GOAL
ORGANIZATIONAL GOAL
ORGANIZATIONAL GOAL
ORGANIZATIONAL GOAL
GOAL
GOAL
GOAL
2
3
GOAL
GOAL
GOAL
1
2
3
GOAL
GOAL
GOAL
1
2
3
11
11
55
GOAL
GOAL
GOAL
1
2
3
55
11
33
2
3
1
1
Align with / Vision / Mission / Corporate values
PERFORMANCE
Achieving and delivering our promises to key stakeholders
Most Preferred & Aspiring Contributor for a Better Financial Life
CONTRIBUTION TO SUSTAINABLE ORGANISATIONAL AND ECONOMIC DEVELOPMENT
THROUGH ETHICAL FULFILLMENT OF CUSTOMER FINANCIAL NEEDS IN THEIR DIFFENENT ROLES .
INNOVATIVE
We constantly redefine the standards of excellence in everything we do. We must constantly move with changing needs
RESPONSIVE
We know the importance of integrating responsiveness into every aspect of our sales efforts
CARING
We have understood the importance of caring to our bottom line . We are dedicated to creating a caring working environment
ACCOUNTABLE
We take accountability for our actions and decisions and there impact on the all aspects of performance
TECHNOLOGY
We constantly move with changing new financial technological improvements
CUSTOMER CENTRACITY
We want to be at the top of mind of customer and bottom of their heart
PEOPLE
A safe, resilient, skilled, work force focused on delivering right outcome in the right manner
Strategic purpose
Strategic purpose of the bank is fulfillment of financial needs simple, efficient, innovative and stress free way for people who seek financial intermediation and to stay a step ahead in their financial life to achieve mutually sustainable growth.
Business Ethics / Corporate Governance / Corporate Social Responsibility
Bank always try to maintain highest level of following business ethics.
Honest Being honest in all our actions, and every communication we do.
Keeping Your PromisesBank keeps every promise that we make, always fulfilling commitments.
FairIn all of our actions, we strive to be fair and just. We are committed to being fair, employ justice in our decisions and treat all people equally, with tolerance and acceptance of diversity.
CaringBank is having a genuine concern for others, as well as a sense of compassion whilst having a greater understanding that there will be an impact on every stakeholder following a decision, and we always consider the financial, emotional and long term business consequences of an action.
RespectBank treating everyone with respect, regardless of who they are.
ExcellenceBank always tries to pursue excellence in everything that we do. We deliver the highest quality of service and products.
Bank is dedicated to implement community initiatives which include developing educational requirements in under privilege areas extend support projects which increase community developments and the projects which enable to enhance cultural heritage. Also bank extend their hands to rebuild the community in disaster situations.
5STRATEGY BUILDING
Organizational culture / Strategic Business Units
The competitive dynamics in the banking industry continue to intensify both among incumbents and alternative digital payment providers. The main challengers that banks face in this context are how to stay relevant to their customers’ needs while finding new income streams, accelerate digitalization initiatives while maintaining the margins, cope up with cyber security treats and Reimagining the workforce inculcate these changers in the minds of them.
Four main areas need to be focused next five years as a bank to keep abreast with the identified challenges. They are technology, customer centricity, people and performance.
11 organizational level strategies have been developed to implement targeting above focused areas. All organizational strategies have been sub divided into several ancillary strategies to accomplish main strategy.
To accomplish the strategies several departmental goals have been developed. Goal number has been circled in this diagram in order to understand the strategy formulation mechanism. Also number has been mentioned in the chart next to each circle to identify the responsible department/s. Existing department structure has been utilized to implement the proposed strategic plan without adding new strategic business units whilst the responsibility of the same may be changed at the discretion of the management.
CHANGE THE CORPORATE CULTURE TO EMBRACE THE CUSTOMER CENTRIC VIEW OF THE CORE BUSINESS.
ENHANCE CUSTOMER EXPERIENCE TO CREATE a MORE LOYAL CUSTOMER BASE
DIGITAL TARNSFORMATION
PROTECT DATA ; MITIGATE CYBER RISK
CUSTOMER CENTRIC PRODUCTS AND SERVICERS
WORK FORCE TRANSFORMATION CONCURRENT WITH DIGITALIZATION
MOBILE CENTRIC TRAINING CULTURE
SUCCESSION PLANNING TO KEY RESPONSIBILITIES
DOUBLE THE BEFORE TAX PROFITABILITY BY 2023
ACCOUNTABLE FOR TARGET ACHIEVEMENT
ESTABLISH OPERATIONAL ISSUE MONITORING AND REPORTING MECHANISM
PERFORMANCE
TECHNOLOGY
CUSTOMER CENTRACITY
PEOPLE
G-1
G-2
G-3
G-4
G-5
G-9
G-10
G-11
G-6
G-7
G-8
33
1
477
3
3
2
44
3
4
3
Responding to competitor threats and strategic directions/Innovations
To become “Most Preferred & Aspiring Contributor for a Better Financial Life” While maintaining substantial profit growth, bank has to focus following strategies.
