Exponential Performance - In a Millennial, Mobile and Programmatic World - Telstra Business & Enterprise
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Exponential Performance In a Millennial, Mobile and Programmatic World
Contents
Foreword 04
1.0: Thriving in an exponential financial services world 06
1.1: From the branch to the back pocket –
the Telstra Millennials, Mobiles and Money Index (3MI™) 06
1.2: Transforming from legacy to peak profit performance –
the Exponential Organisation 11
1.3: Making enterprises programmable –
software-controlled, data-driven automation 18
2.0: Country analysis 20
2.1: Methodology – the Telstra Millennials, Mobiles and Money
Index (3MI™) 20
2.2: Country insights and analysis 22
2.2.1: Australia – Telstra 3MI™ 22
2.2.2: China – Telstra 3MI ™
24
2.2.3: Hong Kong – Telstra 3MI™ 26
2.2.4: Indonesia – Telstra 3MI ™
28
2.2.5: New Zealand – Telstra 3MI™ 30
2.2.6: Singapore – Telstra 3MI™ 32
2.2.7: United Kingdom – Telstra 3MI ™
34
2.2.8: United State of America – Telstra 3MI™ 36
3.0: Transforming to an exponential business model 38
3.1: Global studies – Exponential Organisations and
exponential fintechs 40
3.2: E xponential – traditional financial services institutions
versus pure play online/mobile banks/fintechs 43
4.0: Programmatic technology for exponential performance 46
4.1: Technology investment models 46
4.2: Enterprise technologies driving exponential ecosystems 49
4.3: Customer interaction technologies 58
5.0: Conclusion 62
6.0: About the author 65
7.0: Acknowledgements 66
8.0: Notes and references 68
02 03
Foreword
Rocky Scopelliti
Global Industry Executive – Financial Services
Telstra
Welcome to an ‘exponential’ Whilst we can no longer reliably The three important questions In this report, we review the effects
financial services world predict how financial services will be we address in this report are: of this ‘exponential’ world, where
structured, provisioned and consumed digital transformation will provide
Over the past ten years, I’ve been 1. How do Millennials and mobile
in the long run (nor the entities that will organisations with the ability to
privileged to research the spectacular technologies collectively influence
provide them), we can consider how to harness a new economic physics.
impact of technological innovation, exponential growth? We present
adapt. Digital transformation, therefore, The analysis challenges our linear-
investment, growth and the resulting the results from an eight-country
is the genesis of this report. based assumptions relating to growth,
disruptions to the financial services study of 27,000 consumers
investment and performance as we
industry, which can only be described In last year’s Millennials, Mobiles and (including 8,000+ Millennials)
witness the reprogramming of the
as ‘exponential’. Money report2, we detailed how the using the Millennials, Mobiles and
industry for an exponential financial
three ‘M’ forces are reshaping the Money Index (3MI™)3 developed
Throughout this report, we define an services world.
financial services industry and how by Telstra. Millennials and their
Exponential Organisation as one whose platform-based, data-intensive and use of mobile technologies have The insights presented in this report
impact (or output) is disproportionally capital-light business models would undoubtedly become lead indicators were only made possible through the
large – at least ten times larger than have the greatest disruptive impact. of performance and the Telstra 3MI™ generous participation of the financial
its peers because of the use of new In response to those forces, we also enables us to analyse the competitive services industry, the contributions
organisational techniques that leverage detailed our vision for a ‘distributed, dynamics of institutions as of our research partners and the
accelerating technologies1. These software-controlled, autonomous they prepare for the battle for many wonderful people I interviewed;
accelerating technologies create a and real-time digital financial customer relationships. I am sincerely grateful to all.
new economic physics, enabling the services world’.
marginal cost of both supply and 2. H
ow do legacy business models While we encourage you to peruse our
demand to reduce to virtually zero. For this report, the twelfth in my need to transform to perform in detailed examination of the specific
thought-leadership series, we expand an exponential world, and what are actions institutions can take, we also
The accelerants of this new exponential on those topics. Importantly, we’ve also the inflection points that will drive welcome the opportunity to provide
environment that organisations developed some unique behavioural these transformations? We consider you and your management team with
either commence in, or adapt to, economics and digital technology the business and operating models an in-depth briefing on what these
have included the convergence of: research methodologies that have of financial institutions and share insights mean for your institution’s
• digital technologies that are allowed us to discover fascinating new insights from 77 institutions studied transformation. At the end of this
information-enabling financial insights into how financial institutions across eleven countries. We also document, we’ve provided a list of
services to deliver disruptive new can transform digitally to compete and present the results of a global survey contact numbers you may find valuable.
growth opportunities (both economic win in this new ‘exponential’ world. of 164 financial services executives
Please also visit:
and social), and We share the results of the inaugural using the Exponential Quotient
www.telstra.com/3MI
Millennials, Mobiles and Money Index Methodology developed by the
• behavioural dynamics associated for further information.
(3MI™) with you too. Singularity University4. This enables
with demographic change, specifically us to identify inflection points and
Millennials (18-34 years), who are locate gaps that must be addressed
now the largest demographic group. when transforming to an exponential
As consumers, workforces, investors business model.
and policy makers, they experience
the world in a different way to 3. W
hat technologies enable an
past generations. institution’s transformation for
exponential performance? Here we
consider the impact of an exponential
environment on investment models,
the ‘platformification’ of institutions,
enterprise technologies and customer
interaction technologies. These
include programmable infrastructure,
processes and intelligence.
04 05
1.0: Thriving in an exponential
financial services world
Exponential Banking at BBVA
Banking that draws upon exponential technologies to exponentially expand the area of contact with
our customers and information about them; banking that multiplies both the variety and the quality
of the services we offer; and, in sum, exponentially expands our business on a global scale5.
1.1: From the branch to the back pocket
– the Telstra Millennials, Mobiles and
Money Index (3MI™)
In this report, we look at the value and In a Millennial-led, mobile-first world, 1.1.1: International comparison The adoption of a mobile-first attitude On the other end of the scale, Asia- Whilst no countries studied are in this
mobile banking usage of Millennials we can now assess an institution’s – Telstra 3MI™ by Millennial consumers has not only Pacific countries such as New Zealand, quadrant (due to averaging), some
(18 to 34 years) and how well- or not performance based on its capacity increased digital engagement with Australia and Hong Kong have a lower individual institutions from Australia,
well-positioned institutions are to to attract Millennials (Millennial Transformed quadrant. Relative to their main banks, but also contributed proportion of Millennials in their China, Indonesia, Singapore, the UK
capture exponential growth as this penetration), their ability to engage global averages, this quadrant reflects to the success and evolution of digital population (20 per cent, 26 per cent and the US are positioned here. Players
generation becomes the main source them through mobile devices (mobile a higher proportion of Millennials in payments specialists such as Alipay and 28 per cent respectively). When it in this quadrant are exposed to those
of industry profit. Population growth banking usage) and, importantly, how a country’s population and the higher and Tenpay. comes to smartphone-based digital in the Digitised and Transformed
and economic development has created much Millennials are investing in that degree to which the population engages engagement, Hong Kong Millennials are quadrants. The quadrant title implies
institutions using mobile channels. Digitised quadrant. Relative to global
a consumer group who, in terms of relationship, defined as total balance least engaged (61 per cent), followed that remaining within this quadrant
averages, this quadrant reflects a lower
both number and purchasing power, value of deposits and lending (average Of the countries examined, Indonesia by those in New Zealand (66 per cent), is a non-sustainable position, and
proportion of Millennials in a country’s
are unlike any other in history. wallet size). These metrics make up the and China have the largest proportion Singapore (67 per cent), Australia that a transition will be imperative.
population, but a higher degree to which
Telstra Millennials, Mobiles and Money of Millennials in their populations, (68 per cent) and the UK at (69 per cent)
From a banking perspective, this is the population engages institutions
Index (3MI™). We’ve created the Telstra (54 per cent and 39 per cent respectively). (see Figure 1).
critically important as it is in early life using mobile channels.
3MI™ to enable us to observe, over the Meanwhile the US, Chinese and
stages that consumers take out most Transitioning quadrant. Relative to
course of time, how well institutions Indonesian Millennials mostly engage The US clearly leads the way among
of their financial services products global averages, this quadrant reflects
are transforming their businesses and with their main bank monthly (the bank the nations studied when it comes
(including savings accounts, credit a higher proportion of Millennials
models in response to these converging Millennials consider to be their main to mobile digital usage at 78 per cent
cards, personal loans, mortgages in a country’s population and a
disruptive trends. The quadrant financial institution) via smartphone, (see Figure 1).
and investments). This study will delve lower-than-average degree to which
labels describe the positioning and with 78 per cent, 75 per cent and
into each individual market – Australia, Legacy quadrant. Relative to global that population engages institutions
transformation pathways of institutions 72 per cent of Millennials respectively
New Zealand, the UK, the US, China, averages, this quadrant reflects a lower using mobile channels.
to position for exponential performance. (see Figure 1).
Hong Kong, Indonesia and Singapore proportion of Millennials in a country’s
In addition, we’ll examine case studies
(see Section 2). population, and a lower degree to which
of financial institutions that have
the population engages institutions
successfully targeted the lucrative
using mobile channels.
Millennial segment in each
respective country.
06 07
> Figure 1: International comparison across Telstra 3MI™ > Figure 3: Smartphone penetration among mobile phone holders – total population and Millennials
85% 100% 99% 97% 99%
100% 98% 98% 97%
Digitised Transformed 96% 97%
93%
97% 96%
US, 90%
80% US$96k Indonesia, 86% 85%
US$47k 82%
80% 80%
UK,
US$82k
Mobile banking usage
75% Australia, China,
70%
US$70k US$55k
60%
70%
50%
Singapore,
65% US$82k
40%
Hong Kong, Size of bubble 30%
60% US$115k represents average size
New of Millennial wallet 20%
Zealand,
55% US$67k 10%
Legacy Transitioning 0%
50% China Singapore Indonesia Hong Kong UK Australia US New
Zealand
15% 20% 25% 30% 35% 40% 45% 50% 55% 60%
Millennials Total population
Millennials in population
Data source: RFi Group Research 2016 Data source: RFi Group Research 2016
When it comes to digital engagement, US$8.8 billion – the largest investment markets is US$73,498. Typically, wallet
Inflection point: The US, China and Indonesia share a higher proportion of Millennials and higher rates of mobile banking Chinese consumers are the most likely share of fintech globally8. In terms of size is larger in developed economies
meaning they are likely to ride the exponential growth curve sooner than other markets. to engage with their main bank via a frequency of engagement, however, US such as Hong Kong (US$135,233 for all
This further highlights the significant opportunities that institutions in Australia, New Zealand, Hong Kong, Singapore and smartphone, with 80 per cent of adults Millennials outperform other markets, adults and US$115,088 for Millennials)
the UK have to shift from the Legacy quadrant. This can be done by further digitising their business models to increase and 88 per cent of Millennials doing with 78 per cent banking via smartphone and the US (US$87,890 among adults
mobile channel consumption, thus increasing the penetration of services among Millennials as they become the dominant so6. China is positioned as a leader in at least once a month (using either and US$95,809 among Millennials),
proportion of each respective population. the digital financial space, as it is in the browser or app). Chinese and Indonesian while less-developed and emerging
digital retail space, with 47 per cent of Millennials follow closely at 75 per cent markets such as Indonesia (US$46,721
all global digital retail sales happening and 72 per cent respectively (see Figure 1). for all adults and US$46,823 for
in China7. The mobile-first attitude Millennials) and China (US$52,640
of Chinese consumers has not only 1.1.3: Average wallet size for all adults and US$55,404 for
1.1.2: Mobile device penetration 96 per cent among Millennials) and users have access to a smartphone.
increased digital engagement with their Millennials) have the smallest wallets.
To help compare total wallet size
lowest in the US (74 per cent for In Asia, particularly, over 95 per cent
As Figure 2 shows, mobile penetration main banks, but also contributes to the among the eight markets studied, local The Millennial segment average wallet
Millennials and 76 per cent for all of urban adult mobile users use
is highest in Australia (91 per cent success of innovative digital payments currency values have been converted size has already overtaken that of
adults). Across all the markets, smartphones – and the proportion is
across the adult population and specialists such as Alipay and Tenpay to US dollar (US$) values using market the adult average in the US, UK, China
at least four in five of those mobile even higher for Millennials (see Figure 3).
and a broader appetite for fintech. exchange rates9. The average wallet and Indonesia (see Figure 4).
For the 12 months to June 2016, Chinese size among Millennials across the eight
fintech investment skyrocketed to
> Figure 2: Mobile phone penetration among total population and Millennials
100% 96% > Figure 4: Average wallet size (US$) – total population and Millennials
91% 91%
89% 88%
90% 87% 88% 86%
84% 84%
82% $140,000
78% 79% 80%
80% 76%
74%
$120,000
70%
60% $100,000
50% $80,000
40% $60,000
30%
$40,000
20%
$20,000
10%
$0
0% Hong Kong US UK Singapore Australia New China Indonesia International
Australia New China Indonesia Singapore UK Hong Kong US Zealand average
Zealand
Millennials Total population
Millennials Total population
Data source: RFi Group Research 2016
Data source: RFi Group Research 2016
08 09
1.2: Transforming from legacy
to peak profit performance –
the Exponential Organisation
“If you haven’t transitioned into an Exponential Organisation, it will not only seem as though
your competition is racing away from you, but also, like Kodak, that you are sliding backwards
at breakneck speed into oblivion.”
Samil Ismail – Singularity University
Across all countries studied, we found average size of wallet now exceeds all The significant proportionate share In this section, we will explore the basic An Exponential Organisation These accelerating technologies enable
that the proportionate representation other demographic groups (making of wallet Millennials hold in China and business models, industry revenue and is one whose impact (or output) is the marginal cost of both supply and
of Millennials in a population and the them a highly desirable demographic) Indonesia reflects the high proportion profit, and operating models of traditional disproportionally large: at least ten demand to reduce to virtually zero.
proportion of wallet value they hold are while in Singapore, Millennials’ average of Millennials in those countries. institutions, and draw insights from times larger than its peers because This is a key factor in the multiplying
broadly correlated – except in the UK wallet share is significantly less than challenger banks and fintechs to better of the use of new organisational effect of exponential growth versus
and Singapore. In the UK, Millennials’ other demographic groups (see Figure 5). understand the economic transformation techniques that leverage linear growth referred to by Kurzweil
required for exponential performance. accelerating technologies10. as the Law of Accelerating Returns
Throughout this report, we use (LOAR)11 (see Figure 6).
the following definition for an
> Figure 5: Proportion of Millennials in population versus proportion of wallet value held by Millennials Exponential Organisation:
100%
90%
Figure 6: Exponential/linear growth
80%
49% 46% 48%
70% 61% 61%
69% 71% 69% 69% 68% 68%
72% 74% 74% 75%
60% 78% 80%
85% Exponential
50%
40%
30% Disruption
51% 54% 52%
Growh
20% 39% 39%
31% 29% 31% 31% 32% 32%
28% 26% 26% 25%
10% 22% 20%
15% Linear
0%
Population
Value
Population
Value
Population
Value
Population
Value
Population
Value
Population
Value
Population
Value
Population
Value
Population
Value
Hong Kong US UK Singapore Australia New Zealand China Indonesia International
average
Millennials Other demographics Time
Data source: RFi Group Research 2016
The behavioural economics of have overtaken Baby Boomers (53-71 Their impact as customers,
Inflection point: Millennials have grown their average wallet size and, over time, will increasingly outgrow the average Millennials and their unquenchable years) as the largest demographic employees, investors and policy
consumer wallet size of other demographic groups. In the case of the US, UK, China and Indonesia, they have already thirst for digital experiences helps group and have emerged as the makers will only increase from this
exceeded this inflection point. to explain exponential growth through number-one source of global income, point on exponentially12.
disruptive innovation. Millennials spending and wealth creation.
See Section 2 for the country analysis that includes the Telstra 3MI™ performance of main financial institutions.
10 11
> Figure 7: Global banking revenues and profits by activity (US$B)
1.2.1: Business model –
revenue and industry profit
Balance-sheet Origination/sales % of fintech
As information asymmetry in financial provision concentration 2015
services dramatically diminishes, the
traditional fee – and margin-based
business model from the provision Lending 1,239 301 24%
of transaction, risk management, Core
investment and financing services – banking Checking/savings 526 131 15%
will change dramatically. According
to McKinsey, 59 per cent of industry Deposits 174 44 0%
profit is derived from origination,
sales and distribution activities that
generate a high ROE (22 per cent), with Investment banking 136 214 2%
the provision of credit only generating
Fee-based
6 per cent. Unsurprisingly, the large Payments 0 483 43%
business
profit pools from these activities have
attracted the greatest concentration Insurance and
wealth management 0 577 13%
of fintech investment, with payments
attracting 43 per cent and lending
24 per cent of investment13. McKinsey Total revenues 2,075 (54%) 1,750 (46%)
further predict that by 2025, between Total after-tax profits 436 (41%) 621 (59%)
10 and 40 per cent of revenues in
major retail banking businesses and ROE 6% 22%
between 20 and 60 per cent of profits credit customer
disintermediation disintermediation
in consumer finance will be at risk from
disruption (see Figure 7).
Data source: McKinsey 2015
Older demographic groups are the
main source of industry profit today.
For example, in the US, more than
60 per cent of revenue is generated
from those aged 50 years and older, > Figure 8: Exponential demographic profitability peak growth
and customer value is estimated
to peak at 58 years old14 but this is
about to change. A card portfolio Millennials become Millennials become the Millennials become the Millennials will no longer
profitability growth model developed the majority of the Peak majority of both Peak and majority of both Legacy be the majority of the Legacy
Profits in 2022. Legacy Profit groups in 2028. Profit groups in 2046. Profit groups by 2055.
by TSYS for financial institutions15
shows that Millennials are now the
60%
only demographic on an exponential
profitability trajectory. Millennials are
% of Peak and Legacy Profits
50%
predicted to overtake baby boomers
population combined
in 2022 and Generation X in 2028,
becoming the most profitable customer 40%
demographic to financial institutions
when the older Millennials reach 30%
58 years of age (see Figure 8).
20%
10%
0%
2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
Generation ? (future) Generation Z Millennials Generation X Baby boomers
Data source: TSYS 2016
Inflection point: From 2028, financial institutions will heavily rely on Millennials as a main source of profit for an 18-year
period (2028-2046) and it won’t be until 2030 that we see the next exponential profitability trajectory, resulting from the
rise of Generation Z (see Figure 8).
12 13
1.2.2: Business models gaps Their study of the Fortune 100 in mobile bank/fintech) scored their 1.2.3: Operating model efficiency Maintaining infrastructure and When it comes to efficiency, the eleven
between the traditional and 2015 using the Exponential Quotient organisations at an average of 48/84 regulatory compliance represents a most efficient banks in 2016 were
(see Figure 9). These results are quite Digitisation will transform the
the new breeds revealed that none of eighteen financial significant proportion of investment reported to be from China (see Table
consistent with the findings of the economics of legacy business models
institutions in the Fortune 100, scored expenditure for institutions. PWC 1). Based on this, the Chinese banks
The average lifespan of Fortune 500 Singularity University study in Figure in several ways. Firstly, automation
55/84 or more, indicating a significant reported that in the first half of 2016, are the only traditional institutions
companies reportedly decreased 30 – where traditional institutions in the will reduce the operating costs of
transformation journey ahead for these 51 per cent of the investment spend performing at the operational efficiency
from 60 years in the 1920s to 15 years Fortune 100 scored an average of 39/84 major functions such as distribution.
leading financial services institutions by the major Australian banks were reported for challenger banks or
today. Forty per cent of the Fortune (see Figure 9). According to McKinsey, distribution
(see Figure 30). Conversely, in a separate for these items and they predict these fintechs. For comparison, OneSavings
500 are predicted not to survive the costs (branch network, contact centre,
Singularity University study of the will continue to factor significantly Bank (OSB) reported a cost-to-income
next 10 years16. Leveraging exponential When it comes to pure play online/ fulfilment) typically represent 40–60
Top 100 Exponential Organisations, into prioritisation of investment. PWC (CTI) of 26 per cent in 2015, with ATOM
technologies to transform and compete mobile bank/neo-bank/fintech, our per cent of total costs in retail and
nine organisations were fintechs and further highlight the labour intensity of Bank reporting under 30 per cent20.
against new breeds of organisations results paint a very different picture. commercial banking18, so the impact
all scored between 62/84 and 73/83 the current operating model, with staff
(including fintechs), has become a Respondents ranked those organisations of automation is potentially enormous.
(see Figure 30). compensation reportedly 56 per cent
survival imperative. at an average of 64/84 – well above the Secondly, well-executed digitisation
of total operating expenses19.
With permission from the Singularity 55/84 threshold (see Figure 9). Again, of customer interactions can help
Research by the Singularity University University, we used the Exponential these results were consistent with the traditional institutions retain their vast
on exponential technologies17 identified Quotient diagnostic tool in an online fintechs in the Top 100 Exponential Millennial customer bases, reducing
eleven common attributes that could study of 164 financial services Organisations study (see Figure 30), leakage of profit to newer entrants.
be leveraged to achieve exponential executives across eleven countries which reported those organisations
growth (see Table 3). Often organisations between January and March 2017. scoring an average of 67/84.
only require four of these attributes We sought to understand the degree
to achieve the 10 x baseline threshold. to which executives thought their
An Exponential Quotient was created
> Table 1: Best cost-to-income ratios of top 50 banks worldwide
institutions were exponential-ready
based on these attributes to rate and the perceived readiness gap Cost-to-income Cost-to-income
organisations. Those with quotient between traditional institutions and World rank Bank Country
ratio rank ratio (per cent)
scores above 55 out of 84 were fintechs. Executives from traditional
1 29 Shanghai Pudong Development Bank China 26.44
classified as Exponential Organisations. institutions (excluding pure play online/
2 32 Industrial Bank China 28.42
3 2 China Construction Bank China 29.83
4 1 ICBC China 30.40
> Figure 9: Exponential Quotient score – financial services industry study
5 27 China Merchants Bank China 31.47
6 46 China Everbright Bank China 32.40
70 Average fintech Top 100 EXO score (67/84)
Exponential quotient score
7 30 China CITIC Bank China 33.00
60
Exponential Quotient score threshold (55/84) 8 33 China Minisheng Bank China 35.38
50 Average FSI EXO score (ex-fintech) (48/84)
9 13 Bank of Communications China 35.78
40 Average FSI Fortune 100 EXO score (39/84)
10 4 Bank of China China 36.15
64
30
53
11 5 Agricultural Bank of China China 38.12
49
48
46
44
41
20
12 50 Commonwealth Bank of Australia Australia 39.78
10
13 49 ANZ Banking Group Australia 39.88
0
14 16 Banco Santander Spain 41.85
Retail commercial banks
Credit unions, building societies,
mutual banks
Investment banks
Pure play online, mobile bank,
neo-bank, fintech
General P&C insurers
Life insurers and wealth management
Service providers, e.g. schemes,
payment processors
15 45 National Australia Bank Australia 47.11
16 24 Lloyds Banking Group UK 48.44
17 34 ING Bank Netherlands 50.66
18 43 Scotiabank Canada 51.78
19 28 BBVA Spain 51.97
20 38 Intesa Sanpaolo Italy 52.96
Data source: Telstra Research 2017 Data source: www.thebankerdatabase.com
Underutilisation of new technologies banks underperformed with a reported The picture for credit unions and mutual
Inflection point: A significant quotient gap of up to 36 per cent in exponential performance-readiness has opened up and failure to embrace digital in global average CTI of 64 per cent in banks in Australia was even starker,
between pure play online/mobile bank/neo-bank/fintech and traditional institutions. operating models were among the 2016. Interestingly, APAC institutions with an average CTI for 2016 reported
reasons capital markets and investment performed best at 49 per cent21. to be 74.8 per cent22.
14 15
> Figure 10: Operating expense – per cent of outstanding loans
1.2.4: Mobile digital Digital transformation attracts • range of touchpoints,
Inflection point: Direct banks and transformation – competing increasing levels of investment and,
5-7 digital attackers enjoy substantial • enrolment and login,
in the experience economy as we saw in the previous section,
cost advantages over traditional institutions vary widely in their • account information,
players to the order of 67 per cent “The only source of competitive transformation maturity. Millennials
for operating expenses and 98 • transactional functionality,
advantage is the one that can live in a mobile, digital-first world.
Digital bank’s per cent on customer acquisition23 But when it comes to mobile banking • service features,
cost advantage (see Figures 10 and 11). Many survive technology-fuelled applications, apps aren’t apps.
3-5 • cross-channel guidance, and
-67% fintech lenders may have a disruption: an obsession Forrester24 conducted a major global
400-point cost advantage over with customer experience.” study of 46 large retail banks • marketing and sales.
banks because they have little offering mobile banking services and
to no physical distribution costs. Harley Manning – constructed a composite measure While Forrester reported an average
This enables pure play online/ Forrester Research of functionality by analysing: functionality score of 65 (out of 100),
~2 the huge variation in mobile functionality
mobile bank/neo-bank/fintech
businesses to pass significant is immediately apparent in Figure 12.
benefits on to consumers, including
lower costs and shorter time to
process loan applications.
> Figure 12: Mobile banking functionality benchmark score 201625
Traditional1 Direct banks2 Digital attacker3
Westpac
1 Traditional banks: based on sample of top 500 banks’ data from Reuters. See Section 3 for more analysis on Bank of America
2 Direct banks: ING DiBa, Activo, Checbaca, AirBank, mBank, Zuno (2014).
3 Lending Club First Quarter 2016 Results. transforming to an exponential-centric Wells Fargo
Source: Annual reports, press searches, McKinsey & Company analysis business model. Lloyds Bank
CBA
Data source: McKinsey 2016 NAB
Chase
Barclays Bank
ICBC
> Figure 11: Customer acquisition cost China Merchant Bank
Citibank
NatWest
$ per customer
DBS
300 Santander
HSBC
Bank of China
OCBC
Agricultural Bank of China
China Construction Bank
Digital bank’s Nationwide
cost advantage ANZ
-98% UOB
110
40 45 50 55 60 65 70 75 80 85 90 95 100
Functionality score
Data source: Forrester 2016
5
The barriers to digital transformation See Section 3 for more detail on
are clear. According to a study by Inflection point: In a mobile, transforming to an exponential
Traditional1 Direct banks2 Digital attacker3 EFMA and Infosys, a legacy technology digital-first world, a small group of business model.
environment (50 per cent), lack of Australian, US and UK institutions
1 Foundation Capital, 2014; Lending club based on St. Louis Fed, Federal Reserve.
2 Based on expert interviews. unified vision for digital across the have out performed their peers by
3 On Deck, company presentation May 2015.
organisation (44 per cent), lack of investing to substantially improve
Source: Annual reports, press searches, McKinsey & Company analysis
skills and expertise (38 per cent) transactional features, functionality
and lack of budget(s) (31 per cent) and service sets. These efforts
Data source: McKinsey 2016 were reported as the top inhibitors are characterised by the adoption
to digital transformation for financial of a test-and-learn approach to
institutions. Importantly, the study functionality and an agile approach
found that 20 per cent of banks are to development. Westpac, a major
launching, or considering launching, Australian institution, was ranked
a parallel digital bank to support their #1 for 2016 (see Figure 12).
digital transformation strategy26.
16 17
1.3: Making enterprises programmable
– software-controlled, data-driven
automation
A new generation of organisations • Programmable infrastructure, which Additionally, a new set of customer
is emerging. They are growing can be orchestrated in near real-time interaction technologies is emerging > Figure 13: Vision for a distributed, software-controlled, data-driven, autonomous,
exponentially by efficiently connecting by software to minimize costs and in the form of intelligent personal real-time, programmable financial services enterprise
supply to demand – and they are to dynamically support changes in assistants, smart chatbots and natural-
doing so with a near-zero marginal demand or supply, language voice interfaces. These
cost. They also have delivery models potentially offer institutions a holy grail:
• Programmable process, which avoids
that are massively scalable, and they experiences that customers find both Third-party data Programmable Banking functions Artificial intelligence
or removes the cost and friction and services intelligence on demand on-demand
are connecting to that demand with satisfying and engaging, and delivery
associated with a huge range of manual
compelling, engaging and ultimately models that companies find affordable, Continuous: Transactions Behavourial
and semi-manual processes, and Operation analytics analytics
sticky user experiences. scalable and through which they Market analytics
Financing Cognitive
• Programmable intelligence, which can differentiate themselves. These Customer analytics
services
To paraphrase Tom Goodwin, Uber, Product analytics
was enabled by commoditised high- technologies are new and immature, Risk Natural language
Facebook, Alibaba and Airbnb don’t management services
performance big data and analytics but user adoption is growing rapidly. Tablet
hold, create or own the services they Investment Machine-learning
platforms allowing evidence-based services
create27: The equivalent for this industry Ultimately, however, the technologies
decision-making at speed and scale. Online
therefore is: are not a sustainable differentiator. The API gateway
Digital Platform-as-a-service
Machine learning is drastically reducing APIs APIs APIs
same technologies can be accessed by
the manual effort required to develop Mobile
‘[Exponential], the world’s start-ups and incumbents, by fintechs
orchestration
new analytical models and insights.
Intelligent
real-time
and traditional institutions and by linear In-network Programmable
largest financial services By utilising these key elements, growth companies and exponentials.
APIs intelligent
security
software-defined
network
APIs Chatbot
company, holds/creates/owns organisations can become, in effect, One major hazard for traditional
no [_ _ _ _ _ _ _?]’. “programmable enterprises”. They organisations is that their technology Robotic
process APIs APIs
Voice
can use analytics to remove costs investment models are simply not automation Intelligent
virtual
and friction from almost every aspect designed to cope with exponential
This is a story waiting to be told. Legacy systems Programmable Data services on demand assistant
of their operation. Programmable technologies. These processes need to and processes infrastructure
on demand Next
Companies achieve these three enterprises can also easily conduct evolve or institutions will be outflanked Enterprise systems,
mainframes, etc.
Security and Operational data big thing!
validation
outcomes by making infrastructure, product and market experiments and by companies who have the capacity to services
CRM ERP Product and
processes and intelligent systems immediately make evidence-based out-scale institutions before the threat Identity market data
elastic to meet demand and by (often automated) decisions based is even recognised. Emails, spreadsheets,
reports, documents Blockchain Customer
making them programmable – thereby on the results of those experiments. distributed context data
While the world's next largest financial ledger
bringing much of the business into Further, they can personalise service
services company remains to be Data-scrubbing
the domain of software-controlled, delivery because personalisation is much and matching
Customer
transformed or created, based on End-to-end security monitoring and management
experience data
data-driven automation. The three key cheaper in software. Programmable
the exponential business models of
elements include: enterprises can also scale – massively
disruptors in other industries, we
– because all aspects of production Continuous incremental demand-driven investment model
can assume it will likely become a
happen in direct, real – or near real-time
programmable enterprise. Our vision
response to demand. Data source: Telstra Research 2017
for what this enterprise will be, and
how it will operate, is based on four key
principles and illustrated in Figure 6.
See Section 4 for more analysis on programmatic technology for exponential performance.
18 192.0: Country analysis “Over the next 15 years we will see the Millennial segment become the most profitable demographic group for banks around the world. However, Millennials are driving interactions and demanding engagement in a manner never before seen in financial services and it is therefore critical that any financial services organisation that wants to succeed in the long term, acts to align itself from a customer engagement perspective with what will shortly become the norm.” Alan Shields, Managing Director – Consulting, RFi Group In this section, we use the Telstra 3MI™ to review institutions and their performance across eight countries. 2.1: Methodology – the Telstra Millennials, Mobiles and Money Index (3MI™) The data reported in this section they held with financial institutions, was collected from more than 27,000 the value of these product holdings consumer research interviews, and how they conduct their banking conducted in eight markets through activities. Data for China and Indonesia 2016. The sample included over was largely obtained from urban 8,000 Millennials (18-34). Interviews populations. In addition to the were conducted online and required consumer study, 77 financial interviewees to note the products institutions were also analysed. 20 21
> Figure 15: Main bank market share of Millennials in Australia
2.2: Country insights and analysis 40%
36%
(all data presented as an average) 30%
20%
2.2.1: Australia – Telstra 3MI™ As in many of the markets in this study, proportions among the countries studied. 14%
12%
Australian financial services providers Yet Australian institutions are well 11%
9%
have become increasingly focused aware of this segment’s potential 10%
on Millennials. and there are numerous examples 4% 4%
3% 3% 3%
1%
Millennials currently represent of products and services that
0%
26 per cent of the total adult population target Millennials. CBA ANZ NAB Westpac ING Direct St. George Suncorp Bankwest Bendigo Bank BOQ Other
Bank and Adelaide Bank
in Australia, one of the lowest
Data source: RFi Group Research 2016
2.2.1.1: Mobile banking 2.2.1.2: Wallet size
> Figure 14: Comparison of main Australian banks across Telstra 3MI™ penetration 2.2.1.3: Case study – ANZ
Australians take out a significant
As we see in Figure 2 and 3, mobile proportion of their first banking There are many examples of
85% phone penetration in Australia is products between the ages of 18 to 34 institutions targeting Australian
Digitised Transformed years and for this reason, Millennials Millennials. For example, through
high (91 per cent of adults) as is
smartphone penetration (85 per have significant ‘banking wallets’. student-centric products such
80% Suncorp
cent of mobile users). In contrast, We define wallet size as the sum as traveller-focused credit cards
Bank,
US$61k 96 per cent of Millennials have mobile of deposits and loan holdings with a and referral incentives of as
phones and 93 per cent of these use particular institution. As we can see much as AU$75 (offered to both
Mobile banking usage
75% Westpac,
US$71k
NAB,
smartphones. While only 53 per cent from Figure 1, on average, Australian the referring customer and the
US$70k
of all consumers with smartphones Millennials have US$70,026 in deposit referred individual).
Bankwest,
70% US$134k CBA, ING Direct, access banking services via and lending balances. This makes A relatively recent addition is ANZ’s
US$63k US$113k
smartphone, 68 per cent of Australian them a very attractive proposition 'Job-ready' package29, which targets
Millennials access their main bank for banking players. young adults about to enter the
St. George, ANZ,
65% through mobile banking at least workforce. The package includes:
US$40k US$68k
Size of bubble In Figure 14, ING Direct (US$112,542)
monthly 28. This is by no means the
represents average size and Bankwest (US$133,603) stand • a transactional or salary account,
of Millennial wallet highest mobile banking penetration
out as having comparatively large which is fee-free for those
60% in the study, but it does highlight
Millennial wallet size. Both banks have depositing more than $2,000 per
the difference in digital engagement
traditionally targeted online savers month (AU$2 per month if not),
Legacy Transitioning between the Millennial population and
and have brands that resonate among
55%
the average Australian adult. • a superannuation account, into
15% 20% 25% 30% 35% 40% 45% first homebuyers – positioning them
Today, ANZ has a comparatively low perfectly to target Millennials looking which a customer can nominate
Millennials in financial institution to have their compulsory
proportion of customers engaging via to purchase property and take out
mobile (see Figure 14). This may change loans. Westpac, National Australia superannuation contributions paid,
Data source: RFi Group Research 2016 soon as ANZ is the first of the major Bank and other major institutions are • a fee-free savings account paying
Australian banks to launch Apple Pay. clustered around the national average. a three-month bonus interest of
Although Apple Pay is distinct from 1.45 per cent on top of the ongoing
As Figure 14 shows, the banks with CBA is particularly noteworthy as it mobile banking, it may drive overall rate (1.30 per cent as at January
the largest proportions of Millennials has long targeted a younger segment mobile app usage among 2017), and
among their main bank customers (i.e. in the Australian market with products Millennial customers.
Millennials who consider a bank to be including Youthsaver accounts and the • mobile banking app access.
their main financial institution) are ING Dollarmites Club, which are aimed at With ANZ positioned in the
Direct and the Commonwealth Bank school children. CBA currently has a Transitioning quadrant, this package,
of Australia (CBA) – with 39 per cent main bank share of 36 per cent among along with the launch of Apple Pay in
and 34 per cent respectively. They are Millennials, well ahead of its largest 2016, positions ANZ well to target the
positioned in the Transformed quadrant competitor ANZ on 14 per cent (see mobile-savvy Millennial segment.
together with NAB and Suncorp. Figure 15). RFi Group research shows that
brand preference for ANZ among
Millennials stood at 24 per cent in
November – second in the market –
which is consistent with ANZ having
the second-highest market share of
Millennials. These statistics suggest
that ANZ is set to do well at acquiring
Millennial customers in 2017.
22 232.2.2: China – Telstra 3MI™ Of those countries examined in this adult population, at 39 per cent, 2.2.2.1: Mobile banking penetration In Figure 16 we see that, among the 2.2.2.2: Wallet size
study, China has the second-highest trailing only Indonesia (see Figure 1). major Chinese banks, Ping An Bank,
The rate of mobile phone penetration The Millennial wallet size at CMB
proportion of Millennials among its Bank of Communications and CMB have
in China is high – 88 per cent of urban (US$89,609) is substantially larger than
the highest proportions of Millennial
Chinese consumers own a mobile the average across the Chinese majors
customers regularly engaging through
phone, and 98 per cent of these have (US$55,404) – a likely contributing
the mobile banking channel. On the
smartphones (see Figures 2 and 3). factor to CMB’s high level of digital
other hand, ICBC sees the lowest
The pervasive use of smartphones is engagement. Bank of China (BOC) and
proportion of mobile engagement
a strong foundation to promote mobile Shanghai Pudong Development Bank
among this segment (68 per cent).
> Figure 16: Comparison of main Chinese banks across Telstra 3MI™ banking. Urban Chinese consumers
CMB has leveraged its strong
(SPDB) and Agricultural Bank of China
have indeed taken heed, with 80 per (ABC) trail CMB by some distance, with
technology capabilities to prioritise
cent of urban Chinese adults having average Millennial wallets sitting just
100% mobile and online banking and to
Digitised Transformed used mobile banking to conduct day- over US$55,000, or about the national
provide a seamless digital channel
to-day banking activities in the past average (see Figure 16).
95% experience. CMB has also created a
12 months32. Eighty-eight per cent of
closed-loop banking ecosystem, which
Ping Chinese Millennials use smartphones encourages customer engagement by
90% An Bank,
Bank of
China US$28k and three in four Chinese Millennials providing lifestyle and entertainment
Mobile banking usage
Communications,
US$54k
Merchants regularly bank with their main bank information through rewards and
85% Bank (CMB),
US$90k via smartphones. Despite one of promotions with integrated payment
the highest levels of smartphone capabilities so that customers can
80% ownership and a high level of regular
Bank of China, take advantage of these offers.
US$64k mobile banking behaviour in this study,
75% there is still a marked difference in the
Shanghai Pudong
Agricultural Bank of China (ABC),
Development Bank behaviour of Millennials compared
US$55k
70% (SPD Bank), Size of bubble with the average Chinese adult.
ICBC, US$63k represents average size
US$51k of Millennial wallet
65% China Construction
Bank (CCB),
Legacy US$40k Transitioning 2.2.2.3: Case study – CMB • pay utility bills and credit card bills,
60%
20% 25% 30% 35% 40% 45% 50% 55% Many banks in the Chinese market • apply for loans,
Millennials in financial institution offer card propositions targeting the
• check transaction records,
Millennial segment. Major banks offer
cards providing discounts on travel- • make peer-to-peer (P2P) transfers,
Data source: RFi Group Research 2016
related expenses, discounts on dining
• search for the nearest branch,
experiences, rewards for shopping
as well as the number of people
online and a choice of attractive
While Ping An Bank shows the highest China Merchants Bank (CMB) has long respectively, versus market averages waiting in line,
card designs, as well as student-
proportion (49 per cent) of Millennials been an innovator of digital banking of nine and nine. Despite not holding centric products such as tuition fee • answer queries via an automated
among its main bank customers, in China. According to RFi Group data30 a market-leading share of main bank cashback and discounts on study customer service robot, and
the proportion of Millennials in the it consistently performs well in terms relationships among Millennials programs. Aside from bank offerings,
customer base of most major Chinese of advocacy for its internet banking (11 per cent), it has led the way in • order and pay for a taxi.
numerous digital wallet players in
banks sits at around 40 per cent. and mobile banking offerings, with offering features desired by Millennials, the market look to target the many The integration of multiple banking
Net Promoter Scores31 of 13 and 18 such as WeChat Bank (see Figure 17). digitally engaged Millennials. and non-banking features in CMB’s
mobile banking offering, and its
As mentioned earlier, CMB leads the
ongoing strategy for improvement,
market and has pioneered innovative
will continue to strengthen its
> Figure 17: Main bank market share of Millennials in China functions including the integration
position with the lucrative
of ‘WeChat Bank’ in 2013 to improve
Millennial segment.
the customer experience of its mobile
30%
proposition. Other banks such as
ICBC, Agricultural Bank of China and
21%
20%
China Construction Bank have since
17%
15% 14%
followed suit. With WeChat Wallet
11% integration, users can use their
9%
10% smartphone to:
5%
3% 2% 2% 2%
0%
ICBC
Bank of China
Agricultural Bank
of China (ABC)
Ping An Bank
China Construction
Bank (CCB)
Bank (CMB)
Bank of
Shanghai Pudong
Development Bank
(SPD Bank)
Postal Savings
Bank of China
(PSBC)
China CITIC
Bank
Other
China Merchants
Communications
Data source: RFi Group Research 2016
24 252.2.3: Hong Kong – Telstra 3MI™ Hong Kong has the smallest proportion 2.2.3.1: Mobile banking penetration Millennial customers of international 2.2.3.2: Wallet size
(29 per cent) of Millennial adults among banks Citibank and Standard Chartered
Eighty per cent of the adult population Millennial adults in Hong Kong hold on
the Asian countries in this study are most likely to be mobile banking on
in Hong Kong has access to a mobile average a US$115,088 wallet size – the
(see Figure 1). a regular basis (81 per cent and 73 per
phone, compared with 79 per cent of largest among the countries studied
cent respectively). In a market where
Millennials. Smartphone penetration is (see Figure 1). Standard Chartered
online and mobile banking culture
high, with almost all Millennials studied Millennial customers hold the largest
is less developed, both institutions
signalling that they hold a smartphone average wallet (US$194,243) followed
provide customers with user-friendly
capable of mobile banking (see Figures by Citibank customers (US$136,007).
experiences and easy access to
> Figure 18: Comparison of main Hong Kong banks across Telstra 3MI™ 2 and 3). While 76 per cent of Millennials
account information via their mobile
While, as mentioned previously, Hang
bank with their mobiles and 61 per Seng enjoys the highest proportion of
banking apps. Citibank, for example,
cent do so at least monthly, this is the Millennials within its customer base,
90% enables its mobile app users to view a
Digitised Transformed lowest level of Millennial digital banking
snapshot of all their accounts (such as
these Millennials hold the smallest
engagement across the eight countries average wallet size (US$94,002 below
85% savings balance and credit card spend).
Citibank,
studied (see Figures 18). the national average) (see Figure 18).
80% US$136k
Mobile banking usage
75% Standard
Chartered,
US$194k 2.2.3.3: Case study Standard Chartered also offers
70%
Hang – Standard Chartered Breeze Home, an app for customers
Seng Bank, looking to enter the property market,
65% US$94k Banks in Hong Kong endeavour to which includes:
Bank
of China,
attract Millennials through attractive
60% US$114k card and deposit propositions • ability to search properties listed
aimed at the student demographic. for sale in Hong Kong,
Size of bubble
55% represents average size These include discounts or cashback • a customisable borrowing profile,
of Millennial wallet
HSBC, rebates on dining, entertainment to help identify properties that meet
50% US$96k and online shopping experiences, their requirements,
Legacy Transitioning as well as discounts and instalment
45%
plans on tertiary-related fees. • a mortgage calculator, to estimate
20% 25% 30% 35% 40% 45% Additionally, Hong Kong has digital monthly repayments based on their
Millennials in financial institution wallets and payments offerings such borrowing capacity, and
as O!ePay, TNG, Alipay, and Tap & Go, • a calendar function that offers
Data source: RFi Group Research 2016
which are more likely to appeal to tips and informs users about key
digitally savvy Millennials than the milestones or events throughout
average consumer. the home-buying process.
Hang Seng Bank and Citibank have credit card offerings for university support university projects, and Standard Chartered promotes digital With multiple mobile banking
the highest proportion of Millennials students. The card offers students activities for alumni and students. engagement through user-friendly solutions, including Standard
in their main bank customer base (37 and alumni of leading universities internet banking and mobile banking Chartered Mobile, Breeze Home and
By focusing on students and alumni,
per cent and 35 per cent respectively), and colleges exclusive features such offerings. This includes the ability to: Breeze Trade, Standard Chartered is
Hang Seng Bank engages the younger
while HSBC has the lowest (see Figure as interest-free instalment payment well placed to actively target digitally
generation and creates an incentive for • access all the banking services
18). It is noteworthy that Hang Seng plans for tuition fees and discounts for engaged customers in Hong Kong,
them to continue with the bank as their in a mobile banking app, using
Bank has a long-term strategy targeting campus facilities. The bank donates particularly Millennials. Standard
financial needs mature. fingerprint authentication,
Millennials. One example is its exclusive a proportion of total card spend to Chartered currently holds seven
• view balances and transaction per cent market share of main bank
history on a single platform, relationships in the Millennial space
• personalise the viewing settings (see Figure 19).
> Figure 19: Main bank market share of Millennials in Hong Kong of accounts,
• make payment transfers, and
40%
• buy and sell currencies.
33%
30%
25%
22%
20%
10% 7%
5%
3% 2%
1% 1% 0% 0%
0%
HSBC BOC Hang Seng Standard Citibank BEA NCB Chong Hing Dah Sing DBS Other
Bank Chartered Bank Bank
Data source: RFi Group Research 2016
26 272.2.4: Indonesia – Telstra 3MI™ Millennials as a group make up studied, and suggests that mobile 2.2.4.1: Mobile banking penetration BCA, CIMB Niaga and Bank Mandiri 2.2.4.2: Wallet size
54 per cent of Indonesia’s urban banking and digital solutions are have the highest proportions of
Mobile phone penetration among urban As with most markets, the foundation
adult population, which is the highest especially relevant in this market Millennials using mobile banking to
adults in Indonesia sits around the of many Indonesian adult banking
proportion among the countries (see Figure 1). engage with their main bank, while BNI
international average for this study, wallets will be laid during the 18 to 34
has the lowest (see Figure 20). Going
with 86 per cent of adults owning a year old period, making this a critical
forward, BCA may further reinforce
personal mobile phone, of whom 97 stage for consumers and banks alike.
its position as a Millennial leader in
per cent have smartphones. Millennial Urban Indonesian Millennials average
the digital space, with strong internet
mobile penetration is marginally lower US$46,823 in deposits and loans
banking, mobile banking and digital
> Figure 20: Comparison of main Indonesian banks across Telstra 3MI™ at 84 per cent (see Figures 2 and 3).
wallet offerings. Similarly, Bank Mandiri
with their banks – the lowest dollar
Levels of digital engagement among value across the countries studied
is driving engagement through its digital
Millennials (81 per cent accessing (see Figure 1).
85% wallet – Mandiri e-cash. This is available
Digitised Transformed mobile banking with their main bank
to all mobile phone owners and allows BNI has the most invested Millennial
in the past year) and average adults
for payments online, payments in-store, customer base with an average wallet
80% (79 per cent) are similar33.
BCA,
CIMB Niaga, cash withdrawals and transfers. size of US$81,810, some 75 per cent
US$38k
US$72k larger than the average Millennial
wallet. The other standout is CIMB
Mobile banking usage
75%
Bank Mandiri, Niaga, (US$72,000). On the other
US$20k
hand, Millennial customers of the
70% state-owned Bank Mandiri, are the
least affluent, holding on average
of just US$20,273 (see Figure 20).
65% Size of bubble
Bank BRI, represents average size
US$38k of Millennial wallet
BNI,
US$82k
60% 2.2.4.3: Case study – BCA • see friends who also use Sakuku,
Indonesian institutions have • withdraw cash without a card
Legacy Transitioning developed several products aimed at BCA ATMs,
55%
to attract the Millennial market,
45% 50% 55% 60% 65% 70% • make mobile top-ups,
for example current and savings
Millennials in financial institution • make money transfers and carry
accounts with shopping perks and
unique card designs. Bank Danamon out balance enquiries,
Data source: RFi Group Research 2016 has partnered with Manchester
• split bills between Sakuku users,
United to create a sports-branded
and
card. Other examples include new
Figure 20 shows that state-owned Bank deposit account products, such as and all groups (Figure 21). BCA’s reach digital wallets, more contactless • pay no monthly administration fee.
Negara Indonesia (BNI) has the largest BNI Tapma. This acts as both a payment across all age groups suggests it card and sticker payments options,
BCA also engages with Millennials via
proportion of Millennials among its card and student identity card on has a broad customer acquisition e-commerce payment solutions and
a strong social media presence on
main bank customer base (62 per cent). campus. Bank Central Asia (BCA), strategy, which may contribute to one-stop branches in popular retail
major social media platforms such
Although positioned in the Transitioning the third-largest bank in Indonesia the comparatively small proportion locations offering self-service and
as Facebook, Twitter, Instagram,
quadrant, one way BNI is reaching by total assets, enjoys the largest of Millennials in its customer base. automated technologies.
YouTube and Indonesian online
this younger segment is by partnering market share of main bank relationships Digital wallets are becoming harder forums all popular with Indonesian
with local universities to offer tailored across both Millennials (40 per cent) to differentiate, with many offering Millennials. For example, BCA allows
similar functions. Apart from its prospective and existing customers
mobile app (m-BCA), BCA offers an to communicate with BCA in their own
electronic wallet – Sakuku – that it time via Facebook Messenger and
> Figure 21: Main bank market share of Millennials in Indonesia seeks to differentiate by offering other social messaging platforms.
the ability to:
40%
40%
30%
20%
20%
12%
11% 10%
10%
3%
2% 1% 1% 1% 1%
0%
BCA Bank Bank BNI CIMB Bank Bank BTN BII Bank Other
Mandiri BRI Niaga Danamon Muamalat Permata
Data source: RFi Group Research 2016
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