RBC Financial Group Power Point
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| | By : IRFAN Roos Indra Djaja
| ¦ adquart r d in Toronto, Canada Consid r d on of Canada¶s f full-s rvic , national and int rnational financial stablishm nts RBC Financial Group s rvic s; 5 main ar as of practic - P rsonal and comm rcial r tail banking (RBC Royal Bank) - Insuranc (RBC Insuranc ) - W alth manag m nt (RBC Inv stm nts) - Corporat and inv stm nt banking (RBC Capital Mark ts) - Transaction proc ssing (RBC Global S rvic s)
RBC Financial Group
Consid r d Canada¶s larg st bank h n m asur d in t rms of ass ts and mark t capitalization $270 Billion in ass ts 23 Million r tail accounts 700 Products 58,000 Employ s 10 Million p rsonal, comm rcial, corporat , and public s ctor custom rs s rv d in North Am rica and much of th orld RBC Royal Bank (p rsonal and comm rcial r tail banking) compris d of 1,300 branch s, 4,800 ABM¶s, 87,250 propri tary POS t rminals, 900+ mobil sal s staff, 1.4 million onlin banking custom rs and 2 million t l phon banking custom rs ith 300 offic s in 30 countri s
RBC Financial Group Th p rsonal banking d partm nt cov r d consum rs and small busin ss banking and loan, hil larg r compani s arning $5 million to $25 million r cov r d by th comm rcial division RBC Royal Bank also provid d cr dit card s rvic s, Visa cr dit and d bit cards provid d; via RBC C ntura and RBC Prism
Royal Bank b gan its pansion in 1946, ith th philosophy in mind; ³all things to all p opl Sought to pand both nationally and int rnationally, hil d v loping n products and s rvic s in th proc ss Du to changing mark t condition in th 1960¶s and 1970¶s RBC sought to suppl m nt d th ir pansion by utilizing m rging ABM t chnologi s and a d c ntralization strat gy 1968 ± 25 ABM¶s r utiliz d in dom stic op rations
D v loping a CRM Philosophy Th ultimat goal as to bring tog th r in on plac a vi of all contacts, transactions, accounts and int raction ith ach custom r. A financial institution¶s fully int grat d CRM syst m could allo its p rsonal bank rs (PBs) to ass ss a custom r¶s transaction history.
Addr ss, ag , and account balanc s All contacts th custom r had at any company location, phon c nt r, or Int rn t sit What l v l of s rvic th custom r qualifi d for, bas d on curr nt and futur profitability What products th custom r h ld at th tim of th call What products th custom r as targ t d/approv d for by sal s and mark ting ¦o th custom r r spond d to targ t d dir ct mark ting campaigns
Probl ms ith CRM Syst m
Although tr m ly b n ficial, CRM as p nsiv and difficult to d ploy, sp cially on a larg scal
In 2001, a US industry journal found that hil 78% of r spond nts found CRM critical, only 35% actually had impl m nt d it.
Various roadblocks such as; budg t constraints, lack of coordination/coop ration ithin compani s, lack of manag m nt commitm nt mad it v ry hard to p n trat th industry ith CRM.
Compani s ho r succ ssful ith CRM cr at d ongoing r p at purchas r lationships ith th ir custom rs and had th r sourc s and infrastructur to captur d tail d data about th custom rs b havior h n th custom r purchas d, us d and r purchas d th ir products and s rvic s
CRM at Royal Bank
In 1997 Royal Bank und r nt s v ral mark ting strat gi s. Th Strat gic Mark ting R s arch and Analytics (SMR&A) group conduct d brand r s arch, s gm ntation and pr dictiv mod ling using information from Royal Bank¶s data mart Th obj ctiv of this r s arch as to d t rmin th imag p rc ptions of major financial institutions and id ntify th optimum positioning for RBC Royal Bank. Du to th push from comp tition Royal Bank as ag r to us th information th y had gath r d about th ir custom rs in futur int ractions ith th m
Th ³Burning platform
A study conduct d in 1997 of 2000 custom rs of th larg Canada financial institutions ask d ³What asp cts of banking do you highly valu . Th r sults cr at d th ³burning platform for CRM ithin th Bank. Custom rs said th most important valu to th m as intimacy, ncompassing f lings of trust, r assuranc , a f ling that th bank knos and und rstands th m and th ir n ds. Banks had b n folloing th id a that conv ni nc as k y to th ir consum rs, hich is hy banks off r d 24-hour ATMs and call c nt rs. This study sho d a hol ar a of diff r ntiation that Royal bank could plor Royal bank chos to d ploy CRM in points of contact critical to th custom r p ri nc such as call c nt rs, branch s and dir ct mail
R organization around CRM Royal Banks Primary custom r s gm nts: K y, Groth, Prim Th structur r fl ct d lif stag s and th diff r nt rang of compl ity ithin financial n ds Th groupings also r fl ct d commonaliti s in s rvic and product r quir m nts.
m !" Compris s four sub-s gm nts; Youth, N us, Small Busin ss, and Farming & Lif styl Agricultur . Lo curr nt valu , pot ntial to mak high profits for bank !#Ô¦$Ô Cli nts in mid-lif , and/or busin ss¶ that ar still groing th ir ass ts and hav high cr dit and financial advisory. Strat gy: R tain, gro, consolidat th s r lationships Consists of mor matur custom rs in th accumulation and pr s rvation phas s ith significant pot ntial for full RBCFG off rings. Valu proposition: trust d s rvic and r f rral to sp cializ d r sourc s
S gm nt manag rs comp t d for r sourc s alon ith product manag rs and functional ar a manag rs. Th ³fri ndly comp tition fost r d clos collaboration b t n th s ar as. Th r as r sistanc to th chang s ithin th n custom r and c nt r d organization. Part of th probl m as th inability to communicat ho th n program ould ork, po r shifts from product manag rs to custom r manag rs Consolidation of r gional sal s and mark ting groups m ant that branch s r c iv d compil d lists from sal s and mark ting offic s in Toronto rath r than r gional offic s. Royal bank cr at d a small, sp cializ d group that produc d ad-hoc and follo-up l ads as r qu st d by th branch s. Th goal as to r plac oft n-haphazard sal s l ads proc ss at th local l v l ith c ntraliz d and standardiz d sal s l ads No th l ads ar g n rat d c ntrally and v ryon has dir ct acc ss to th m, th y sitch d from pap r bas d to b ing availabl l ctronically
Aggr gat Information vs. Actual Data 20% custom rs account d for 100% profit ³A custom rs mad th most profit ³B custom rs mad som profit ³C custom rs brok v n or lost mon y
NCR ± Valu Analyz r Calculat d Profitability fast r ¦igh Proc ssing Po r Mor accurat spr ad of information Cr at d a B tt r Und rstanding of Custom rs ¦ lp D t rmin Custom r tol ranc
1) Calculat Pr s nt Valu of Profit
2)Factoring in Variabl s
Assuming profitability p rc ntil of cli nt r mains constant (Eampl : Ag , T nur ith Bank, , Numb r of Products ¦ ld, Acquisitions)
Lif tim Valu calculat d individually Can b aggr gat d up to S gm nt L v l
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Custom r profitability as a d t rminant us d for s gm nting and targ ting Studi s r don on custom rs lik s, dislik s and typ s of products th y ould b n fit from. Mod ls r d v lop d to d t rmin d th y¶r prop nsity to buy
RBC also d t rmin d a s t of custom r tr atm nt strat gi s using th custom r s gm nt cat gori s A custom rs cat gory ould d t rmin th l ngth of ait and typ of custom r s rvic r pr s ntativ th custom r talks to.
Th CRM syst m us d custom r profitability and futur pot ntial calculations to giv pricing param t rs to account manag rs to d t rmin ho to pric products d p nding on th custom r.
Anoth r us for custom r profitability data as to inform in th d bat ov r h th r to chang for s rvic s using a flat rat packag or charg f s bas d on th amount and typ of transaction th custom r as g n rating ith th bank.
& Ô Th bank d t rmin d profits on ass t products by subtracting transf r rat s from actual int r st incom and for liability accounts by subtracting int r st paid from th transf r rat on th mon y in th d posit account
| Factors such as Incom , S rvic D bt Ratio, Cash Flos, and cr dit r ports h lp d mak an initial d cision. Onc loan grant d, a risk scor as giv n bas d on natur and fr qu ncy of transactions in th custom rs account. Scor conv rt d into cost driv r All inputs r nt r d into softar that calculat s custom r profitability