Banking Transformation in ASEAN and Mobile Banking in Indonesia 16 Feb 2012 Indonesia International Banking Convention (IIBC) Devabalan Theyventheran Head of Transformation Office and Business Process Development CIMB Group
Agenda 1 CIMB’s Transformation Journey 2 Promoting ASEAN Agenda 3 Key Elements of Our Transformation Strategy 4 Mobile Banking in Indonesia
Looking Back : Our Origins 2005/6 2001 1974 1986 1987 2002 2003 2004 Transformatio Acquired Acquired Founded as PBS Acquired Launched • Listing of n to a securities BCHB’s Pertanian renamed CIMB Private CIMB Universal house, stake in Baring CIMB discount Banking Berhad Bank CIMB CAFM Sanwa House • Launche Securities Multinational d CIMB Bhd. (PBS) Islamic ASSET MANAGEMENT Securities / CIMB ISLAMIC Investment WHOLESALE FUNDS Universal Bank PRIVATE BANKING Banking STRUCTURED PRODUCTS DEBT HOUSE EQUITY AND IPO HOUSE CONSUMER BANKING 1991 1999 1979 2000 1935 1972 1924 1965 Biggest BOC & UAB SBB acquired Ban Hin Lee Bian Chang Bian Chiang • SBB United Asian merger in merged, BHLB and Bank (BHLB) Bank Bank founded as Bank Bhd. Malaysia holding co. other finance founded in renamed established in Southern (UAB) (BBMB & renamed co.’s Penang Bank of Kuching Banking Ltd. established BOC), Commerce Commerce • Bank renamed Asset Holding Bhd. (BOC) Bumiputra Bumiputra- Bhd. (CAHB) Malaysia Commerce Consumer Bhd (BBMB) Bank (BCB) incorporated Banking
Modern “CIMB” – our more recent history 4B 3 7 The launch of CIMB Bank Acquired Southern Bank Entered into an asset Completed Indonesian Singapore completes Berhad (“SBB”) to strengthen merger between Bank management joint-venture customer segment coverage our consumer banking Lippo and Bank Niaga with the Principal across the key markets in capabilities. The transaction was Financial Group the ASEAN region the largest takeover of a financial institution in Malaysia Feb June Jan March November July November 2005 2006 2007 2008 2009 2010 April June June September 4A 8 6 Bank Niaga was 1 2 transferred from BCHB With the launch of CIMB Completed to CIMB Group as part of Cambodia , the Group is now acquisition of 42.13% the group’s internal re- present in 8 out of 10 ASEAN in BankThai , and organisation nations Acquired GK Goh Evolved into the first fully subsequently Securities in integrated universal bank in increase stake to Singapore, the Malaysia with the 93% due to tender 5 second largest acquisition of Bumiputra- offer and rights issue broking house in Commerce Bank Berhad Signed SPA to acquire Singapore to become (“BCB”), the second largest 20% stake in Bank of the biggest commercial bank in Malaysia Yingkou, China investment bank in Strengthened partnership with the South East Asia launch of CIMB-Principal Islamic Asset Management
DBS 2011: 27.6b Fastest Growing Bank in ASEAN 2005: 14.7b OCBC 2011: 25.7b 2005: 10.9b UOB BCG ranked CIMB the 2 nd most high 2011: 24.6b performing mid-cap bank globally 2005: 13.0b Maybank 2011: 22.1b 2005: 11.3b +88% CIMB 2011: 20.7b +136% 2005: 3.3b BCA 2011: 20.5b +89% 2005: 3.9b Mandiri 2011: 19.7b +96% 2005: 4.2b BRI 2011: 18.3b +527% Public 2005: 3.7b 2011: 15.5b +425% Notes: All figures in USD 2005: 6.3b Siam Comm 1 January 2005 2011: 12.9b +369% 2005: 2.1b 31 May 2011 +394% +146% +514%
Agenda 1 CIMB’s Transformation Journey 2 Promoting ASEAN Agenda 3 Key Elements of Our Transformation Strategy 4 Mobile Banking in Indonesia
ASEAN: Scale, Network, Synergies Indonesia Singapore 230 million people 5 million people Malaysia 28 million people Thailand Cambodia 68 million people 15 million people We believe that ASEAN will truly prosper when it embraces diversity and leverages cross border synergies • ASEAN is poised for robust economic growth • CIMB Group reaches at least 81% of the ASEAN population, representing 89% of the region’s GDP • Through our comprehensive regional network and local expertise, we are able to offer seamless banking services and privileges to our customers, so they are able to do business, shop and dine with ease all over ASEAN
We commenced our comprehensive ASEAN universal bank journey since 2005 CIB Yes Yes Yes Yes 38,000 staff serving 11 Treasury Yes Yes Yes Yes mil customers via 1,092 branches Retail Banking Yes Yes Yes Yes Thailand 149 branches Credit Cards Yes Yes Yes WIP 502 ATMs 3,860 staff Commercial 2.0 mil customers Yes Yes Yes Yes Banking Islamic Banking Yes Yes Ltd No Malaysia 325 branches Private Banking Yes Yes WIP Yes 2,066 ATMs 19,705 staff Indonesia Stock Broking Yes Yes Yes Yes 6.2 mil customers Singapore 615 branches 2 branches 1,304 ATMs Most comprehensive UB platform 6 ATMs 12,551 staff in ASEAN 1,172 staff 3.5 mil customers 225 k customers Note: Data as at 31 December 2010, Includes one branch in Cambodia
CIMB Group - “ASEAN For You” “From our hugely diverse personal and institutional backgrounds, we have come together as one ASEAN company, with the conviction that our scale, networks and synergies strengthen our ability to deliver for our customers. No one has more precisely designed their business model around ASEAN as we have – no one is as integrated across ASEAN as we are .” Dato’ Sri Nazir Razak, Group CEO
CIMB as ASEAN’s Universal Bank Customer Need What our vision is enabling for Customers Customer Need Cross border seamlessness My turf has grown. It spans Does CIMB know what I am worth as a • Operate Bank Accounts ASEAN. customer? • Manage investments • Issue and accept payments • Financing Consistent experience across borders Pricing, rates and service levels based on aggregate ASEAN customer relationship I need a one-stop shop. • Single View of CIMB Bank across ASEAN I need flexibility. • Innovative products, available across the footprint • Financing based on regional collateral and limits • Solutions to meet needs from effective product bundles • Tailor products to in-country conditions and customer needs
Agenda 1 CIMB’s Transformation Journey 2 Promoting ASEAN Agenda 3 Key Elements of Our Transformation Strategy 4 Mobile Banking in Indonesia
Banking Transformation is Complex Data Data Data Data Data Data INCIDENTAL, ACCIDENTAL ENTERPRISE ARCHITECTURE Application Application Application Application Application Application •Highly heterogeneous •Silo-ed Technology Technology Technology Technology Technology Technology •Redundancies Platform Platform Platform Platform Platform Platform •Cost sub-optimal •Pockets of obsolescence Operations Operations Operations Operations Operations Operations •High time to market for enterprise standard products Process Process Process Process Process Process •Challenges with enterprise consolidated information Business Business Business Business Business Business Model Model Model Model Model Model BU BU BU BU BU BU EXISTING EXISTING EXISTING ACQUIRED ACQUIRED ACQUIRED ENTITY ENTITY ENTITY ENTITY ENTITY ENTITY 13
Our Banking Transformation Roadmap is based on following 4 Pillars Optimus – A technology-based, phased, incremental transformation Start State (2008) End State (2015) • Each country had different systems, • Shared / standardised operations and systems, standards, governance models, scope of governance and quality management mechanisms services and processes Governance Governance Governance Governance Scope Scope Governance Standards Scope Systems Systems Standards Scope Systems Standards Scope Systems Governance Governance Governance Scope Systems Scope Standards Scope Systems Governance Systems Systems Standards Scope Systems • New, regional, technology-enabled business and operations capabilities to strengthen our ASEAN universal bank proposition 1 4
Our Roadmap is not static. Each year we revisit and re- prioritise versus market trends and business demands The Optimus Transformation Programme comprises 6 major elements, geared towards growth agendas of customer centricity, differentiated capabilities, flexibility, speed-to-market, regionalization, and renewal of internal IT capabilities. Examples of Strategic Imperatives Grow Organically ahead of CRM A1: Sales A2: Service A3: Customer-Centric A: New Transformation & Transformation & Architecture/ Product Market Multi-Channel Capabilities Effectiveness Excellence Bundling B2: Corporate services Support Organic and Inorganic Regional Transaction Banking B1: Product systems B: Upgrades/ systems growth Regional Payment upgrade/replacement upgrades/ replacement Replacements C: Regional C1: Core Banking Support migration to a Regional Core Banking – 1P System Replacement Operating Model Banking Program Platform D: IT Capability D1: IT Transformation SOA-ESB Strengthen IT Capability Program Implement systems that are E: Regulatory- mandatory from a regulatory E1: Basel II Program E2: IFRS Program driven perspective F: Business-as- Support BAU initiatives F1: 2008 Releases F2: 2009 Releases F3: 2010 Releases usual 15
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