Transcript C&I strategy presentations

High-level feedback from April FSI Away-Day
Summary output from FSI “Away Day” – April 2012
High level overview
The following is a high-level summary of the comments entered into Think Tank by
participants at the meeting.
It is not a record of all the comments made and some comments have been
summarised or aggregated into common themes.
The notation in red italics post a comment is RV’s response where he felt it was
required……..clearly, though, we need to work through the comments in detail in
preparation for the next session.
Slide 7 showing the FSI client landscape is the current (May 2012) updated slide
post any changes made based on the session
There were a large number of bold plays and none of the ideas have been
discarded and these will be revisited
Watch this space re smaller follow-up sessions and the next Away Day which is
planned for post June.
Africa’s FSI Landscape
Africa’s financial services
industry could make up
around 20% of the
continent's collective GDP
within the next decade…
Insurance premium income
for Africa based on GDP
growth is estimated to
The banking industry in 16
key African countries could
boost its financial assets
grow to $105.35bn
by 2015
248%
to $1.37 trillion
by 2020
by
…compared to 10% today…
(4.3% insurance penetration,
still below the minimum 6% rate
expected from the insurance sector)
…much of the new growth
will come from retail banking
Less than 10% of the
insurable population
in Africa are insured
African banks have grown
rapidly in the past few years
# of banks that have a tier 1
capital of over $1bn
10
90% growth
2007
2010
Lenders on the continent with
capital strength of $500m or more
13
2007
31
2010
620m
mobile phone subscriptions
84m
139% growth
Percentage of mobile only internet users:
70% Egypt
internet-enabled mobiles
69%
of mobile phones will have
internet access by 2014
19
Africa combined has
230m financially
excluded households
57% South Africa
55% Ghana
54% Kenya
50% Nigeria
Of The Banker’s top 1,000
banks globally in 2011
30 were African
Pressure points for FSI providers
Security - Fraud & Cyber
Constant need to grow shareholder
returns & be innovative
• Banking clients were collectively
robbed of R180 million in 2010
• Nedbank Capital is targeting
double digit growth
• Malware responsible for
95% of cyber attacks
• Sanlam is eyeing acquisitions
in the UK and Africa
Lack of data integration,
accuracy & insight
effectiveness
Regulatory, risk &
cost pressures
• In an EIU survey 53% of senior
executives that use data effectively
said their organisations achieve higher
financial performance than peers
Fragmented legacy
systems that are not
ready for “Big Data”
•
•
•
•
•
•
Pressures on financial
services providers
• SA’s mobile data traffic to
grow 49-fold between 20112016
Customer experience,
fairness & disintermediation pressures
• Africa is the 2nd largest
mobile market in the world
• SA Webpage views grew
164% between 2011-2012
• TCF and public pressure
• Google, Facebook, Telcos
moving into payments
Talent, organisational
structure & design pressure
• Lion of Africa has implemented E-learning
TCF / CPA
Basel III
SAM / Solvency II
IFRS 9
IFRS 4
AML
• 22Seven apps emerging
• ABSA is restructuring and cutting down staff
New operating models, products,
services & pricing pressure
• Pressure on executive remuneration
• FNB app
• Capitec, Standard Bank, FNB having a fee war
What we think FS3.0 potentially looks like…
FSI today
FSI tomorrow
One specialised skill
Hybrid skills
“As we have always done it”
Business unusual, pioneering
Conservative and neutral
Bold and opinionated
Undifferentiated Audit
Value adding, engaging Audit experiences
“Just” the auditor or “just” the consultant
Strategic business advisor
Focused on the present
Future focused, digitally savvy, networked
“Hero” partner, operating in silos
“Hunt in packs” - multidisciplinary/team strength
Change apprehensive
Nuke nostalgia
Fragmented information/view
Always one step ahead, anticipatory
Slow to market
Be fast, be first
SA FSI Leadership Team
Assurance:
Kevin Black
Louis
Geeringh
C&I Leader
Banking
Consulting:
Dirk Kotze
Assurance:
Yuresh Maharaj
Roger Verster
FSI Country
Leader
Insurance
Consulting:
Being recruited
Investment
Management
To be discussed
Advisory
Client portfolio – Financial Services
PIC
Michael van Wyk
Sihlalo Jordan
Sihlalo Jordan
Riaan Eksteen
Sonwabo Mateyisi
Nina Le Riche
Dirk Kotze
Craig Turnbull
Roger Verster
Dirk Kotze
?
Bertie Loots
Ashleigh Theophanides
Mark Harrison
Mike van Wyk
Yuresh Maharaj
Karthi Pillay
Dirk Kotze
Won
Jaco vd Merwe
Andy Rayner
Sihlalo Jordan
Sonwabo Mateyisi
Dee Botha
PIC
Sihlalo Jordan/
Gert de Beer
Andy Rayner
Sonwabo Mateyisi
Riaan Eksteen
Sonwabo Mateyisi
Thomas Jankovich
Riaan Eksteen
Wendy Smith
Acquire
Werner Nieuwoudt
Roger Verster
Grow
OCEO
Danie
Dinesh Munu
Crowther
Haroon Loonat
Carl vd Riet
Dinesh Munu
Carl vd Riet
Wiebe Klaassen
Yuresh Maharaj
Darren Ship
Kevin Black
Sihlalo Jordan
Kevin Black
Sihlalo Jordan
Anushuya Gounden
Diana Jorge
Lito Nunes
Jaco du Plessis
Patrick Kleb
Geoff Fortuin
Brian Escott
Won
Danie Crowther
Arend vd Berg
Roger Verster
& Financial Services
Wiebe Klaassen
Trevor Brown (BIDVEST)
Yuresh
Maharaj
Breakthrough-win
Key target
Kevin Black
Ronel van Graan
Ulrike vd Horst
Kumeshnee
Singh
Yuresh Maharaj
Paul Stedall
Pan-African client
Assurance
Your reaction to the FSI trends presentation (a
selection of the more common comments)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Need for speed - to get our views and solutions to the market first
This is good news as it provides lots of opportunities
We need to invest in IP and training/recruit experienced FSI skills/recruit SME skills
This will require is to leverage better off our global network and thinking
There must be a focus on developing “bold plays”
Deliver more solutions as opposed to products
The trends say nothing about the mainstream market with no access to technology? (SA’s population has almost
total access to cellphones which is the main technology required)
We must make the audit delivery more value adding
Do we need to redefine our FSI brand? (Hopefully that is what FS3.0 will do)
Need to relook at our structure and skill sets
Need to identify the future clients/ market disruptors and start working with them
We must work with our existing banks/insurers to help them clearly define what they are doing to reposition over
next 5-10 years
FSI skills across the firm need to work more closely together – need fewer silos . Need to better understand what
our colleagues do.
We all need to keep up to date on trends and developments
Need to work with our colleagues in BRICS (emerging markets)
We must formulate good, client specific game plans
We need to engage more with the C-Suite – what do they want?
Our independence constraints are too limiting. Our competitors seem to take a different view and have it easier
We should structure the firm along industry lines rather than service offerings
Integrate the firm across Africa/pick key African countries for dedicated expansion
These are macro trends – what are the SA/Africa specific ones we need to manage? Do not assume global works
here or is replicated here. What are other emerging markets /rest of Africa/ the East seeing and doing?
FSI trends - areas you felt we need to develop or
focus on
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Corporate and investment banking advisory
Agri banking in Africa
Work with our clients on their Africa strategies
Bigger focus on insurance
Do strategy sessions with our clients in the i-zone
IT security
Finance Transformation
Data and analytics – focused on solutions to problems/predictive/doing analysis real-time
Risk Intelligence
Making regulatory issues strategic/value adding
Results Management Office (RMO)
Outsourced insurance and back office support model/insurance in a box (Interestingly, our Portuguese practice
is already rolling out “Insurance in a box” in Africa and at the session Thys presented the banking equivalent)
Invest in SAP banking services
Build skills in Public Finance/DFI space across Africa
Mobile-based solutions
Develop forward thinking solutions – not just work with today’s issues and solutions
Use crowd sourcing
What are our views re unsecured lending?
Banking the unbanked
Tax technology, compliance, reporting systems, analytics in the tax space across Africa
The digital workplace
Customer-led operating models focused on efficiency and value maximisation
FSI Strategy/FS3.0 – your comments
•
•
•
•
•
•
•
•
•
•
•
•
We need to articulate what FS3.0 stands for /what our signature solutions are/what we want to be known for
How are we going to communicate this to our clients/what are they going to experience that is different?
Will this have a new “look and feel”?
We need to spend more time on bold plays – how?
Sales looks like it is driven through C&I but delivery is BU centric = disconnect?
How will our remuneration structures support this? – they need to change
Need a bigger focus on eminence
What does “ubiquitous” mean (Pervasive/everywhere)
We need to differentiate from the opposition – this must do that
We will need to become client-centric
This needs to be an African operating model – how do we take solutions to Africa?
This will never be achieved without better firm integration – the silos will still work against each other
Your comments on the client portfolio
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Where are the Chinese banks? (Agreed – we are looking at this more for the Pan-African plan)
Who are the new banks/new fin services providers – where are they being picked up? (We will focus on this)
Postbank – why not an Advisory target? (Primarily assurance – we will re-evaluate)
Can’t audit Allen Gray – should be removed (It has now been removed)
Ecobank? (it is one of the 10 key Pan African clients)
JSE? And other African stock exchanges (Will evaluate)
Deutsche/Citi? (Will evaluate)
Renaissance Capital? (Will evaluate)
Marsh is moving towards being a Pan African client (Noted)
United Bank of Africa? (Being looked at as part of Pan-African plan)
Are we not targeting any Health clients (No, they are in the Health Industry grouping and are not part of FSI)
Discovery is FSI not Health – they do business administration and insurance is where their growth and profits are
(Point taken – been moved back into FSI)
Maitland? (Now included)
Blue is Pan African (Noted)
NSFAS is missing? (Who??)
Should have a separate slide showing our actuarial footprint in insurance and use that to target work
Where are the detailed client plans? They are lacking.(LCSP/D responsibility – picked up by C&I initiative)
Old Mutual should be Pan Africa.(Will consider in African plan)
LCSP/Ds must be accountable for fees across all service areas not just their “home” area (Picked up by the C&I
initiative)
National Treasury? (Sits in Public Sector – not FSI)
Too many LCSP/Ds have multiple clients – lack of time and focus will result. Also what succession planning? (Good
point – being picked up by C&I client programme)
Targets not clearly prioritised (C&I focus is on OCEO and acquire)
Views on Investment Management
•
•
•
•
•
•
•
•
•
•
•
•
•
•
High volume, low margin game
This is an audit play not an advisory play
Our competitors are here and we should be also – not being there will impact negatively on the market perception
of our FSI capability
We should leverage off our practices in Luxembourg, Bermuda, Cayman etc.
What is the addressable spend? History suggests not a big spender
It is a growing industry/critical for banks funding
Important to the Deloitte Western Cape office
Large asset managers are linked to institutions we do not audit
Pension Fund industry is an important contributor to our market eminence
This is a big market – hedge funds, pension funds, unit trusts, Private equity
Opportunities are outsourcing, Reg 28 consulting, risk management, new regulation in line with global trends, cost
reduction/revenue maximisation,
Must be in the market – just needs proper focus
FS3.0 means banking, insurance AND investment management
Key players are Old Mutual, Ethos, Peregrine, Coronation, Kagiso, PIC, Horizon, Investment Solutions, Cannon,
Prudential, MMI, PSG, Brait, RMB, MAM, Future Growth, co’s linked to all the major banks and insurers, Cadiz,
ASISA, trustees of large pension funds, focus on umbrella funds
Overall response was that we
should do a proper analysis
of the market, our capabilities
and what it would take to
make a success of this and
then make a decision
Views on FSI Public Sector
•
•
•
•
•
•
•
•
•
•
•
•
•
Relationships must be developed beyond Sihlalo and Sonwabo – can Futhi play a role? We have not invested
enough in relationships. We need to position our experts
Do enough Deloitte people really have the passion to work in this space?
We need the right political relationships/ we are probably not the firm of choice
Difficult market – full of ST strategies that constantly change – difficult to be anything other than a transactional
consultant
Service via solutions to problems as we do in the private sector
Attend to the needs of all stakeholders – e.g. National Treasury, DPE
Work with Frank Dubas in the US and Andre Pottas in SA
Need single PS focus with FSI just being a sub-component of that
Need comprehensive PS FSI focus
Help to add value by marrying private and public sector involvement to achieve PS goals and mandates
Are there cross functional offerings we can pitch to PS FSI?
What is the role of the AG in allocating work in this sector? How do we work with the AG/around the AG?
Priorities in PS FSI are: forensics, infrastructure financing, risk and corporate governance, regulatory guidance,
technology, admin processes, funds management, lending/collections advisory, PPPs, skills training, outsourcing,
executive remuneration, sustainability
Overall response was that
Sihlalo should develop his
thinking further as this is an
important market for us to
operate in
Views on Regulators and Regulatory
Associations
•
•
•
•
•
•
•
Views on those we should have a relationship with are : SARB, FSB, National Treasury, ASISA, IISA, Banking
Association, NCR, Bank of International Settlements, the JSE, IRBA and SAICA, African Central Banks and
regulators, SABRIC, the Banking Ombudsman, Insurance Ombudsman, FICA
Key opportunities: Providing SARB with onsite support re all prudential regulation, integrated governance risk and
compliance training, Twin Peaks consulting, training the SARB on insurance given their upcoming prudential role in
this space, secondment of skills, forensics
We are behind our competitors in relationship with regulators – they have broad representation and relationships
with key individuals
Who is Deloitte’s next Tim Store?
We must develop relationships and share relevant IP – need to spend time with the regulators
Identify an LCSP for centralisation of regulatory relationships
Twin Peaks – SARB will be prudential regulator and FSB will be market conduct regulator
Overall response was that we
need to formulate a coherent
approach to managing the
key FSI regulators
FSI Marketing – comments and feedback
•
General comments:
•
Needs to support our strategic FSI objectives
•
Must identify key players in the firm who can market FSI and the firm/must be part of our KPCs
•
We need media training
•
We should create the waves and not just catch them
•
Do we really work off our global thought leadership and tailor for local consumption
•
We must have a strong social media presence as an industry and as individuals
•
We do not have a coherent and consistent message to the market
•
No-one is responsible for FSI marketing
•
We do not have strong relationships with the media
•
We must focus on key insights and differentiators – do not regurgitate the known
•
Are we too long to market with our marketing? Yes ,is the view with the following reasons given:
•
We take too long to market as marketing is an afterthought
•
We have too much red tape
•
Not integrated into our proposition development
•
We have day jobs/ we are too busy selling
•
We are very risk averse and always want to be 100% right
•
The impact of the “brand police”
•
We do not seem to be confident in our points of view
•
We follow rather than lead
•
We are afraid of offending our clients
•
And a caution……speed and agility in marketing should not be at the expense of quality and credibility
FSI Marketing – Ideas from the meeting
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Work with the industry associations
A Deloitte FSI Song (think this is Kevin’s contribution!)
We should adapt global thought pieces better
We must have a point of view/house view on contentious matters and voice it
We must have a cross-functional approach to our market
Leverage off regular visits from overseas specialists
We must present solutions – not just comment and critique
We must all have a social media presence – but do not neglect the traditional media (strong view that we are overemphasizing social media)
Be able to talk to our clients re topical issues
Partner with industry bodies
Involve marketing in the delivery of our services
Talk about and publicise the things we have done
Spend time at clients talking to them
We must make our people interesting (any ideas?)
More entertainment/golf/gifts etc. for key clients
Hold the GFSI Summit in SA (actually, has been discussed……more cons than pros at present)
Ask our clients what they want
Bold plays – top 4 ideas
1. Develop SAP banking services capability
2. ERP/Mobile technology integration layers for big banks
3. Develop performance fee based comprehensive opportunity, strategy and
risk reporting service based on comprehensive data analytics
4. Analysis and refinement of banks’ client –centric business model
These and the other ideas
need to be properly unpacked
and evaluated