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New Horizons
Managing Growth
Stephen Coulter
General Manager Global eCommerce
Commonwealth Bank of Australia
June 19, 2001
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Disclaimer
The material that follows is a presentation of
general background information about the Bank’s
activities current at the date of the presentation,
19 June 2001. It is information given in summary
form and does not purport to be complete. It is
not intended to be relied upon as advice to
investors or potential investors and does not take
into account the investment objectives, financial
situation or needs of any particular investor.
These should be considered, with or without
professional advice when deciding if an
investment is appropriate.
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Group Strategy
Strategic Vision
To be
the best
brands in
helping
customers
manage and
build wealth
Financial
Goal
Top
Quartile
TSR
Business Goals
Attract more customers
& more revenue per customer
Best value service through
innovation & on-line leadership
WHY?
Growth with low
inflation
Major technology
shift
Best Team
Pace of change
Develop offshore
opportunities
Limited longer
term domestic
scope
Global best-practice costs
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Margin squeeze
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Index of Top Consistent Performers
98.7
97.0 96.8
SPI through December 2000.
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100.0
99.3
96.6
95.9
95.6 95.5 95.4 95.3 95.3
95.2
94.9 94.6
94.4 94.3
93.8
92.7
Source : Oliver, Wyman & Company Report Number 3 Volume 11 March 2001
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Flashback
Analysts Presentation – May 27, 1999
Banking is now part of the
information industry
Banking and
Financial
Services
Technology
Information
TeleCommunications
Media
Customer Needs
• Time
• Convenience
• Information
• Money Management
• Value
• Trust
Analyst Presentation, May 27, 1999
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Flashback
Analysts Presentation – May 27, 1999
Relationships built around customer needs, brand
and multi-channel accessibility will be
Commonwealth’s strength
Customers
Experience
Brand
Accessibility
Analyst Presentation, May 27, 1999
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Flashback
Analysts Presentation – May 27, 1999
Strategic Priorities
1.
Win the strategic battles
– Relationships, Alliances, Positioning
2.
Implement end-to-end model to enable
cost savings to be realised
3.
Harvest the cost savings
Analyst Presentation, May 27, 1999
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Commonwealth Group Home Page
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Strategic battles around relationships
have been successful….
Measure
NetBank
Quickline
MobileBank
Diammond/
eCommCorporate
ASB/BankDirect
Banking
ComSec Online
HomePath
Total Online Customers
Jun 99
Jun 00
Jun 01 est
89,400
23,600
-
325,000
36,000
6,500
900,000
50,000
17,000
6,100
18,000
137,100
7,300
58,000
432,800
8,000
100,000
1,075,000
60,000
155,000
225,000
-
36,000
100,000
197,100
623,800
1,400,000
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e-commerce
EDS
Telecom NZ
Vodafone
KeyCorp
CommerceNet
Knowledge Lab
Cyberlynx
Technology/Skills Access
•
•
•
•
EDS
Telecom NZ
ninemsn
Cyberlynx
• Australia Post
• Woolworths Ezy Banking
• ninemsn
Risk Sharing
Alliances
Scale Economics
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•
•
•
•
•
•
•
Market Access
solutions
As have our alliances...
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•
•
•
•
•
•
EDS
TelecomNZ
Vodafone
SupplySearch
KeyCorp
Cyberlynx
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Customers are moving transactions
and business activities online
• Transactions
–
–
–
–
–
December 2000 profit announcememt we advised 84% of
transactions are now electronic versus 16% over the counter
Over 1,800 online merchants
Over $10 billion in payments through NetBank
80% of Commsec trades occur online
Total transactions of 34 million online in April 2001
• 4m in 98, 8.5m in 99 and 18.5m in 2000
• Sales
–
Over 4,000 credit and 10,000 deposit account applications per
month online
• Inquiries
–
Over 17 million service enquiries per month via NetBank
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Commonwealth Group is applying
web technologies to its own business
• Finance and Human Resources with
PeopleSoft
• IP enablement of all premises
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– Target of end July for all branches to be cabled
• eProcurement with Cyberlynx
• Growing intranet applications and information
– Over 2 million activities per week
• Online Shareholder and Media Centres
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Intranet Development & Usage is Improving
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Shareholder Centre for Investors
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Cyberlynx has been successfully implemented
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Looking Forward……….
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Commonwealth’s Online Vision
“ In chosen markets,
to be the leading global provider of online information services
related to financial services in a profitable manner.”
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Requirements

Retain and attract commercially astute, eCommerce aware people

Customer focussed information

Network and device independent

Anything, Anywhere, Anytime

Decision support, Information, Education and Advice

Web enable our enterprise
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There is no “new economy”
• There is one economy
• There are old and new ways of doing business
• Old truths still prevail
–
–
–
–
–
Customers
Products and Distribution
Returns to owners
Employees – retain and attract
Community – support and earn respect
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The only sustainable competitive
advantages will be customer
service and trust
• Products are commoditising
• Price differences will narrow
• Low costs will be a hygiene factor
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Customer
Retention
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Customer Performance Model
Customer
Acquisition
Customer
Share of Wallet
Customer
Value
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NetBank customers are valuable
Product Penetration
Balance vs
Average Customer Online Customers Average Customer
Credit Cards
31%
76%
130%
Loans
14%
46%
178%
Deposits
81%
98%
100%
•
Online Customers also make significant use of the Internet for
product origination, enquiries and transactions.
•
These are the tip of an online-influenced iceberg
–
–
–
Cross Channel referrals and service are vital
Monitor sales rates by origination point
Monitor quality of business by origination point
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•
•
•
•
Better customer service leading to revenue growth
Lower internal delivery cost
Quicker time-to-market
Lower distribution costs
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e-commerce
Organisations are now realising the power and
value delivered from end-to-end web enablement
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Trust as a competitive advantage
•
•
•
•
•
•
•
•
Identification
Authentication
Security
Privacy
Integrity (Data & Message)
Fairness & Honesty
Experience
Stability
Trust based services will grow……..
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Account Aggregation
Bring My Information Together at One Web Site with
one user name and password.
Site
User Name
Password
Commonwealth Bank
ComSec
NAB
eTrade
Westpac
Hotmail
Ozemail
Qantas
Wall Street Journal
GolfWeb
F2
Financial Times
Individual Inc
etc
etc
etc
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Commonwealth Bank Example
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Commonwealth Bank Example
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Aggregation Issues
• Trust
• Banking Terms & Conditions
• Customer Consent/Authority Process
• Privacy & Security
• Fraud Mitigation
• Liability
• Advice
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Summary
•
•
•
eCommerce and eBusiness are significant business tools
– not strategies in themselves
Successful businesses need to integrate these tools as part of
their overall business strategy
Leading incumbent players have significant advantages and
opportunities
– Customer base
– Brand
– Multi channel distribution
•
•
Customer Service & Trust will be critical for future success
Commonwealth Group has and will continue to be trusted and
successful in applying eCommerce tools to its business
strategy, benefiting
– Customers
– Employees; and
– Shareholders
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