KeyBank Case Study

12TH ANNUAL MBA MINORITY STUDENT CASE COMPETITIONCLEVELAND, OHIO

PresentersAlternate Hypothesis Consulting

Success in the Digital Age:Leveraging KeyBank’s Branch Legacy

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Can you guess what this picture is?

Origins of KeyBank (The Commercial Bank of Albany) America's export potential (Agriculture, textiles and chemicals) Signed by Dewitt Clinton

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Agenda

Executive Summary

Key Competitive Advantages

Industry Trends

1. Key4Growth, 2. KeySideCar, 3.KeyMelange, 4. KeyAdapt

Mr. Simpson’s KeyBank experience

ROI, Risks and Mitigation

KeyMet – Solution Tenets

Summary and Concluding Thoughts

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Team Introduction

PravinRamasamy Balasundaram

GeethanjaliMani

JyothsnaKakarwada

6 years of technology consulting experience (4 years in ERP & SAP Analytics)

Cross-functional experience (Biz. Dev., Process improvement, pre-sales)

Technology Evangelist Published novelist working on his 2nd

Novel

5+ years of experience as an IC design engineer and team lead

Product management experience including module design and new product development analysis

Plays the role of 'devil's advocate' by critiquing our team's ideas and solutions

4 years of experience as SAP Consultant

Expertize in Business Process Improvement & Client Advisory

Cross-functional Leadership experience

Led multiple SAP HCM implementations

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Executive Summary

Maximize value of KeyBank’s existing

branch network

Business Case Solution Objectives

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Disruptive technologies have spurred creation of new products, services, and delivery models

Internet and Mobile have accelerated move away from branch visits, while increasing the number of interactions

A Googolplexian dollar question: Is bank branch network an asset or a liability?

MaximizeRevenue

IncreaseProfitability

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KeyBank Competitive Advantages

47%% of customers who feel a bank is not legitimate without a branch. Ubiquitous.

Best Checking Accounts of 2015.Hassle Free.

Top 10

944 Number of Branches across 13 states. Highly evolved network.

Number of states where KeyBank has footprint. Diversity.

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Industry Trends

A Tectonic Shift!

Why is retail bank on the decline?

A no brainer!Shift in customer

from retail to online

Need for Wholesome

Banking Experience

3,000

50%

Number of bank branches closed from 2009-2012

% of today’s bank branches may be obsolete by 2020

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Solution Tenets

KeyAdaptInternal transformation

KeyMélangeOne Teller to rule them all

Key4GrowthNew Growth Services

KeySidecarIncidental Services

Integrated Marketing Communications

Metamorphosis of KeyBank’s existing Branch Networks

KeyMet

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KeyMélange – One Teller to rule them all

Key Kiosk

BAU Banking

Fin. Advisory (Hello Wallet)

Currency Services

IT returns filing

Printing

Rent a room

Utility Bill

Mobile Connection

Print Token Here

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KeySideCar

KeyBank

Incidental Services

Strategic Partnerships

Leverage Internal Resources

‘Huddle Rooms’ for Biz. meetings

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KeyAdaptInternal Business process re-engineering through changes to

People & Place

Training Hub and Spoke

training Train the trainer Branch layout

restructuring Nimble and agile

props (Ex: Movable walls)

Branch Makeover

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Key4Growth

Introducing Media Walls

Equip Key Bankers with Tablets Predictive Analytics

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Mr. Simpson’s experienceKeyMetBefore

10:00 AM

Amazon Locker

9:15 AM

Café Meeting

with Investor

11:00 AM

2:00 PMMeeting with Financial advisor

4:00 PM

I’m too tired. Let me bank

online

9:15 AM

Let me go straight to KeyBank.

Lockers, Printer, Café, Advisor and

Huddle room. They have it all!

After

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Integrated Marketing Communication

Now that we have seen how KeyMet initiative helps improved branch revenue and profitability, there needs to be consistency in KeyBank’s communication and messages across various media.

Why? What? How?

Consistent Messaging“A single window to world of banking”

“NextGen Banking”

“Convenience Banking”

Multi-Channel Marketing Active presence in

social media to promote discussions

Redesign and rebrand KeyBank’s marketing messages in hoardings

Ads during TV Shows

Tectonic shift in banking Make every single Key

Banker understand the gravity of the changes

Change without communication is recipe for disaster

Empower all Key Bankers

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Return on Investment

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37

-2500000

-2000000

-1500000

-1000000

-500000

0

500000

1000000

Net Income

Time(in Quarters)2017 2024

Break-even Point

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ROI & Timeline estimates for KeyMet

2020Jan, 2017

Technology Upgrade

Infrastructure Upgrade

Kiosk Development

Ongoing Training

1/01/2017 - 31/12/2020

Key Adapt

1/01/2017 - 1/1/2019Key4Growth

1/01/2017 - 1/6/2018

Key Mélange

Jun, 2017 Jan, 2018 Jun, 2019Jun, 2018 Jan, 2019 Jan, 2019 Jun, 20192017

Analytics Upgrade

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Risks and Mitigation

Recommendation Risks Mitigation

Key Sidecar Contractual complexities Partner with ‘minimalist-transaction’ oriented organizations and services

KeyAdapt Workforce’s resistance to change and training

Positive reinforcement (awards, incentives)

Key4Growth Investments for redesigning

individual bank branches Technology deprecation

Leverage a single architecture firm to minimize costs

Focus on simplicity/austerity Periodic software upgrades and audits

KeyMélange Communicating new brand

image and services Breach of Privacy

Integrated marketing communication Biometric logins and cyber security

audits

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Summary and Concluding Thoughts

KeyMetTectonic Shift in Banking

Growth Services Incidental Services Internal Change One-Stop Shop

Thank You!Thank You!

FCOB and KeyBank

Thank You!Questions?

Thank You!Appendix

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References

EFMA, “The future of banking branch networks”, December 2012 http://www.huffingtonpost.com/gobankingrates/we-ranked-the-10-bes

t-che_b_6502390.html http://voxglobal.com/intersection/2014/07/the-future-of-retail-banking

/#sthash.g1TbCWVb.dpuf https://www.capgemini-consulting.com/the-future-of-bank-branches McKinsey & Company, The Future of U.S. Retail Banking Distribution Harvard Business Review:

https://hbr.org/2009/09/what-service-customers-really-want http://www.zipcar.com/press/releases/15years Tower Group; McKinsey & Co., Novantas

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Financials – Pro Forma Income Statement

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Assumptions

Our project costs are for one prototype branch only. However, many of the costs will be reduced because of economies of scale.

Costs for ongoing R&D activities like Facial recognition and Biometric activities are not included in the calculation.

Revenue generated from new customer acquisition and employee engagement are not included in the calculation.

There will be ongoing training and maintenance. No depreciation has been considered. Model assumes steady value of USD and no inflation.