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Electronic Billing

Unleashing the power of the online banking platformg p g p

Barbara Roels – Fortis | 23 November 2007 | 1

Fortis Retail Banking - Pan-European FootprintNet profit Fortis 2006: € 4.4 billionNet profit Retail Banking: € 1.1 billion

Belgium Turkey

4 million active customers1 098 branches/343

Belgium

737,000 customers226 branches

Turkey

1.098 branches/343 agents

1.6 million customers1 8 b h

Netherlands

280,000 customers

Poland

158 branches

278 000 t

Luxembourg

220 sales points/ branches

Active in 7 countries

Consumer Finance

278,000 customers37 branches

Active in 7 countries4 million credit cardsPostal banking

IRL: 1,384 post officesofficesBE: 1,000 post offices

Operating in markets with GDP that is half of the Euro-area GDP4 out of the 7 countries will experience GDP growth rates

f


significantly above the Euro-area averageAccess to about 220 million potential customers

Strong multi-channel approach with more than 1,800 branches/shops and a presence in more than 350 cities …branches/shops and a presence in more than 350 cities … Branch PC Banking / Fortis Website

> 1,700 branches 1,700 branches+Newest branch concept in Belgium

>1.3 mio internet banking users

Self Phone-banking / Client Service

Largest self network in Belgium, at par with ING (2900 ATM)

Highly performing CTI and Application platforms, as basis to boost sales development

Off-Premise

( )

Shops

Leader in Belgium with 50% market share

ShopsInnovative concept in Germany (86 end September)


El t i BilliElectronic Billing Agenda

User centricity drives product innovation: the end-user’s perspective#1

Designing a two-sided platform: adding the sender’s perspective#2 adding the sender s perspective


Di it l di id t F ti R t il k t l tiDigital divide at Fortis: Retail market lags one generation behind. Age and Wealth Pyramid inverse absolutes

Uptake in segments

#

Absolute number of users

# usersThousands

70% 120

40%

50%

60%

80

100

10%

20%

30%

40

60

10-17 18-24 25-34 35-49 50-64 65-74 75+

0%

10%

10-17 18-24 25-34 35-49 50-64 65 74

0

20


Bottom Lower-middle Upper-middle Top

50 64 65-74 75+

Top Upper-middle Lower-middle Bottom

T i l PC b ki i f t b tTypical PC banking use is frequent but narrow

Functional breadthFrequency

# sessions/ % active

2,5week

% act eusers

80,00%

1,5

2

5000%

60,00%

70,00%

130,00%

40,00%

50,00%

0,5

000%

10,00%

20,00%


02003 2004 2005 2006 2007

0,00%Daily

bankingSave &Invest

Save &Invest trx

Lending Protecting

M i d i f li b ki i th b i t f d tMain driver of online banking use is the basic money transfer and account information. In these areas, a shift from paper to electronic has already taken place.

Transfers PC banking usage

60

# trxmillion

PC banking 120

Millions

40

50

g

80

100

30

40

Self

40

60

10

20 Paper

Branches20

40


02002 2003 2004 2005 2006

Phone banking 02003 2004 2005 2006 Q2

2007 2007 2008

# sessions # transfers

O it l itOnce you use it, you love it

1

User love it

3

2

Customer

0 4%

0,8%

0,5%

6

5

4

27,2%

5,0%

0,4%

8

7

6

Satisfaction

33,7%

32,4%

10

9


Score ≥ 8 : 93%

Source: Fortis Market Survey February 2006

I t t B ki i th f d h l f i iInternet Banking is the preferred channel for receiving e-invoices

– Mature market– Second most used Internet

Prefered channel to receive e-invoices

application– ‘Comfort zone’ for our customers

Internet Banking;

91%– The preferred channel– Known and trusted environment

91%

Biller; 6%

Other; 3%


Source: Insites Consulting – June 2006

N t l i l t t di t i f ti dNext logical step: extending account information and money transfer








Wh t ill d tWhy customers will adopt

E f– Ease-of-use– No need to subscribe or enroll– One-click functions for payments and direct debts– Import data in accounting software

– Convenience– Convenience– One single environment for payment and invoice– 24/7 access to invoice details


Wh t d tWhy customers adopt

C t l– Control– Customer still decides if, how and when– Reduced risks caused by late payment, instant clarity

– Trust – Guarantees concerning availability security and confidentiality– Guarantees concerning availability, security and confidentiality– eInvoice has the support of their bank



El t i BilliElectronic Billing Agenda

User centricity drives product innovation: the end-user’s perspective#1

Designing a two-sided platform: adding the sender’s perspective#2 adding the sender s perspective


F bl diti f l hi billi l tfFavourable conditions for launching an e-billing platform

S b db d i S b ki i L di d bi iStrong broadband penetration Strong e-banking penetration Low direct debit penetration

26

32

Sweden

Denmark

44

53

Netherlands

Sweden

39

41

Germany**

Spain

23Belgium30Belgium* 28Netherlands**

20

22

France

U.K.

25

27

France

U.K.

20

22

U.K.

Italy**

15

15

Spain

Germany

10

10

Italy

Spain

11

15

Belgium

France**


11Belgium

Source: forrester, insites, pyramid, banca d’italia, press clippings, mckinsey analysis

P i it f f l billi l tiPrerequisite for a successful e-billing solution: a common e-billing platform that taps the entire internet banking community

Large Enterprises

Info & Instructions

Large EnterprisesLarge Enterprises

Internet

bankin

Info & Instructions

I t

g

Small & Medium Enterprises

Small &

– 3.000.000 internet banking customers

Internet

banking

Small and Home

Small & Medium Enterprises

8.000 suppliers send domiciliation over Isabel

1,2 billion invoices/year

Internet

banking

Home Office


, yIndividua

l customers

(B2C)

B i t d i i t thBring payment and invoice togetherAverage on paper = 51 days

Zoomit=

invoice + payment

Shorter cycle


C t t d billi fl f tCurrent payment and billing process flow of paymentsOutbound - Sender

Draw up invoice Send Solve

issuesManage disputes

Financial impactArchive Follow-up

unpaidReconcilePrepare

Mail ( t) Payment

Scan Validate Make t Archive Manage

di t

Inbound - Receiver

Handling Process(k i )

(post) Payment

– Relies heavily upon human interaction– Many risks for errors

Scan Validate payment Archive disputesHandling (key-in)

Many risks for errors– Slow, time-consuming and unsure process– Effort does not always justify the gain (little or no value)– Could trouble the relationship between sender and receiver


p

I i th fi i l t h iImproving the financial cost chainOutbound - Sender

Draw up invoice

Solve issues

Manage disputesArchive Follow-up

unpaidReconcilePrepare Financial impactSend

ElectronicPayment

Scan Make t Archive Manage

di t

Inbound - Receiver

Handling Process(k i )

Payment

ValidateScan payment Archive disputes

– Increase operational efficiencyF t d i d h ll ti

Handling (key-in) Validate

– Faster and improved cash collection– Reduce costs– Better treasury


A i i i t S li € 8Average invoicing cost Supplier € 8

Total potential savings € 2.40

€ 8

p g

€ 2

€ 4

€ 6 € 2.4

€ 2

€ 4

€ 0.5

€ 0.8

€ 0.8

0 € 0.3

€ 1.2


Source : Arthur D. Litlle

A i i i C t € 13 8Average invoicing Customer € 13.8

€ 15Total potential savings € 3.90

€ 12 € 1.5

€ 1.8€ 5

€ 9€ 2.8

€ 6€ 5.4

€ 3

0 € 0.9€ 1.4

0 € 0.9


Source : Arthur D. Litlle

Z it i fi i l ffi i f S dZoomit increases financial efficiency of Senders

Z it– Zoomit– Delivery of digital documents– Integrated with payment– In the customer’s financial environment

– Result– Result– Optimized quality of payments and cash collection– Accelerated and more efficient financial flow– Straight-through processing of financial data (in and out)– Reduced direct and indirect costs


Fi i l d ti l ffi iFinancial and operational efficiency

F t d i d h ll ti– Faster and improved cash collection– Automate payments by a single-click button– Less customer errors – Increased volume of Direct Debts (Domiciliation)– Better treasury

– Increase operational efficiency– Fast and reliable – Automated and simplified reconciliation p– Decrease in issues and disputes

– Reduce costs– Printer, paper, envelope, stamp, handling– Improved operational processes


Th SEPA h ll Th ti i i htThe SEPA challenge… The time is right

F ti l t t Si l E P t A– From national payment to Single Euro Payments Area– Implementation from 2008 to 2010

– Impacts financial administration of all corporations– Belgian account number will be replaced by IBAN and BIC– Transfer form will change– Transfer form will change– Direct Debits (DD)

– Customer has 6 weeks to reject debit– Mandates will be administered by the supplier

Payment is the essence of Zoomit


Zoomit facilitates and secures correct money transfer

“Due to capacity restrictions in paper-based and early electronic paymentsystems, the data content attached to payments was considerable restricted.Invoice data was transported separately between supplier and customer.

Today storage and communication capacity costs have reached such lowToday, storage and communication capacity costs have reached such lowlevels, that the invoice can be easily attached to the payment information andthereby completely new benefits can be achieved.”

Harry Leinonen, December 9 2005 in “SEPA incentives”Harry Leinonen, December 9 2005 in SEPA incentives by European Commission, Internal Markets and Affairs DG.


K f tKey success factors

Receivers and senders– Receivers and senders– Already handling their financial transactions through Isabel– Same channel will also deliver the business documents

– Receivers– Internet Banking is their preferred channel for convenience and trust

I t t B ki t i fi i l t ti d b i f– Internet Banking contains financial transaction and business reference

– Key differentiators– No need for the receiver to enroll. It’s a service from their bank.– Huge delivery channel for payers and billers. Over 3.000.000 accounts.

Convenience for the receivers and senders


Volume for senders

M i b fitMain benefits

Ti d t i– Time and cost saving– Free service for receiver– Better treasury management for the sender

– Simple and efficient solution– Trustful environment which meets privacy reliability and security– Trustful environment which meets privacy, reliability and security– Minimised impact on Internet Banking and senders’ systems– Improved efficiency of the sender’s processes

– Broad reach

– Increased customer service and cross-selling


Economy & Finance

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