Drivers for strategy update for the 2013-2015 period confirmed
BNP Paribas Fortis confirms the basic drivers and objectives set out in the strategy update announced at end-2012. Over the next three years, the Bank will be investing in its offering – especially the digital offering – and in its people. In addition, the Bank will hold costs flat by slimming down the organisation and increasing efficiency, leading to projected cost savings of €300 million by 2015.
The digital revolution
This strategy update is driven by three major trends: the fundamental changes taking place in the macro-economic environment; the specific characteristics of the Belgian market; and the changing expectations of our clients. Digitally savvy clients, who are now better informed and more critical, are becoming ever more demanding of service providers, and of banks in particular. Driven by the revolution in digital communications, as represented by smartphones and tablets, the day-to-day behaviour of our individual clients has altered radically, bringing new needs and expectations.
A few figures will serve to illustrate just how fast the digital revolution is moving. By 2017 close to 90% of the Belgian population will be active on the internet. Smartphone ownership in Belgium rose from 25% of the population in 2011 to 35% in 2012 and is projected to reach 52% in 2013. At end-2012, one family in three owned a tablet device. It is expected that by end-2013 this figure will have risen to two in three families (source: GfK – Society for Consumer Research) and that there will then be more than 3,000,000 tablets in use in the country.
The figures reveal that mobile devices are increasingly becoming a natural channel for interactions with BNP Paribas Fortis, thus changing the face of banking. Our Easy banking app has seen 286,986 downloads since its launch in late February 2012. Every month 12,000 new customers sign up for our PC banking channel and the Bank processes 300,000 online transactions every day. The number of calls to the Contact Centre is expected to rise to 17,000 per day by the end of 2013. Thus our customers’ needs as regards face-to-face contact with the Bank are changing: while the total number of basic counter operations diminishes, there is a growing demand for advisory meetings, and meanwhile the proportion of banking products sold online has risen from just 2% in 2007 to 15% today.
As a universal bank, BNP Paribas Fortis has resolutely embarked on a process of digital innovation. The Bank is investing in a further infrastructure upgrade, with the latest ATM technology. By the end of this year, 750 bank branches and Private Banking and Wealth Management Centres are scheduled to be equipped with Wifi. Applications such as Easy banking and services such as Easy transfer have been a huge success, while our initiatives such as the mobile payments terminal for smartphones and the Mastercard MasterPass further illustrate our determination to innovate. Another recent initiative was the launch of the Belgian Mobile Wallet, in conjunction with Belgacom, which will help to drive in-app commerce for consumers and traders in this country.
We will also continue to invest in our service offering to corporate clients, expanding existing activities such as Specialised Finance, Leasing, Factoring and Cash Management. “In these areas, we are able to respond decisively to the changing needs of businesses. Through our Specialised Finance offering we’re well placed to support companies in their import and export activities, while Leasing, Factoring and Cash Management are indispensable instruments that enable companies to manage their business activities and assets in an efficient manner,” underlined CEO Max Jadot. BNP Paribas Fortis is also exploring new initiatives such as the SME Fund.
A leaner organisation
The changing customer needs coupled with the current economic realities have led the Bank to carefully examine its organisation and personnel resources. Over the next three years we will be cutting 1,800 full-time posts through a process of natural attrition. We will emphasise internal job-mobility to fill vacancies and new recruitment will be limited to around 200 full-time posts per year during this period.
The branch network, which today numbers 936 branches, is to be more closely aligned with the service provision that clients require. Some 50 branches are to close this year, followed by around 100 more over the next two years. Some of the branches will focus more on providing high-added-value advice from skilled relationship managers and specialists. At other branches, BNP Paribas Fortis is planning to increase its investment in the ATM fleet, which currently numbers 4,382 cash-points and non-cash machines, enabling customers to carry out all their basic banking operations. Following these adjustments, BNP Paribas Fortis clients will still continue to enjoy access to the widest network in Belgium. Moreover, the 400 staff currently working at our four Contact Centres will be joined by an extra 100 colleagues.
The network will be streamlined on the corporate side as well. The number of geographical areas is to be reduced from seven to five and the Business Centres will be regrouped from the current 22 in 21 locations to 16 BCs in 13 locations. We will continue to provide clients with the necessary local coverage through walk-in branches in some of the more remote locations.
Focus on efficiency and lower costs
BNP Paribas Fortis will also take steps to centralise many purely administrative tasks that are today carried out at the branches, thus freeing up more time for advisory sessions with clients. The creation of
Client Competence Centres will expand the role of the Bank’s support functions. So far three Client Competence Centres are being started up, specialising in Housing Loans, Estate Planning and Small Businesses. These are three areas where our new way of working is most likely to deliver immediate, tangible results for our clients in the form of a better and faster service.
All our support departments are being structurally simplified and streamlined. Departments such as HR, Finance and Risk are being organised around competence clusters and fields of expertise. The shorter lines will help ensure a better, more direct service, greater efficiency and lower costs.
Fostering employee versatility
The challenge for the coming years will be to promote internal job mobility, so that our staff are able to take on new roles and respond to the changing needs of the customers. The Bank will therefore continue to devote great attention to employee development. Dedicated training paths are enabling our people to build the knowledge they need and obtain the required certificates both to perform their duties at the Bank and further develop their skillsets. Extra initiatives are under way to foster internal job mobility and build Bank-wide career paths.
With this strategic update, BNP Paribas Fortis is preparing for the future. “This update confirms our ambition to be the bank of choice, not only for our clients but also for our employees and all other stakeholders,” stressed CEO Max Jadot, adding: “Our mission remains clear: to serve the Belgian economy and society in an engaged and responsible way. With these plans that we have drawn up, we are aligning our product and service range, our organisation and our way of working to the fast-paced changes taking place in the economy and in our society.”