Monthly Archives: May 2014

ASEAN Banking Studies

I use this post to keep links to various banking studies in ASEAN.



  • DBS study of affluent consumers, March 2014
    • [DBS wants to] establish a stronger and longer term relationship with emerging affluent customers. The first-of-its-kind programme is part of the bank’s strategy to become a trusted banking partner to the emerging affluent segment even in the early stages of their wealth accumulation.
    • emerging affluent between the ages of 30-59, and with a monthly income of $5,000 and above, allocate around 29% of their income to savings, 30% to loans and investments, and 25% to expenses.
    • The total cash flow can be any combination of salary credit, credit card spend, investment dividend or mortgage installments.
    • More than 27% of working residents in Singapore have a gross monthly income of over SGD 5,000[1] and spend around SGD 1,500[2] on credit cards each month. Along with an average monthly mortgage repayment of SGD 1,150 for a 4-room HDB flat[3], this group would be eligible for the tiered interest rate of 0.98%.
    • strategy:  develop relationships with emerging affluent
    • uses game mechanics to influence consumers to consolidate banking business.
  • NY Times, UOB, 2012
    •  The first is that it’s a really large market opportunity,” he said. “We estimate that in most countries, 25 to 35 percent of the Consumer Financial Services revenue pool comes from people defined as emerging affluent.”
    • This segment, he added, is also growing at an estimated annual rate of 8 percent to 15 percent as more Asians climb the revenue and wealth ladders.
    • At the end of 2010, Citibank conducted a detailed study of emerging affluent customers across seven Asian markets. The bank found that these customers favored convenience and responsiveness from their bank. They are also embracing new technologies, with 78 percent saying they looked for the bank with the best online services and 66 percent wanting to manage their accounts through their mobile phones.
  • Ministry of Manpower, Gross monthly income from work, 2013
  • Latest travel trends of affluent Singaporean travelers
    • Singapore’s affluent travellers want access to internet banking while on holiday.
    • “affluent travellers” as concerns the Visa Global Travel Intentions Study 2013, are travellers with monthly household incomes of Sin$ 11,000 or higher.
    • The survey shows Singapore’s affluent travellers require constant contact with others with 82% accessing their emails and 61% accessing instant messaging platforms during their travels
    • Affluent Singaporeans have averaged seven annual trips in the last two years, compared to the global average of three trips every two years.
  • Standard Chartered 2012 survey of affluents in Singapore
  • AsiaOne article, April 2013
    • About 500,000 are in [the emerging affluent] bracket here, and this segment is tipped to expand 10 per cent year-on-year in the next three years, according to market research agency Datamonitor.

What is a Business Model?

This entry is part 17 of 31 in the series Defining words

The standard definition for “business model” is an articulation of how an organization creates, delivers and captures value.

Business Model Generation breaks a business model down into 9 building blocks:

  1. Customer Segments
  2. Value Propositions
  3. Channels
  4. Customer Relationships
  5. Revenue Streams
  6. Key Resources
  7. Key Activities
  8. Key Partnerships
  9. Cost Structure.

They organize it all into a “business model canvas” and provide useful and entertaining artwork (see below).



Strategy: Starting with Why

This entry is part 3 of 6 in the series Doing Strategy

Simon Sinek’s TED talk – “How great leaders inspire action” about the “golden circle” is a good place to begin when setting out to create a strategy or marketing message.  Starting by understanding and communicating the WHY behind what you do is a very powerful way to get others to support it.  Simon asserts that this an element of the strategy behind companies like Apple responsible for exceptionally high levels of innovation and customer loyalty and promoter-ship.

“People don’t buy what you do, they buy why you do it.”

I think that the benefits of understanding and communicating the WHY go beyond invoking a positive emotional response.  It allows each employee and customer to derive for themselves the HOW and WHAT of the business — transparency that results in comprehension and trust.  Mike Hobday, an important mentor of mine, explains how important the issue of trust has become to banks.

Let us analyze a favorite WHY statement of mine…




If you communicate the WHY then the organization knows what to do and how to do it, and customers know what to expect.

  • First, the organization needs to understand some things about the customer such as what they want, need and expect; and what kinds of things they find enjoyable.
  • Secondly, the organization needs to understand the customer’s situation and what they are trying to accomplish.
  • Finally, the services provided need to be appropriate for the person, situation and purpose.

All this available to anyone with a great mission statement and a dictionary.

What is a Segment Strategy?

This entry is part 16 of 31 in the series Defining words

In my previous posts on business strategy I talked some about business-unit strategy.  Sometimes a business unit is focused on a particular market.  If an organization wants to create a strategy for a market segment, but for whatever reason doesn’t want to create a business unit around it, then what do you call it?

I call it a “segment strategy”.   The customer segment being important enough to warrant executive leadership (and a strategy) but not important enough to warrant a business unit.  In banking, a “Retail” business unit is typically broken down into broad customer segments such as Ultra High Net Worth (UHNW), High Net Worth (HNW), Affluent and Mass.  These, being broken down further into micro-segments on the way to nirvana where every customer is “a segment of one”.

The segment strategy inherits all of the business-unit strategy content that is general across all customer segments.

A segment strategy provides all the product-market strategies for a broad customer segment, including the 4 P’s.  then it amends the business-unit strategy as needed for the customer segment.  For a retail banking business unit this would include things like how to attract, organize, use and retain key skills such as local/regional private banking and SME expertise.

Strategy: Why so many perspectives?

This entry is part 5 of 6 in the series Doing Strategy

A key part of the business strategy for most banks is to become more customer-oriented.  Some banks are accomplishing this by giving increasing control to executives who are responsible for broad customer segments.   These customer-segment-oriented strategies (I call them “segment strategies“) are an important part of the bank’s business model.SegStrategy

Segment strategies impact the bank’s operating model and these impacts end up in the bank’s enterprise target operating model (TOM).  Due to the complexity of the enterprise TOM, subordinate TOMs are sometimes created for areas of focus such as branches, CRM, digital channels, processing centers, product areas, etc.  Each of these subordinate TOMs might have its own executive sponsorship and leadership.

When you multiply the number of customer segments times the number of TOMs you get a lot of communication paths that must be intact in order to formulate a holistic strategy.


Why Do I Blog?

The world is getting harder to understand because it is changing faster and in ways that are hard to predict.  I left Bank of America to return to IBM about 8 years ago, and since that time the questions that I have been asked to tackle have gradually changed from questions about how to build things to questions about what to build.  As an architect I am still focused on banking channels, but I have morphed into a technologist engaged in business model innovation.  Now, I spend a lot of time thinking about how banks can gain a competitive advantage by exploiting technologies to better engage customers.

This blog is a place for me to organize my thoughts about…

  1. Understanding the financial services industry and how it is changing
  2. Understanding technology trends and how they impact financial services and systems of engagement
  3. Positioning firms for success in financial services
  4. Envisioning the next systems of engagement for financial services
  5. Creating strategy, a strategy process, and how it all fits together
  6. Learning and innovating quickly (which takes us back to #1).

Or, in other words, figuring out better ways to figure out what to build.

I write each post in my blog to be useful to myself and others as a reference.  My blog posts are based on my years of learning having read hundreds of books, worked for a leading US bank, co-founding a start-up, and built IBM products.  Most recently at IBM, I have visited banks in about 30 countries to talk about the business drivers and technical challenges of providing integrated banking user experiences to retail and corporate customers.

I have published my blog because I hope to connect with others doing similar work.  Figuring things out is always more fun and more productive when we do it together.

Category: Me

Increasing customer engagement with game mechanics?

I am gearing up to do some crowdsourcing and looking for ways to motivate my private crowd to participate.  Answer in short:  Game mechanics.

Thinking…if gamification is the way to motivate people in the digital space then why is this not considered more strongly in the design of digital services?

Thinking some more…

What is Crowdsourcing?

This entry is part 15 of 31 in the series Defining words

I have kept crowdsourcing on the shelf over the years as a “plan B” should I ever need an alternative way to make a living.

I explored it further when brainstorming ways to gather information about authenticated digital services in various countries.  I was considering whether to engage a private crowd within IBM using a micro-task marketplace such as Amazon’s Mechanical Turks.

Crowdsourcing is huge and diverse and includes micro-tasking, macro-tasking, crowd contests, crowd funding and self-organizing crowds.  In my usual fashion I will refer you to a book that explains it all better than I can here:  Crowdsourcing for Dummies.

9781119940401I decided to use an IBM social media tool for my study instead of a market place because I wanted to keep my work in a private crowd.  The “crowd” is a large part of the value of a market place and I doubt I can reach my intended crowd that way.  I am going to need to need to find my contributors manually.  I still found the book helpful in understanding how to organize the micro-tasks, provide instructions, and use gamification techniques to motivate participation.

The reason why I talk about it here is because I think that crowdsourcing is going to become more important in the future and should be one of the key technology trends impacting business strategies and digital services.

What is Gamification?

This entry is part 14 of 31 in the series Defining words

Gamification is another one of those words that I have been scolded for using in meetings.  Folks, this is one worth looking up, understanding, and shoehorning into your vocab.

Gamification is the use of game mechanics to influence people.  Game mechanics are becoming one of the most important means of influencing people with technology.  Hmm, now that sounds important!

Click on the picture below to get started.  This TED talk is a bit dated but it still a good place to start.

See SCVNGR’s Secret Game Mechanics Playdeck.

You can also Google “Game Dynamics” and “Game Mechanics”.

Also refer to Gartner’s “Gamification Is Not Just for Fun; It Can Personalize Customer Engagement With Bank Products and Services Published: 3 December 2012“.



According to Digital Bank, Poland’s mBank revamped its mobile banking services to, among other things, leverage gamification to encourage sensible spending and saving.