Deposits Capability Transformation at The Royal Bank of Scotland

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Vivian Jennings
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1 Deposits Capability Transformation at The Royal Bank of Scotland Conor Maher Head of Domestic Cash Management and Liquidity RBS Commercial & Private Banking SAP Financial Services Forum September 9th 2014

2 Agenda Context Deposits challenge SAP solution Customer view Different approach Looking ahead 2

3 Context RBS key performance indicators Worst point H Medium-term target Loan: Deposit ratio (net of provisions) 154% 1 96% c.100% Short-term wholesale funding 2 297bn 3 34bn <10% TPAs Liquidity portfolio 4 90bn 3 138bn >1.5x STWF Tier 1 leverage ratio x 6 <18x Core Tier 1 Capital ratio 4% 7 B % B2.5 9 >10% BIII 10 Funded balance sheet 1,563bn bn Achieved Note: 1) As at October ) Unsecured wholesale funding <1 year to maturity. Including bank deposits <1 year. Excluding derivatives collateral. 3) As of December ) Eligible assets held for contingent liquidity purposes including cash, government issued securities and other securities eligible with central banks. 5) Funded tangible assets divided by Tier 1 Capital. 6) As of June ) As of 1 January ) Based on Basel II Regulatory Requirements. 9) Includes impact of CRD3 Regulatory Requirements. 10) Fully compliant under Basel III Regulatory Requirements. 11) Statutory funded assets at 31 December

4 Deposits challenge 1 Balance sheet funding Building a diverse and sustainable deposits base 2 Legacy infrastructure Speed to market Product capability Cost to serve Stronger product proposition 3 New regulation FCA ILAA, Basel III LCR Conduct Reshape deposits portfolio through greater diversification by sector and product attributes 4 Meeting customer needs Complexity through simplification 4

5 SAP solution What were we looking for 1 One and Done technology deployment (SAP Core Banking 8.0) The SAP platform is stateof-the art, integrated, channel-agnostic and extremely flexible. 2 Future proof and scalable It will provide market-leading product capability to meet the current and future needs of 3 Transform the Corporate Bank Deposit products Other products Core banking platform our customers Angela Potter Programme Sponsor 4 Changing our product deployment SAP product taxonomy Agility Configurable attributes 5

6 Customer view The old way The new way Simplification Complex product proposition due to legacy system capabilities Simpler product proposition to both transact and describe to customers Servicing Lack of appropriate customer insight inhibits proposition and servicing Single view, informed insights, information services Consistency Lack of harmonisation across currency and domestic account solutions (channels and products) Harmonised product offering with consistent look and feel to the customer Tailored solutions Long product development timelines leading to unsatisfied customer requirements Agile product development with clear proposition for each segment to meet customer needs 6

7 Different approach Typical Roadmap Business Case Approval RFP Vendor Selection Project Life Cycle Design principles Off-the-shelf solution Accountable project governance Leverage experience in organisational transformation No customisation of box Weekly key executive meetings Delivery partner approach Project methodology Business led (demand, selection, ) Buy, not build New operating model/change process Project Scale 700+ business requirements Integration with ~25 RBS systems No integration layer requiring engagement with various SMEs 7

8 What next? Delivered product capability Next Phase(s)? Future? New Basel III compliant 35-Day Notice Product Flexibility in product configuration kickers, bonuses, tiers, allowance amount New Currency Notice Products Deliver cash management capability, (e.g. sweeping and pooling on SAP platform) Extend product offering to debt products Integration to all available payment schemes SWIFT based reporting for account balances, transactions & confirmation Account migration to SAP platform and decommissioning of legacy platforms Improved single view of the customer for the bank Better MI and insights on customers for decision support ( information services ) Greater self-service capability for customers 8

9 Thank you Conor Maher Head of Domestic Cash Management and Liquidity Transaction Services RBS Customer Solutions Group 280 Bishopsgate London EC2M 4RB United Kingdom uk.linkedin.com/pub/conor-maher/ 22/44b/b71 9

10 Disclaimer This communication has been prepared by The Royal Bank of Scotland plc, The Royal Bank of Scotland N.V. or an affiliated entity ('RBS'). This material should be regarded as a marketing communication and has not been prepared in accordance with the legal and regulatory requirements to promote the independence of research and may have been produced in conjunction with the RBS trading desks that trade as principal in the instruments mentioned herein. This commentary is therefore not independent from the proprietary interests of RBS, which may conflict with your interests. Opinions expressed may differ from the opinions expressed by other divisions of RBS including our investment research department. This material includes references to securities and related derivatives that the firm's trading desk may make a market in, and in which it is likely as principal to have a long or short position at any time, including possibly a position that was accumulated on the basis of this analysis material prior to its dissemination. Trading desks may also have or take positions inconsistent with this material. This material may have been made available to other clients of RBS before it has been made available to you and regulatory restrictions on RBS dealing in any financial instruments mentioned at any time before is distributed to you do not apply. This document has been prepared for information purposes only. Nothing in this document should be construed as a recommendation or an offer by RBS to purchase securities from or sell securities to the recipient, or to underwrite securities of the recipient, or to extend any credit or like facilities to the recipient, or to conduct any such activity on behalf of the recipient. This document has been prepared on the basis of publicly available information believed to be reliable but no representation, warranty or assurance of any kind, express or implied, is made as to the accuracy or completeness of the information contained herein and RBS and each of their respective affiliates disclaim all liability for any use you or any other party may make of the contents of this document. This document is current as of the indicated date and the contents of this document are subject to change without notice. RBS does not accept any obligation to any recipient to update or correct any such information. Views expressed herein are not intended to be and should not be viewed as advice or as a recommendation. RBS makes no representation and gives no advice in respect of any tax, legal or accounting matters in any applicable jurisdiction. You should make your own independent evaluation of the relevance and adequacy of the information contained in this document and make such other investigations as you deem necessary, including obtaining independent financial advice, before participating in any transaction. This document is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. The information contained herein is proprietary to RBS, is being provided to selected recipients, may not be given (in whole or in part) or otherwise distributed to any other third party without the prior written consent of RBS and must be returned on request to RBS and any copies thereof destroyed. RBS and its respective affiliates, connected companies, employees or clients may have an interest in financial instruments of the type described in this document and/or in related financial instruments. Such interest may include dealing in, trading, holding or acting as market-makers in such instruments and may include providing banking, credit and other financial services to any company or issuer of securities or financial instruments referred to herein. This marketing communication is intended for distribution only to major institutional investors as defined in Rule 15a-6(a)(2) of the U.S. Securities Act 1934 (excluding documents produced by our affiliates within the U.S.). Any U.S. recipient wanting further information or to effect any transaction related to this trade idea must contact RBS Securities Inc., 600 Washington Boulevard, Stamford, CT, USA. Telephone: In Singapore, this marketing communication is intended for distribution only to institutional investors (as defined in Section 4A(1) of the Securities and Futures Act (Cap. 289) of Singapore). In Hong Kong, this marketing communication is intended for distribution only to Professional Investors (as defined in Schedule 1 of the Securities and Futures Ordinance of Hong Kong). Issuers mentioned in any material may be investment banking clients of RBS Securities Inc. and RBS Securities Inc. may have provided in the past, and may provide in the future, financing, advice, and securitization and underwriting services to these clients in connection with which it has received or will receive compensation. Accordingly, information included in or excluded from this material is not independent from the proprietary interests of RBS Securities, Inc., which may conflict with your interests. For further information relating to materials provided by RBS, please view our RBSMarketplace Terms and Conditions ( The Royal Bank of Scotland plc. Registered in Scotland No Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. The Royal Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The Royal Bank of Scotland N.V., established in Amsterdam, The Netherlands. Registered with the Chamber of Commerce in The Netherlands, No Authorised by De Nederlandsche Bank N.V. and regulated by the Authority for the Financial Markets in The Netherlands. The Royal Bank of Scotland plc is in certain jurisdictions an authorised agent of The Royal Bank of Scotland N.V. and The Royal Bank of Scotland N.V. is in certain jurisdictions an authorised agent of The Royal Bank of Scotland plc. Copyright 2014 The Royal Bank of Scotland plc. All rights reserved. This communication is for the use of intended recipients only and the contents may not be reproduced, redistributed, or copied in whole or in part for any purpose without The Royal Bank of Scotland plc s prior express consent. Copyright 2014 RBS Securities Inc. All rights reserved. RBS Securities Inc. member FINRA ( ( is a subsidiary of The Royal Bank of Scotland plc. RBS is the marketing name for the securities business of RBS Securities Inc. 10

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