Our Client Service. Capital Markets Day May 2018

Transcription

1 Capital Markets Day May 2018

2 Breakout Part I Breakout Part II Introduction: Vision and Values PETER HETHERINGTON Risk Management JOE McCAUGHRAN Prospect Acquisition HEIDRUN LUYT Our Client Service ROB BOWEN IAN PEACOCK Growth Opportunities BRIDGET MESSER Conclusion PETER HETHERINGTON Cost Analysis PAUL MAINWARING Dealing and Internalisation Our Platform & Technology Q&A Regulatory Landscape PETER HETHERINGTON MATT BRIEF JON NOBLE Q&A 2

3 Building long standing relationships with valuable clients APPROPRIATE AND VALUABLE Demand for our products is huge, however we only on-board applicants for whom our products are appropriate EFFICIENT ONBOARDING For the appropriate applicants, we combine cutting edge technology with a human touch to ensure our on-boarding process is efficient and to minimise fallout THIS FOCUS... results in us having the highest value clients and the best rates of retention in our industry CLIENT SCORE We use an internally generated client score to identify our highest value clients, and use this to offer an appropriate service 3

4 Huge demand for our product, but we only onboard appropriate clients 925,000 Start the application form 225,000 Completed applications 125,000 Accounts opened We want clients who understand our products and the associated risk FIRST HURDLE: RISK WARNINGS AND SIGNPOSTING 1 Risk warnings and signposting in the form as to the complexity of our products mean this is the biggest point of fallout 65,000 Accounts funded 2 Reduces operational burden and increases flow of committed potential clients 60,000 Clients traded Funnel data April 2017 to March

5 We onboard appropriate clients 925,000 Start the application form 225,000 Completed applications 125,000 Accounts opened SECOND HURDLE: WEALTH AND APPROPRIATENESS Knowledge and experience Wealth KYC Why do we do this? To ensure we onboard a wealthy client base, who are aware of the risks associated with trading and who are more likely to be sustainable clients in the future 65,000 Accounts funded Funnel data April 2017 to March ,000 Clients traded Applicants Fail: appropriateness / wealth Fail: KYC Clients opened 5

6 Efficient onboarding driven by Technology and People Minimising fallout amongst our appropriate applicants to maximise value Technology Electronic ID verification (EIDV) Document upload tools Process People 60+ people in our KYC centres of excellence: South Africa, India and Poland 24/7 cover Challenging SLAs, but the main priority is Regulatory compliance Critical in geographies where EIDV is not available 6

7 The human element is key to building long and valuable relationships We have a sales team of 70+ people based in 13 countries across the globe 925,000 Start the application form 225,000 Completed applications 125,000 Accounts opened 65,000 Accounts funded Meaningful interactions to drive conversion We use client scores to prioritise high value This local team builds relationships over the phone, in person and through seminars Our valuable clients choose to commit to IG because of our strong local presence, with staff in an office local to them Funnel data April 2017 to March ,000 Clients traded 7

8 In summary 1 DEMAND Huge, growing demand for our products 3 EFFICIENCY Our onboarding process for those clients is efficient, ensuring we minimise fallout 2 APPROPRIATE CLIENTS We only onboard appropriate clients who understand our products to focus on maximising future value 4 RELATIONSHIPS We employ a human element to build relationships and increase trust and future retention 8

9 Breakout Part I Breakout Part II Introduction: Vision and Values PETER HETHERINGTON Risk Management JOE McCAUGHRAN Prospect Acquisition HEIDRUN LUYT Our Client Service ROB BOWEN IAN PEACOCK Growth Opportunities BRIDGET MESSER Conclusion PETER HETHERINGTON Cost Analysis PAUL MAINWARING Dealing and Internalisation Our Platform & Technology Q&A Regulatory Landscape PETER HETHERINGTON MATT BRIEF JON NOBLE Q&A 9

10 How do we prioritise our clients Client Score Value and data driven We on-board 4,000 clients / month Objective to identify valuable accounts early 20 data scientists examine all known variables Regression analysis & predictive analytics Output Dynamic lifelong client score (1-8) Machine learning based algorithm To prioritise value and shape our service organisation Parameter Description 1 ***** 2 ***** 3 ***** 4 ***** 5 Application Score 6 ***** 7 Location 8 ***** 9 First deposit amount 10 ***** 11 ***** 12 ***** 13 ***** 14 ***** 15 ***** 16 ***** 10

11 Our Service Matrix Transactional & Commercial Client Score 1,2,3 4,5,6 7 8 No clients 120,000 15,000 7,500 7,500 % of clients 80% 10% 5% 5% % of revenue 10% 10% 12% 68% % of tasks 67% 15% 8% 10% Conversion Strategy Digital CRR Service Strategy Admin -> low cost operational centre Core proactive Trading Services Nature of support Written & Self service High Touch One Stop High Touch Premium Team High Touch Premium Team High Touch Premium Team Personal Client Manager (PCM) Personal Client Manager Personal Client Manager Size of Team SLA (phone / written) 60s, 8hr 20s, 2hr 10s, 1hr 10s, 1hr 11

12 Our Service Matrix Transactional & Commercial Client Score 1,2,3 4,5,6 7 8 No clients 120,000 15,000 7,500 7,500 % of clients 80% 10% 5% 5% % of revenue 10% 10% 12% 68% % of tasks 67% 15% 8% 10% Conversion Strategy Digital CRR Service Strategy Admin -> low cost operational centre Core proactive Trading Services Nature of support Written & Self service High Touch One Stop High Touch Premium Team High Touch Premium Team High Touch Premium Team Personal Client Manager (PCM) Personal Client Manager Personal Client Manager Size of Team SLA (phone / written) 60s, 8hr 20s, 2hr 10s, 1hr 10s, 1hr 12

13 CRR CONVERSION RETENTION REACTIVATION Purpose Dedicated high touch team with clear purpose To surfacing and develop value through Knowledge & Education Tools and Systems Risk Management Confidence 80% out performance from the control group CUMULATIVE TRADES BY CLIENT CUMULATIVE REVENUE PER CLIENT ( ) CLIENT RETENTION (% of clients still active) CRR TEAM CONTROL GROUP 1,600 1,400 1,200 1, CRR TEAM CONTROL GROUP CRR TEAM CONTROL GROUP Days from client first trade Days from client first trade Days from client first trade

14 Our Service Matrix Transactional & Commercial Client Score 1,2,3 4,5,6 7 8 No clients 120,000 15,000 7,500 7,500 % of clients 80% 10% 5% 5% % of revenue 10% 10% 12% 68% % of tasks 67% 15% 8% 10% Conversion Strategy Digital CRR Service Strategy Admin -> low cost operational centre Core proactive Trading Services Nature of support Written & Self service High Touch One Stop High Touch Premium Team High Touch Premium Team High Touch Premium Team Personal Client Manager (PCM) Personal Client Manager Personal Client Manager Size of Team SLA (phone / written) 60s, 8hr 20s, 2hr 10s, 1hr 10s, 1hr 14

15 Premium Client Management Premium Client profile 7,500 1 or top 5% of clients globally by revenue They account for 68% of group revenue They trade on average over 4,000 times a year They average 44k revenue per annum They are extremely engaged They have a cycle They are not static PCM Purpose Engage: 50% - Multi Local Structure - Meet and connect 5000 clients annually Empower: - Support and bring together - Build confidence Retain: - Custom service. Curate and target - 55% revenue generated from clients > 3yrs CLIENT RETENTION BY VALUE (%) Highest value client base in the industry with considerably lower attrition 1 Based on OTC leverage traders active in FY Top 2% 2% to 10% 10% to 30% 30% to 50% Bottom 50% to years 3-5 years 1-3 years 7-12 months 0-6 months 15

16 Client Outcomes WHY DO THEY TRADE? How strongly do you agree with the following statements regarding financial spread betting / CFD trading? Among all traders (n=3,850) 100% CUSTOMER SATISFACTION How do you rate IG? 90% 80% 60% 40% 20% 0% 32% 30% 25% 42% 40% 35% 24% 18% 17% 5% 7% 9% 4% 6% 7% A B C Strongly agree Tend to agree Neither agree nor disagree Tend to disagree Strongly disagree 85% 80% 75% 70% 65% 60% 55% 50% Live chat Phone A B C I value the opportunity leverage offers me to make large returns The satisfaction of getting it right on a winning trade is one of the main reasons I enjoy trading I enjoy the intellectual challenge of speculation on which way the markets will turn Red Contact Group; Top 10% of the client base Amber Contact Group; 11 th -20 th percentiles of the client base Green Contact Group; bottom of the client base 16

17 Client Outcomes How much are they winning or losing? HOW MUCH ARE THEY WINNING AND LOSING? (No. of clients April 2018) 43,579 Losing clients 18,653 34,614 Profitable clients 13,381 10,030 9,854 7,241 8, ,677 3,279 3,013 2, > 1m 10k to 100k 100 to 1k 1 to to 100 1k to 10k 0.1m to 1m 0.1m to 1m 1k to 10k 10 to to to 1k 10k to 100k > 1m 17

18 CHAMPION THE CLIENT Our PURPOSE is to empower informed, decisive, adventurous people to access opportunities in the financial markets 18