Next generation banking starts with the customer

Next generation banking starts with the customer

Next generation banking starts with the customer 9 October 2017 Jaidev Janardana (CEO) What do customers want? Click icon to add SmartArt graphic Click icon to add SmartArt graphic Fairness Intuitive Experience

Security Customer outcomes dont match expectations Credit cards - balance transfer 49% of people who took the 0% deal, ended up paying 267 more interest 1 80% of customers dont understand the features of their balance transfer card 2 Sources: 1. uSwitch.com; 2. FCA, Credit card market study, 2016; 3. Zopa Expect to pay interest 8% VS End up paying 3 interest 53%

Leading to adversarial relationships Savings rates 1.50% 66% of savers dont like that banks advertise a rate and cut it after a year 1.10% 1 0.60% 0.25% 20% of savers with a fixed-term account dont know what happens to the interest rate at the end of the term 1 Sources: 1. Zopa; 2. FCA, Cash savings market study report, 2015 Easy access Cash ISAs

Rates (less than 2 years) 2 Rates (more than 5 years) Customer experience: held back by tech & structure Biggest obstacles in banks delivering the best possible customer experience? 13 14 27 74 -4 Outdated tech 4

Siloed systems 4 42% Lack of a consolidated customer view 32% Lack of clear CX strategy & exec 22% commitment 20% Siloed organisation / conflicting KPIs Net Promoter Score Lack of data for personalised experience

17% Lack of funding Source: www.NPSBenchmarks.com, company filings Source: Digital Banking Report, Improving the Customer Experience in Banking, 2017 All leading to continuing erosion of trust More than 50% of customers dont have full trust that their money and personal details are safe with their banks 1 1 out of 3 1 out of 2 think they are likely to be a victim of bank fraud over the next 5 years 2 dont trust fingerprint

recognition in place of passwords 4 Sources: 1. EY, Customer trust: without it youre just another bank, 2016; 2. Populus, Inevitable or preventable?; 3. Which?, 2016; 4. HSBC, Trust in Technology, 2017 Next generation banking starts with the customer Click icon to add Smart Art Click graph icon ic to add Smart Art Click graph icon

ic to add Smart Art A fair business model designed to win when customers win, with simple and transparent products and services based on customers needs, delivering personalised customer experience driven by proprietary technology. Zopa Bank Customer aligned products Unsecured Personal Loans No early repayment fees Credit cards

No 0% Saving & investments No front book and back book pricing differentiation Prioritising existing customers Auto loans Soft check Transparent pricing delivered through award winning experience embracing open banking to enable customers to get in control of their finances Simplifying finances:

Everything in one place, securely and in customers control Snappy insights: To act on, whether to avoid charges or work towards a bigger goal Great value: Personalised pricing What does it take? Strong sector specific expertise Financial engineering Advanced analytical skills Prudent risk management Regulatory knowledge Strong credit risk management

Customer obsession This is my second loan from Zopa and I have been so impressed by the staff and how easy you make the whole process Zopa customer Exceptional customer service Continuous testing Insight to empower customers Simple & intuitive experience 182 hours Satisfaction surveys of usability testing Zopa

employee Zopa is a fantastic place to work, great teamwork, great work ethic, great customer service, putting customers at the heart of what we do Structure and culture that attracts and nurtures talent Technology 4.2 4.3 4 Regulation Product 3.5 UX

Great customer proposition 3.3 Risk Finance Design Datascience Multi-disciplinary Glassdoor Ratings out of 5 Source: Zopa engagement survey, Glassdoor 4.4 Control of the technology stack

Secure and stable architecture Short release cycles Built in-house for scalability & flexibility Nimble and low-risk development Lean and agile operating model 99.6% service availability 53% lower operating costs than UK banks for similar products1 +3000 software releases Sources: 1. Deloitte Study 1. Source: Deloitte

Zopa Bank Customer aligned products delivered through award winning experience embracing open banking to enable customers to get We need to change the narrative 42% have experienced stress or anxiety due to financial difficulties 1 adults are not in control of their finances 2 adults cannot read a bank statement 2 4 / 10

1 in 5 only 20% believe their primary financial services provider will provide unbiased advice 3 1. Equifax, 2016; 2. Financial Capability Board and Money Advice Service, 2015; 3. EY, The Relevance Challenge What retail banks must do to remain in the game, 2016

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