JJ Mois Année Competitive Intelligence as a key decision factor in Komercni banka André Léger Executive Director, Marketing

2 Agenda KB and the Czech banking market The competitive intelligence in KB Illustrative example on the mortgage loans

3 A few figures about KB KB and Czech banking market Network and employees 360 branches employees Clients Individuals clients - market share 20% SB and MEM clients - market share 35% A competitive banking market A concentration of the number of banks A decrease of the multibancarisation rate of customers Main players belong to international groups and bring strong upgrade of their commercial offer

4 Agenda KB and the Czech banking market The competitive intelligence in KB Illustrative example on the mortgage loans

5 Competitive intelligence in KB Competitive intelligence in KB: Set of information (banking markets, customers) that enables targeted decisions InformationAnalysisDistributionDecision

6 Scope of sources Competition Monitoring and Benchmarking International Trends Monitoring Customers’ needs and expectations KB network feedback and insights DECISION MAKERS Information for better decisions and actions ?

7 Commercial offers Prices & IR Daily IR report & alert Competitors Newsletter Market Shares report Financial Results Products comparisons KB Market Research Competitors monitoring Processing Main outputs Weekly Quarter 30 sources Competitors monitoring and benchmarking: an extensive monitoring of competitors activities Scope of sources

8 Detailed and summary reports KB Market Research Customers feedback: - Expectations - Satisfaction - Loyalty 40 surveys/year interviewed customers Oral presentations to managers Market Research suppliers Customer feedback Processing Main outputs for each survey Customers feedback: provide a deep understanding of Czech customers’ financial needs and expectations Scope of sources

9 KB network insight: get feedback from KB network on local competitors’ activities and customers needs Scope of sources Product and process potential issues Competitors local activities Customers’ feedbacks Network InsightsMain outputs Regular reports Regular meetings Informal contacts Monthly

10 International trends: providing best practices from foreign banking markets Trends monitoring Processing Main outputs Consulting companies market analysis Quarter List of analysis at disposal for managers KB Market Research Networking Societe Generale Group Banking associations Scope of sources

11 Agenda KB and the Czech banking market The competitive intelligence in KB Illustrative example on the mortgage loans

12 Competitive intelligence in the mortgage loans strategy MARKET SHARES EVOLUTION* Volume growth Total Market KB *Illustrative data MARKET GROWTH EVOLUTION* VI-05XII-05III-06VI-06 GROWTH POTENTIAL* (mortgage to GDP) CZPLFREU-15 Context: KB needed to secure and strengthen its position in a strongly growing market

13 Interest rates war Innovation Aggressive communication Agressive Offers Competition Monitoring and Benchmarking Competitive intelligence in the mortgage loans strategy

14 Customer Behavior:  Behavior change  Social shift Communication to customers:  Technical: Innovation Transparent fees Easy subscription / Simple products  Soft Skills: Professional seller Bank = Partner Easy deal Customers’ needs and expectations ? Competitive intelligence in the mortgage loans strategy

15 Improved Risk Scoring Innovative Products International Mortgage Loans International Trends Monitoring Competitive intelligence in the mortgage loans strategy

16 Role of 3rd parties Conversion rates KB network feedback and insights Competitive intelligence in the mortgage loans strategy

17 STRATEGY Competitive intelligence in the mortgage loans strategy

18 Strategy Impact: Mortgage Loan Strategy  5 Marketing aspects  Complete Sale Process (before sales – sales – after sales)  Distribution Network: Real Estate partnerships  Processes: Instant Mortgage  Communication: Easy and fast  Price: Guaranteed Interest Rate  Business Model: Anyone can get a Mortgage Example of strategies on the Czech market:

19 Student ID Card 4 in 1 card Target: students Channels:  Trends monitoring (US best practices) 1st phase: sell insurance products 2nd phase: connect insurance to bank products Channels:  Trends monitoring (Worldwide trends) Network of animators Internal communication and trainings Quality commitments Channels:  SG Group practices Other examples BancassuranceQuality

20 Other Examples: KB quality organization Customer Satisfaction and Quality Promotion Unit 39 Quality Animators Network (GoB Managers) 15 Quality Animators HQ (1 per bank Arm) Comm. Finan. Payments Corp Sek.RiskIT Audit Invest HR Corp BankingPOM Distribution Internal Customers - External Customers HQ Network

21 Security: we protect your money and banking data - funds management - personal data protection - security of direct banking Trust: we offer you a trustworthy relationship - RM at disposal - clear information about charges - warning about any condition changes Speed: easy and fast access to money and banking data - direct banking tools - 24/24h access to banking information - dense ATM/branch network Other examples: KB quality commitments Satisfaction: your satisfaction is important to us - fees reimbursement - no closing fees - complaint system

22 Conclusion Competitive Intelligence used on a daily basis Legal information gathered on a formal or informal way Raw information to be analyzed and distributed efficiently People are the main key success factor of the process