Online Strategies of Banking and Insurance Companies in the BRIC Countries

Transcription

1 Online Strategies of Banking and Insurance Companies in the BRIC Countries Industry Forecast Report Reference code: IS0206MR Published: March 2012 BRICdata John Carpenter House 7 Carmelite Street London EC4Y 0BS United Kingdom Tel: +44 (0) Fax: +44 (0)

2 TABLE OF CONTENTS 1 Executive Summary Brazil Online strategies Internet banking has become increasingly popular in Brazil, and the country s banks have begun to offer various online services, ranging from checking account transactions to making investments and even paying bills on the internet. There were XX.X million customers of internet banking in Brazil in 2010, who together conducted XX.X billion online transactions in The use of mobile-based banking and insurance services is still in an early stage of development in the country. The registered mobile banking users in Brazil grew by over XX% in 2010, to reach X.XX million at the end of the year. The high growth of mobile internet transactions is mainly due to its low initial user base. Due to this, Brazilian banking and insurance companies are developing applications for smartphones users to make financial transactions through their cell phones. Technological advancements and changing consumer preferences have fuelled the growth of social media, which is now used as a strategic marketing tool by companies. The strong growth in Brazil s internet and smartphone penetration will continue to encourage social media marketing in the country over the forecast period ( ). Trends and drivers Brazil s internet penetration recorded strong growth during the review period ( ), from XX.X% in 2007 to XX.X% in Brazil s internet penetration is expected to continue growing rapidly, to reach XX.X% in The rising internet penetration will support the adoption of using the internet for financial transactions. Social media marketing is becoming an integral part of banking and insurance companies marketing and advertising value chain in Brazil. This is being driven by Brazil s rising internet penetration and increasing adoption of mobile phones with internet capability. With Brazil s changing consumer preferences and technological advancements, social media has become a strategic marketing tool for companies of all sizes and business types in Brazil. Challenges The rising sales of smartphones in Brazil have been supported by the declining price of handsets. This also led to a growth of mobile content services and social media-based promotional and marketing campaigns. The online distribution model is generally used for buying simple financial products as customers prefer to discuss their options with a financial advisor before purchasing higher value financial products. While customer may use the online channel to gather information about various products available, they prefer to purchase premium and complex financial products through more traditional channels than the internet. The number of phishing and online banking frauds in Brazil is increasing. Although banks and insurance companies are trying to make their website more secured by using the latest and most up-to-date security solution, rising e-security crimes is one of the main factors which could prevent the acceptance of online channel as the preferred medium for conducting financial transactions. Regulatory framework According to the current regulation, the physical presence of a customer is necessary, either at bank s branch or at retail agent, in order to open an account. As a result, banks cannot open accounts through the online channels. Sistema de Pagamentos Brasileiro (SPB) is the Brazilian Payment System that contains a set of rules and procedures. It provides online support to financial transactions among the various agents in the Brazil. Citizens can use Transferencia Eletronica Disponivel (TED) payment system to transfer funds to any bank account on a real time basis. Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 2

3 TABLE OF CONTENTS Russia Online strategies Most Russian banks and insurance companies are currently seeking to develop English language websites in order to attract more international customers. The Bank of Moscow s ibank2 platform is one of the most popular online banking platforms in Russia. Russian customers are generally very apprehensive of shopping or conducting banking activities online. Due to this, Russian banks have focused on improving the security of their websites. For example, Rosbank uses multiple software programs to ensure the complete security of their customers transactions. There was only one third-party online distributor in Russia in Rosno s strategic agreement with the retailer Ozon has ensured that travel insurance is also available on this third-party website. The Bank of Moscow and Rosno are among the leading financial services companies in Russia that have a blog running on the social media website, Live Journal, in addition to their regular presence on other social media networking sites such as Facebook and VKontakte. Trends and drivers Russians are generally apprehensive of using online services for payments. For this reason, the penetration of debit and credit cards in Russia is poor compared to other countries. To overcome this obstacle, Russian financial services companies are aggressively using online distribution channels to popularize their products and increase the attractiveness of e-retail. SMP Bank became the first Russian bank to launch a new internet banking platform that integrated personal financial management (PFM) for an individual. This amalgamation of PFM into online banking services is expected to become an important trend across the online strategies of financial services companies over the forecast period. Russian insurance companies are entering into partnership agreements with the travel operators to offer insurance coverage to travel operator s customers. These travel operators provide a number of travel and tourism services to their customers, including travel insurance. The web-based e-money issuers are becoming more important in Russian online banking systems. These e- money issuers have a strong customer base, and recorded significant transaction volumes during the review period. Challenges Although the emergence of modern technology has increased the possible banking and insurance services available to customers, it has also led to more fraudulent activities. The number of smartphone and tablet users in Russia stood at X million in Russia in 2010, which almost tripled by the end of The growth in financial institutions mobile and tablet applications has been significantly slower than the phenomenal growth of smartphone and tablet users in Russia. Regulatory framework There are currently no laws specific to defining e-money or governing the e-money and transfer of money in Russia. However, the Russian government is working on creating a regulatory framework for e-money. The Ministry of Finance and the Russian Central Bank are at the forefront of the initiative to construct e-money regulation in Russia. Ensuring an efficient and stable payments system is one of the objectives of Russian banking regulators. Although there is currently no national payments systems law, a draft law has been proposed. The legal framework for payments systems, their administration and regulation are provided by the Civil Code and CBR regulations. Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 3

4 TABLE OF CONTENTS India Online strategies Internet banking has become an integral part of the Indian banking industry, although online insurance sales only started in the country in the late 2000s. Most Indian banks have developed mobile applications as a strategy to attract young customers. The banks in India are expected to extend the scope of the mobile banking channel to offer a broader array of products and services over the forecast period. Indian banks also use social media sites to provide basic information and market their products and new offers. It is expected that banks will incorporate consumer grievance redressal mechanisms into social media networks over the forecast period. Most insurance companies offer their insurance products online alongside additional online services such as premium calculators and insurance advisory services. Mobile application-based marketing is at an early stage of development in the insurance industry, as only a few insurance companies offer these applications. Indian insurance companies are expected to use mobile applications extensively to gain customers attracted to this technology. Trends and growth drivers The Indian internet penetration is expected to increase from X.X% in 2011 to XX.X% in This will be driven by the population s increasing awareness of the internet, as well as the country s introduction of advanced connectivity devices and rising number of service providers. Similarly, India s mobile penetration recorded massive growth during the review period, and is expected to increase from XX.X% in 2011 to XX.X% in This will be supported by the launch of attractive call rates and data plans, and the advent of 3G services, in India. The most popular service for internet uses is online travel, and the use of the internet for financial services and online retail purchases follow this service. Internet banking is offered by all India s main banks, and customers have adopted this banking method due to its convenience. The sale of financial products online in India is expected to increase from US$XXX.X million in 2011 to US$X.X billion in Challenges The online channel enables banks and insurance companies to reduce their intermediaries costs. This can be indicated by the fact that online insurance plans are available at cheaper prices than those that are bought from agents. The online sales and marketing of banking and insurance products has ensured better service quality and convenience for customers, while the companies benefit from increased access to the customers. The India s rural population accounts for over XX% of the country s total population and people in these areas traditionally prefer the branch-based or agent sales of banking and insurance products to online channels. This presents a key challenge for the Indian financial service companies that are seeking to capture higher market shares by focusing on internet and mobile platforms. Internet banking in India is at an early stage of development and there are several risks associated with it. For example, the absence of proper encryption norms in India has led internet banking in India to be relatively unsecure. There has also been a high number of phishing and online banking fraud activities in India. The Indian Insurance Regulatory and Development Authority (IRDA) has set strict guidelines for the operation of web aggregators, which makes the generation process of finding sales leads for insurers and brokers more difficult. The strict minimum capital requirements of INR5 million and limiting of the lead sharing will hurt the operation of the web aggregators over the forecast period. These strict guidelines might discourage web aggregators from operating in the country, and could slow down the lead generation and sales process. Regulatory framework According to the new IRDA guidelines, an insurer needs to have a standardized script during the sale of insurance through the internet, , SMS, telephone, newspaper inserts and other such routes. This script must also be filed with the IRDA. Moreover, all insurance conversations with customers regarding the sale of the product should be recorded to ensure there are no miss-selling issues. The IRDA has also announced guidelines governing web aggregators in India, which requires web aggregators to disclose the fact that personal information shared by the website visitors will be passed on to the insurance companies. The Reserve Bank of India (RBI) brought in new guidelines for online credit card transactions, effective from August According to the new guidelines, the government required that customers must have an additional authentication code verified by VISA or MasterCard, in addition to their regular name, card number and CVV Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 4

5 TABLE OF CONTENTS China verifications. This additional code is known as VBV (Verified by Visa) or MSC (MasterCard Secure Code). This was brought in to prevent frauds associated with credit card thefts. Online strategies Banks and insurers are increasingly utilizing the online platform to market their products and services. Companies are attracting customers by providing an all-inclusive online service network. The Bank of China launched a special online service for its small- and medium-size enterprises (SMEs). Chinese banks also offer an online banking platform for their overseas customers. To attract domestic and international customers, the Industrial and Commercial Bank of China launched a cross-border foreign exchange remittance and global account management services. Similarly, the Chinese insurance company PICC introduced a special online website to offer online insurance and other value-added services to its customers. Meanwhile, Ping An Insurance introduced an online shopping model that offers all of its insurance services. Banks and insurance companies are also using social media as an important marketing portal. This channel allows companies in the two industries to increase their brand reputation among the country s large social networking population. For example, PICC launched a microblogging site to better interact with customers and improve its customer care values. In addition, Ping An Insurance opened its internet shopping center on the leading social networking site Taobao.com in Banks and insurance companies are also entering strategic agreements with social media networks. For example, Renren and China Merchants Bank issued a co-branded Renren CMB credit card in July Renren s location-based services function was also integrated with CMB s XX,XXX merchant partners. Third-party online distribution is emerging as one of the country s preferred insurance purchasing channels, aince these sites allow customers to compare the products and services of various insurance companies based on the premium cost and returns offered by the policy. Baowang ( is one of the leading insurance comparison website in China s third-party online insurance businesses. Although mobile banking has emerged as one of the most innovative distribution strategies, it is still in its initial development stages in the insurance industry. Leading Chinese banks, such as the Bank of China, China construction Bank and ICBC Bank, already offering mobile banking services, while only Ping An Insurance offers a mobile insurance platform among China s insurance companies. However, considering the country s expanding mobile subscriber base, more companies are expected to develop services for mobile and smartphones over the forecast period. Trends and growth drivers With XXX million internet users, China became the world s largest internet community in The growing number of internet subscribers in the country has encouraged the banking and insurance industries to adopt the online platform to distribute their products and services and improve their reputation among customer. The rapid adoption of 3G services in China is expected to support the use of mobile banking and insurance. With a 3G subscriber base of XX million in July 2011, after growing at a quarterly growth rate of nearly XX%, financial services companies are expected to utilize this platform to engage a large potential customer base. The reduced costs and convenience associated with online and mobile financial services compared to the offline platforms, such as bank branch banking and selling insurance through agents and bancassurance, are the main reason for their popularity for both service providers and customers. On average, online banking operation costs only X% of manual transaction costs. Challenges Security concerns present significant challenges for the adoption of online financial services, as the Chinese population is reluctant to trust online and mobile banking and insurance platforms. With the increasing number of phishing and online banking frauds occurring in China, convincing consumers to adopt online banking and insurance transactions in China will be difficult. The Chinese government s restriction over various popular social networking sites like Facebook and Twitter has restricted the use of these platforms as a marketing and brand awareness tools. Financial services companies require a clear understanding of the Chinese internet environment before they start marketing and distributing services on the local Chinese social networking websites. Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 5

6 TABLE OF CONTENTS Regulatory framework Chinese government and regulatory authorities of banking and insurance industry have placed strict regulations with regards to the usage of online platform as a distribution channel. Companies in both these the two industries must adhere to these regulations. Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 6

7 TABLE OF CONTENTS TABLE OF CONTENTS 1 Executive Summary BRIC Countries Comparison Banking and Insurance Industries Attractiveness Online Marketing Environment Macroeconomic Drivers Online Strategies of Banking and Insurance Industries in Brazil Market Environment Macroeconomic fundamentals Market size and growth potential Brazilian banking industry Market size and growth potential Brazilian insurance industry Evolution of Distribution Strategy Evolution of distribution strategy for the banking industry Evolution of distribution strategy for the insurance industry Online Marketing Strategies of Banking and Insurance Industry in Brazil Internet marketing Mobile application-based marketing Social media marketing Competitive Benchmarking Key Trends, Growth Drivers and Challenges for Online Banking and Insurance Strategies Trends Growth drivers Challenges Regulatory Framework Online Strategies of the Banking and Insurance Industries in Russia Market Environment Macroeconomic fundamentals Market size and growth potential Russian banking industry Market size and growth potential Russian insurance industry Evolution of Distribution Strategy Evolution of distribution strategy for the banking industry Evolution of distribution strategy for the insurance industry Online Marketing Strategies of Banking and Insurance Industries in Russia Internet marketing Mobile applications based marketing Third-party online marketing Social media marketing Competitive Benchmarking Key Trends, Growth Drivers and Challenges for Online Banking and Insurance Strategies Trends Growth drivers Challenges Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 7

8 TABLE OF CONTENTS 4.6 Regulatory Framework Online Strategies of the Banking and Insurance Industries in India Market Environment Macroeconomic fundamentals Market size and growth potential Indian banking industry Market size and growth potential Indian insurance industry Evolution of Distribution Strategy Evolution of distribution strategy for the banking industry Evolution of distribution strategy for the insurance industry Online Marketing Strategies of Banking and Insurance Industries in India Internet marketing Mobile application based marketing Third-party online marketing Social media marketing Competitive Benchmarking Key Trends, Growth Drivers and Challenges for Online Banking and Insurance Strategies Trends Growth drivers Challenges Regulatory Framework Online Strategies of the Banking and Insurance Industries in China Market Environment Macroeconomic fundamentals Market size and growth potential Chinese banking industry Market size and growth potential Chinese insurance industry Evolution of Distribution Strategy Evolution of distribution strategy for the banking industry Evolution of distribution strategy for the insurance industry Online Distribution Strategies of Banking and Insurance Industries in China Internet marketing Mobile application based marketing Third-party online marketing Social media marketing Competitive Benchmarking Key Trends, Growth Drivers and Challenges in Online Banking and Insurance Strategies Trends Growth drivers Challenges Regulatory Framework Appendix About BRICdata Areas of expertise Methodology Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 8

9 TABLE OF CONTENTS 7.3 Disclaimer Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 9

10 TABLE OF CONTENTS LIST OF FIGURES Figure 1: BRIC Countries Banking Industry Scenario, Figure 2: BRIC Countries Insurance Industry Scenario, Figure 3: Brazilian GDP at Constant Prices (US$ Billion), Figure 4: Brazilian Annual Per Capita Disposable Income (US$), Figure 5: Brazilian Population Distribution by Age (%), Figure 6: Brazilian Urban and Rural Population (%), Figure 7: Brazilian Banking Industry Value by Loans and Deposits (US$ Billion), Figure 8: Brazilian Banking Industry Value by Loans and Deposits (US$ Billion), Figure 9: Brazilian Insurance Industry Dynamics by Insurance Segment (US$ Billion), Figure 10: Evolution of Brazilian Banking Distribution Figure 11: Brazilian Banking Transaction by Channel (Million) Figure 12: Evolution of Brazilian Insurance Distribution Channels Figure 13: Brazilian Banking Transactions Comparison by Banking Channels (Billion), Figure 14: Bradesco Online Banking Interface Figure 15: Banco do Brazil Online Banking Interface Figure 16: Caixa Seguradora Online Insurance Interface Figure 17: Brazilian Mobile Banking Users (Million), Figure 18: Social Media Strategy Figure 19: Brazilian Bank Using Slideshare Figure 20: Brazilian Insurance Company Using Twitter Figure 21: Brazilian Internet Penetration Rate (%), Figure 22: Brazilian Mobile Penetration Rate (%), Figure 23: Russian GDP at Constant Prices (US$ Billion), (Base Year ) Figure 24: Russian Annual Per Capita Disposable Income (US$), Figure 25: Russian Population Distribution by Age (%), Figure 26: Russian Urban and Rural Population (%), Figure 27: Russian Banking Industry Value by Loans and Deposits (US$ Billion), Figure 28: Russian Banking Industry Value by Loans and Deposits (US$ Billion), Figure 29: Russian Insurance Industry Growth Rate by Insurance Segment (%), Figure 30: Evolution of Russian Banking Distribution Channels Figure 31: Evolution of Russian Insurance Distribution Channels Figure 32: Typical Internet Banking Platform of Russian Banks Figure 33: Typical Insurance Portals of Russian Insurers Figure 34: Typical Mobile Application for Russian Banks Figure 35: Third-Party Online Marketing Platform in Russia Figure 36: Social Media Strategies in Key Russian Industries Figure 37: Average Number of Credit Cards Used by an Individual by Country, Figure 38: Russian Internet Penetration Rate (%), Figure 39: Russian Mobile Phone Penetration Rate (%), Figure 40: Indian GDP at Constant Prices (US$ Billion), Figure 41: Indian Annual Per Capita Disposable Income (US$), Figure 42: Indian Population Distribution by Age Group (%), Figure 43: Indian Urban and Rural Population (%), Figure 44: Indian Banking Industry Value by Loans and Deposits (US$ Billion), Figure 45: Indian Banking Industry Value by Loans and Deposits (US$ Billion), Figure 46: Indian Insurance Industry Dynamics by Insurance Segment (US$ Billion), Figure 47: Evolution of Indian Banking Distribution Channels Figure 48: Evolution of Indian Insurance Distribution Channels Figure 49: ICICI Bank Online Banking Interface Figure 50: Citibank Online Banking Interface Figure 51: Life Insurance Company of India Online Banking Interface Figure 52: ICICI Prudential icare Plan Interface Figure 53: Bajaj Allianz Online Insurance Interface Figure 54: Policybazaar Online Web Aggregator Interface Figure 55: Snapshot of Medimanage s Online Banking Interface Figure 56: Social Media Strategies of Key Industries in India Figure 57: ICICI Bank Official Twitter Page Figure 58: ICICI Bank Official Facebook Page Figure 59: HDFC Bank Official Twitter Page Figure 60: Indian Internet Penetration Rate (%), Figure 61: India Mobile Phone Penetration Rate (%), Figure 62: Indian Online Sales Distribution by Online Services (US$ Million), Figure 63: Chinese GDP at Constant Prices (US$ Billion), (Base Year ) Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 10

11 TABLE OF CONTENTS Figure 64: Chinese Per Capita Annual Disposable Income (US$), Figure 65: Chinese Population Distribution by Age Group (%), Figure 66: Chinese Urban and Rural Population (%), Figure 67: Chinese Banking Industry Value by Loans and Deposits (US$ Billion), Figure 68: Chinese Banking Industry Value by Loans and Deposits (US$ Billion), Figure 69: China Insurance Industry Dynamics by Insurance Segment (US$ Billion), Figure 70: Evolution of Chinese Banking Distribution Channels Figure 71: Evolution of Chinese Insurance Distribution Channels Figure 72: Chinese Internet Banking Transaction Value (RMB Trillion), Figure 73: Bank of China Online Banking Interface Figure 74: China Merchant Bank Online Banking Platform for New York Branch Figure 75: PICC Property and Casualty Company Limited Online Marketing Portal Interface Figure 76: Snapshot of Chinese Social Media Strategies in Key Industries Figure 77: PICC Social Media Platform on Weibo.com Figure 78: Chinese Internet Penetration Rate (%), Figure 79: Chinese Mobile Phone Penetration Rate (%), Figure 80: Chinese 3G Subscriber Base (Million), December 2010 July Figure 81: Chinese Internet Consumer Behavior, June Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 11

12 TABLE OF CONTENTS LIST OF TABLES Table 1: BRIC Countries Banking Industry Scenario, Table 2: BRIC Countries Insurance Industry Scenario, Table 3: Market Environment for Online Marketing of Banking and Insurance in BRIC Countries Table 4: BRIC Countries Current Macroeconomic Scenario, Table 5: Comparison of Macroeconomic Prospects of the BRIC Countries, Table 6: Brazilian Banking Industry Value by Loans and Deposits (US$ Billion), Table 7: Brazilian Banking Industry Value by Loans and Deposits (US$ Billion), Table 8: Brazilian Insurance Industry by Insurance Segment (US$ Billion), Table 9: Brazilian Banking Transaction by Channel (Million), Table 10: Online Distribution Strategies in Brazilian Banking and Insurance Industries Table 11: Brazilian Internet Banking Users and Transactions (Million), Table 12: Brazilian Online Banking Service Comparison Table 13: Brazilian Online Insurance Service Comparison Table 14: Russian Banking Industry Value by Loans and Deposits (US$ Billion), Table 15: Russian Banking Industry Value by Loans and Deposits (US$ Billion), Table 16: Russian Insurance Industry by Insurance Segment (US$ Billion), Table 17: Online Distribution Strategies in Russian Banking and Insurance Industries Table 18: Russian Online Banking and Insurance Services Comparison Table 19: Indian Banking Industry Value by Loans and Deposits (US$ Billion), Table 20: Indian Banking Industry Value by Loans and Deposits (US$ Billion), Table 21: Indian Insurance Industry by Insurance Segment (US$ Billion), Table 22: Online Distribution Strategies in the Indian Banking and Insurance Industries Table 23: India Online Banking Service Comparison Table 24: India Online Insurance Service Comparison Table 25: Chinese Banking Industry Value by Loans and Deposits (US$ Billion), Table 26: Chinese Banking Industry Value by Loans and Deposits (US$ Billion), Table 27: Online Distribution Strategies in Chinese Banking and Insurance Industries Table 28: Introduction of Internet Banking Services Among China s Leading Commercial Banks Table 29: China Online Banking Service Comparison Table 30: China Online Insurance Service Comparison Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 12

13 Forecast CAGR Forecast CAGR BRAZIL 2 BRIC Countries Comparison 2.1 Banking and Insurance Industries Attractiveness The Chinese banking industry is the largest among the Brazil, Russia, India and China (BRIC) countries in terms of both the size and growth rate. China accounted for the largest share of XX.X% of the overall BRIC countries banking industry value in 2011, followed by Brazil, with a share of X.X%, India, with a share of X.X% and Russia, with a share of X.X%. The banking industry growth rates for all BRIC countries recorded compound annual growth rates (CAGRs) of over XX% during the review period, and China recorded the highest CARG of XX.X%. In addition, Russia, India and China are expected to record CAGRs of more than XX% over the forecast period. The robust growth of the banking industry indicates the huge unexplored potential customer base in these countries. With the adoption of advanced internet and mobile technology in the countries, the online channels for providing banking services in the BRIC countries will also register substantial growth. Figure 1: BRIC Countries Banking Industry Scenario, % 25% 20% Russia India China 15% 10% 5% Brazil 0% 0% 5% 10% 15% 20% 25% 30% 35% CAGR Source: BRICdata analysis BRICdata Figure 2: BRIC Countries Insurance Industry Scenario, % 20% China 15% India 10% Russia Brazil 5% 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% CAGR Source: BRICdata analysis BRICdata Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 13

14 BRAZIL 3 Online Strategies of Banking and Insurance Industries in Brazil This chapter provides insights into the online strategies of banking and insurance companies in Brazil. The chapter comprises six sections which cover different aspects of the industries online strategies. The first section provides a brief overview of the macroeconomic indicators that impact online banking and insurance services in the country, as well as the market size and growth potential of the insurance and banking industries in Brazil. The second section reflects on the evolution of distribution strategies followed by the industries. The third section discusses the specific online marketing strategies followed by Brazilian banking and insurance companies, including online marketing, mobile applications and social media marketing, with specific examples of strategies followed by Brazilian companies. The fourth section compares the online services across companies in both the banking and insurance industries. The fifth section provides detail on the main trends, growth drivers and challenges faced by the banking and insurance industries. The final section provides the regulatory framework governing the country s online banking and insurance services. 3.1 Evolution of Distribution Strategy Evolution of distribution strategy for the banking industry Online banking systems came into prominence in the Brazil during the mid-1990s. Prior to this, customers used to visit bank branches to conduct banking transactions. The use of the internet for conducting banking, which started in Brazil in 1996, revolutionized the country s banking system. Internet banking, which accounted for a smaller share of total banking transactions in Brazil in 2000, registered continuous growth over the past decade, and is now one of the most important channels for making banking transaction through in the country. With the country s increasing internet penetration and growing awareness of online banking, the internet is projected to become the primary channel for conducting banking transactions through in the near future. Figure 10: Evolution of Brazilian Banking Distribution Source: BRICdata analysis BRICdata Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 14

15 BRAZIL The following table and figure provide detailed information on the volume of banking transactions through banking channels in Brazil. Figure 11: Brazilian Banking Transaction by Channel (Million) ,000 20,000 30,000 40,000 50,000 60,000 ATM Others Internet banking Face-to-face transaction at bank Correspondent banks Debit card Phone Banking Source: BRICdata analysis and FEBRABAN BRICdata Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 15

16 BRAZIL 3.2 Competitive Benchmarking This section compares the services of leading companies in the Brazilian banking and insurance industries in terms of their online capability, which includes internet and mobile services. Brazil are focusing on developing this channel due to the rapid growth in the use of online channels for conducting financial transactions, banking and insurance companies. Financial service companies are also ensuring that most of their services become available online. Table 12: Brazilian Online Banking Service Comparison Banks Mobile Application Online Platform English Language Online Platform for Visually Impaired Social Media Presence Banco do Brasil Banco Bradesco HSBC Citibank Source: BRICdata analysis and company website BRICdata Table 13: Brazilian Online Insurance Service Comparison Insurance companies Mobile Application Online Platform Online Payment English Language Social Media Presence SulAmerica Caixa Seguradora Porto Seguro Source: BRICdata analysis and company website BRICdata Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 16

17 RUSSIA 4 Online Strategies of the Banking and Insurance Industries in Russia This chapter provides insights into the online strategies of banking and insurance companies in Russia. The chapter comprises six sections which cover different aspects of the industries online strategies. The first section provides a brief overview of the macroeconomic indicators that impact online banking and insurance services in the country, as well as the market size and growth potential of the insurance and banking industries in Russia. The second section reflects on the evolution of distribution strategies followed by the industries. The third section discusses the specific online marketing strategies followed by Russian banking and insurance companies, including online marketing, mobile applications and social media marketing, with specific examples of strategies followed by Russian companies. The fourth section compares the online services across companies in both the banking and insurance industries. The fifth section provides detail on the main trends, growth drivers and challenges faced by the banking and insurance industries. The final section provides the regulatory framework governing the country s online banking and insurance services. 4.1 Competitive Benchmarking This section analyzes the performance of Russia s leading banking and insurance companies in terms of their online capabilities and distribution of products and services. Since the demand for online financial services in Russia is growing rapidly, these companies are aggressively pursuing strategies to improve their online presence in order to provide their services to clients on their computers and mobile phones. The below table provides an overview of the online products and services offerings for top Russian bank and insurance companies: Table 18: Russian Online Banking and Insurance Services Comparison Banking and Insurance Companies Online Mobile Online English Language Online Retail Customers Online Corporate Customers Mobile Retail Customers Mobile Corporate Customers VTB Bank Sberbank Bank of Moscow Rosbank TransCreditBank Renaissance Insurance Group OJSC IC Allianz (Rosno) VTB Bank Source: BRICdata analysis BRICdata Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 17

18 INDIA 5 Online Strategies of the Banking and Insurance Industries in India This chapter provides insights into the online strategies of banking and insurance companies in India. The chapter comprises six sections which cover different aspects of the industries online strategies. The first section provides a brief overview of the macroeconomic indicators that impact online banking and insurance services in the country, as well as the market size and growth potential of the insurance and banking industries in India. The second section reflects on the evolution of distribution strategies followed by the industries. The third section discusses the specific online marketing strategies followed by Indian banking and insurance companies, including online marketing, mobile applications and social media marketing, with specific examples of strategies followed by Indian companies. The fourth section compares the online services across companies in both the banking and insurance industries. The fifth section provides detail on the main trends, growth drivers and challenges faced by the banking and insurance industries. The final section provides the regulatory framework governing the country s online banking and insurance services. 5.1 Competitive Benchmarking Most of the largest banks in India offer online services including online banking and mobile banking facilities, although only a few banks, such as ICICI Bank, Citibank, PNB and Bank of Baroda, collect feedback on their websites. Most of the leading Indian banks have a social media presence. ICICI Bank and HDFC Bank are more active on these sites than most leading banks, and use social media to stay regularly connected with their customers. It can be expected that these banks will try to expand their product and service offerings for the online channel over the forecast period. Table 23: India Online Banking Service Comparison Banks Online Banking Mobile Banking Online Retail Banking Online Corporate Banking Online NRI Banking Online Feedback Collection Social Media Presence State Bank of India ICICI Bank Punjab National Bank Bank of Baroda Bank of India HDFC Bank CitiBank Source: Company website and BRICdata analysis BRICdata Table 24: India Online Insurance Service Comparison Insurance Companies Online Insurance Mobile Insurance Premium Payment Premium Calculator Advisory Services Social Media Presence Life Insurance Corporation of India ICICI Prudential SBI Life Bajaj Allianz Source: Company website and BRICdata analysis BRICdata Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 18

19 CHINA 6 Online Strategies of the Banking and Insurance Industries in China This chapter provides insights into the online strategies of banking and insurance companies in China. The chapter comprises six sections which cover different aspects of the industries online strategies. The first section provides a brief overview of the macroeconomic indicators that impact online banking and insurance services in the country, as well as the market size and growth potential of the insurance and banking industries in China. The second section reflects on the evolution of distribution strategies followed by the industries. The third section discusses the specific online marketing strategies followed by Chinese banking and insurance companies, including online marketing, mobile applications and social media marketing, with specific examples of strategies followed by Chinese companies. The fourth section compares the online services across companies in both the banking and insurance industries. The fifth section provides detail on the main trends, growth drivers and challenges faced by the banking and insurance industries. The final section provides the regulatory framework governing the country s online banking and insurance services. 6.1 Competitive Benchmarking Chinese banking and insurance companies have invested significant amounts of time and capital to develop robust online and mobile distribution platforms for their customers. Using the most advanced and modern technologies, companies in both these industries have developed online platforms that provide a variety of services instantly. The following section compares Chinese banking and insurance companies on the basis of their online and mobile services provided. Table 29: China Online Banking Service Comparison Banks Online Platform Mobile Application English Language Online Retail Banking Online Corporate Banking Mobile Retail Customers Mobile Corporate Customers Social Media Presence Bank of China China Merchant Bank China Constructi on Bank ICBC Bank Source: Company website and BRICdata analysis BRICdata Table 30: China Online Insurance Service Comparison Insurance Companies Online Platform Mobile Application English Language Premium Payment Claim Status Report Premium Calculator Social Media Presence PICC Property and Casualty Company Limited Ping An Insurance China Pacific Insurance Taikang Life Insurance Company Source: Company website and BRICdata analysis BRICdata Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 19

20 APPENDIX 7 Appendix 7.1 About BRICdata BRICdata publishes in-depth strategic intelligence reports that help its customers better understand opportunities in emerging markets and industry sectors. Its reports provide an independent, expert view supported by primary research and access to leading data and intelligence sources. BRICdata is a comprehensive source of insights and analysis, and publishes a broad range of reports across a number of different industry sectors, including consumer, retail, financial services, technology, telecoms and construction. BRICdata is headquartered in London with research, analysis and account management teams based across Europe, the US and Asia-Pacific. Its global research footprint is supported by a network of external associates, data partners and industry experts to give the clearest possible perspective on emerging markets Areas of expertise BRICdata operates a dedicated, multilingual team of in-house industry analysts with significant experience of global and country-level research. BRICdata also maintains data and research partnerships with other research companies, industry experts and trade associations, along with a network of independent industry consultants and former industry participants contributing research and reports to bring additional insight and expertise in more specialist areas. BRICdata s research offering spans the following industry areas: Construction BRICdata publishes reports covering the entire construction value chain: construction materials, equipment, construction services, architectural services and interior design. It also covers the main value sectors of construction activity: commercial, infrastructure, industrial, institutional and residential. This comprehensive view of the market enables BRICdata to detail key growth sectors and countries and identify the most attractive industry opportunities. Consumer goods Covering a broad range of areas across the consumer goods market, from interior products to fast-moving consumer goods (FMCG), ingredients, and packaging, BRICdata offers a comprehensive insight into key consumer sectors across fast-growing markets, identifying key trends, future innovations and growth opportunities. Comprehensive data sets including unique primary survey-driven research creates accurate market forecasts and understanding of the factors driving consumption behavior. Financial services Providing detailed insights into insurance and banking markets, BRICdata s financial services reports identify key market opportunities, emerging technologies and channel strategies. The reports provide unique data combined with local examples of best practice and expert insights into the market. Retail BRICdata maintains a comprehensive database of forecasts of retail spending, along with a series of unique indicators enabling a forward view of retailers prospects in emerging markets. The reports identify emerging concepts in retail, including the nascent online and mobile retail sectors in the BRIC countries and other emerging markets. Technology BRICdata tracks key trends and innovations, emerging technologies and markets, and the key operators in both emerging markets and technologies. Covering a range of emerging and disruptive technologies including telecoms, social media, online and mobile retailing, and telemedicine, BRICdata examines strategies for success, the state of the competitive landscape and the inherent threats and opportunities in the emerging technological economy. Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 20

21 APPENDIX 7.2 Methodology All BRICdata reports are rigorously sourced and created according to a comprehensive, two-stage methodology. This includes internal audit and primary research. A) Internal audit Review of in-house databases to gather existing data: o Historic market databases and reports o Company database o projects database B) Primary research Review of the latest company strategy and asset management trends 1) Research A. Sources Collection of the latest market-specific data from a wide variety of industry sources: o Government statistics o Industry associations o Company filings o Broker reports o International organizations B. Expert opinion Collation of opinion taken from leading industry experts Analysis of third-party opinion and forecasts: o Broker reports o Industry associations o Official government sources C. Data consolidation and verification Consolidation of data and opinion to create historical datasets Creation of models to benchmark data across sectors and geographies 2) Research Analysis Market forecasts Feed of forecast data into market models: o Macroeconomic indicators o Industry-specific drivers Analysis of Market Databases to identify trends by sector: o Latest trends o Key drivers of the market 3) Report Writing Analysis of market data Discussion of company and industry trends and issues Integration of survey results Annual review of trends Standardization of market definitions using recognized industry classifications 4) Quality Control A. Templates Detailed process manuals Standardized report templates and accompanying style guides Complex forecasting tool used to ensure forecast methodologies are consistently applied QC checklists B. QC process Peer review Senior-level QC Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 21

22 APPENDIX 7.3 Disclaimer All rights reserved. Random spot checks on data integrity Benchmark checks across databases Market data cross-checked for consistency with accumulated data from company filings No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, BRICdata. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that BRICdata delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. BRICdata can, therefore, accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect. Online Strategies of Banking and Insurance Companies in the BRIC Countries Page 22