A highly impressive cost-income ratio of 42.5%, revenue growth of 9%, two dividend increases during 2016 for a total of 5% growth and increased loyalty scores: just some of the reasons why RBC scooped RBI’s 2017 Global Retail Bank of the Year award sponsored by Fiserv, writes Douglas Blakey
Pick a retail banking metric – any metric – and Royal Bank of Canada (RBC) has posted another blinding year.
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It is a fully deserved winner of the 2017 RBI Global Retail Bank of the Year; the third time it has scooped this award.
RBC shareholders have reaped the benefits: RBC stock has outperformed its peers for annualised return over the past three years, five years and 10 years periods.
RBC is Canada’s largest bank by assets and market capitalisation, and the 5th largest in North America and the 11th largest globally by market capitalisation.
RBC’s retail-focussed Personal & Commercial Banking (P&CB) segment contributed 50% of RBC’s C$10.5bn of earnings in 2016 with 2016 highlights including:
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By GlobalData- A best-in-class efficiency ratio of 42.5% for Canadian Banking, improved by 120 basis points (bps) on a year over year basis. This ratio is best among RBC’s Canadian peers;
- RBC YoY revenue growth of 8.7% and earnings growth of 4.3%;
- Increased loyalty from customers who gave RBC a Net Promoter Score of 65% for personal banking, up from 62% in 2015, and
- In-branch sales dollars for branch adviser roles were up nearly 10% vs. 2015 experiencing positive growth in almost all lines of business.
Add-it
Among RBC’s most impactful 2016 innovations was the launch of “Add It” to enable faster and more convenient access to products and services, and the introduction of “Voice Biometrics Authentication” in their Advice Centre (the contact centre), each of which reflects the bank’s commitment to delivering outstanding customer service.
To deliver on RBC’s “digitally enabled relationship bank” strategy, RBC has made it easier than ever for customers to get the products and services that are right for them.
Using timely, relevant data, RBC now offers personalised products and solutions that clients can instantly activate digitally – no traditional applications and no branch visits are required.
Clients log-in to their online or mobile banking and are presented with relevant, pre-approved offers: they can choose to ‘Add It’, and easily and quickly complete the fulfillment process in the same session.
Add It has reduced operational costs while driving incremental sales and an outstanding client experience.
“RBC Secure Voice” – Biometric Authentication
In late 2015 RBC became the first organisation in Canada to provide clients with fast and secure identity verification through natural conversation, with the service being fully rolled out in 2016. RBC Secure Voice verifies a client’s identity within seconds through biometrics, without any need for passwords or PINs, or for the client to respond to a series of authentication questions. Clients also do not need to memorise and repeat a specific, dictated phrase – a requirement of other voice biometric systems.
Instead, when clients call an RBC Advice Centre, their unique voiceprint is matched to their live voice in “real time”, allowing rapid authentication. As a result, RBC advisers can begin assisting clients right away – a convenience that customers appreciate.
Impressive results
In its first full year of use in 2016, RBC Secure Voice has generated impressive results:
- 1.9 million Canadians have enrolled in RBC Secure Voice
- 5.1 million total Secure Voice matches have been completed
- 37 seconds (average) saved per call, freeing up handling time for sales and service, and enabling advisors to focus on the client’s need.
Virtual reality connected loyalty programme
In 2016, RBC introduced virtual reality (VR) technology so that customers could interact with the bank’s credit card loyalty program (RBC Rewards). This technology gives RBC Rewards members the ultimate “try before you buy” experience by taking them on an immersive journey into the world of available rewards, to experience the rewards in a tangible way before making a redemption decision.
This launch marked the first time in the world that a bank had connected its clients to a loyalty programme through VR. Clients can access RBC’s VR experience at selected branches, at special holiday boutiques in shopping malls, or via their smartphones with Google Cardboard VR glasses, which are available free of charge.
This on-demand video service currently offers 13 languages, with more to follow. The app also supports 200 languages through audio conferencing, a service RBC has offered over the telephone since 2009.
RBC has kicked off 2017 strongly with Q1 net income of C$3.03bn, up 24% year-on-year and way ahead of analyst forecasts.
Credit quality across its major business units also improved with provisions for bad loans down by 18% year-on-year.
There was one notable change in the bank’s leadership: Neil McLaughlin, currently the executive vice-president of business financial services, takes over from Jennifer Tory as group head of personal and commercial banking at RBC.
He has a hard act to follow but is well regarded by bank insiders: do not bet against him delivering.
