TEC 2020 Strategic Plan
For François Pérol, Chairman of the Groupe BPCE Management Board: “The digital revolution is the big issue for banks over the coming the years and this is duly reflected in the name of our new strategic plan, TEC 2020. This plan comprises new engagements toward our clients – to whom we intend to bring more expertise, value-added solutions and satisfaction -, toward our employees – so as to support them in the transformation of their jobs, to equip them with better tools and with the goal of attracting even more talent -, and toward our cooperative shareholders - because a bank that belongs to its clients needs to serve the society in which it operates. In order to respect these engagements, succeed with the Group’s digital transformation and meet the ambitious growth targets set for each of our business lines, we will be amplifying our investments in people and technology. And throughout the plan, we will be staying true to the choices that accompanied the creation of our Group back in 2009: all our resources are employed to serve our clients in our banking and insurance businesses; we maintain a moderate appetite for risk; our Group’s various companies work together; we exercise the strictest financial discipline; our governance is cooperative and decentralized.”
Accelerate our digital transformation
The Group’s digital transformation is set to accelerate on the back of the organization introduced in early 2017 around the digital taskforce and underpinned by five multi-brand platforms developed by the 89C3 factory. The objective is to lift the Group’s digital net promoter score (NPS) into line with the levels commanded by pure players, with 90% of active clients using the Group’s digital spaces and 10% of subscriptions being made via digital channels on completion of the plan in 2020.
To achieve these ends, we are going to:
- develop common interfaces for all of our brands, so as to ensure our clients enjoy an experience that matches the best standards,
- invest massively in exploiting data, in order to customize solutions, measure certain risks more precisely, enhance CRM and build artificial intelligence tools,
- make our IT more agile by taking advantage of cloud resources,
- continue to optimize our operational model via shared platforms (credit management, Group middle offices, etc.), management by business line, and digitalization and robotization of processes.
Digital transformation investments are to be raised to €600m a year (2020 target)
Strong engagements toward our clients, staff and cooperative shareholders
Groupe BPCE makes an engagement to clients by pledging to provide them with more expertise and more solutions:
- In retail banking: by focusing sales forces on advisory, thanks to greater digitalization of processes, increasing the number of specialist advisors by over 50%, introducing broader and global solutions in order to respond to customers’ new expectations and uses, and keeping a continuous watch on customer satisfaction,
- In asset management: by delivering customized and innovative solutions and active investment strategies,
- In corporate & investment banking: by leveraging our globally recognized expertise in four sectors (energy & commodities, infrastructure, aviation, real estate & hospitality), in order to broaden our relations with clients beyond financing.
Groupe BPCE makes an engagement to staff by pledging to make them active players in the Group’s transformation process:
- by enhancing their employability through ambitious investments in training (10 million hours of training) and facilitating mobility within the Group via a dedicated portal,
- by equipping them with digital tools (100% of staff equipped on completion of the plan),
- by reinforcing the Group’s employer image, so as to attract and retain new talent (recruitment of 800 key-skilled staff in the IT and digital field).
Groupe BPCE makes an engagement to its cooperative shareholders by pledging to reinforce the Group’s cooperative roots:
- the bank for everyone (access for fragile customers, such as disabled or protected persons, micro-credit, etc.),
- the bank that serves local needs (contribution of Group companies to local business and social ecosystems),
- by doing business responsibly (introduction of a code of ethics, prevention of over-indebtedness),
- by assigning priority to green growth and establishing targets out to 2020 that involve granting over €10bn of financing for energy transition, more than €35bn in socially responsible deposits & savings and making two annual green bond issues.
Ambitious growth objectives in all business lines
Despite persistently low interest rates, the sizeable sums to be invested in Groupe BPCE’s transformation are mirrored in strong growth ambitions for all the Group’s business lines:
- Banques Populaires: focus growth on selected client categories (by 2020: +200,000 new principal active customers, +40,000 active professional clients, +5,500 corporate and institutional clients),
- Caisses d’Epargne: tailor commercial organization and approaches to customer profiles (by 2020: +430,000 new principal active customers, of which +120,000 customers with high net-worth potential, +30,000 active professional clients, +4,000 corporate and institutional clients),
- Crédit Foncier: further integrate its activities into the Group,
- Banque Palatine: provide an offering of high-end services focusing on dual banking relationships,
- Fidor: create a benchmark European banking community, targeting growth primarily in Germany, the UK and France in the banking business, and across Europe for marketplace solutions and as a provider of B2B solutions,
- Specialized financial services: become a payments pure player, digitalize all business lines, and increase synergies between Natixis and the two networks, all with the objective of growing revenues by 6% p.a.,
- Insurance: become one of the top five French life and personal protection insurers by 2020, with the target of increasing revenues by 7% p.a.,
- Asset management: reinforce our position in Europe, develop our distribution network in Asia-Pacific, expand the range of alternative products, and increase distribution by the Banques Populaires and Caisses d’Epargne networks, all with the target of lifting revenues by 6% p.a.,
- Corporate & investment banking: become a reference on four key sectors, continue international development, strengthen the originate-to-distribute model and improve positioning with insurers and investment funds, all with the target of lifting revenues by 3% p.a.
This growth will be achieved while strictly respecting the Group’s financial fundamentals, i.e. managing the CET1 ratio to ensure it remains above 15.5% and keeping the cost of risk on outstandings between 20 and 30bps. By year-end 2020, Groupe BPCE is targeting net revenues in excess of €25bn.
To reach these targets, the Group can rely on further revenue synergies between Natixis and the Banque Populaire and Caisse d’Epargne networks (over €750m) and a cost-cutting program set to unlock €1bn of savings on a full-year basis by 2020.