Are you doing today? My name is Dylan. We met in the airport a couple of weeks ago. My team, Evelyn and Francesca, will talk a few things today. I didn't ask you. How was the FinTech forum that you went to Spain? Good, actually. Yeah, good. Any interesting insights we have to meet them. Well, there you go, there you go, and we'll touch upon that today. So what was interesting is we've looked at your annual report, and great growth for last year. Dylan,
we met a few days back. I've had so many meetings. Yes, what did I tell you? You recap what my problems are? Yeah,
no problem. So there was some challenges that that we explored. One was regulation, and how the regulator is either suppressing interchange and reducing the amount that you can charge on merchants, so thus suppressing the margins that you can then there is you've launched your digital app, which is great. But then we're seeing multiple other banks launch other digital propositions. We're seeing fintechs also launch the competition is getting more difficult, right? And then you're also looking at different ways in order to make money. So those were those, those, I think the things that we, we, yes, you remember, thanks for the money. No problem. We, you know, we had a few drinks at the time. So laughing. Mr. Baxter, yeah. Okay, so, um, so look, I know you might be thinking in this position, right? Let's talk about solution. How do we make more money, right? Is there a last time you were in the client forum, we presented some risk solutions, and you might be thinking, okay, maybe we could explore increasing our E commerce volumes, right? However, today, what we might actually want to do step back a little bit and look at it from kind of regional trends perspective for a bank and and look at other opportunities that we may we could explore, and our team will dig a little bit deeper. But one thing I just wanted to bring up was other business opportunities that are growing on the region. I mean, did you realize that there's actually 2 million remittances going out of FinTech apps a month, and they're growing at 30% annually, and the margins are between five to 10% in that and actually, LCB hasn't got that remittance basin at the moment, what would you think about that?
That sounds like a big opportunity. Yeah, I want to
know more on this perfect Okay, so we're here to help. Francesca is our head of advisory services, so she really helps on how to expand and grow your business, but then also tighten costs. And then we've got Evelyn here, who can talk about some of the products that we've got, like the remittance products, which is what we call a money movement solution, and other solutions on the risk.
Yeah. Thank you. So Francesca, I lead a visa consulting and advisory so once again, I would like to thank you for giving us this opportunity to meet today. I've looked at your data, and obviously profitability is a big issue, like my colleague mentioned, and fraud as well. And how do we deal with profitability? So from a VCs standpoint, Visa consulting standpoint, what we'll start first of all doing is we'll do a portfolio health check, I need to look at your portfolio to see what lines of business that you're making money off, the segment that is giving you most of your revenue. So that way, it helps you to decide on what segment to focus more on, and also, and also looking at your churn rate. And what I mean by churn rate is you know your customers that are not using your card. So that way, when you want to do a targeted marketing campaign, you know the areas and the segment to focus on. That's the first thing we'll do. And also looking at your data, we see that your authorization rate is not very good compared to market industry competition. And so the portfolio health check picks up the authorization, and then we work with our client support team to help improve your authorization. And I can tell you, we've done that for some issuers in the market, and there was uplift of almost 50, 60% in improving authorization, because the better your authorization gets, the more revenue you make as a bank. So that's also another area we're going to look at. And then we know we've done a good job in terms of digital onboarding. So we're going to look at the spend pattern those people digitally, what segment they belong to, what areas to spend. So that way, if we have to do targeted campaign, be it merchant centric, wise, or if it has to be a set. Segment, airline, or whatever, it will help drive the payment volume you're looking which translates into profitability. I have
a question. So remittance is a great area, but it's highly cluttered, you know, very comparative, very thin margins. It might be growing at a great rate. I earn money when I give credit as a bank, right? So do you guys have any credit based permissions that you could offer? Yes,
so we can do a credit card optimization project. So today, currently, I know you're doing a credit card your classic credit, but you don't have the offline credit. But looking up your portfolio from your data, we see that your high spenders, they are carrying the classic card. So where we do the credit card optimization, we then start looking at the upgrade opportunities. Do we have to give a higher card? So that way it brings up your spark the spend on the card, and that way you can earn more revenue.
And so that's that's one good area. How about you? Know, you have now, buy now, pay later. For example, I only get into that space, but we can't for various technical reasons. So integrations, etc. Does visa have any partnerships or any products in that area? Yeah.
So Visa has an installment credit, like, buy now, pay later, which we can integrate into the digital app. And what that means is looking, if you look at the target, the people you're targeting for the installment, they have the flexibility to even decide, oh, do I want it to use for just certain merchants, or do I want to use it as open ended? So it's something visa have, and we can, I can bring our product experts, that specialists on visa installment to come and speak more about maybe,
maybe I can just add to that. So one of the things that we can help you with is, we helped a bank in Brazil purchase a buy now, pay later, solution in AP, right? So what we did was we can also and as part of Evelyn's area, is we can bring advisors that can potentially help you, you know, either buy, build or partner, if there are different areas to help you in your time to market.
Yeah. And since credit is a very is an area of focus for you would also bring global best practice the markets where we've done we've helped issuers to do buy now and pay later and then apply it so that it can show you the best practice and how well we can do it as well. That's part of advice. You brings in, and then I know fraud is also an area you guys are very worried about. In consulting, we have something called fraud advisory optimization, which we can do. What that means is we bring in the fraud experts. They look at your fraud rules. I mean, part of the declines and authorization we see has to do with fraud, because maybe you're very skeptical, and you set certain rules. So they tell you the global best practice, what rules they feel based on your card, your card holders, how they spend, where they spend, and whatever it is we do, we still need the buying of the bank. So even if I tell you this is the best practice, you still have to look at it with your team, your risk team, to agree, oh, this is the best thing in terms of the rules. And if you're fine, we can help deploy and we monitor it. So I won't just solution and tell you I have VA VRM my risk tool. I would also help you write the risk rules based on global best practice to help in terms of boosting your optimization. And the good thing is, we're not just train numbers. We have issuers that we've done this and it gave them an uplift of almost $2 million so it's something we've been doing now we know it's gonna work. So
if we do such a project, yeah, and you've done this with multiple banks across the world, what is the cost of the project to me, and what is the average value? I'm trying to understand, the multiple of value generated versus the investment in the COVID. Okay,
so for typically, VCA, you're a very big VCA. So these are consulting and analytics. Sorry. We know you a big issue and you have a deal with us. So within the deal, we can have funding to use and do this for you. And basically we're going to monitor it by not just using the funding. So if I start with my portfolio health check. They are called, I mean, we're gonna give you the documentations in terms of the cost and pricing before we start. But typically it takes about six weeks to do the portfolio health check to see the viability and all the solutioning we want to give you, not just saying, I'm gonna give you the solutions you've
done so many of these assignments globally, what's typically the multiplier of value versus investment
in in some clients, sometimes the office can be between 25 30% Yeah, of course,
Mr. Chairman, if I may. You know, we have something called mandated products that visa gives us, right? We get emails saying that, you know, we have to pay, no questions asked, and we can't even choose to not pay, and that is really inflating my cost base. So why does visa do this? And can we not have these mandated products? You know, post on to us. Maybe
I can take that one on the product. So I. As the leader in the ecosystem. Obviously, we are looking at different challenges that issuers and acquirers are facing, and we are building in some mitigating products to actually help secure the ecosystem. Some of them, like tokenization, that I'm sure you probably are referring to, is actually meant to make sure we can secure the ecosystem. Part of what you're complaining about is actually your cost. Your imagine being very low. Part of what is eating up your margin is actually the fraud cost that you're incurring. So if we can reduce the fraud costs on our side, and that's part of the tokenization as an example, then you actually see your operating margin becoming higher. So as much as it does sound like a cost to you, but actually they are meant to mitigate some fraud losses that you are incurring on your side, and again, at the end of the day, it actually gives you a higher margin on your side.
So it's you're absolutely right. You know, great ideas and increasing revenue, but I would really appreciate if I can get some cost cutting ideas as well to increase my profitability.
Yeah, in terms of the cost cutting, when we do the portfolio optimization for some of the issues, we've done it, we've realized, for your authorization, you know today, for your failed authorizations, you pay certain amount. If I'm able to reduce that drastically, by 50% I reduce your cost by 50% okay,
so on the mobile app, you know, we talked about remittances and, you know, even credit related ideas, anything else like, out of the blue, blue sky. Any trends that you're seeing? I keep hearing about ESG, but I don't want to talk about that. Any other areas coming up which you guys can think of, I mean, there's this big trend of gamification nowadays. Does visa offer anything in gamification of mobile app I have saw this really cool FinTech where you could play around and discuss this in last week. Yeah, Visa doesn't have
something. We
always have something, right? I think what we need to what we maybe need to do is prioritize the different areas and what we can actually do with the help of Francesca's team, the advisory team is what is a main priority for LCB? Where do you want to go? Is it a bandwidth issue? Do you need managed services? Is it time to market? Is it revenue? Do we need to help you with an acquisition? Is it really gamification, or is it, you know, managing costs, even
if it was gamification, we do have the reward program on our side. It's a product that we are currently piloting today. However, we are still collecting some data on how to configure, how to sell and all of that, but within few months, we could actually come and presenting. Maybe we you can, if you're really interested, buy into our pilot program, and then you can actually help take this product to market in the region.
So our suggestion today is really to leave this meeting with, let visa come in and spend a bit more time with your team. Let's discuss the opportunities, and let's build more of a structured approach to maybe a roadmap of product launches or enhancements, whether that's cost savings, whether that's growing revenues.
So we have identified, obviously, two pillars on your side. One is how to maximize your your margin, and that's where your consulting comes in. But also on the new flows. Then we are we can look together to understand, okay, what are the new features of product that we can actually in that can enrich your current offering to your customers, to allow you to actually draw in new revenue lines that you don't currently have today. He did mention the whole money movement. Yes, we do do on card. There is on mobile, there's an account. So there is untapped areas today that you are not touching, that you can actually add on to your current revenue lines. I mean, obviously there are other products that today you probably are not considering you are so focused today on the issuing card of the business, maybe also looking at the acquiring side of the business and understanding what are the other acceptance products that you can actually pull in to also grow your revenue lines. And I mean, for you, it's trying to not concentrate on just one side of the business, but also adding, you know, a 20% on the acquiring side of your business. So it's really something that we would want to get your team to come to us and we work together to understand where else we should be focusing in terms of growing business and revenue alliance for you. So
