Value-generating banking: the roadmap (1/2) New Now Take control Next Stabilise through New Accelerate the 1–2 months New efficiency future bank 3–6 months New normal 6+ months In addition to the measures banks have already Enhance risk monitoring Continue relief measures for customers taken, things to consider are: • Ring-fence higher-risk COVID-19-related loans–deploy • Closely monitor customers who have taken out credit Identify and monitor at-risk customers different systems, monitoring and reporting and develop a during the COVID-19 period and support them with separate credit model for loans impacted by COVID-19, appropriate treatment strategies • Identify and adapt treatment plans for customers who are financially at risk, e.g.: e.g. “zombie” businesses, or mortgage defaults Enhance cost consciousness • Employees who did not receive a pay cheque in the • Enhance credit watchlist, increase the frequency of credit • Create a cost-conscious culture and establish current month reviews to enable early intervention, by: governance, policies and measures to optimise spend; • Identifying trends in consumer transaction activity / reinvest savings to scale the business • Self-employed individuals who cannot access account balances to predict individual or SME government funding until June customers in financial difficulty Scale up new propositions • Businesses ineligible for COVID-19 relief • Uncovering potential hidden risks in SMEs using • Re-evaluate the customer segmentation model and adopt • Continue to monitor early warning signals and offer new personal accounts for business a persona-led approach to proposition design short-term loans, e.g. unsecured lending, transactional Suggest alternative financing options • Launch new propositions aimed at supporting customer and working capital loans growth, tailored to different segments: • Work with customers to restructure or refinance existing • Adapt credit policies to allow customers to lend against • A savings product to help consumers re-start wealth loans alternative underlying assets where cash flow is accumulation, e.g. low-risk funds integrating with constrained wealth managers such as Wealthify • Review credit policies to ensure credit decisions made to • Consider directing customers to alternative lenders with • Give SMEs access to new supplier finance /working support customers comply with regulations different eligibility criteria, e.g. recommend to digital capital products to help scale-up production banks such as OakNorth, Tide, Starling, etc. Continued on next slide 16