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Background
Hermès Bank1 is a European multinational investment bank and financial services
company headquartered in London. Apart from investment banking, Hermes is organised
into four core businesses: personal banking, corporate banking, wealth management, and
investment management. Hermes traces its origins back to 1690, starting off as goldsmith
bankers in Lombard Street, London. Hermes PLC Group today operates via two clearly
defined divisions – Hermes UK and Hermes International.
Hermes International
Hermes International business operates in three divisions: Hermes US, Hermes Business
Solutions and Hermes Germany. In 2017, Hermes International contributed 68% to Group
income with a RoTE (Return on Tangible equity) of 6.6%, excluding the impact of the US
deferred tax assets remeasurement.
Hermes US offers co-branded and branded credit cards in the US, along with consumer
loans and online retail deposits. Hermes was the ninth-largest credit card issuer in the
market as of 2017. Across all credit card products, Hermes US added over two million
new accounts in 2017. In addition, Hermes-branded consumer retail deposits exceed
$12.5bn as of 2017.
Digital Lending Market
Digital lending (excluding mortgages) is a total addressable market of $1 trillion in the
U.S., and loan origination volumes could reach $90 billion (more than 10% of the U.S.
lending market) by 2020 from about $25 billion in 2015.
Non-bank lenders are creating and meeting significant new demand in areas not
traditionally served by banks, focusing on nonstandard credit profiles that expand their
market for borrowers. While their initial solutions targeted lending for a limited range of
loan types, new non-bank offerings have expanded to include student loans, mortgages,
commercial real-estate loans and small to medium-sized enterprise (SME) loans. At the
same time, the flood of non-bank lending companies has fragmented the lending market,
resulting in specialized, agile solutions that traditional lending platforms have found
difficult to match. Well known examples include Lending Club and Prosper for consumer
loans, OnDeck for SME loans, Promise Financial for weddings and CommonBond and
SoFi for student loans

1
This is a fictitious name chosen for the competition, any resemblance to an actual bank is purely coincidental.
US Market
The last 10 years have seen the emergence of a powerful new trend – the intersection of
technology and finance, now referred to as Fintech. Driven by the distresses of the 2008
financial crisis and propelled by the rise of smartphones, financial services are being
reinvented. The key consumer touchpoint is more the bank branch but the smartphone
app. The emergence of this new channel and new consumer behaviours has left banks
in the lurch.
P2P payments driven by apps like Venmo, Square Cash and Zelle has grown to about
63.5 Mn users and over $100 bn in volume. Even social networks like Facebook and
Snapchat provide p2p payments as part of their offerings. The P2P lending market too
crossed $54 Bn in 2018.
Meanwhile, Uber not only disrupted cabs but accidentally disrupted banks as well. In a
bid to keep operations lean, Uber does not pay its driver in cash. Turns out that nearly
30% of Uber drivers did not have a bank account, making Uber one of the largest
acquirers of small business accounts.
However, the real leader in fintech is China. Chinese consumers have leapfrogged from
cash to mobile payments lead by apps like WeChat and Alipay. The volume of mobile
payments crossed $12.77 Trillion in 2017. Meanwhile, the app-based Yue Bao has
become the world’s largest money market fund handling over $233 Bn in assets.

Problem statement
Hermès bank has offerings in products across personal, corporate and investment
banking in credit cards and wealth management, and wants to venture into the consumer
banking sector. With a strong presence in the credit card business in the US, the company
now wishes to leverage its existing analytics and consumer data to foray into consumer
digital loans in the US market.
As the product manager of the consumer digital loans, you are given the responsibility to
design the product. Your task is to:
• Devise a strategy to decide the target customer group for the product? What kind
of data will you use to make your decision? What synergies between credit card
business and consumer loans would you be looking at leveraging?
• Propose tangible product features which could be implemented in the current
market scenario
• Clearly define the metrics that you will use to evaluate the success of your product
and mention the differentiating features
• Keeping in mind that US Regulations around Open Banking are still at a nascent
stage, suggest futuristic use-cases and propose features to enable the bank to
leverage open banking to create a strong foothold in this space
Presentation Guidelines

• Present your findings & solution in a PowerPoint presentation (Max. Limit = 5

slides, appendix & embedded excel answers can included in the PowerPoint to
support your presentation)
• Your solution must be clear and concise
• You will be evaluated on your thinking process and the recommendations that you
come up with
• Provide the reference articles, documents in case you quote any numbers from the
industry

Submission Guidelines

• A team must consist of 2-3 members. Choose a team name

• The last date of submission is 25th September’18
• Please mention only the team name on the slide. Do not mention team member’s
name or the college name on the slide
• There is no limit on the number of teams that can participate from a single institute,
however, no student from such an institute can be part of more than one team
• The submissions need to be uploaded on Dare2Compete

Case Exhibits
Exhibit – 1
Exhibit – 2