Sales channels

We offer our commercial proposition and maintain customer relationships via a varied network of sales and relational channels.

From the organisational standpoint, we have (a) set up an Area dedicated to development of conventional and innovative channels and (b) redefined physical territorial coverage to achieve more effective business co-ordination at local level.

Our aim is to be close to customers with appropriate facilities and human resources.

As regards the latter, in FY2006 we improved the back-office/front-office ratio to 32% (vs. 42% in FY2005).

The branch network numbers 1,903 branches in Italy (36 abroad) and 139 private-banker offices. In FY2006 we strengthened and rationalised the network with 50 new openings, compared with the target indicated in the Business Plan of some 200 new locations by the end of 2009.

We also activated 36 new specialist centres (27 for SMEs and to local public administrations and 9 to private customers) and signed on a further 143 private bankers.

ATMs (automatic teller machines) totalled 2,233 and they too increased in number.

REMOTE CHANNELS

A growing number of customers choose channels other than the bank branch - Internet, home or mobile telephones, and call centres - to access our banking and information services.

Virtual channels grew by 9% on average, with 725,000 contracts in place at year-end. The Internet platform is the one most used, both by retail and corporate customers, 39% and 35% respectively of holders of Internet banking contracts used the channel during the year.

We have centralised our commercial banks' call centre activity in just one unit. The number of incoming telephone calls increased (+13%) as did instruction and information operations (+11%), whilst marketing activity was more focused, with the aim of improving its quality and effectiveness. Call-centre operators (115 at 2006 year-end) received over 8,000 hours of training, with the objective of further developing their banking skills and of making the unit into a more incisive commercial sales channel.

The Group insurance companies' customer service unit handled 76,000 telephone calls and close to 3,000 items of written correspondence.

ACCESSIBILITY

We are committed to making our facilities and services more accessible for disabled people. To do this, we are eliminating architectural barriers and upgrading ATMs, with new functionalities made possible by technological progress and meeting accessibility requirements:

• Operating shelf at the right height for wheelchair users (a condition already met by 20% of ATMs)
• Braille-equipped keyboards and earphone sockets (standard features of new installations, already applied to 850 ATMs)
• Adaptation of software to support audio functionalities for the blind and sight-impaired (completion scheduled for the end of 2007).

Once again for the blind and sight-impaired, we have

• Followed WAI (Web Accessibility Initiative) guidelines in revamping our website, so as to overcome the barriers to Internet use often encountered by people with motorial and sight problems, the elderly, and those who do not have advanced technological devices.

SECURITY

Anti-fraud systems
We prevent computer fraud and identity thefts (phishing) by investing substantially to assure maximum security and privacy in use of banking services via Internet. As regards this, our website complies with the Ebtrust quality standard devised by the DNV certification body and, once again in 2006, there were no cases of phishing or other computer attacks.
The technological infrastructure's critical parts are located in a secure zone and accesses to services are limited and protected by systems able to avoid interception and involuntary disclosure of information, i.e.

• A certificate resident in the customer's computer (and therefore recognised by the bank)
• Personal password, also of the "disposable" (single-use) type, to access services from computers potentially not secure.

To avoid fraud - not only computer fraud - we have launched a project with the aim of:

• Improving general corporate culture concerning the problem
• Discouraging illicit activities, increasing risks for those guilty of abuse
• Reinforcing internal controls
• Developing the necessary IT support to assure timely flagging of anomalous cases.

Operating continuity
The increased complexity of business activities, the growing interdependence between financial intermediaries, the major use made of technology in processes, and new risk scenarios (which now also have to consider the eventuality of terrorist attacks) have made it necessary to adapt the overall system for their management - also to reflect the rules established by the Basel Committee and the regulation issued by the Bank of Italy.

We have therefore taken action, both to (a) prevent and mitigate damage potentially caused by any type of event and (b) be ready to manage crises relating to operating continuity (e.g. prolonged non-usability of premises, outages of infrastructures, and absence of indispensable staff). As regards this, our banks have devised specific plans assuring immediate resumption and maintenance of a minimum viable level of operation of key business processes.

Disaster recovery plans are in place for prompt restarting of computer systems in the eventuality of serious damage to the central electronic processing centre.
Thus far no malfunctioning of security systems has occurred of an entity such as to jeopardise continuity of customer services.

Training activities, audits, and plan simulations have been scheduled.

Bank robbery risk
In 2006 we experienced 115 robberies (vs. 123 in 2005) with an incidence of 6.2 every 100 branches (vs. 6.6 in 2005), less than the Italian national average (11.8%).

In branches at greater risk, in additional to normal security measures (double doors with release mechanisms, video surveillance systems, and so on), there are also biometrical access control systems, i.e. based on combined capture of images and fingerprints.

At present, there are 53 of these systems in the Group's network. Given their effectiveness (at the branches where they are installed no further robberies have occurred), we plan to apply such systems to a growing extent, always assuring compliance with regulations concerning the protection of privacy.