 Good afternoon or good morning everybody and thanks Pat for that introduction. I just want to say before I start thank you to the IIEA for hosting this conference. It's a great opportunity I think for all of us some of us to speak but all of us to listen and particularly in the Q&As I think it's very instructive to hear similar themes and issues coming up that we all need to address here in Ireland when we when we shape this for success. Just in terms of my my own role in AIB as head of personal banking part of my remit is the consumer finance side of the business. I also spent 15 years myself in the capital market side of the business and have been directly involved in financing everything from toll roads through PPP to to the the mobile licenses so from an infrastructure perspective happy happy to take any questions on the end but that's not the side I'm going to focus on today obviously just in terms of what I am going to focus on I'm going to talk and first of all to appease you'll all be very familiar with but I think it's critical to our understanding which is what is it the consumer needs from us and if we if we truly look to match that need and we do it in a viable way and we keep the costs down then this will be successful. There's no doubt speaking from personal experience having financed everything from golf courses to to bridges and if you if you do it in a in a viable way backed by cash flow it will work that's the first thing. The second thing I'm having talked about the consumer I'm going to briefly talk about some of the industry challenges but but but with a financiers perspective and then I'm going to share with you our own experience to date and I'll give you some stats on that and a very open view on how that's worked which will bring me full circle back to when you marry the customer experience the banking experience and the industry challenges and what the customer journey should look like what does that then instruct us to do in the financing side and I just talked to some of the financing options as a happy accident actually I'm not going to talk to the the options that Lisa spoke to not because you know they're not viable they absolutely are but more so because we're looking to it from the size of the Irish market I suppose and the perspective of what we feel works for the Irish market but clearly there are a number of options and there are a number of options discussed in Joe and Josephine's very well put together documents that the IEA produced there just this week and so just just to to take you to the I hope I'm holding this the right way now yes great and just to talk to the consumer need very briefly because you're all going to be very familiar with this I'm just going to look at it from the from the really the banking perspective the first thing is when it when a personal customer comes and talks about what they're looking for they talk about savings but all of the research our own and indeed the research and from the IEA and the HES and others tells you that afterwards customers don't tend to know what their savings were but they do notice the comfort and in terms of customer advocacy which is one of the key things particularly in the Irish market refined and every piece of research we do one of the most powerful and movers on the demand dial in Ireland is getting people to say I did this it was easy and it works so that that that customer advocacy piece particularly in the promotion that was talked about early earlier on is really critical ease of execution I'll talk to a lot how do we make this from an industry's perspective easy to understand and easy to deliver very briefly from a business perspective it's much more hard-nosed that return on investment has to be actually evident and those proofs of savings have to be evident to them but that's clearly doable and I think the examples given to us earlier of Eli Eli Lilly and others and are good examples of that we've had plenty of experience of companies coming to us and they know what we're doing they're doing and we're while we're not energy experts we're happy to have an engineer certify for us at an industry level what those cash flow perspectives are and then they're bankable and the corporate social responsibility is one we tend to forget but for big brands it does help and it helps the story and the advocacy piece and the feel good factor and lastly we're all playing into this one which is the national priorities and we all know about the EU targets they've been talked about and thankfully it isn't a penalty based structure but it could move that way and actually I think the penalties will be self-imposed by us if we don't get this right we don't need the EU to do that the the importance of the savings and the efficiency for us as an exporting nation and our our competitiveness is absolutely vital particularly when you see the type of savings that that can be made in terms of just understanding the Irish market I'm just going to talk from a pull and a push perspective and I think part of the dynamics particularly when you see our experience so far has been very often in a new industry where you're relying on early adopters it's very much around timing and getting that timing right and in terms of the demand curve we've had the early adopters we've had that if you like enhanced by grants which are highly likely to leave and it's really a question of how do we move that demand curve dial forward that's down to the cost effectiveness and the ease of access for consumers and for business users alike the golden rule was mentioned earlier and I have a question mark after it because we know it's not going to be a guarantee but I think if that can be used particularly in the marketing and what we find again and again in our research we're very very different from the Germans actually and this research goes back over 10 years consistently Irish consumers when they're looking for a loan the first thing they look for and this is backed by our own research will the banks say yes to me it's the embarrassment factor it's the approach ability do I understand the formula how do I put this to the bank the second thing they look for isn't price it's affordability so it's a bit like when you go in to buy a car how much will it cost me per month and I think that's critical in the solution if you say to somebody 210 euro per month which you're only going to say 500 euro per year you have to be able to say it's going to cost you 60 euro per month and it's the affordability it's what can I pay out of my pay packet every week or every month that that that's critical and the golden rule plays a part whether it's guaranteed or not been able to show that in a very straightforward way particularly in the promotion obviously the cost effectiveness and then I've mentioned the access and incentives which I will come back to the push factors unfortunately are becoming much more prevalent I won't speak to them other than to mention rising fuel costs colder weather and the levies can be a car or a stick in the sense that they can be I think platformed in to be if you like an encouragement to invest particularly one thing as a nation we can do more of is to give people advanced warning of where poor taxes and prices are going to go if you don't take energy efficient and initiatives yourself and if there's one thing we're very good at as a nation and I think the conversion to the euro and we were the fastest country to convert Irish people understand finance and they understand the dynamic of what something's going to cost them they're very good at that is this enough I think I put it there at the bottom and in green which isn't an accident and the customer experience do I understand it do I want it is it easy to do and that's the advocacy piece and is it worthwhile I've a colleague of mine here today from our facilities management area and the right hand side of this box is really a credit to them and I'll be in trouble if I don't mention our own corporate social responsibility in terms of what we've done in energy efficiency ourselves we reduced our carbon footprint by 15% between 2007 and 2010 and we're not you know we're not an energy user in the way that a Pfizer would be but given the number of buildings we have that's quite a significant saving and we've done someone wins for example e-statements but but they're minor in terms of what they're going to do for the environment I will acknowledge this is just a backdrop coming into the customer journey very briefly in terms of some of the research findings to date that 85% of customers and consumers have used savings and only 15% of sought finance which talks to my earlier slide and that average spend is quite low and significantly below what a deeper retrofit would require and and so our financing mechanisms when we come to talk about that have to encourage those who are prepared to do deeper retrofit if they find that they don't have sufficient savings to actually use the financing and that is available interesting while 47% almost half and having having said that they were going to invest for savings they weren't clear what the savings were afterwards and I think the next one is probably the most important one in terms of our conversation today lack of own funds is cited as the main reason for not proceeding these are direct quotes I only take out loans when absolutely necessary was an answer from 43% of the participants in that TGI survey which was only last year and if there's something I want I save up for it now I do think that's been impacted by the economic climate that we're in and probably also experience it's fair to say we also know from our own research and a morax research that the primary focus of customers now is paying down debt particularly home mortgage and the secondary focus is on saving money so we just have that challenging backdrop but that won't be like that forever and I think the one thing I would say to that myself is that lending to somebody who wants to invest in energy efficiency if you think of the mindset of someone who does that whether they're a consumer or a business is a very good risk it's a very good mind that has had the head on them to think about that and that does make a huge difference and you know when you think of the other options in terms of consumer finance that's a pretty good one this is just I won't go through all of this but I think it's really important for all of us who are playing in the industry to make this journey easier it's quite fractured at the moment the chevrons and excuse me and the chevrons are quite separate and you know I deliberately put an arrow at the end of those chevrons that needs to be a journey that flows quite seamlessly and we all play a role in that from creating the customer awareness these slides will be available so I won't walk through but but they're obvious is the customer aware which brings us back into the promotion and it doesn't have to be national TV there can be shop fronts etc and but that helps and unlocking the demand so explaining those invest to save options that are available involving everybody from the marketeers to the suppliers to the financiers having accredited that's come up several times today and an accredited and I think was mr. Kelly who mentioned not just accredited suppliers but the accredited assessment advice I think is is is a very important point and finding a dynamic to do that reliable installation and lastly finance which I'm going to talk to whether that's via the energy bill whether it's via white labeling and these are all options that are under under discussion and in a working group at the moment whether it's direct loans and we have to allow for people who want to use their savings there's one thing we have to remember and particularly in in propositions and the marketing of these at the end of the day what we're doing here is providing a service we're facilitators finance lubricates the proposition it isn't the proposition itself when someone buys a car they're thinking about the engine the speed the oil consumption finances a hygiene factor but it's a hygiene factor that has to work very effectively in the middle of all that we're a bit like the dentist you just want to make the experience as pleasant as possible but nobody really wants to experience it in the first place the retrofit industry challenges I think have been covered a lot so I'll walk through these very quickly in terms of the the questions that bankers are asking as we sit in a working group at the moment is what is the size of the market I mean just a little a little insight this 44 million meters in the UK that makes that's attractive to pension funds there's four million meters in Ireland just to just to put a perspective on it but I think that means that the solutions lie in the island of Ireland you know we've made lots of industries viable here despite the size of our nation and we're we're very conscious we're very cost-conscious nation so there are there are and opportunities there for us to make this work and I mentioned cost effectiveness and I think in that the third last point they're leveraging expertise and competencies without adding to the cost so we can't if we the more if we layer cost into this proposition we're taking away from the savings and and that's not the place to go so we need to keep those costs everything from the legal advice cost to the financing costs to a level that's commensurate with making it viable but not too expensive and I think and somebody talked about the prevalence of of promotion part of that is education and making consumers the the agents of change and championing advocates at every opportunity that we can and you know Brian motherway speaking this morning on morning Ireland and speaking to people in a language they understand I think we've all a responsibility in that regard in terms of using every opportunity to to make this visible I I'd encourage you to look at the agri-lobby in Ireland and you know I I think retrofit needs a lobby frankly and I think that everybody in this room could play a part in that but the concept of actually deciding that you're going to make this visible and and and structuring a very focused lobby around getting getting this on every agenda and mostly the consumer and the business and agenda is is is worth thinking about and and it will help that appetite to invest so here's the page of all been waiting for the the financing options I'm only covering some of them and they are all under consideration with a working group and I'll just walk through at a very high level and how how they work from what's most similar to a conventional and to what I would call a heavy a heavy joint venture and then a light joint venture perspective and there there's definitely in the second one and absolute room for PPP type structure and I'm the key thing about a PPP structure having been involved in them in the past is making sure that cash flow is is is very tangible so starting with the first one which banks have a tendency to want to see and an appetite for a conventional but visible finance proposition so that's that's saying well why don't we use the banking facilities that are there I think that I'd be the first to admit there are a couple of things at a minimum that would have to be done in that regard first of all the industry would have to agree on a standard application form and make the front end very simple and we'd have to make streamlined decisioning and speaking to that first point that consumers tell us in research which is will you give me the money if I come in don't embarrass me a formula based and this is an industry I'll add the golden rule where the concept of putting a formula forward works quite well frankly is it enough it could be but I've I've spoken about the two thousand and seven experience we've had ourselves and I think we do have to go further than that and as an industry at this point and I'll come back to that the second option speaks very closely to what we've heard already in the sense of a one-stop shop joint venture the likes of an energy bank a pre-funded joint venture fully functioning from the marketing at the front end all the way back to the finance and you could have a number of streams of pension funds here everything from bank funding pension funding and government and levy and payments in in terms of financing an element of it and all the way down to commission based payments depending on how the the industry structure structures it and an involvement of utilities you you can pay through the utility bill or you can pay directly we you know that the pay as you save is a model that I had intended talking to but I think it's been very well described by the by the previous speaker and happy to take any questions on that afterwards so I won't talk to that now and and then all of the payments are everything's fronted by the energy bank and with financial institutions potentially playing a role from financiers to just credit assessors in the background the challenges with this one are you're replicating the processes that are already available in the financing system around credit assessment and managing debt and provisioning you look you have to have a banking license and you have the governance of that and you know what's been worked through at the moment is is the demand sufficient to warrant the cost of that that's still been worked through and it would be unfair to call it it's definitely a structure that can work but in a market of this size we have to be very careful this is one area where you have to be very careful not to layer in more cost than the savings that you're you're providing and and that's up to those that structure to make sure of that the third option then the cross industry alliance when I use this word I am adamant that this can't be some kind of loose alliance this has to be a formal alliance underpinned by contracts if if it's if it's going to work in in my view and that's my my personal view and in terms of the discussion so far and before I describe this to you I'm going to use an analogy from the motor industry you go into a garage and you're thinking of buying a new car before you leave most garage for courts will say to you would you like to finance that in some cases they've got a pre agreed supplier in some cases they'll give you a choice of financiers so picture forward you've got a very strong lobby for the industry you've got the visibility of maybe an agreed and shared marketing front with both government levies commissions utilities banks and being involved in that and you have a front end whether that's electricity shops or whatever front end the industry would agree where somebody can come in on that customer journey the share runs I showed and say I'd like to understand what I can do in my retrofit and in my home or in my business and we we can take that all the way at that front end and in that formal alliance from awareness to execution in a fully streamlined process which takes all the benefits of the previous streamlined application form used the same throughout all of the banks preferably a streamlined application form that covers off the needs of everybody from the energy company to the bank all in the one form fully streamlined with an accessible sales engagement at the front end and behind that are the banks whichever one of them are chosen by the consumer it's the consumers choice then underwrites that keeping the costs down agreeing to do it on a formula and the only basis in which they would refuse to do this and this is a prerogative that one has to retain is if it is known for some reason that that's that's going to be a bad debt and that that and that answer goes straight back to the customer not not not via a supplier provider so there is a an example of very like the motor industry where an awful lot of the infrastructure the IT and the costs are already embedded and they can be leveraged that's scalable and not just to the retrofit industry but to others and and that's another one that's on the table at the moment but I suppose from from my perspective and I can say this on behalf of AIB I mean this is potentially a 14 billion to a 20 billion industry you know even if if a third of that is financed there's definitely a business opportunity here for everybody in the room if we if we use our mindset and and put our minds to it and and I'm happy to say that I've spoken to a lot of this already in terms of the the ownership issue on the on the joint venture and the risk share becomes an issue that needs to be fleshed out if we have participants and particularly sharing in a bill it was referred to by an earlier speaker and you know if you have somebody who hasn't paid and they're electing to pay one or the other there is a slight divergence of requirements there if a bank has an unpaid bill it quickly starts to eat into capital in terms of how Basil charges whereas an energy company doesn't doesn't charge for that and isn't providing in the same way so it it's work throughable but there's a there's a lot of work to be worked through there and if a customer is in difficulty and part of that bill is an energy bill and part of it is a bank bill you're talking about two customer and difficulty regulators you're talking about the energy regulator and the bank regulator so I think there probably would be need for some legislative change there but listening to the minister this morning I think there's an appetite to go that road and to facilitate the industry in that way which is which is good to hear and in fact it was mentioned earlier are we lending to the consumer or are we lending to the meter and there are legal issues been worked through there I think was well covered earlier and I've just mentioned some of them but in terms of and the consumer that's a well-tried formula in terms of recourse to the consumer there are some challenges in the in the meter and provision that are still being worked through and particularly in terms of vacant property and therefore unpaid but I think there are structures that can be looked at there and I think they will be different in Ireland to the UK market just because of the size of the market in terms of how that might pan out but that's under active discussion at the moment and finally there are lots of opportunities in how the repayment will be collected be it the utility bill directly by the by the lender and we have to be careful to have interest rate fluctuations the last thing we want to somebody getting an energy bill that's going up because interest rates are going up now there are ways of of playing in fixed rate funding there but it's just another factor to be considered the bad debt collection there may be a level of it development which in the current environment we'll all want to keep to a minimum because that has to be passed on to the consumer and there are regulatory considerations so to come full circle back and to the market size in business case there's no doubt there's a market there we've spoken earlier about the minimum and 14 billion of a market but the market becomes a market of one when somebody comes into and says they want to to retrofit their home or retrofit their business and when it becomes a market of one every penny counts and that brings me full circle to making sure whatever structure we put in here we have to remember every penny counts and structured in such a way that it is cost effective I'm going to quote Brendan Halligan now in terms of a recent thing he said and which struck me and in terms of the momentum that we need here we do have to move with speed but he cautioned on haste and I think the point there is that we have a lot to do before 2020 and I don't think we have too long of a comfort zone and getting this going because it will take time to build momentum it'll take time to get the legislative and the structures right and every year the passes is another 100,000 homes and another 100,000 opportunities for the building industry and for the banking industry so we do need to move at speed here and I think as an industry the fact there are so many people here I think it's a good sign in terms of the fact that we're about that and I do think the interests are aligned in summary and this is a quality lending opportunity I've said that already once we get the structure right from our perspective it supports the community ethos it supports business open for business and employment and it supports economic investment and recovery if it's structured for viability and the critical thing for us is to make it easy and seamless I'll finish by leaving you two contact names which will be on the my own if there's anything you'd like to ask me or if you have any ideas that we haven't covered off that you'd like to play into the discussion we'd be very happy to hear from you and the second gentleman there who is in the audience today John Hearn is the head of consumer finance for AIB and he has his product development manager Esther Ashefield with him today as well so they're available to talk to you during coffee thank you very much