Christophe Langlois, Visible-Banking.com Athenes, Novembre 2008 Internet & Mobile Novembre 2008

Online Financial Services Monitoring, Trendwatching, Measuring Social Media to Drive Customer Advocacy Value Added Services to Drive Retention Online Security: a Layered Approach Online Award 2008: Winner & Nominees The 4 th Generation Internet Bank 7 Killer Apps for Web 2.0 Behind The Firewall

Monitoring, Trendwatching, Measuring

Social Media to Drive Customer Advocacy

Value Added Services to Drive Retention

Online Security: a Layered Approach

Online Award 2008: Winner & Nominees

The 4 th Generation Internet Bank

7 Killer Apps for Web 2.0 Behind The Firewall

Listen, Watch Trends, and Measure www.Visible-Banking.com

Wells Fargo 2.0: Create Emotions www.Visible-Banking.com

SNS Reaal 2.0: Customize & Reach www.Visible-Banking.com

Useful Services, the Best Retention Tools www.Visible-Banking.com

NyKredit: Winner, Online Award 2008 1 st www.Visible-Banking.com

NyKredit’s WebDesk 2.0 • Dramatic increase of the conversion rate • Leads up to 500% • Sales up to 400% Success Measures • WebDesk Phase 1 -> Q1 2007 • WebDesk Phase 2 -> Q2 2008 WebDesk 2.0 www.Visible-Banking.com

Swedbank’s 4 th Gen. Internet Bank • 98% of clients migrated voluntarily in only 2 months • Growth speed of online sales • Positive feedback from clients and employees Success Measures • Customer Base Customer offers and personalization Customer “comfortability” Security 4 Key Areas www.Visible-Banking.com

• Customer Base

Customer offers and personalization

Customer “comfortability”

Security

Bank Hapoalim’s PFM Budget Tool • Drive Online Banking Adoption Attract Business from Duo Customers 2 Key Benefits “ Why not make customers pay for Online Banking?” www.Visible-Banking.com

• Drive Online Banking Adoption

Attract Business from Duo Customers

Can You Spot the Difference? Educate your customers: they need to act responsibly! www.Visible-Banking.com

IB Security Framework: a Layered Approach www.Visible-Banking.com

7 Killer Apps for Web 2.0 “BTF” Internal Monitoring and Intervention Systems Using Web 2.0 internally to “blow up” the company Merging of Internal apps & external collaborative environments Step-By-Step replacement of current “dinosaur” infrastructures Standardization of all user experiences (internal & external) connecting everybody to everybody (when allowed) Replacing many traditional “workflow and BPM tools” with Lite rule-based/knowledge-based apps In merger and splitting-up programs and projects www.Visible-Banking.com

Internal Monitoring and Intervention Systems

Using Web 2.0 internally to “blow up” the company

Merging of Internal apps & external collaborative environments

Step-By-Step replacement of current “dinosaur” infrastructures

Standardization of all user experiences (internal & external) connecting everybody to everybody (when allowed)

Replacing many traditional “workflow and BPM tools” with Lite rule-based/knowledge-based apps

In merger and splitting-up programs and projects

Mobile Financial Services Mobile Financial Services Landscape mBanking: Opportunities & Challenges Education to Drive Adoption Blurred Frontier between Banks & Telcos Near-Field Communications Micro Finance Innovations from Google & Mastercard

Mobile Financial Services Landscape

mBanking: Opportunities & Challenges

Education to Drive Adoption

Blurred Frontier between Banks & Telcos

Near-Field Communications

Micro Finance

Innovations from Google & Mastercard

Leveraging the mobile penetration rate There are over 3 billion mobile phones in the world, but only 1,5 billion credit cards! Gives banks access to a growing subset of customers 40% of bank customers are interested in mobile services 25% of bank customers would consider switching banks for mobile banking services Source: “Mobile Banking: Weighing the Lessons Learned,” Bank Systems & Technology (July 29, 2008) mBanking is a new segment Only 50- 60% of mBanking users are also online banking users Source: Absa www.Visible-Banking.com

There are over 3 billion mobile phones in the world, but only 1,5 billion credit cards!

Gives banks access to a growing subset of customers

40% of bank customers are interested in mobile services

25% of bank customers would consider switching banks for mobile banking services Source: “Mobile Banking: Weighing the Lessons Learned,” Bank Systems & Technology (July 29, 2008)

mBanking is a new segment

Only 50- 60% of mBanking users are also online banking users Source: Absa

Mobile Financial Services mBanking - Ideal for balance enquiries, funds transfers, expense management, bill and credit card payments, stopping payments, mobile statements and loans. Mobile Payments - Key challenges: Money laundering issues (especially cross-border) and the complex value chain (the total revenue stream is getting smaller, as charges reduce. Currently the banks’ margin is 0.3%) www.Visible-Banking.com

Mobey Forum Challenges faced by the banking industry Credit-crunch (mobile cuts costs) SEPA Increased regulation New entrants (eg PayPal) Business cases for cash replacement & mobile payments 3 business models for a service provider Collaborative, Joint-Venture and Independent Model www.Visible-Banking.com

Challenges faced by the banking industry

Credit-crunch (mobile cuts costs)

SEPA

Increased regulation

New entrants (eg PayPal)

Business cases for cash replacement & mobile payments

3 business models for a service provider

Collaborative, Joint-Venture and Independent Model

Mobile Banking Worldwide Expansion www.Visible-Banking.com

Three Main Mobile Banking Technologies www.Visible-Banking.com

mBanking: Opportunities & Challenges The key: mobile customer experience functionality, quality and utility Consumers want mobile services that are intuitive, easy to use, uncluttered, secure, integrated, trusted and customizable. Potential barriers to adoption of mBanking Ease of use, Security, Convenience and cost And the supply chain is complex with issues around collaboration and revenue sharing www.Visible-Banking.com

The key: mobile customer experience

functionality, quality and utility

Consumers want mobile services that are

intuitive, easy to use, uncluttered, secure, integrated, trusted and customizable.

Potential barriers to adoption of mBanking

Ease of use, Security, Convenience and cost

And the supply chain is complex with issues around collaboration and revenue sharing

Lloyds TSB’s SMS Text Alert Service • Greater control • Ease-of-use • Increased awareness • More confident Key Benefits • Previous day’s closing balance Last six transactions Sent weekly or daily Secure 4 Key Features www.Visible-Banking.com

• Previous day’s closing balance

Last six transactions

Sent weekly or daily

Secure

Universal Service with Rendering Engine www.Visible-Banking.com

Education to Drive Adoption The benefits of Mobile Banking are not as obvious to your customers as you think www.Visible-Banking.com

The Frontier is blurred btw Telcos&Banks Banks / MVNOs Telcos / Banking License Joint-Ventures www.Visible-Banking.com

Solutions for Retail & Business Customers www.Visible-Banking.com

Near-Field Communications (NFC) Key opportunities Payment, transit, marketing loyalty, authentication Key issues Availability of handsets and security NFC is a key enabling technology Source: Mobey Forum NFC payments using a mobile are quick & convenient and could replace cards, but it is still difficult to build a business case. Develop NFC on cards first. Source: Nordea www.Visible-Banking.com

Key opportunities

Payment, transit, marketing loyalty, authentication

Key issues

Availability of handsets and security

NFC is a key enabling technology Source: Mobey Forum

NFC payments using a mobile are quick & convenient and could replace cards, but it is still difficult to build a business case. Develop NFC on cards first. Source: Nordea

Successful Apps for NFC www.Visible-Banking.com

NFC - Transit Hong Kong Transit’s Octopus card uses NFC technology and was deployed very quickly. In Japan, there are 74million NFC chips in mobile phone. www.Visible-Banking.com

Mobile contactless payments Drivers 1. cash replacement 2. fast & convenient Challenges Business Models Schedule for contactless Standards for mobile contactless www.Visible-Banking.com

Drivers

1. cash replacement

2. fast & convenient

Challenges

Business Models

Schedule for contactless

Standards for mobile contactless

MicroFinance: Mob. Banking for the Unbanked Target 3 billion people leaving under US$ 2 Dispersed / far from infrastructure Limited education, illiteracy No formal identification and financial document Require a range of financial services Cultural bias or negative perception of banking Key challenges, Clients adoption, Interoperability, Liquidity/conversion to/from cash, Regulatory issues www.Visible-Banking.com

Target

3 billion people leaving under US$ 2

Dispersed / far from infrastructure

Limited education, illiteracy

No formal identification and financial document

Require a range of financial services

Cultural bias or negative perception of banking

Key challenges,

Clients adoption, Interoperability, Liquidity/conversion to/from cash, Regulatory issues

MicroFinance: Examples in BRIC & Africa Safaricom (2006): Mobile wallet for remittances, purchases, bill pay, store value 2,500+ agent locations, Available to anyone, No joining or monthly fees, No minimum balance, Pay-as-you-go pricing 2.5 mil registered clients in 2 yrs, Handles USD 1.5 mil daily Banco Bradesco: Pension payments, utilities, loans, savings, purchases all enabled 17,360 POS-equipped merchants acting as agents of largest bank Banks reach all 5,561 municipalities 12 mil accounts opened ’02-’06, 1.5 bil transactions via agents in 2006 Replaced branches as #1 service pt www.Visible-Banking.com

Safaricom (2006): Mobile wallet for remittances, purchases, bill pay, store value

2,500+ agent locations, Available to anyone, No joining or monthly fees, No minimum balance, Pay-as-you-go pricing

2.5 mil registered clients in 2 yrs, Handles USD 1.5 mil daily

Banco Bradesco: Pension payments, utilities, loans, savings, purchases all enabled

17,360 POS-equipped merchants acting as agents of largest bank

Banks reach all 5,561 municipalities

12 mil accounts opened ’02-’06, 1.5 bil transactions via agents in 2006

Replaced branches as #1 service pt

Google’s Open Handset Alliance Mobile is a huge opportunity, but data are price-elastic, and the high-cost of data discourages use Source: http://code.google.com/android/index.html (Nov 2008) www.Visible-Banking.com

Mobile is a huge opportunity, but data are price-elastic, and the high-cost of data discourages use

MasterCard’s Unique Stadium Offering www.Visible-Banking.com

Christophe Langlois, Visible-Banking.com Athenes, Novembre 2008 Internet & Mobile Novembre 2008