The (re)Birth of Mobile Banking A look at consumer attitudes and opinions around mobile banking Ryan Burke – Director, Telecommunications and Media Paul Zeckser – Director, Financial Services

What we will talk about today What has stimulated the rebirth in mobile banking? What do consumers want from this next generation of services? What does this mean for service providers and financial institutions?

What has stimulated the rebirth in mobile banking?

What do consumers want from this next generation of services?

What does this mean for service providers and financial institutions?

The (re) Birth of mobile banking "Starting today, Bank of America customers will have the freedom to choose where, when and how they want to access their financial information - along with the added assurance that their wireless banking transactions are securely backed by their trusted financial institution.“ Greg Wolfond, Chief Executive Officer, 724 Solutions August 29, 2000 "We're taking convenience and control to a new level by providing customers with the ability to stay connected with their finances even when they're on the go, if you have a cell phone, you have the opportunity to take advantage of the latest innovation from the country's leading online bank." Sanjay Gupta, e-Commerce executive for Bank of America, February 13, 2007

"Starting today, Bank of America customers will have the freedom to choose where, when and how they want to access their financial information - along with the added assurance that their wireless banking transactions are securely backed by their trusted financial institution.“

Wireless subscribers and online bankers have grown since 2001 Mobile banking is better positioned for success this time because there are more web enabled handsets, better user interfaces, and other online services Number of Online Bankers and Wireless Subscribers in the United States in 2001 and 2007 MILLIONS

Mobile banking is better positioned for success this time because there are more web enabled handsets, better user interfaces, and other online services

Landscape of mobile banking in 2007 Citi mobile banking powered by mFoundry COST CARRIER Cingular BANKS Citi Wachovia Regions Financial SunTrust BancorpSouth ROLL-OUT Southern CA now, nationwide this summer Cingular’s mobile banking powered by Firethorn Data fees only Bancorp South customers now, other banks later this year Bank of America mobile banking Agnostic Bank of America Tennessee now, nationwide this summer Data fees only Data fees only Sprint Citi and others Sprint mobile banking powered by mFoundry Announced April 27, 2007 Data fees only VZW N/A Verizon Wireless mobile banking powered by Firethorn Announced March 28, 2007 Data fees only Agnostic

Online bankers and wireless self-care users are a fertile segment to grow mobile banking awareness and adoption Penetration is declining as overage protection and free bank hosted online bill pay become more widely adopted Wireless Industry Online Customer Penetration (Monthly online customers that logged in divided by quarterly average subscribers, Q3 2005 – Q4 2006) Source: Compete

Penetration is declining as overage protection and free bank hosted online bill pay become more widely adopted

Online, wireless customers are mostly reviewing usage and paying bills But many are transacting as well (changing plans, upgrading phones, adding features and purchasing content) Please select the following tasks you set out to accomplish when visiting your carrier’s website December 2006 n=1,402 Source: Compete

But many are transacting as well (changing plans, upgrading phones, adding features and purchasing content)

Only Cingular has consistently increased online bill payment volume Cingular specifically promoted bill pay functionality in concert with its VISA 12x bill amount sweepstakes 1 column = 1 quarter One-Time Bill Pay Volume (Average monthly volume of Customers executing a bill payment, 1Q05 – 4Q06) Source: Compete

Cingular specifically promoted bill pay functionality in concert with its VISA 12x bill amount sweepstakes

There is an existing comfort level with managing an account relationship on the handset The rebirth of mobile banking is well positioned with 44% of consumers saying they have used their wireless phone to manage their account Have you ever used your wireless phone to manage your account (i.e. view bill, pay bill, check minutes, etc.)? December 2006 n=1,402 Source: Compete

The rebirth of mobile banking is well positioned with 44% of consumers saying they have used their wireless phone to manage their account

Checking account balance and bills are a well positioned entry point for mobile banking adoption A number of consumers have already made the leap to paying bills through the handset Which activity do you primarily use your wireless phone for when managing your account? December 2006 n=617 Source: Compete

A number of consumers have already made the leap to paying bills through the handset

Traditionally, consumers exhibit strong interest in productivity tools Tools such as location based services, m-commerce, push-to-talk and international calling show the largest gaps between interest and current adoption How interested are you in purchasing the following services or features for your wireless phone? Asked of wireless shoppers June 2006 n=2,005 Source: Compete

Tools such as location based services, m-commerce, push-to-talk and international calling show the largest gaps between interest and current adoption

What we will talk about today What has stimulated the rebirth in mobile banking? What do online bankers want from this next generation of services? What does this mean for service providers and financial institutions?

What has stimulated the rebirth in mobile banking?

What do online bankers want from this next generation of services?

What does this mean for service providers and financial institutions?

Key Findings & Implications Nearly 30% of existing online bankers expressed interest in mobile banking Service fees and security remain major concerns for consumers Consumers are interested in productivity applications and mobile payment Consumers prefer a mobile banking solution provided by their bank rather than their wireless service provider Consumers are interested in using their mobile device to communicate directly with their bank

Nearly 30% of existing online bankers expressed interest in mobile banking

Service fees and security remain major concerns for consumers

Consumers are interested in productivity applications and mobile payment

Consumers prefer a mobile banking solution provided by their bank rather than their wireless service provider

Consumers are interested in using their mobile device to communicate directly with their bank

What do online bankers do today? 90% of active online bankers check their balance on a regular basis Reviewing account statements, paying bills and transferring money round out the four key activities Which have you done in the past 90 days? (multi-select) n=307 Source: Compete

90% of active online bankers check their balance on a regular basis

Reviewing account statements, paying bills and transferring money round out the four key activities

How many say they would use banking features on their phone? Of active online bankers, 29% would “definitely” or “probably” use banking services on their wireless phones The largest segment, 38%, seem set against adoption while 33% remain undecided How likely would you be to use banking features if they were available to you on your wireless phone? n=307 Source: Compete

Of active online bankers, 29% would “definitely” or “probably” use banking services on their wireless phones

The largest segment, 38%, seem set against adoption while 33% remain undecided

What banking features will consumers use on their phones? How interested you would be in doing the following banking-related services on your wireless phone? n=190 A significant number of online bankers are interested in the ability to contact their bank and access their accounts through their mobile device Source: Compete

A significant number of online bankers are interested in the ability to contact their bank and access their accounts through their mobile device

Willing to pay for mobile banking? 7 out of 10 consumers who are open to using online banking expect to receive the service for free How much would you expect to pay to use banking-related services on your wireless phone per year? (n=190) Source: Compete

7 out of 10 consumers who are open to using online banking expect to receive the service for free

Preferred partner: bank or phone provider? Consumers appear to prefer their bank over their carrier for providing mobile banking Which of the following are you most likely to use if you had to pick only one? (n=119) Source: Compete

Consumers appear to prefer their bank over their carrier for providing mobile banking

What concerns do consumers have about mobile banking? Service fees and security top the list of consumer concerns around mobile banking How much of a concern are each of the following issues to you regarding using banking-related services on your wireless phone? Source: Compete

Service fees and security top the list of consumer concerns around mobile banking

What we will talk about today What has stimulated the rebirth in mobile banking? What do online bankers want from this next generation of services? What does this mean for service providers and financial institutions?

What has stimulated the rebirth in mobile banking?

What do online bankers want from this next generation of services?

What does this mean for service providers and financial institutions?

What does this mean for service providers and financial institutions? No fees – can mobile banking be completely free? Mobile banking is secure – how many ways can you say it? Train your consumers – how should they use services? Focus on current relationships – who will choose you based on mobile banking?

No fees – can mobile banking be completely free?

Mobile banking is secure – how many ways can you say it?

Train your consumers – how should they use services?

Focus on current relationships – who will choose you based on mobile banking?

Additional food for thought Target segments: In addition to existing wireless customers, there are opportunities to focus on ‘early adopter’, heavy mobile web browsers, and digital media enthusiasts Extend, and enhance the online experience: Create services unique to the mobile channel, such as time saving measures for ‘on the go’ information and location based applications. Differentiation is for marketing only: As mobile banking is already table stakes, and revenue will come from more traditional functions such as account balance and bill review, consumers can still be brought in the door with positioning of ‘cooler’ features and services Pricing can be creative: Although consumer expectation is around a ‘free’ service, more time sensitive or time saving applications can still merit additional cost Integrate within the mobile ecosystem: As social networking, location based services, mobile payments, and digital media all evolve in the mobile arena, mobile banking needs to integrate within the ecosystem

Target segments: In addition to existing wireless customers, there are opportunities to focus on ‘early adopter’, heavy mobile web browsers, and digital media enthusiasts

Extend, and enhance the online experience: Create services unique to the mobile channel, such as time saving measures for ‘on the go’ information and location based applications.

Differentiation is for marketing only: As mobile banking is already table stakes, and revenue will come from more traditional functions such as account balance and bill review, consumers can still be brought in the door with positioning of ‘cooler’ features and services

Pricing can be creative: Although consumer expectation is around a ‘free’ service, more time sensitive or time saving applications can still merit additional cost

Integrate within the mobile ecosystem: As social networking, location based services, mobile payments, and digital media all evolve in the mobile arena, mobile banking needs to integrate within the ecosystem

Contact information Paul Zeckser Director (617) 933-5644 [email_address] Ryan Burke Director (617) 933-5645 [email_address] Financial Services Telecommunications & Media

Compete provides an unparalleled view of consumers More than 2 million consumers representative of the US online marketplace 6 Years of historical data 360-degree view of consumers, over time and across all of the sites they visit Largest continuous consumer behavior database

More than 2 million consumers representative

of the US online marketplace

6 Years of historical data

360-degree view of consumers,

over time and across all of the sites they visit

Largest continuous consumer behavior database