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A New Vision For Payments In Financial Services
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A New Vision For Payments In Financial Services

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Financial service companies are under growing pressure from a seismic shift in consumer adoption and usage of smartphones/tables and social media driven by technology. This has opened the door for ...

Financial service companies are under growing pressure from a seismic shift in consumer adoption and usage of smartphones/tables and social media driven by technology. This has opened the door for new and innovative competitors to challenge banks and financial services companies for market share in traditional banking services. Globally, millennials and consumers in general are rapidly adopting mobile payments as a primary method to move money. The lessons are the same regardless of industry - adapt, innovate, and engage or risk losing relevancy and market share. Learn how these trends are unfolding and how companies can respond to them.

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A New Vision For Payments In Financial Services A New Vision For Payments In Financial Services Presentation Transcript

  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 1! A New Vision For Financial Services Jeff  Fleischman,  CEO  Blue  Panda  Interac9ve     June  2013  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 2! “Digital channels have transformed the way firms interact with their customers. The convergence of mobile, social, and technology have enabled the creation of value added products and services that customers increasingly expect. In order to succeed it is essential to focus on the convergence of experience, data, and technology to meet customer expectations.”! ! Jeffrey Fleischman, CEO
 Blue Panda Interactive!
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 3! Executive Summary • We’ve  become  a  mobile  first  civiliza3on  –  our  smartphones  an  indispensible  part  of  our  lives.    66%   access  use  their  smartphones  to  access  the  web  daily,  buying  goods,  conduct  financial   transac3ons,  find  informa3on,  text  with  others,  etc.   Smartphones  are  an  indispensible  part  of  our  lives   • Social  media  Is  ubiquitous  and  consumed  across  all  channels  with  mobile  becoming  the  dominant   choice  for  global  users.    Social  networks  are  the  most  trusted  source  of  informa3on  and   recommenda3ons  above  all  other  sources.   Social  media  and  social  networks  con3nue  to  drive  engagement   • The  prolifera3on  of  smartphones  and  tablets  have  led  to  widespread  mul3-­‐tasking  among   consumers.  Usage  across  these  devices  vary  throughout  the  day,  but  collec3vely  they  are   becoming  a  growing  share  of  media  consump3on  coming  at  the  expense  of  tradi3onal  channels   e.g.  TV,  radio,  newspapers,  magazines.   Mul3-­‐screen  usage  con3nues  to  grow   • Adop3on  of  technology  and  user  experience  has  enabled  and  embolden  new  compe3tors  to  make   inroads  in  tradi3onal  banking  ac3vi3es.    Banks  will  con3nue  to  face  pressure  as  technology  and   data  are  used  to  create  targeted  informa3on,  offers,  and  real  3me  decision  algorithms.   Tradi3onal  Banking  is  increasingly  under  pressure  by  new  entrants  and  the   usage  of  technology  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 4! The New Financial Services Frontier Technology   Mobile/   Tablet,  Social   Media   Big  Data   • The  convergence  of  financial  services  with  technology  and  plaQorms  has  created  a  new   paradigm  that  is  drama3cally  reshaping  the  banking  model.   Advisory   Wealth   Management   Payments   Banking   Social-­‐Mobile   Financial  Services   Technology,   PlaQorms,   &  Data   Products   &   Services  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 5! The New Financial Services Frontier – Are Banks Adapting Fast Enough? The  convergence   of  financial   services  with   technology  and   plaQorms  has   created  a  new   paradigm   Barriers  to  enter   tradi3onal  banking   markets  are  low   New  compe3tors   have  become   serious  threats   grabbing   marketshare  with   innova3ve   solu3ons   Consumer  trust  of   banks  is  waning   and  they  are   willing  to  use  non-­‐ tradi3onal  banking   firms   Millennials  have  no   inhibi3ons  to   conduct  “bank   less”  financial   services    
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 6! Where  Do  We  Go  From  Here?  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 7! eBanking Has Emerged As The Preferred Method For Consumers To Interact With Their Banks ² Growth  in  electronic  banking  (eBanking)  con3nues  to  accelerate,  increasing   worldwide  in  terms  of  both  users  and  transac3on  levels.   ² This  growth  is  not  without  risks  –  banks  face  disintermedia3on  from  innova3ve   compe3tors,  shiing  customer  expecta3ons,  and  price  transparency.     ² Mobile  Payments  (mPayments)  is  among  the  fastest  growing  transac3ons,   rapidly  becoming  the  payment  vehicle  of  choice  for  consumers  worldwide   especially  among  the  world’s  unbanked.   ² Challenges  remain  for  banks  to  integrate  a  broad  set  of  capabili3es,  plaQorms,   and  data  to  provide  value  added  services.   ² Shiing  behavior  to  web  and  mobile  are  crea3ng  cost  benefits  while  opening   the  door  to  higher  revenue  opportuni3es  for  bank  and  bank  compe3tors.   ² Mobile  Banking  (mBanking)  provides  the  opportunity  to  capture  a  greater  level   of  detailed  informa3on  on  spend,  payments,  and  loca3ons  for  CRM  ac3vi3es.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 8! Between 2008 – 2015, mBanking Will Grow Over 3000%! SOURCE: Mobile Financial Services: FISERV and Payments Cards & Mobile • Global  mBanking  users  are  expected  to  grow  67%  from  150MM  in  2012  to  250MM  by   2015.   • mBanking  transac3ons  will  more  than  double  from  71.9MM  in  2012  to  167.6MM  in  2015.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 9! Global Growth In mPayments Has Grown Exponentially SOURCE: Mobile Financial Services: FISERV and Payments Cards & Mobile • Global  mPayments  is  expected  to  grow  to  over  $6T  by  2015.   • Domes3c  and  interna3onal  money  transfers  are  growing  at  a  CAGR  of  137%  and  247%,   respec3vely  between  2008  –  2015.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 10! mBanking Continues To Grow Across All Regions • Mobile  Banking  has  had  a  profound  impact  on  the  banking  industry,  globally  consumers   are  adop3ng  mobile  banking  at  a  rapid  pace.   Source:  comScore  April  2012   25.8%   43.8%   35.4%   23.0%   16.9%   9.2%   28.7%   45.0%   37.8%   25.1%   22.0%   8.8%   Worldwide   North  America   Europe   La3n  America   Asia  Pacific   Middle  East  -­‐  Africa   Apr-­‐12   Apr-­‐11   -­‐0.4  percentage  points     +5.1pp   +2.1pp   +2.4pp   +1.2pp   +2.9pp  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 11! China’s mBanking Growth 2010 – 2014E 0%   10%   20%   30%   40%   50%   60%   70%   80%   0   500   1,000   1,500   2,000   2,500   2010   2011   2012   2013E   2014E   Penetra3on  Rate   Transac3ons  (US  $B)   Transac3on  Value   Penetra3on  Rate   Source:  Celent;  CINIC  Jan.  2013     •  In  2012,  users  of  online  banking  reached  221.5MM,  growing  by  33%;  online  payments   reached  220.7MM  growing  at  32%;  mobile  banking  users  reached  150MM.   •  Commercial  banks  had  more  than  100%  growth  in  mobile  banking  users  in  and  by  over   300%  in  transac3on  value  in  2012.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 12! Banks View Of Online And Mobile Channels Demonstrate The Emerging Importance For Customer Interaction • Respondents  responded  strongly  that  online  and  mobile  channels  will  play  a  prominent   role  for  transac3ons  and  customer  service.   • Sen3ments  run  much  lower  for  online  and  mobile  as  a  channel  for  sales  and  advice.   Source:  Efma  Digital  Channels  Survey  2013   80%   93%   65%   38%   Complementary  channels  to   branches   Primary  channels  for  transi3ons   Primary  channels  for  customer   service   Primary  channels  for  sales  and   advice  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 13! 82%   80%   56%   50%   44%   43%   31%   29%   31%   mBanking Ranks Among Top Mobile Activities Source: Pew Research September 2012 • As  smartphone  growth  con3nues  to  accelerate  there  will  be  a  corresponding  growth  in   banking  transac3ons.   • Fueling  this  growth  will  be  addi3onal  func3onality  and  a  bemer  customer  experience.   2016E   Ac3vi3es  done  on  a  smartphone  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 14! mBanking Is The Leading Financial Transaction Conducted By Smartphone Users • Accessing  bank  accounts,  credit  cards,  and  conduc3ng  ePayments  have  the  highest   penetra3on  of  smartphone  usage.   38.0%   26.9%   24.3%   21.8%   21.1%   19.9%   17.1%   16.2%   11.9%   9.2%   8.8%   8.5%   Bank  Accounts   Online  Retail   Classifieds   Credit  Cards   Electronic   Auc3on  Sites   Shopping  Guides   Deal-­‐a-­‐Day   Travel  Service   Stock  Trading   Automo3ve   Insurance   %  Smart  Phone  Owners   Financial  Services  and  Retail/E-­‐Commerce  Category  Usage   Source: comScore
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 15! Source: Celent mBanking Functions Performed By Users • Passive  transac3ons  e.g.  balance  inquiries  and  transac3on  history  con3nue  to  make  up  a   large  por3on  of  mobile  banking  func3ons.   • Approximately  33%  of  users  paid  a  bill  or  transferred  funds  and  these  rates  are  growing   rapidly.   11%   8%   2%   62%   17%   Mobile  Banking  Func9ons   Funds  Transfer   Bill  Payment/Pay  Anyone   Change  Password   Blance  Requests   Transac3on  History  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 16! Most Widely Used mBanking Transactions • mBanking  has  had  the  highest  usage  rates  among  basic  transac3ons,  however,  is   growing  more  rapidly  for  transfers,  payments,  and  purchases.   • Mobile  RDC  capture  will  eliminate  over  1.5B  check  deposit  transac3ons  from  U.S.  bank   branches  by  2014.   Source:  American  Banker  2012;  Berg  Insight   90%   48%   42%   33%   26%   21%   11%   30%   20%   Checked  an  Account  Balance   Download  Your  Bank's  Mobile   Banking  Applica3on   Transferred  Money  Between  Two   Accounts   Received  A  Text  Messge  Alert  From   Your  Bank   Made  A  Bill  Payment  Using  Bank's   Website   Located  the  Closest  in-­‐Network   ATM  for  your  Bank   Deposited  a  Check  to  Your  Account   Using  Your  Phone   Refused  to  Answer   Managed  Investments  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 17! Despite The Growth In mBanking Transactions, Customers Have Apprehensions With Its Usage Source:  American  Banker  2012   • The  largest  concerns  cited  by  customers  are  security,  ability  to  conduct  transac3ons   through  tradi3onal  channels,  and  difficulty  using  a  small  mobile  screen.   1%   2%   3%   9%   10%   13%   17%   18%   22%   48%   57%   Refused  to  Answer   My  bank  charges  a  fee  for  using  mobile  banking   It  is  not  offered  by  my  bank  or  credit  union   Don't  have  a  banking  account  with  which  to  use  mobile   banking   It  is  too  difficult  to  set  up  mobile  banking   Other    It  is  too  difficult  to  see  on  my  mobile  screen   The  cost  of  data  access  is  too  high   I  do  not  trust  the  technology  to  do  bank   I'm  concerned  about  the  security  of  mobile  banking   My  banking  needs  are  being  met  without  mobile   banking  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 18! Source: CEB Tower Group mBanking Is Dramatically Cheaper Than Other Channels • As  online  and  mobile  con3nue  to  pick  up  share  of  volume,  companies  will  see  average   cost  to  service  customers  decline.   • Although  banks  will  see  marginal  costs  decline,  they  will  incur  the  expense  of  managing   more  plaQorms  and  channels  –  integra3on  will  be  essen3al  to  deliver  a  seamless   customer  experience.   $0.09   $0.17   $0.19   $0.61   $4.00   $4.04   Online   IVR   Mobile   ATM   Branch   Call  Center   Customer  Preference   ²  Cost  to  service  decreases   significantly  for  online  and   mobile  transac3ons.   ²  Customers  prefer  to  use  low  cost   channels  but  have  shown  a   preference  to  have  access  to  all   channels.   ²  Banks  will  need  to  integrate   across  channels  to  create  a   seamless  banking  experience.   ²  Mobile  banking  via  smartphone   or  tablet  in  the  US  jumped  to   32%  in  2012.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 19!       Banks Are Under Increasing Pressure By New Competitors, Changing Engagement Models, and Technology  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 20! eBanking Implications ² The  global    banking  industry  is  facing  increasing  challenges  largely  driven  by   new  compe3tors,  evolving  technologies,  and  changing  consumer  attudes.   ² Integra3on  across  channels,  plaQorms,  and  devices  will  be  required  as   financial  service  companies  rethink  how  they  engage  their  customers.   ² Big  (“unstructured”)  data  is  a  growing  source  of  rich  informa3on  that  can   provide  greater  customer  insights  enabling  banks  to  cra  more  targeted  CRM   capabili3es.   ² Banking  services  are  increasing  mobile  based  –  engagement  via  apps  will   become  the  primary  customer  facing  touch  point.   ² Technology  plaQorms  will  con3nue  to  grow  in  complexity  largely  driven  by   new  plaQorms  and  devices,  these  must  all  be  integrated  into  exis3ng  systems.   ² Non-­‐tradi3onal  companies  have  entered  the  tradi3onal  banking  space  and   are  becoming  formidable  compe3tors;  In  the  short  term,  banks  face   disintermedia3on  for  core  transac3ons.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 21! ² Voice  ac9vated/natural  language  interac3ons  enable  users  to  transfer  funds,   make  payments,  conduct  customer  service  with  voice  commands;  natural   language  will  allow  customers  to  answer  ques3ons  about  specific  spending.   ² The  merger  of  data  and  experience  will  enable  banks  to  create  new   engagement  models  based  on  real  3me  behavior.   ² Mobile/Tablet  dominance  will  displace  computers  and  branches  as  the   primary  access  point  for  the  majority  of  banking  transac3ons.   ² Loca9on  based  services  will  enable  banks  to  make  real  3me  offers  and   improve  secure  transac3ons.   ² Branch  banking  experience  will  change  with  the  introduc3on  of  tablet,  mobile   devices  –  think  Apple  store  model.   ² Video  access  to  bank  employees  via  mobile,  computers  and  ATMs  will  con3nue   to  proliferate.   Future eBanking Trends To Watch • Technology  and  access  to  rich  data  will  enable  banks  to  create  more   meaningful  and  relevant  interac3ons.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 22! Drivers Of eBanking eBanking   mPayments   Social   Media   Technology   Unbanked   • The  growth  in  eBanking  has  accelerated  over  the  past  five  years  largely  driven  by   technology  and  consumer  acceptance  digital  channels.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 23! Drivers Of eBanking eBanking   mPayments   Social   Media   Technology   Unbanked   The  growth  in  eBanking  has  accelerated  over  the  past  five  years  largely  driven  by   technology  and  consumer  acceptance  digital  channels.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 24! mPayments Will Continue To Grow At A Rapid Rate Changing The Way Consumers Transact And Move Money ² Worldwide  mobile  payment  transac3on  volume  will  reach  US  $235B  in  2013,   a  44%  increase  from  $163B  in  2012;  mobile  payment  users  will  reach  245.2M   in  2013,  up  from  200.8M  in  2012.     ² Although  Near  Field  Communica3ons  (NFC)  comprise  a  rela3vely  small   por3on  of  mobile  payments  expect  it  to  become  the  emerging  choice  for   users.   ² Convenience  and  ease  of  use  of  mobile  capabili3es  has  created  a  seismic  shi   in  the  consumer  acceptance  and  usage  of  mPayments.   ² Social  media  coupled  with  mobile  phones  have  been  the  catalyst  to  a   growing  opportunity  to  engage  consumers  and  win  share  for  companies.   ² mPayments  con3nue  to  grow  rapidly  as  a  percentage  of  total  payments,   however,  banks  risk  disintermedia3on  by  innova3ve  non-­‐bank  compe3tors   and  a  growing  acceptance  by  users  to  adopt  non-­‐bank  payment  op3ons.   ² A  big  driver  of  mPayments  will  be  the  2.5B  global  unbanked  turning  to  non-­‐ bank  mPayment  op3ons.   Source:  Gartner  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 25! Late  1970’s    –  Mid  1980’s   1994   1997   Today   Evolution of Electronic Payments Fric3onless  Finance  –   device,  currency   agnos3c   • Coinciding  with  the  evolu3on  of  payments  has  been  the  development  of  technological   advances  that  have  created  the  ability  to  easily  move  money  anywhere,  any3me.   Rudimentary  Home   Banking  system  based  on   landlines   Online  Banking  and   Bill  Pay.    Ability  to   access  accounts   any3me   First  Mobile   Banking  service  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 26! Mobile/Tablet Adoption Has Grown Exponentially In Line With Functionality, Becoming An Indispensible Part Of Our Lives Adop3on   Feature/Func3onality   Tablets/ eReaders   Smart  Phones  Feature  Phones  PDA  and  Mobile   First wave of mobile devices revolutionized conversation Mobile moves beyond voice; adoption of text/ SMS and functionality grows e.g. music Tablets and eReaders blur the line between mobile and computing. Touch interaction is a design trend Mobile proliferation explodes with rich features, apps, utility. Technology delivers advanced features – mobile is now an indispensible part of our lives – Nomophobia is a condition • Emerging  technologies  such  as  Google  Glasses  are  crea3ng  new  opportuni3es  to   connect  and  engage.    
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 27! Mobile Payment Ecosystem Is Crowded With Many Firms Vying For A Place In The Mobile Payment Space   • Are  epayments  an  experience,  a  plaQorm,  or  a  commodity?   • The  prolifera3on  of  new  entrants  into  the  space  demonstrate  the  importance  on  winning   share  for  mPayments.   • Innova3ve  solu3ons  by  non-­‐banks  will  take  share  and  profits  from  banks.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 28! The Growth Rate For mPayment Users By Region Is Large • mPayment  usage  has  had  significant  growth  from  2009  through  2013,  growth  rates  will   slow  through  2016  as  penetra3on  rates  reach  satura3on  levels.   • All  regions  will  experience  a  substan3al  shi  to  mobile  devices  which  presents  a  large   opportunity  to  create  meaningful  engagement  opportuni3es.   Source:  Gartner,  TechCrunch   Mobile  Payment  Users  By  Region  (Millions)       2009   2010   2011   2012   2013   2014   2015   2016   CAGR   Western  Europe    4,519      9,418      15,974      22,784      29,734      36,886      44,144      51,514     36%   North  America    1,905      8,260      19,111      32,788      46,518      60,853      75,514      90,653     62%   Asia/Pacific    41,865      55,265      69,622      85,031      102,064      120,822      141,364      163,642     19%   Eastern  Europe    954      1,002      2,226      3,882      5,694      7,729      9,935      12,447     38%   Middle  East    186      524      935      1,527      2,326      3,440      4,710      6,019     54%   Africa    16,559      32,396      45,539      57,751      69,694      80,530      91,034      101,336     25%   La3n  America    4,012      5,578      7,058      8,456      10,479      13,373      17,268      22,314     24%   Total    70,000      112,443      160,465      212,219      266,509      323,633      383,969      447,925     26%  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 29! Global mPayment Transaction Growth By Regions • mPayments  across  all  regions  have  experienced  substan3al  growth  from  2008  to  2012;   rates  will  slow  as  markets  reach  satura3on.   Source:  Arthur  D.  Limle  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 30! China mPayments Between 2010 – 2013 Has Accelerated Payment growth will be fueled by:! ² The share of hours of internet access on mobile devices is rising rapidly among all age groups. ! ² Growing usage of mobile apps! ² Technology that increases the utility of mobile devices as a payment option! ² Proliferation of mobile devices and mobile infrastructure! ² Greater access to the web through mobile devices! ² Convenience in researching product information and pricing transparency! 19   48   121   219   102   191   308   481   2010   2011E   2012E   2013E   Mobile  Payments  (Billion  Yuan)   Mobile  Payment  Users  (MM)   Source:  China  Internet  Watch   • mPayments  are  expected  to  grow  by  1132%  and  mobile  payment  users  will  increase  by   472%.    In  2011,  69%  of  users  said  they  used  their  phones  to  access  the  Web—up  30   percentage  points  in  just  three  years.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 31! Mobile Purchases Made On Smartphones Reaches 19.4% • Frequency  of  mobile  purchases  has  increased  with  14.1%  of  consumers  making  a   purchase  everyday.   Source:  comScore  MobiLens,  3  month  average  ending  Dec.  2011  vs.  Dec.  2010,  US   14.1%   21.0%   54.9%   Almost  Every  Day   At  Least  Once  a  Week   Once  to  Three  Times  a   Month   %  Made  Purchase  with  Smartphone     19.4%  Made  On-­‐Device  Purchases  with  Smartphone  in  December  2012  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 32! The Emergence Of The mPayment Ecosystem •  Mobile  phones  have  become  an  indispensible  tool  for  real  3me  research  and  purchasing   behavior  globally.       •  An  increasing  amount  of  purchases  online  and  in-­‐store  are  being  driven  from  mobile   devices  –  mobile  apps  are  connec3ng  consumers  real  3me  offers  and  coupons.   16%   18%   21%   24%   26%   29%   In-­‐Store  Price   Comparison   Purchased  With  A   Mobile  App   Researched  on  Mobile   and  Bought  Online   Purchased  On  A  Mobile   Website   Researched  on  Mobile   and  Bought  In-­‐Store   Researched  Product  on   Mobile   Javelin  Strategy  2009   ²  Mobile  applica3ons  and   technology  have  created  complete   pricing  transparency.   ²  Nearly  30%  of  consumers  conduct   product  research  on  mobile   devices.   ²  Over  20%  that  do  research  on  a   mobile  device  will  buy  products   either  in-­‐store  (26%)  or  online   (21%).   ²  Purchases  from  mobile  devices  is   on  the  rise  with  consumers  -­‐  24%   bought  on  a  mobile  website  and   18%    on  a  mobile  app.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 33! Tablets Have Overtaken Smartphones For A Range Of Activities Including Research And Purchasing of Products 39.1%   38.7%   38.2%   38.1%   33.2%   30.4%   21.1%   22.6%   23.6%   19.4%   33.7%   22.2%   19.2%   20.9%   Researched  Product  Features   Compared  Product  Prices   Purchased  Goods  or  Services  Online   Found  Store  Loca3on   Found  Coupons  or  Deals   Checked  Product  Availability   Made  Shopping  Lists   Share  of  Smartphone  and  Tablet  Owners  Performing  Mobile  Retail  Ac9vi9es   Tablet   Smartphone   • Smartphones  are  driving  showrooming  (in  store  price  comparison)  frustra3ng  retailers   with  price  transparency  but  empowering  consumers  to  find  lowest  prices.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 34! Attitudes Towards Mobile Payments Are Consistent Across Asia And The West 0%   20%   40%   60%   80%   Privacy  Issues   ID  The  &  Fraud   Concerns   More  Convienent   Prefer  Most  Payments   are  Mobile     Asia   Europe/US   Source:  SapientNitro   • Respondents  have  concerns  regarding  privacy  and  ID  the  although  they  are  offset  by   consumer  preference  and  convenience.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 35! Interest Among US Consumers In Using Mobile Wallet Technology To Pay For Merchandise In-Store • Mobile  wallets  have  uphill  climb  for  consumer  acceptance  –  this  will  occur  as  mobile   payment  systems  gain  trac3on  and  retailers  integrate  in-­‐store  terminals.   Completely   Disinterested   41%   Very   Interested,   15%   Somewhat   Interested,   10%   Neutral,   17%   Not  Very   Interested,   17%   Source:  eMarketer;  Catapult,  Shopper  Lab,”  April  1,  2012   ²  25%  of  respondents  expressed  an   interest  in  using  mobile  wallets.   ²  17%  of  respondents  were  not   very  interested  and  41%  stated   they  had  no  interest  at  all  in   using  mobile  wallets.   ²  While  the  numbers  of  those  not   interested  were  high  part  of  this   can  be  explained  by  the  wide   spread  acceptance  and  usage  of   credit/debit  cards.   ²  Looking  forward  these  opinions   will  change  as  retailers  offer   incen3ves  and  make  it  a  faster   and  more  convenient  payment   method.   US  Consumer  Interest  In  Mobile  Wallets  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 36! The Global Players: Several Industry Groups Are Working On mPayment Solutions • The  digital  wallet  is  “owned”  by  several  industry  segments  that  each  provide  key   components  for  mPayments  and  digital  wallets.   Financial   Ins3tu3ons   Telecommunica3on   Companies  (1)   Retailers   (1)Telecommunica3on  companies  include  carriers,  handset  makers,  chip  makers,  OEMs  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 37! The Global Players: Each Industry Group Has A Unique Role Within The mPayment Process • Collec3vely  mPayment  players  each  provide  key  components  for  mPayments  and  digital   wallets.    They  must  work  together  to  create  end-­‐to-­‐end  experiences.   Financial   Ins3tu3ons   Telecommunica3on   Companies(1)   Retailers   Banking  services   Loans   Payment  Processing   Credit  Card  services   Security  Infrastructure   Wireless  Networks   Handsets   Mobile  Apps   Mobile  Payment  Services   Mobile  Coupon  Services   Security  Infrastructure   Loyalty  Programs   Merchandise   Shopping  Experience   Consumer  Data   Point  of  Sale   Security  Infrastructure   (1)Telecommunica3on  companies  include  carriers,  handset  makers,  chip  makers,  OEMs  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 38! The GlobalPlayers: Who Owns The Customer Relationship? • The  mPayment  customer  rela3onship  is  fragmented  with  each  player  having  a   unique  role  that  will  vary  by  market.   Financial   Ins3tu3ons   Financial  Rela3onship   Telecommunica3on   Companies(1)   Reliability   Retailers   Shopping  Experience   (1)Telecommunica3on  companies  include  carriers,  handset  makers,  chip  makers,  OEMs  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 39! Financial   Ins3tu3ons   Telecommunica3on   Companies  (1)   Retailers   ² Financial institutions, telecommunication companies, retailers, and technology companies are all vying for a place in the mPayments space.! ² The stakes are high – winners will gain the loyalty of customers and increase revenue for a market size that will exceed $1T in volume.! ² Businesses need to create meaningful experiences through the integration of data and technology to drive adoption, loyalty, and retention.! ² mPayment capabilities must also ensure that the end-to-end user experience is easy to use, intuitive, and seamless.! ² Technology will evolve as cross-platform interaction models evolve.! The Growing Influence Of mPayments Is Setting The Stage For Intensive Competitive Pressures To Win Share (1)Telecommunica3on  companies  include  carriers,  handset  makers,  chip  makers,  OEMs  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 40! mPayment Roadmap For Banks – Creating Frictionless Finance Networks ² Success  will  come  from  con3nued  focus  on  building  new  distribu3on   models  and  capabili3es  to  enable  mPayment  experiences.   ² In  order  for  the  mobile  wallet  and  payments  to  grow  in  adop3on,  it  has  to   be  simple,  ubiquitous  and  have  a  compelling  value  to  consumers.   ² Prolific  growth  of  smartphones/tablets  and  consumer  acceptance  has  been   the  catalyst  in  driving  annual  double  digit  growth  rates  in  mPayments   volumes.   ² Banks  must  invest  in  several  mPayment  technologies  as  standardized   plaQorms  have  yet  to  emerge  and  will  likely  vary  across  geographies.   ² Banks  must  rethink  their  rela3onships  with  other  players  in  the  mPayment   space  to  build  and  protect  their  payment  marketshare  from  new   compe3tors.   ² Data  will  play  an  important  role  to  enable  banks  to  provide  personalized   content  and  offers  to  their  customers.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 41! Drivers Of eBanking eBanking   mPayments   Social   Media   Technology   Unbanked   The  growth  in  eBanking  has  accelerated  over  the  past  five  years  largely  driven  by   technology  and  consumer  acceptance  digital  channels.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 42! ² Social  networking  accounted  for  50%  of  all  page  views  on  mobile  phones  in   2011.   ² Facebook  total  ac3ve  users  reached  1  billion  and  its  mobile  users  quadrupled  in   2  years  from  50MM  to  200MM.   ² More  people  access  Twimer  and  Facebook  on  mobile  devices  than  on  desktop   computers.   ² There  are  200MM  mobile  video  playbacks  from  YouTube  every  day  and  48   hours  of  video  are  uploaded  every  second.   ² There  are  1.2B  internet  connected  smartphones  and  77%  of  individuals  use   mobile  phones  for  search.   ² Nearly  30%  of  consumers  conduct  product  research  on  mobile  devices.   ² Over  500,000  apps  have  been  developed  in  the  past  3  years  and  downloaded   more  than  14B  3mes.   SOURCE: Mobile Banking News Drivers of mPayment Growth - Social Media • Social  media’s  popularity,  smart  phone  sales,  and  app  prolifera3on  have  combined  to   create  an  organic  and  seismic  shi  in  mobile-­‐social  media.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 43! Social Media Usage Has Grown Exponentially As Has The Frequency In Its Usage Every  second  on  social  media:   ²  100,000  tweets   ²  685,000  items  shared  on  Facebook   ²  2  million  Google  search  queries   ²  48  hours  of  YouTube  uploads   ²  47,000  applica3ons  downloaded  from  app   store   ²  3,600  Instagram  photos  shared   ²  571  websites  created   ²  $272k  spent  on  line   ²  31,250  Facebook  Likes   • 23%  of  Facebook’s  users  check  their  account  five  or  more  3mes  every  day.   • 40%  of  people  spend  more  3me  socializing  online  than  they  do  face-­‐to-­‐face.   • Facebook  posted  a  67%  year-­‐over-­‐year  mobile  growth  rate.     Source:  Bricat,  March  2013;  The  Social  Habit;  Twimer;  Facebook  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 44! Top 15 Social Media Sites Worldwide, Q1 2013 Source: Lifelong Learners Journal; GlobalWebIndex “Stream Social: Quarterly Social Platforms Update Q1 2013, April 26, 2013 51%   26%   25%   22%   21%   21%   20%   19%   12%   10%   9%   8%   6%   4%   4%   Facebook   Google+   YouTube   Twimer   Sina  Weibo   Qzone   Tencent   Tencent  Weibo   Youku   RenREn   Tudou   LinkedIn   Kalxin   Pinterest   51.com   Top  15  Social  Media  Websites     Percent  Of  Ac3ve  Web  Users   • American  and  Chinese  firms  dominate  the  top  social  media  sites.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 45! Smartphone Usage In Both China and the U.S. Continues to Grow Across Activities     Source: McKinsey, 2012 Smartphone  social  media  browsers   Visit  social  networks   Visit  at  least  once  a  day   Expect  to  make  more  mobile  purchases   Watch  video   Use  video  at  least  once  a  day     58%   92%   49%   56%   85%   24%   43%   80%   55%   31%   76%   25%   • Both  countries  have  high  penetra3on  and  ac3ve  rates  among  their  ci3zens  and  usage   rates  con3nue  to  climb.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 46! Multi-Tasking Is Prevalent Among Smartphones Users • In  both  the  US  and  China  consumers  are  using  their  smartphones  when  doing  everyday   ac3vi3es.   • Mul3-­‐plaQorm  consump3on  has  grown  strongly  –  33%  of  minutes  spent  online  is  now   spent  beyond  the  PC.   People  Who  Use  Smartphones   While  Doing  Other  Ac3vi3es   16%  28%   86%   51%   52%   43%   34%   17%   83%   42%   42%   34%   32%   29%   18%   24%   Source: Google
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 47! Top Chinese Online Activities Top  Online  Ac3vi3es   Fasted  Growing  Online  Ac3vi3es   83%   80%   77%   66%   66%   Instant   Messaging   Search   Engine   Online   Music   Blogs  and   Social   Media   Online   Videos   33%   32%   29%   25%   24%   Online   Banking   Online   Payments   Group   Buying   Online   Shopping   Weibo  and   Microblog   Source:  China  Internet  Network  Informa3on  Centre,  January  2013   •  Although  financial  transac3ons  are  not  among  the  top  online  ac3vi3es,  online  banking   and  online  payments  are  the  two  fastest  growing  ac3vi3es  at  33%  and  32%,  respec3vely.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 48! Case Study: Advisory & Wealth Management The Rise Of The Social Financial Advisor
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 49! Over The Next 3-5 Years Expect A Major Shift In How Financial Advisors Interact With Clients and Prospects ² Acknowledgement  in  the  growing  influence  of  social  media  and  mobile   usage  in  the  financial  advisor  community.   ² Skep3cism  exists  that  digital  touch  points  can  be  used  to  build  rela3onships   in  an  industry  that  has  tradi3onally  been  a  high  touch,  personal  service.     ² Firms/financial  advisors  will  need  to  figure  out  how  to  increase  their  social   media  presence  in  order  engage  prospects  and  clients.   ² Companies  need  to  navigate  the  regulatory  and  privacy  hurdles  that  exist   internally  and  externally.   ² Generally,  advisors  need  to  build  up  their  social-­‐mobile  skills  to  be  more   effec3ve  in  engaging  a  growing  digital-­‐first  audience   ² Social-­‐mobile  ini3a3ves  should  not  be  managed  in  isola3on,  integra3on  with   exis3ng  channels  is  cri3cal.    
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 50! Firms Are Gradually Introducing Their Financial Advisors To Social Media, But Within Three Years It Will Be Commonplace Morgan   Stanley   Smith   Barney   plans   to   give   par9al  access  to  Twiber  and  LinkedIn  for  it’s   17,000  financial  advisors  which  amounts  to  a   bet   that   social   media   can   be   an   effec9ve   business  tool  for  financial  advisers.”   “Morgan   Stanley’s   retail   brokerage   unit,   using   Twiber   and   LinkedIn   has   helped   financial   advisers   win   more   business  over  the  past  year.”   “Goldman  Sachs,  which  recently  said   it  was  looking  to  hire  a  ‘social  media   community   manager,’   has   taken   to   Twiber  to  post  news  about  the  firm.”     “The  Blackstone  Group  also  maintains   a  Twiber  account.”     “AllianceBernstein,   has   given   employees  access  to  LinkedIn.”   “Putnam  investments  launches  video  blog  to   help  financial  advisors  tap  social  media”   Source:  The  Securi3es  Industry  and  Financial  Markets  Associa3on    
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 51! Advisors Are Increasingly Using Social Media Although Its Use For Business Purposes Lags Personal Use Source:  Registered  Rep  and  Wealthmanagement.com   Percentofadvisorsusingsocialmedia! • Approximately  30%  -­‐  40%  of  advisors  do  not  use  social  media  for  business  purposes.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 52! LinkedIn Is The Leading Social Network Among Advisors • Among  advisors  using  at  least  one  social  network  for  business,  90%  use  LinkedIn  and  are   more  than  three  3mes  as  likely  to  use  it  over  other  social  networks.   • Facebook  is  the  dominant  social  network  for  personal  use  at  71%.   Source:  LinkedIn  Marke3ng  Solu3ons  and  FTI  Consul3ng,  May  2012   Total  Usage              78%                75%              38%                37%     Social  Networks  Used  for  Business   Among  financial  advisors  who  use  at  least   one  for  business   Overall  Social  Network  Usage  for  Business/  Personal   Purposes  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 53! Active Rates And Frequency In The Usage Of Social Networks Among Advisors Is Increasing ²  Nine  out  of  10  advisors  now  have  a  social   media  profile  or  account  and  56%  are  ac3ve   (vs.  51%  in  2011).     ²  Among  advisors  with  social  network   accounts,  LinkedIn  and  Facebook  have   highest  penetra3on  rates  but  Twimer  is   growing  at  the  fastest  pace.   ²  Although  most  advisors  report  that  their   social  media  use  is  restricted,  it  has  not   deterred  the  overall  adop3on  rate  of  social   media.   ²  Twimer  can  be  an  effec3ve  high  frequency   communica3ons  tool  to  lead  users  to   specific  sites  and  content.   Source:  Registered  Rep  and  American  Century;  LinkedIn  Marke3ng  Solu3ons  and  FTI  Consul3ng,  May  2012   Used  Social  Network  Foe   Business  Purposes  At  Least   1x  Week   1x  Month   LinkedIn   53%   74%   Facebook   37%   48%   Twimer   31%   37%   Google+   20%   27%   %  Of  Advisors  With  An  Account(1)   (1)  Source:  American  Century  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 54! Advisors Believe That Using LinkedIn For Prospecting Has Led To New Client Acquisition And AUM • Advisors  that  gained  clients  from  LinkedIn  were  2-­‐2.5X  more  successful  in  engaging  and   cul3va3ng  client  rela3onships  than  those  who  did  not  acquire  clients  on  LinkedIn.   Source:  LinkedIn  Marke3ng  Solu3ons  and  FTI  Consul3ng,  May  2012  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 55! The “Social-Advisor” Era Has Begun To Take Shape – Are You Ready? Source:  Registered  Rep  and  WealthManagement.com     FACTS  &  STATS   IMPLICATIONS   Social  networking  usage  increased  10%+  in  2012  and  is   approaching  or  exceeding  50%  at  many  firms   Laggards  in  adop3ng  a  social  strategy  will  be  at  a   compe33ve  disadvantage   25%  of  advisors  acquired  clients  through  social  media  efforts   following  a  tradi3onal  first  contact   Its  impera3ve  that  firms  to  adopt  an  integrated   channel  strategy   Social  media  usage  among  advisors:  LinkedIn  84%,  Facebook   28%,  Twimer  16%   Each  social  network  has  a  specific  amributes  and  its   usage  should  be  clearly  defined   43%  of  advisors  do  not  use  social  media  for  business   purposes,  but  74%  are  interested  in  it  for  prospec3ng,   marke3ng  and  communica3ons     Companies  and  advisors  need  a  coordinated   strategy  and  training  to  develop  the  appropriate   social  skills  to  engage  prospects  and  customers   For  those  with  policies  in  place,  nearly  67%  of  firms  prohibit   the  use  of  Facebook,  YouTube  and  Twimer  for  business   purposes;  25%  prohibit  the  use  of  LinkedIn   There  is  a  large  gap  between  the  personal  usage   and  business  prohibi3on  of  social  media  needs  to   be  resolved  to  minimize  compliance  and   reputa3onal  risks   Among  advisors,  compliance  and  regulatory  concerns  are   considered  to  be  the  primary  challenge  when  using  social   media;  specific  areas  of  uncertainty  are  how  to  answer   ques3ons  and  permissibility  in  sharing  opinions  or  advice   with  clients   Coordina3on  needed  among  advisors  and   compliance  teams  to  understand  regula3ons.     Policies  need  to  outline  permissible  usage  of  social   media  by  advisors.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 56! Advisor Social Media Playbook – Building A Personal Brand In A Socially Connected World Build Your Social Media Profile! ² Ensure a LinkedIn profile articulates and highlights experience and expertise. Recommendations and endorsements add credibility. ! ² Create a Facebook profile that highlights a personal side, interests, include content that will garner attention and sharing among your followers.! ² Use Twitter as a communication platform to connect with websites and other social media platforms.! ! Expand Your Circle Of Influence! ² Facebook, LinkedIn, and other social media platforms provide a window into personal events/milestones that an advisor can connect to with relevant, targeted content. ! ² LinkedIn and Facebook enables an advisor to scan a clients' network for potential prospects. Engaging with one’s network provides exposure to contacts and potential leads, but avoid overt selling tactics, take a consultative approach.! Broadcast To Your Network And Their Connections! ² It’s important to publish useful, relevant information, research papers, etc. Sharing this information across LinkedIn Groups, Facebook, email will expand reach. ! ² Twitter is a good way to broadcast to your network and lead them to relevant information.! ² Every client is a sphere of influence and social media is an efficient and effective method to connect with them and their network.!
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 57! Case Study: American Express The Emergence Of The Social eCommerce Model • American  Express  is  arguably  one  of  the  most  innova3ve  companies  to  generate  sales   and  engagement  from  the  integra3on  of  web,  mobile,  and  social  media.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 58! The Emergence Of Social eCommerce Model "Go  Social"  Tool  for  Small  Business  Merchants  -­‐  Launched  May  14,  2012     The  new  "Go  Social"  offer  tool  is  a  virtual   one-­‐stop  shop  that  allows  American   Express  merchants  to:   ²  Create  and  manage  coupon-­‐less  offers   into  digital  channels  such  as  Facebook   and  other  plaQorms.   ²  Track  offer  campaign  results  across   mul3ple  social  networks  and  loca3ons.   ²  Help  merchants  to  build  their  business   and  evaluate  their  social  offer   campaigns  with  detailed  reports  that   they  can  access  through  their  own   secure  dashboards.   ²  The  plaQorm  is  built  upon  American   Express'  Smart  Offer  API.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 59! The Emergence Of The Social eCommerce Model “Link,  Like,  Love”  Facebook  Ini3a3ve  Launched  July  2011   ² On  the  American  Express  Facebook   page,  cardmembers  can  link  their  cards   to  the  program  and  choose  their   favorite  deals.       ² American  Express  will  send  statement   credits  to  cardmembers'  accounts  as   they  shop  online  or  in  stores,  without   the  need  to  pre-­‐purchase  anything,   print  out  or  show  a  coupon  at  the   point  of  sale.     ² Delivers  deals  and  offers  based  on   cardmember  Facebook  ac3vity,  pages   they  like  and  share,  as  well  as  the   ac3vi3es  of  Facebook  friends.       ² When  the  related  transac3on  is  made   with  the  American  Express  card  within   a  specific  3me  period,  the  discount  is   credited  to  cardmember  account.    
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 60! The Emergence Of The Social eCommerce Model “Sync,  Tweet,  Save”  Twimer  Ini3a3ve  –  Launched  March  2012     American  Express  uses  twimer  #hashtags  to  create  couponless  na3onal  merchant  offers  and   Cardmember  savings  using  its  smart  offer  API.  Cardmembers  can  sync  their  cards  with  Twimer,   tweet,  and  save  at  na3onal  merchant  partners  including  Best  Buy®,  McDonald’s,  Whole  Foods   Market,  Zappos.Com.    The  campaign  generated  over  US  $12.8MM  in  it’s  first  two   months.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 61! The Emergence Of The Social eCommerce Model Extending  Twimer  Synch  with  “Pay  By  Tweets”  –  Launched  February  2013   ²  American  Express  has  integrated  payments   into  Twimer.     ²  Payments  are  made  by  twee3ng  a  purchase   hashtag,  and  retwee3ng  the  confirma3on   tweet  from  Amex  within  15  minutes  of   receiving  it.  The  product  will  then  be   shipped  to  the  account  billing  address   synced  with  Twimer,  and  payment  taken   from  your  synced  Amex  account.   ²  The  payment  service  is  ini3ally  limited  to   par3cipa3ng  merchants  and  products  for   for  a  limited  number  of  American  Express   Gi  Cards,  and  products  from  Amazon,   Sony,  Urban  Zen  and  Xbox  360.  The  $25   American  Express  Gi  Card  was  made   available  yesterday,  at  a  discounted  price  of   $15  and  the  hashtag  #BuyAmexGiCard25.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 62! Social Media Implications For Financial Services ² Banks  are  aware  of  the  prevalence  in  social  media  usage  and  are  slowly   adap3ng  it  as  a  customer  engagement  medium.       ² Many  firms  are  using  social  media  as  a  listening  tool  to  bemer  understand   customer  complaints  and  address  customer  service  issues  directly.   ² Social  Media  is  not  a  random  ac3vity,  firms  need  clear  business  objec3ves  for   what  they  want  to  achieve  from  social  media  ini3a3ves.   ² Ensure  social  media  ac3vi3es  are  part  of  a  larger  customer  engagement   strategy;  cra  a  social  media  content  calendar  to  coincide  with  marke3ng   ac3vi3es.   ² Communicate  with  customers  in  a  holis3c  manner  that  is  integrated  across   plaQorms  to  provide  a  consistent  message.   ² Tailor  specific  social  media  efforts  appropriately  across  different  plaQorms  –   Twimer  is  different  than  Facebook.     ² Invest  more  in  social  media  analy3cs,  monitoring,  and  social  intelligence  to   bemer  understand  customer  needs  and  trends.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 63! Drivers Of eBanking eBanking   mPayments   Social   Media   Technology   Unbanked   • The  growth  in  eBanking  has  accelerated  over  the  past  five  years  largely  driven  by   technology  and  consumer  acceptance  digital  channels  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 64! ²  High speed cellular and Wi-Fi network coverage have seen dramatic growth across the globe – reaching a vast audience of consumers.! ²  Mobile subscriptions surpassed the number of landlines in 2002 and is now is 3 times larger globally.! ²  Smartphone sales continue to grow rapidly now accounting for a large share of all mobile device shipments; approximately 5.9B people use mobile phones globally! ²  iPad/tablets have the fastest adoption rate in history – outstripping iPhone adoption by over 300% and driving a sizable amount of purchases.! ²  There are a number of disparate mobile platforms that have emerged and companies are investing in multiple ones as they gauge which of these will survive.! ²  Video continues to make inroads in a number of financial service areas such as customer service – the adoption will be slow but will become an important part of the overall engagement model.! Technology Has Been An Enabler In The Growth Of mPayments, Social Media Platforms, And New Capabilities
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 65! The Emergence Of The Mobile Web As The Dominant Channel Of Choice Social networking accounted for of all page views on mobile phones in 2011! Facebook mobile users have! from 50MM in 2009 to 200MM in 2011! There are mobile video playbacks from YouTube every day! Over 775k apps have been developed in the past 3 years and downloaded more than 50B times! Nearly 30% of consumers conduct product research on mobile devices ! As of December 2011 China had internet users – world’s largest ! Twitter has over active users sending over tweets a day! 86% of mobile internet users use their mobile phone while watching TV ! 90% of the largest retailers have a mobile site or smartphone app!
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 66! Technology Is Enabling Banks To Create Interactive, Seamless Cross-Channel Experiences Alipay  has  launched  a  new  payment  system  in   the   Beijing   subway   that   uses   sound   waves   to   connect   smartphones   with   vending   machines.   The   sound   wave   payment   system   was   introduced  with  the  Alipay  Wallet  mobile  app  in   January   and   uses   white   noise   (link   via   Google   Translate)  generated  by  a  smartphone  to  carry   digital  informa3on  to  another  device.   A   Canadian   bank   has   launched   a   ‘personal   assistant   teller’—PAT—an   innova3ve   ATM   that  enables  customers  to  speak  ‘face  to  face’   with   real   bank   assistants.   Live   streaming   connects  customers  via  the  ATM  to  on-­‐screen   tellers  so  that  they  can  carry  out  a  wide  range   of   rou3ne   banking   ac3vi3es   such   as   making   deposits,   opening   an   account   or   arranging   a   loan.   Users   are   able   to   transact   business   by   exchanging   and   signing   documents   on   the   ATM’s  screen.   A   global   UK   based   bank   has   launched   an   innova3ve   online   consulta3on   service   for   its   premier  customers.  This  allows  them  to  access   the   Live   Connect   service   through   the   bank’s   website  gives  video  access  to  their  rela3onship   manager.     Customers   can   ask   ques3ons,   get   instant   financial   advice   on   products   and   markets.     • Financial  Service  companies  have  begun  to  merge  video  and  technology  into  financial   transac3ons  to  provide  convenience  and  usage.   SOURCE: Tech Crunch, Accenture Select  Examples  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 67! Global Content Grew 900%+ Between 2006 and 2012 to 2.4 Zettabytes • Content  has  evolved  into  more  a  useful  form  –  it  is  increasingly  tagged,  labeled,   searchable,  shared.   • Content  crea3on  has  broadened  widely  across  all  age  groups,  video  and  photos  will  lead   the  way.   1  ZB  =  1  000  000  000  000  000  000  000  bytes   or  1  trillion  gigabytes     Source: KCPB, IDC, Wikipedia
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 68! Approximately 71% Of Financial Service Companies Are Planning Or Implementing/Piloting Big Data • 71% of banking and financial firms believe that the use of insight and analytics creates a competitive advantage, compared with 63% of cross-industry respondents. ! • Only 36% cited this as an advantage in 2010, representing a 97% increase in two years.! Source:  IBM/Said  Business  School,  Analytics: The Real World Use of Big Data in Financial Services, 2012   24%   26%   47%   47%   28%   27%   Cross   Industry   Banking /Fin   Services   Not  Started   Planned   Pilot/Implementa3on  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 69! Data Sources Continue to Proliferate, Integration Will Become A Primary Objective For Firms 88%   73%   59%   57%   43%   42%   42%   41%   41%   92%   81%   70%   65%   27%   19%   36%   47%   42%   Transac3ons   Log  Data   Events   Emails   Social  Media   Sensors   External  Feeds   RFID/POS  Data   Free  Form  Test   All     Banking   • Firms are challenged to integrate data across a broad set of platforms and sources.!
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 70! Photos And Video Continue To Gain Momentum In Usage • Over  500MM  photos  are  uploaded  and  shared  on  a  daily  basis  and  the  growth  rate   con3nues  remain  strong.   Source: KCPB,
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 71! Video Growth Will Continue To Accelerate As It Becomes A Primary Medium For Users Source: KCPB, YouTube • 100  hours  of  video  are  uploaded  to  YouTube  every  minute,  up  500%  from  the  20   hours  per  minute  in  2009.   Hours  of  video  uploaded  per  minute  on  YouTube  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 72! Source: KPCB; Apple iPad  vs.  iPhone  =  3x   Apple Has Sustained Exponential Growth With Each Successive Product Launch First 8 Quarters Cumulative Unit Shipments!
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 73! • Personal  computers  con3nue  to  grow  at  a  slow  rate,  being  outpaced  by  very  high   adop3on  rates  for  smartphones  and  tablets.   • Experience  and  engagement  priori3es  for  companies  must  also  shi  to  these  devices  if   companies  want  to  stay  connected  to  their  customers   Source: Gartner, IDC, Strategy Analytics, BI Intelligence iPad  vs.  iPhone  =  3x   Tablets And Smartphones Will Continue To Grow Exponentially
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 74! Tablet Shipments Have Grown Exponentially And Now Out Sell Desktop Their Inception Than PCs Source:  KPCB;  Morgan  Stanley  Research,  Gartner   • In  3  years  tablets  have  achieved  a  level  of  adop3on  that  took  a  decade  for  smartphones.   • Tablets  have  opened  up  a  new  medium  with  rich  interac3ve  experiences  on  a  mobile   plaQorm.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 75! US Smartphone Ownership Continues to Rise As Does Penetration Of Total New Mobile Device Sales 41.8%   45.6%   47.4%   51.0%   53.8%   Dec-­‐11   Mar-­‐12   Jun-­‐12   Sep-­‐12   Dec-­‐12   %  Total  Market   U.S.  Smartphone  Penetra9on   125.9  million   Smartphone   users     +29%  YOY   59.5%   62.9%   62.1%   66.9%   72.2%   40.5%   37.1%   37.9%   33.1%   27.8%   11-­‐Dec   12-­‐Mar   12-­‐Jun   12-­‐Sep   Dec   %  Newly  Acquired  Devices   72%  of  All  Newly   Acquired  Devices   were   Smartphones   +12.7   percentage   points   Source: ComScore
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 76! Tablets And eReaders Are Growing Rapidly And Have Become A Third Screen For Consumers • Tablets  will  play  an  increasingly  integral  role  for  digital  consumers  –  banks  and  retailers   will  need  to  adjust  their  strategy  and  experiences  specifically  for  them.   *Estimate Source: Pew Research; Independent Research 0%   10%   20%   30%   40%   50%   60%   2%   3%   4%   5%   6%   14%   16%   18%   29%   55%*  %  Ownership  US  Adults  With  A  Tablet  or  eReader  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 77! The Emergence Of The US Mobile Only Household • 60%  of  US  households  with  adults  aged  25  –  29  years  old  only  have  a  wireless  phone.   • 58%  of  all  adults  that  rent  do  not  have  a  landline.   Source: Gigacom; CDC/NCHS
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 78! Web Traffic From Mobile Devices Is Growing At A 150% Rate Source: KPCB; StatCounter Global Stats, May 2013
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 79! Smartphone Usage Is Repetitive And Growing In Activities Source:  KPCB   • Frequency  in  usage  of  mobile  devices  is  growing  across  an  increasing  number  of   ac3vi3es.   • Messaging  and  tradi3onal  calling  are  the  top  ac3vi3es,  social  media  is  gaining  trac3on.   23   22   18   13   12   9   8   8   6   5   3   3   14   Messaging   Voice  Call   Checking  Time   Music   Gaming   Social  Media   Camera   Alarm   News  &  Alerts   Calendar   Web   Search   Other   #  of  Times  Typical  User  Checks  Phone  per  Day  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 80! Smartphone Usage Growth Rates Top 10 Smartphone Usage Categories! % year-over-year growth, December 2012! Source: ComScore MobiLens, December 2012 45.2%   44.4%   43.5%   42.9%   41.2%   40.9%   40.7%   40.5%   40.1%   40.0%   Instant  Messaging   Social  Networking  with  Checkin-­‐In   Insurance  Service   Electronic  Payments   digital  Books/Magazines   Online  Retail   Photo/Video  Sharing   Home/Lifestyle   Adult  entertainment   Da3ng  Services  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 81! Smartphones Are An Integral Part Of The Retail Experience 42.5%   34.9%   32.7%   30.4%   22.4%   18.5%   18.1%   15.4%   10.2%   5.6%   Took  Picture  of  a  Product   Texted  or  Called  Friends/Family  About  a   Sent  Picture  of  Product  to  Family/Friends   Scanned  a  Product  Barcode   Compared  Product  Prices   Found  Coupons  or  Deals   Found  Store  Loca3on   Researched  Product  Features   Checked  Product  Availability   Purchased  Goods  or  Services  (Online)   %  Performed  Shopping  Ac9vity  in  Store  with  Smartphone   Ac9vi9es  Performed  in  Retail  Store  with  Smartphone  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 82! 98%   89%   79%   74%   64%   At  Home   On  The  Go   Shopping   At  Work   Commu3ng   Mobile Consumer Behavior • Mobile  devices  have  become  indispensible  part  of  our  lives.   Over 775k apps have been developed in the past 3 years and downloaded more than 50B times! Where  People  Use  Mobile  Devices  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 83! Smartphones Play A Prominent Role In Showrooming, While Tablets Are Driving Purchases 39%   39%   38%   38%   33%   30%   21%   23%   24%   19%   34%   22%   19%   21%   Researched  Product  Features   Compared  Product  Prices   Purchased  goods  or  services  Online   Found  Store  Loca3on   Found  Coupons  or  Deals   Checked  Product  Availability   Made  Shopping  Lists   Tablet   Smartphone   Source: comScore MobiLens, December 2012   • Tablet  owners  are  twice  as  likely  to  purchase  items  at  38%  than  smartphone  owners  at   19%.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 84! Over Half Of Users Use Tablets While Watching TV; Multi- tasking Across Devices Continues To Grow Source:  ComScore   • Tablets  have  mass  appeal  and  have  become  an  integral  part  of  our  rou3nes  –  we  use   them  for  many  ac3vi3es  especially  when  watching  TV   53%   52%   30%   24%   13%   12%   3%   3%   Accessed  Social  Networking   Played  a  Video  Game   Shopped  Online   Read  a  Book   Read  a  newspaper   Read  a  Magaine   Other  (Please  Specify)   Did  Not  Do  Any  Ac3vi3es   TV  Watcher  Tablet  Ac9vity   Not     Related   44%   Related   Ac9vi9es   56%   Used  Tablet  While  Watching  TV   Yes   53%   No   47%  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 85! Source:  ComScore   Apps Dominate in Most Categories US Top Smartphone Properties, % Share of Time Spent by Access Method Directories/Resources   Lifestyles   News/Informa3on   Portals   Retail   Business/Finance   Games   Entertainment   Services   Social  Media   19%   49%   64%   72%   75%   76%   94%   95%   96%   97%   81%   51%   36%   28%   25%   24%   60%   50%   40%   30%   App   Browser  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 86! Three Core Types Of mPayments Have Emerged mCommerce   Mobile  Web  Browser  (online   wallets,  web  ecommerce)   mPayments   Uses  contactless,  mobile   capabili3es   mWallets   Virtual  Wallet   How  It  Works   Types   1.  Add  items  to  Cart   2.  Fill  out  informa3on   3.  Purchase  and   confirma3on   1.  Add  items  to  Cart   2.  Click  to  buy   3.  Purchase  and   confirma3on   1.  Funds  loaded  on  device  e.g.   mobile  phone   2.  Scan  barcode     3.  Purchase  made,  new   account  balance  displayed   1.  Credit  card  info  stored  on   phone   2.  Enter  PIN  to  purchase   3.  Tap  your  phone  to  POS  ,   authen3ca3on,  approval   Or   1.  Money  loaded  into  account   2.  Purchase  made  via  SMS   3.  Purchase  and  confirma3on  to   merchant   Or   • Availability  for  specific  mPayment  type  will  vary  based  on  cultural  acceptance,   technology,  and  financial  provider  access.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 87! Starbucks Is A Retailing Pioneer In The mPayments Space Starbucks Card Mobile App! ² Mobile bar codes that are delivered to the app and scanned at retail store.! ² Weekly, Starbucks is seeing close to 4 million mobile payment transactions, up from 2 million near the end of 2012. Mobile now accounts for approximately 10% of Starbuck’s total U.S. sales.! ² The company also reports that My Starbucks Rewards is seeing similar growth rates outside the U.S. in countries such as China, Korea and Canada.! ² The app also includes a store locator and is integrated into its rewards program and promotions.! ² Starbucks accounted for over 50% of the $500 million in mobile wallet spend in 2012.! • Mobile  ini3a3ves  allow  retailers  to  monitor  and  analyze  purchase  pamerns,  providing  new   insights  to  customer  behavior.     • The  ability  to  create  highly  personalized  experiences  will  con3nue  to  drive  retailers  entry   into  the  mobile  space.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 88! ²  Over  the  past  12  months,  25%  of  PayPal  account  holders  made  at  least  one  purchase   through  mobile   ²  The  net  total  payment  volume  through  PayPal  during  Q1  totaled  $41  billion,  up  21%   and  was  driven  by  consumer  and  merchant  use  of  PayPal  both  on  and  off  eBay   ²  In  the  first  quarter,  PayPal  gained  five  million  ac3ve  registered  accounts,  ending  the   quarter  with  128  million  ac3ve  users,  up  16%   ²  During  the  first  quarter  the  iPad  version  of  PayPal  Here  –  a  mobile  payment  solu3on   for  small  businesses  –  was  launched  in  the  U.S.   ²  PayPal  Here  also  became  available  for  sale  at  more  than  2,700  SoBank  loca3ons  in   Japan  while  the  chip  and  PIN  version  was  announced  for  roll  out  this  summer  in   Britain   ²  PayPal’s  offline  ini3a3ves  are  now  live  in  almost  20,000  major  retail  loca3ons  in  the   U.S.   ²  Log  In  With  PayPal  allows  a  user  to  sign  up  on  a  retailers  site  with  a  PayPal  account   which  would  include  all  financial,  shipping  and  billing  informa3on,  as  well  as   purchase  history  –  and  has  now  been  extended  to  mobile  sites   PayPal Has Transformed Into A Global, Multichannel Payment Company With Mobile Leading Strong Growth
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 89! PayPal Has Aggressively Forged Partnerships With Retailers And Point Of Sale Developers ²  First mobile payment partner, Home Depot, rolled out to 2,000 locations. Customers make purchases with their PayPal accounts by typing in their mobile phone number and PIN. Customer receives an electronic receipt on their mobile device after making a purchase.! ²  May 2012 announced additional 15 retail partners some of which include: Abercrombie & Fitch, Barnes & Noble, Foot Locker, JC Penney, Office Depot, and Toys "R" Us.! ²  Redesigned website has cross-sell space for promoting mobile payments. The site is also designed to be touch- friendly for use with tablets and smartphones. ! ²  Signed deals with point of sale systems developers and point of sale terminal manufacturers. These partnerships give PayPal access to over 40 million payment terminals across the world.! ²  PayPal is also testing a new app in Britain that enables users to make purchases via a unique bar code linked to their account.! ²  Launched a joint venture in Japan and has plans to enter India, China and other global markets.! PayPal Here   • PayPal  is  quickly  becoming  a  formidable  player  in  the  payments  industry  and  mobile  is  a   major  component  of  that  strategy   Source:  Mobileburn,  TechCrunch  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 90! Several Different mPayment Models Have Emerged And Are Competing To Gain Global Acceptance Payment   Models   CONTACTLESS   NFC,  RFID,   FeliCa   MOBILE  APPS   Internet   SMS     Text   Messaging   WEB    Mobile   Browser   USSD     Similar  to   SMS   • There  has  been  a  prolifera3on  in  proprietary  mPayment  offerings  that  vary  in   func3onality  and  standards.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 91! NFC Estimates - Key Statistics and Figures ²  Current  barriers  to  growth  include  availability  of  NFC  mobile  phones  and  POS   contactless  readers  but  both  are  expected  to  see  strong  growth  entering  2016.   ²  NFC  payments  accounted  for  2%  of  total  transac3on  value  in  2013  and  will  grow  to  5%   of  the  total  transac3on  value  in  2017.   ²  According  to  ABI  Research,  a  total  of  125  million  NFC  phones  were  shipped  in  2012   and  500  million  NFC  devices  will  be  in  use  in  2014.    This  number  will  grow  to  over  800   million  units  by  2016.   ²  Between  2012  and  2017  NFC-­‐enabled  phones  will  increase  at  a  65%  CAGR  to  2.1bn   units  and  will  reach  32%  of  all  mobile  devices  by  2017.   ²  47  million  Japanese  have  adopted  tap-­‐and-­‐go  phones  in  three  years  –  making  it  one  of   the  fastest  roll  outs  of  electronic  products  driven  by  a  broad  set  of  usage  capabili3es.   ²  There  will  be  169  million  users  of  mobile  contactless  payment  in  China  in  2013.  Total   number  of  mPayment  users  will  be  410  million,  making  China  the  world’s  largest   mPayments  market.   Source:  Berg  Insight,  ABI  Research,  Mobile  Commerce  Daily;  Gartner   • Although  expert’s  opinions  vary,  all  agree  that  NFC  mPayments  will  become  a  major   source  of  payment  transac3ons.      
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 92! FeliCa Products and Applications Are A Glimpse Into The Future Of Mobile Contactless Functionality Source:  Wikipedia  and  NitroSapient   ²  The Bank of Tokyo-Mitsubishi UFJ: ”Super IC Card” ! The “Super IC Card” rolled out by the Bank of Tokyo- Mitsubishi UFJ is a dual-interface (contact and contactless), 3-in-l IC card designed for security, flexibility and customer convenience. Multi-functional with prepaid (“Edy” e-money), debit (cash card) and charge (credit card) payments features.!   ! ²  Wallet Phones ! FeliCa compatible wallet phones, referred to as “Osaifu- Keitai” and marketed by NTT DoCoMo, KDDI and Softbank Mobile, are used increasingly in Japan for a wide variety of applications including e-money, credit cards, payments. Additional companies are adopting usage of FeliCa based payment products.! ²  Non-Financial Applications! e-tickets, membership IDs, airline tickets, airport check in, entertainment, loyalty programs, reward membership, PC/ online encryption, home security. New functionality is continuously being added to the FeliCa platform!
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 93! FeliCa Functionality Has Become Ubiquitous In Japan And Is Spreading Globally • 50%  of  Japanese  mobile  users  have  a  FeliCa  phone  and  20%  of  users  have  used  a  mobile   wallet  to  make  a  purchase  Mobile.   • FeliCa  is  more  than  a  mobile  payment  service,  it  provides  a  wide  range  of  user  needs   including  the  use  as  a  secure  ID.     Source:  Wikipedia,  SONY,  Smartnfc   Boarding   Pass   Consumer   Electronics   Transit   Ticket   IC  Card   Vending   Machine   Access   Control   Internet   Credit   Service   Retailers   ID  Card   eTicket  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 94! mPayment Platform Summary ² Although mPayments have seen significant growth, the market in terms of technology, standards, and payment providers vary widely by market! ² The key players in the space are banks, financial service companies (e.g. credit card companies, telecoms, specialist web payment companies, online service providers, retailers/merchants, and technology companies.)! ² Companies have created multiple partnerships/alliances and networks as they test and promote these platforms ! ² Although the market is nascent it is rapidly maturing and there will be an emergence of a few dominant players and platforms that will led to a few global platforms.! ² It is likely that multiple technologies will co-exist on mobile devices and cards which are being pushed by giants such as VISA and FeliCa!
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 95! Drivers Of eBanking eBanking   mPayments   Social   Media   Technology   Unbanked   • The  growth  in  eBanking  has  accelerated  over  the  past  five  years  largely  driven  by   technology  and  consumer  acceptance  digital  channels.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 96! ² There  are  over  2.5B  unbanked  people  globally,  many  of  which  are  in  Africa,   Asia,  and  La3n  America.   ² Because  most  of  the  unbanked  currently  own  a  mobile  phone  they  are   readily  adop3ng  payment  op3ons  based  on  mobile  ownership  and   distribu3on.   ² Mobile  payments  are  bringing  disparate  players  together  in  collabora3on  to   provide  new  payment  op3ons  to  the  unbanked.   ² The  majority  of  mobile  payments  are  focused  on  retail  and  person-­‐to-­‐person   (P2P)  payments.   ² The  ability  to  enhance  the  unbanked  regions  will  vastly  improve  the  flow  of   funds  and  ul3mately  spur  economic  growth  that  would  otherwise  be  difficult   to  obtain.   ² Consumers  in  Africa,  the  Middle  East,  and  India  rely  on  telecoms  including   Vodafone  and  MTN  to  provide  mobile  money  op3ons.   Source: Mobile Banking News The World’s Unbanked Are Rapidly Adopting mPayments, Banks Will Face Stiff Competition To Win Marketshare
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 97! Source: Demirguc-Kunt and Klapper 2012 Many Parts Of The World Have A Large Percentage Of The Population That Is Unbanked • mPayments  will  provide  access  to  a  more  efficient  and  lower  cost  payment  system   fueling  new  economic  prosperity  for  the  world’s  unbanked.   89%   55%   45%   39%   33%   24%   18%   11%   45%   55%   61%   67%   76%   82%   High  Income   Economies   East  Asia  &   Pacific   Europe  &   Central  Asia   La3n  America   &  Caribbean   South  Asia   Sub-­‐Saharan   Africa   Middle  East  &   North  Africa   Unbanked   Banked  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 98! Source: Hoohan, World Bank; McKinsey; Federal Reserve Board Survey 2011 Unbanked Adults Who Do Not Use Formal Financial Services ²  2.5  billion  adults  do  not  use   formal  financial  services  to   save  or  borrow.   ²  Of  the  1.2  billion  adults  who   use  formal  financial  services  in   Africa,  Asia,  and  the  Middle   East,  at  least  two-­‐thirds,  a   limle  more  than  800  million,   live  on  less  than  $5  per  day.   ²  8.2%  of  US  households  (10   million)  are  unbanked.  20.1%   of  US  households  (24  million)   are  under  banked.     • Among  the  90%  of  under  banked  consumers  with  mobile  phones,  49%  had  used  mobile   banking  type  services  in  2012,  up  from  29%  in  2011     • The  unbanked  are  rapidly  adop3ng  payment  services  from  non-­‐banks,  as  their  affluence   grows  they  will  be  less  likely  to  use  Banks  for  tradi3onal  products   2,455   876   60   136   193   250   326   612   Total   High  Income  OECD   Arab  States   Central  Asia/Eastern   La3n  America   Sub-­‐Saran  Africa   South  Asia   East  Asia   Unbanked  Popula3on  By  Region  (MM)  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 99! India Is The World’s Second Most Populous Nation And Has Over 450MM Unbanked People • In  a  country  where  cash  is  used  in  65%  of  retail  transac3ons  and  mobile  phones  are   common,  mPayments  are  poised  to  grow.   India  Facts  &  Figures   ²  Mobile  phone  connec3ons  outnumber  bank  accounts   by  more  than  a  factor  of  three:  893MM  mobile  phone   subscribers  and  250MM  bank  accounts.     ²  The  Na3onal  Payment  Council  of  India  (NPCI)   launched  the  Interbank  Mobile  Payment  Service   (IMPS).  IMPS  allows  a  person  to  pay/remit  money  to  a   merchant  or  an  individual  in  real-­‐3me  using  a  mobile   phone  number  and  a  mobile  phone  iden3fier.     ²  India's  leading  m-­‐commerce  player,  ngpay,  has  over   1.5  million  registered  users  who  can  purchase   products  through  their  mobile  phones.   ²  Western  Union  has  announced  that  State  Bank  of   India  (SBI)  bank  accountholders  will  be  able  to  receive   cross-­‐border  money  transfers  using  their  mobile   phones.      
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 100! Unbanked Usage of SMS And USSD Has Grown Rapidly in Certain Regions And Will Continue To Grow Globally • Consumers  in  Africa,  the  Middle  East,  and  India  rely  on  telecoms  including  Vodafone  and   MTN  to  provide  mobile  money  op3ons.   Kenya   M-­‐Pesa  Facts  &  Figures   ²  M-­‐Pesa,  Swahili  for  money  is  a  mobile-­‐phone  based   money  transfer  and  microfinancing  service  for   Safaricom  and  Vodacom  launched  in  2007.   ²  By  2011  68%  of  adults  use  mobile  money;  average   transac3on  size  is  $30   ²  M-­‐PESA  now  has  10.5  million  ac3ve  users.   ²  There  are  65.5k  M-­‐PESA  agents.  26k  M-­‐PESA  agents   were  added  in  the  last  financial  year.   ²  Users  give  cash  to  agent,  money  is  loaded  onto   account,  payment  made  via  SMS,  confirm  given  to   merchant  via  SMS   ²  M-­‐PESA  now  Contributes  18%  of  Safaricom’s  total   revenue;  revenue  grew  by  29.5%  to  21.84  billion.   ²  Kshs  522bn  was  transacted  between  customers   within  M-­‐PESA,  Kshs  444bn  was  deposited,  Kshs   390bn  was  withdrawn  from  M-­‐PESA  via  agent.  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 101! Western Union Has Partnered With MTN In Uganda To Launch A Mobile Money Transfer Service Western  Union/MTN  Facts  &  Figures   ²  WU  has  agreements  with  over  20  mobile  operators   across  21  countries.  Over  2  million  MTN  subscribers   can  send  and  receive  Western  Union  Money  Transfer   transac3ons  using  their  MTN  MobileMoney  accounts.     ²  MTN  amracted  16%  of  its  customers  to  its  mobile   money  service  in  its  ini3al  13  months,  and   approximately  60%  of  its  transfers  are  to  ‘unbanked’   customers  in  rural  areas.   ²  MTN’s  Mobile  Money  users  can  add  funds,  send  money   interna3onally  with  WU  directly,  online,  or  from  their   Mobile  Money  accounts  for  cash  payout  at  WU  Agent   loca3ons  or  mobile  phone  partner  subscribers.   ²  To  gain  trac3on,  9,000  branded  mobile  “Yellow   Phones”  were  distributed  to  Ugandans.  MTN's   MobileMoney  service  is  currently  available  in  Benin,   Cameroon,  Ghana,  Guinea  Bissau,  Ivory  Coast,  Rwanda,   South  Africa  and  Uganda,  with  pilots  underway  in   several  other  markets  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 102! Unbanked • Sub-­‐Saharan  Africans  are  more  likely  to  use  a  mobile  device  to  conduct  banking   transac3ons  due  to  the  physical  limita3ons  of  banking  loca3ons  and  cost.   Source:  Demirguc-­‐Kunt,  Asli  and  Leora  Klapper,  2012;  World  Bank  Policy  Research  Working  Paper  6025  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 103! ² Mobile  devices,  par3cularly  smartphones,  have  become  an   ubiquitous  part  of  our  lives.   ² Consumers  are  now  mul3-­‐plaQorm  and  consume  content   across  all  channels  oen  on  mul3ple  devices  simultaneously.   ² Tablets  growing  influence  have  surpassed  laptop/desktop   sales  and  will  con3nue  to  grow  into  a  primary  appliance  for   consumers.   ² Mobile  web  traffic  will  exceed  desktop  traffic  by  2015  and   access  through  smartphone  will  con3nue  to  accelerate.   ² Companies  need  to  build  experiences  across  plaQorms  and   devices  to  accommodate  a  mul3-­‐modal  consumer  or  face  a   loss  of  business  to  more  innova3ve  compe3tors.   Source: Mobile Banking News Mobile’s  Growing  Global  Influence  On  Chinese  Consumers    
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 104! Q&A  
  • © 2013 Blue Panda Interactive. Proprietary And Confidential.! 105! Blue   Panda   Interac3ve   customer   experience   consultancy.     Regardless   of   industry,   companies   are   focused   on   customer   acquisi3on,   retaining   customers,   and   increasing   customer   loyalty   and   usage.     We   have   extensive   experience  in  building  mul3channel  customer-­‐centric  experiences  that  deliver   business  outcomes.     We  focus  on  digital  strategy,  media,  and  analy3cs  to  connect  brands  with  their   customers.  We  leverage  innova3ve  ideas  that  are  based  on  business  goals  and   customer   needs   to   execute   winning   strategies.   Our   belief   is   that   integrated   marke3ng  and  content  are  key  ingredients  to  connect  and  engage  with  your   audience.    It’s  about  sharing  a  passion  to  drive  business  outcomes  and  delight   customers.     If  you  would  like  to  learn  more  about  how  we  can  partner  with  you  please   contact  us  at  info@bluepandainterac3ve.com