The Impact of Mobile on the Future ofRetail Banking21 June, 2013 Confidential 1Ron ShevlinSenior Analyst, Aite GroupJohn B...
© Copyright 2013 Aite Group, LLC 2@rshevlin
© Copyright 2013 Aite Group, LLC 3@rshevlinThemeMobile innovation is creatinga new phase of competitionin financial services
© Copyright 2013 Aite Group, LLC 4@rshevlinAgenda• Why change now?• How will mobile change FIs?• What is the new phase of ...
© Copyright 2013 Aite Group, LLC 5@rshevlin-2%0%2%4%6%8%10%12%14%16%1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008...
© Copyright 2013 Aite Group, LLC 6@rshevlinBridging the ROE gapSource: Boston Consulting GroupCurrentROECostreductionPrici...
© Copyright 2013 Aite Group, LLC 7@rshevlinDeposit account service charges32.034.036.038.040.042.044.02008 2009 2010 2011 ...
© Copyright 2013 Aite Group, LLC 8@rshevlinThe NII challengeSource: http://www.bankregdata.com/allIEmet.asp?met=NII2.62%1....
© Copyright 2013 Aite Group, LLC 9@rshevlinI have seenthe future…
© Copyright 2013 Aite Group, LLC 10@rshevlin
© Copyright 2013 Aite Group, LLC 11@rshevlinHow mobile changes FIs• What FIs market: NeoChecking accounts• Where FIs marke...
© Copyright 2013 Aite Group, LLC 12@rshevlinThe DebankedMainstream consumers whowillingly opt out of thetraditional bankin...
© Copyright 2013 Aite Group, LLC 13@rshevlinNeoChecking accounts
© Copyright 2013 Aite Group, LLC 14@rshevlinNeoChecking accounts• Mobile-first design• Point-of-decision input/feedback• B...
© Copyright 2013 Aite Group, LLC 15@rshevlinDigital receiptprovides real-timefeedback toconsumers on theirpurchase along w...
© Copyright 2013 Aite Group, LLC 16@rshevlin
© Copyright 2013 Aite Group, LLC 17@rshevlinMobile apps:The new marketing platform
© Copyright 2013 Aite Group, LLC 18@rshevlin
© Copyright 2013 Aite Group, LLC 19@rshevlin
© Copyright 2013 Aite Group, LLC 20@rshevlinFrequencyof useper weekAverage User Retention (90 days)3.515% 55%Streaming mus...
© Copyright 2013 Aite Group, LLC 21@rshevlinPeople pay to download apps…Source: Gartner5.028.1411.8516.4321.672012 2013 20...
© Copyright 2013 Aite Group, LLC 22@rshevlin…just not finance appsSource: Distimo2,28035027021030Games Entertainment Photo...
© Copyright 2013 Aite Group, LLC 23@rshevlinWhy not?• Financial services customers are used to free• Not important as game...
© Copyright 2013 Aite Group, LLC 24@rshevlin“When we speak with app developers, many areconcerned about monetization or pl...
© Copyright 2013 Aite Group, LLC 25@rshevlinApps: The new marketing platformIn-app purchasesfrom free apps71%iPhone Apps R...
© Copyright 2013 Aite Group, LLC 26@rshevlinNo data in the selected period
© Copyright 2013 Aite Group, LLC 27@rshevlin
© Copyright 2013 Aite Group, LLC 28@rshevlin
© Copyright 2013 Aite Group, LLC 29@rshevlinMobile apps revenue triple play• In-house developed• Third-party developed• In...
© Copyright 2013 Aite Group, LLC 30@rshevlinThe old moments of opportunity
© Copyright 2013 Aite Group, LLC 31@rshevlin
© Copyright 2013 Aite Group, LLC 32@rshevlinThe new moments of opportunity
© Copyright 2013 Aite Group, LLC 33@rshevlin
© Copyright 2013 Aite Group, LLC 34@rshevlinJIMMY CHOO$400Can I afford it?How should I pay?Can I get an offer?What did oth...
© Copyright 2013 Aite Group, LLC 35@rshevlin
© Copyright 2013 Aite Group, LLC 36@rshevlinHow mobile changes FIs• What FIs market: NeoChecking accounts• What/Where FIs ...
© Copyright 2013 Aite Group, LLC 37@rshevlinThemeMobile innovation is creatinga new phase of competitionin financial servi...
© Copyright 2013 Aite Group, LLC 38@rshevlinThird wave of competition1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 200...
© Copyright 2013 Aite Group, LLC 39@rshevlin• Monthly feesCosts Benefits• Penalties• Service fees• Interest earned• Reward...
© Copyright 2013 Aite Group, LLC 40@rshevlin
© Copyright 2013 Aite Group, LLC 41@rshevlinHow mobile changes marketingDemographics BehaviorCreative AnalyticsOld NewData...
© Copyright 2013 Aite Group, LLC 42@rshevlinNew changes=New challenges• Analytics• Data integration• Application integration
© Copyright 2013 Aite Group, LLC 43@rshevlinThemeMobile innovation is creatinga new phase of competitionin financial servi...
© Copyright 2013 Aite Group, LLC 44@rshevlinAite: Partner, CounterpartAite Group (eye-tay) is an independent research and ...
Mobile is the New Opportunity21 June, 2013 Confidential 45
What challenges do you face?• Internal Challenges – ROE and NII‒Multiple channel management platforms‒Multiple secure user...
Why does a good mobile banking strategy matter?• Drive business results andaddress challenges‒(OLB Only vs. OLB +Mobile)• ...
TransactionalHistoryAccount toAccount xFerPlatform Convergence48User AdminAccountServicesAccountTransactionsUser ProfileEn...
Enable Consumers with aFeature Rich User Experience49
Consumer Preference with the Triple Play50Fully Integrated Browser,Downloadable App andText BankingControl All User Interf...
Smartphone Features with the Downloadable App51Downloadable App• Account andTransaction History• Bill Payment• Account to ...
Drive Transactions to the Mobile Channel with RDC52Integrated RemoteDeposit Capture (RDC)utilizing SmartphonehardwareReduc...
Sales and Service Channel ofPreference53
Enable Smartphone Technology with a DownloadableApp• Market your brand with an app storepresence• Serve the demand for dow...
Targeted Offers to Maximize Your Marketing EffortsTarget just mobileusers with specificoffersBuild, deliver andmanage your...
Service Your Consumers56Enable your users tocomplete their selfservice needs in theirchannel of preferenceControl their ri...
Thank You!Questions?Ron ShevlinSenior Analyst, AiteJohn BalosePrincipal Market Manager, ACIWorldwide
For more information, emailcommunityfinancial@aciworldwide.com
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The Impact of Mobile on the Future of Retail Banking

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The Impact of Mobile on the Future of Retail Banking

  1. 1. The Impact of Mobile on the Future ofRetail Banking21 June, 2013 Confidential 1Ron ShevlinSenior Analyst, Aite GroupJohn BalosePrincipal Market Manager, ACI WorldwideOur software underpins electronic paymentsthroughout retail and wholesale banking,and commerce, all the time, without fail.Debi Harrison, Director Customer andOperations Manager, Watford
  2. 2. © Copyright 2013 Aite Group, LLC 2@rshevlin
  3. 3. © Copyright 2013 Aite Group, LLC 3@rshevlinThemeMobile innovation is creatinga new phase of competitionin financial services
  4. 4. © Copyright 2013 Aite Group, LLC 4@rshevlinAgenda• Why change now?• How will mobile change FIs?• What is the new phase of competition?
  5. 5. © Copyright 2013 Aite Group, LLC 5@rshevlin-2%0%2%4%6%8%10%12%14%16%1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Source: Federal Reserve BankBank return on equity
  6. 6. © Copyright 2013 Aite Group, LLC 6@rshevlinBridging the ROE gapSource: Boston Consulting GroupCurrentROECostreductionPricing Growth8%HistoricalROE+3-4%+1-2%+1-2% 13-16%
  7. 7. © Copyright 2013 Aite Group, LLC 7@rshevlinDeposit account service charges32.034.036.038.040.042.044.02008 2009 2010 2011 2012US$ (in billions)-19%Source: Novantas
  8. 8. © Copyright 2013 Aite Group, LLC 8@rshevlinThe NII challengeSource: http://www.bankregdata.com/allIEmet.asp?met=NII2.62%1.27%1.46% 1.42%>$50B(n=35)$5B to $49B(n=125)$1B to $5B(n=471)<$1B(n=5,881)2012 Non-Interest Income (% of assets)
  9. 9. © Copyright 2013 Aite Group, LLC 9@rshevlinI have seenthe future…
  10. 10. © Copyright 2013 Aite Group, LLC 10@rshevlin
  11. 11. © Copyright 2013 Aite Group, LLC 11@rshevlinHow mobile changes FIs• What FIs market: NeoChecking accounts• Where FIs market: Mobile apps• When FIs market: Mobile shopping
  12. 12. © Copyright 2013 Aite Group, LLC 12@rshevlinThe DebankedMainstream consumers whowillingly opt out of thetraditional banking system
  13. 13. © Copyright 2013 Aite Group, LLC 13@rshevlinNeoChecking accounts
  14. 14. © Copyright 2013 Aite Group, LLC 14@rshevlinNeoChecking accounts• Mobile-first design• Point-of-decision input/feedback• Blend prepaid, debit, and credit
  15. 15. © Copyright 2013 Aite Group, LLC 15@rshevlinDigital receiptprovides real-timefeedback toconsumers on theirpurchase along withcontextualtransaction insights.Spend trackingtracks how fastconsumers spendmonth-to-datecompared tohistorical spendingpatterns.
  16. 16. © Copyright 2013 Aite Group, LLC 16@rshevlin
  17. 17. © Copyright 2013 Aite Group, LLC 17@rshevlinMobile apps:The new marketing platform
  18. 18. © Copyright 2013 Aite Group, LLC 18@rshevlin
  19. 19. © Copyright 2013 Aite Group, LLC 19@rshevlin
  20. 20. © Copyright 2013 Aite Group, LLC 20@rshevlinFrequencyof useper weekAverage User Retention (90 days)3.515% 55%Streaming musicSocial gamesDatingSocial networkingPhoto & videoDealsCommunicationNewsSports scoresWeatherFinancialMusicHealth/fitnessRetailEducationFood & drinkTravelSource: FlurryFinancial apps “loyalty”19
  21. 21. © Copyright 2013 Aite Group, LLC 21@rshevlinPeople pay to download apps…Source: Gartner5.028.1411.8516.4321.672012 2013 2014 2015 2016Worldwide mobile paid apps downloads (billions)
  22. 22. © Copyright 2013 Aite Group, LLC 22@rshevlin…just not finance appsSource: Distimo2,28035027021030Games Entertainment Photography Utilities Finance# of paid apps within category to reach the Top 25
  23. 23. © Copyright 2013 Aite Group, LLC 23@rshevlinWhy not?• Financial services customers are used to free• Not important as games, entertainment• Inadequate marketing
  24. 24. © Copyright 2013 Aite Group, LLC 24@rshevlin“When we speak with app developers, many areconcerned about monetization or platformfragmentation, but the number one problemthey face is getting their apps noticed.”Canalys Senior Analyst, Tim Shepherd
  25. 25. © Copyright 2013 Aite Group, LLC 25@rshevlinApps: The new marketing platformIn-app purchasesfrom free apps71%iPhone Apps Revenue(February 2013)Paid revenue24%In-app purchasesfrom paid apps5%Source: Distimo, March 2013
  26. 26. © Copyright 2013 Aite Group, LLC 26@rshevlinNo data in the selected period
  27. 27. © Copyright 2013 Aite Group, LLC 27@rshevlin
  28. 28. © Copyright 2013 Aite Group, LLC 28@rshevlin
  29. 29. © Copyright 2013 Aite Group, LLC 29@rshevlinMobile apps revenue triple play• In-house developed• Third-party developed• In-app purchases
  30. 30. © Copyright 2013 Aite Group, LLC 30@rshevlinThe old moments of opportunity
  31. 31. © Copyright 2013 Aite Group, LLC 31@rshevlin
  32. 32. © Copyright 2013 Aite Group, LLC 32@rshevlinThe new moments of opportunity
  33. 33. © Copyright 2013 Aite Group, LLC 33@rshevlin
  34. 34. © Copyright 2013 Aite Group, LLC 34@rshevlinJIMMY CHOO$400Can I afford it?How should I pay?Can I get an offer?What did others pay?
  35. 35. © Copyright 2013 Aite Group, LLC 35@rshevlin
  36. 36. © Copyright 2013 Aite Group, LLC 36@rshevlinHow mobile changes FIs• What FIs market: NeoChecking accounts• What/Where FIs market: Mobile apps• What/Where/When FIs market: Mobile shopping
  37. 37. © Copyright 2013 Aite Group, LLC 37@rshevlinThemeMobile innovation is creatinga new phase of competitionin financial services
  38. 38. © Copyright 2013 Aite Group, LLC 38@rshevlinThird wave of competition1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2025LocationRatesPerformance
  39. 39. © Copyright 2013 Aite Group, LLC 39@rshevlin• Monthly feesCosts Benefits• Penalties• Service fees• Interest earned• Rewards redeemed• Savings generatedTBO: Total Benefits of Ownership
  40. 40. © Copyright 2013 Aite Group, LLC 40@rshevlin
  41. 41. © Copyright 2013 Aite Group, LLC 41@rshevlinHow mobile changes marketingDemographics BehaviorCreative AnalyticsOld NewDataSkillCompetencyPersuasion EngagementPhilosophy
  42. 42. © Copyright 2013 Aite Group, LLC 42@rshevlinNew changes=New challenges• Analytics• Data integration• Application integration
  43. 43. © Copyright 2013 Aite Group, LLC 43@rshevlinThemeMobile innovation is creatinga new phase of competitionin financial services
  44. 44. © Copyright 2013 Aite Group, LLC 44@rshevlinAite: Partner, CounterpartAite Group (eye-tay) is an independent research and advisoryfirm focused on business, technology and regulatory issues andtheir impact on the financial services industry.Ron ShevlinSenior Analystrshevlin@aitegroup.comwww.aitegroup.comTwitter: @rshevlinBlog: Snarketing2dot0.com
  45. 45. Mobile is the New Opportunity21 June, 2013 Confidential 45
  46. 46. What challenges do you face?• Internal Challenges – ROE and NII‒Multiple channel management platforms‒Multiple secure user messaging systems‒Inconsistent user experience‒Different call center support capabilities‒Varying levels of risk management and security• External Challenges‒Evolving technology and devicerequirements‒Changing consumer preferences‒Fraud threats‒Lack of brand differentiation‒Customer acquisition andretention46
  47. 47. Why does a good mobile banking strategy matter?• Drive business results andaddress challenges‒(OLB Only vs. OLB +Mobile)• Improve operationalefficiencies with a singleplatform• Support the consumerexperience to the channelof their choice47*Zions Bank Mobile Banking Impact Study
  48. 48. TransactionalHistoryAccount toAccount xFerPlatform Convergence48User AdminAccountServicesAccountTransactionsUser ProfileEntitlements BalancesSecurityStopChecksPayments andTransfersBill PayOnlineServicesReportsSecureMessagingDesktop Banking FeaturesMobile Banking Features Faster implementation Easier FI administration andconfiguration Lower TCO Create and deliver new functionalityacross all channels / user interfaces Desktop features available tomobile usersPFMUserExperienceTargetedMarketingCommonInterfaceNextGeneration
  49. 49. Enable Consumers with aFeature Rich User Experience49
  50. 50. Consumer Preference with the Triple Play50Fully Integrated Browser,Downloadable App andText BankingControl All User InterfaceswithCommon Admin andConfiguration Tools
  51. 51. Smartphone Features with the Downloadable App51Downloadable App• Account andTransaction History• Bill Payment• Account to AccountTransfers• PFM• User ProfileAdministration• Remote DepositCapture• ATM/Branch Locator
  52. 52. Drive Transactions to the Mobile Channel with RDC52Integrated RemoteDeposit Capture (RDC)utilizing SmartphonehardwareReduce routine tellercheck transactions atthe branch whichreduces costsEnable for bothconsumer andbusiness segments
  53. 53. Sales and Service Channel ofPreference53
  54. 54. Enable Smartphone Technology with a DownloadableApp• Market your brand with an app storepresence• Serve the demand for downloadable apps• Leverage smartphone features54
  55. 55. Targeted Offers to Maximize Your Marketing EffortsTarget just mobileusers with specificoffersBuild, deliver andmanage yourpromotions with selfservice tools
  56. 56. Service Your Consumers56Enable your users tocomplete their selfservice needs in theirchannel of preferenceControl their rights withentitlements specific tothe mobile userMaximize yourinvestment in yourdigital channels andminimize your supportcosts
  57. 57. Thank You!Questions?Ron ShevlinSenior Analyst, AiteJohn BalosePrincipal Market Manager, ACIWorldwide
  58. 58. For more information, emailcommunityfinancial@aciworldwide.com

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