Mobile Financial Services - IBC / Singapore

1. Dan Armstrong, Rabo Mobiel B.V. Rabobank and Rabo Mobiel: The Bank in Your Pocket Mobile Financial Services, International Remittances, NFC, Mobile Payments Singapore, 26 May 2009

2. Rabobank and the NL Banking Landscape Market Position: Primary Consumer Bank Association  Mortgages (1) 27% Rabobank 18,4%  Savings Accounts (1) 41%  Loans (1) 22% ING/Postbank 19,2%  Insurance (1) 13% Fortis/ABN 11,2% AMRO  Payments (2) 30% SNS Bank 2,1%  Investment (2) 16% 0,0% 25,0% Rabobank Rabo Mobiel  Highest trust rating of all NL banks with 42%; #2 is 17%  Started in mid-2005, market launch in Nov 2006  AAA rating (Moody's, Standard & Poor's), top-15 world financial institution  Postpaid/prepaid, ZZP, all customer segments, regions.  3,7 mln internet banking customers, 7 mln customers overall; 180 local banks and 1.400 locations  2 Roles: MVNO and Mobile Financial Services Incubator (mobile banking  Strong loyalty, broad national customer coverage, key segments: and payments, NFC, VAS) consumers and small business  Tradition of innovation

3. Rabo Mobiel in the Marketplace

4. Rabo Mobiel in the Marketplace

5. Rabo Mobiel and Local Rabobank Partners

6. Rabobank GSM MVNO Value-Added Bank Product - Telecommunications Services (voice, - Banking “On the Go” SMS, VAS, Prepaid/Postpaid, MKB) - Premium Product / Combination - Mobile Internet Access (GPRS, UMTS, - Communications Channel for Local Banks, HSDPA), Portals and Self-Care Leden and Customers Mobile Incubator Mobile Knowledge Centre - NFC, Consumer Behaviour & Usability - Product/Business Development for - Encryption, Mobile Business Rules Mobile Financial Services and Products - Mobile Low-Value Payments - Launch of Remote and Contactless - Standards, Retail/Consumer Acceptance, Payments and Partnerships Security, Sustainability

7. Rabobank GSM MVNO & Value-Added Bank Product

8. Rabobank GSM MVNO & Value-Added Bank Product  Great Mobile Telecommunications Product – top-quality services, bundles or bundle-free, unlimited internet, competitive tariffs, SMS packages, MKB offers  Core Rabobank Values - trust, security, quality, easy-to-use services, cooperative value  Online Self-Care Environment  Commitment to innovation - core asset for differentiation is Mobile Financial Services  Independent company - for speed, innovation, customer experience trials  Secure mobile banking

9. NL Mobile Marketplace (2009) – many choices Telecombination

10. Some examples of MVNO Models  Telephony • Cheap (SIM only, large bundles, no-frills, VoIP) • Target segments (youth, minorities, cheap international destinations) • Cheap roaming (multi-IMSI, international players)  Leverage point-of-sales locations or distribution • Existing telecommunications retailers • Strong retailers in other branches • Alternate distribution channels  Leverage powerful brand  Reinforce core business in other areas  M2M/network utilisation

11. Rabobank Mobile Incubator & Knowledge Centre

12. Rabobank Mobile Incubator & Knowledge Centre 2006 – Open Mobile Internet (OMI) programme launched 2006 – Rabo Mobile launched (world’s first bank MVNO) 2007 – Rabo Schoolbank NFC Cashless Schools 1981 – First ATM in NL 2007 – Rabobank / Rabo Mobiel NFC Trials Kick-Off 1994 – 1st web portal www.tref.nl 1986 – Pin Retail PoS 2008 – Mobielbankieren up to €50k (RR) 1996 – Internetbankieren launched 1989 – Telebanking 2009 – NFC Payments Roll-Out 1980 1990 2000 2010 1995 – “Rabofoon” IVR Banking 2008 – SMS Betalen Launched 2007 – MiniTix SMS 1999 – 1st bank WAP site launched (mmm.rabobank.nl) 2005 – Rabo tv 2003 – Mobielbankieren on i-Mode 2004 – Mobielbankieren launched on Vodafone Live!, Orangeworld, T-zones 2004 – MiniTix Online Launched Rabo Mobiel B.V. 2006 2007 2008 Postpaid Launch Prepaid Launch 30 Banks Online MIB 4.1 (RR) Orange -> KPN 120 Banks Online MIB 6.0 (OMI) Launch of Segment Packages C1000 NFC Trial Diergarde Blijdorp NFC Ticketing SMS Betalen Launch MKB/ZZP MyOrder Terrace Betalen NFC Trials: Coca-Cola, FEBO Retail Launch Senioren 100k + customers Postpaid Retail Launch Youth AH To-Go Trial 180k + customers

13. A few trials and products 2007-2009 4 1 2 3 5 8 6 7 11 12 10 9 13

14. MiniTix and SMS Betalen Customer bank account MiniTix Online (2004-06) | MiniTix SMS (2007) SMS Betalen (2008) | MiniTix NFC (2008-09)

15. Will the current “issuer-centric” world become a “customer-centric” world? Rabo Mobiel wants to move customers themselves to the centre of the card ecosystem. A connected device, card/ID with a screen and keyboard can help do that… Customer needs to go to the bank, request PIN pass, credit cards, changes… Debit Card Credit Office Different cards, chips for Travel to NS for an OV- Cards Entrance different services… chipkaart, apply for personalised OV-chipkaart… Public Rabo Transport Schoolbank Member- Loyalty ship Sport Pick up loyalty cards at supermarkets and retail Pass locations

16. Some thoughts on the impact of NFC  What role do mobile operators or banks want  Are multi-application mobile environments to play in brokering a customers’ identity? interesting/killer app? iPhone? To really figure  Can’t be only technology-led … consumers it out, key players in the industry on a nation- must get benefit, receive logistic value and wide basis really need to become actors in the cost savings. mobile NFC ecosystem as well.  Useful security is always a balance between  Establish a federation model? Include major protection and usability. Security is critical, players in key B2C sectors. but so is the perception of security. banking mobile loyalty  Consumer value-add for NFC and specifically, using an NFC phone? Ticketing, payments, public loyalty, etc. can be done with plastic cards. retail ticketing transport How to leverage the capabilities of a connected device?  2007-08:  What about NFC vs. my anonymous behaviour? Not just smart-postering. Can we think of anything new? Permission-based marketing and location-based services as the basis of “context awareness” – a sort of spam?

17. Some thoughts on the impact of NFC NFC Handsets NFC Standardisation  GMSA statement in 11/2008 @ GSM World  Standardisation for standardisation’s sake Asia on NFC and SWP means a lot. Why was alone is not (a priori) a business goal. there no serious industry reaction to it?  Mifare support is key in many countries.  3GSM in Barcelona in 03/2009 means a lot. NFC was basically invisible and not on any  Solving the technical issues won’t be enough handset manufacturer’s roadmap for the acceptance of NFC payments alone  Nokia’s announcements @ WIMA in 04/2009 (TSM interoperability, transaction latency, mean a lot. But the 6218 is one handset, but SWP, HCI and BIP, etc.). The user-experience is we need 30-40 handset models minimum to key, therein mobile phone hardware, OS and start momentum in GSM. What’s the story UI are critical. with the models, other manufacturers?  Is SWP a defacto NFC model? What about  Nice one  : “I want to be clear about this, embedded SE? Sounds silly, but perhaps mobile operators will not buy mobile phones there is a way. that banks specify. They will buy mobile phones that they specify.” (GSMA member @  Do we have a default Low-Value Payments GSM World Asia, 11/2008) standard? What will it take for banks to move  For service providers taking NFC seriously, en masse? GSM has both benefits and drawbacks.

18. NFC: Mobile Operators vs. Service Providers  SE form factor, a critical issue for banks. But, does it really matter so much? More the cashflows and clearing model that matters.  However, with SWP, mobile operators will be primarily B2B enablers in NFC, service providers will be primarily B2C and provide the application and the environment for it’s interaction.  Rabo Mobiel is both; which is highly interesting from a learning perspective. B2B? B2C? other MVNOs  “Who owns the customer?” Silly question. If anyone does, all of us do somewhat. However ... NFC customer support? (NFC transaction, TSM activity)

19. Banks and the Role of the TSM (in a SWP future)  Many TSMs in one national mobile or payment ecosystem inter-working to manage similar applications on mobile phones probably won’t really work.  How to fit existing NFC “TSMs” into a larger NFC TSM (e.g. TransLink, Oyster)?  What is the scope and limits of the TSM role? Pretty much everyone has a different opinion. Isn’t the real question: What are the successful building blocks of a healthy NFC ecosystem? LARGER “TSM” ROLE? GSM Radio Network OTA App Delivery Customer Service POS Formulas & Mgmt. Standardisation Mobile Handsets & SIMs OTA App Life-Cycle Mgmt. Service Provider Mgmt. App Design Brand & Promotion ??? ??? other MVNOs

20. SWP and OTA bank card management = complexity Service TSM Key TSM MNO Provider Management OTA Service Provider Service Provider Service TSM Key TSM OTA OTA MNO Provider Management OTA Service Provider Service Provider Service TSM Key TSM MNO PIN Provider Management OTA Service Provider

21. Dan Armstrong Rapenburgerplein 81 1011 VJ Amsterdam The Netherlands dan.armstrong@takashimobile.com http://www.rabomobiel.nl/innovaties http://www.youtube.com/RaboMobielNFC