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Guiding Principles for Mobile Payment Readiness

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Learn the key success factors that banks must address to differentiate mobile offerings and provide industry-leading capabilities that drive customer satisfaction.
Learn how to:
Navigate the diverse digital payments “ecosystem”
Support customer loyalty and retention
Gain valuable customer insights from mobile data
Achieve symmetry with other mobile trends
Leverage core legacy technology investments
Demonstrate return on investment

Published in: Technology
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Guiding Principles for Mobile Payment Readiness

  1. 1. Guiding Principles forMobile Payment Readiness October 3, 2012
  2. 2. What We Will Cover Future ofAbout Us Perspectives Payments Mobile CustomerBusiness Case Tr e n d s Experience Leverage ITSecurity Investments Q & A
  3. 3. About PerficientPerficient is a leading information technology consulting firm serving clientsthroughout North America.We help clients implement business-driven technology solutions that integratebusiness processes, improve worker productivity, increase customer loyalty and createa more agile enterprise to better respond to new business opportunities.
  4. 4. Perficient Profile Founded in 1997 Public, NASDAQ: PRFT 2011 Revenue of $260 million Major market locations throughout North America — Atlanta, Austin, Charlotte, Chicago, Cincinnati, Cleveland, Columbus, Dallas, Denver, Detroit, Fairfax, Houston, Indianapolis, Los Angeles, Minneapolis, New Orleans, Philadelphia, San Francisco, San Jose, Southern California, St. Louis and Toronto Global delivery centers in China, Europe and India 2,000+ colleagues Dedicated solution practices 87% repeat business rate Alliance partnerships with major technology vendors Multiple vendor/industry technology and growth awards
  5. 5. Our Solutions Expertise & ServicesBusiness-Driven Solutions Perficient Services• Enterprise Portals  End-to-End Solution Delivery• SOA and Business Process Mgmt  IT Strategic Consulting• Business Intelligence  IT Architecture Planning• User-Centered Custom Applications  Business Process & Workflow• Interactive Design Consulting• CRM Solutions  Usability and UI Consulting• Enterprise Performance Management  Custom Application Development• Customer Self-Service  Offshore Development• eCommerce & Product Information  Package Selection, Implementation Management and Integration• Enterprise Content Management  Architecture & Application Migrations• Enterprise Resource Planning  Education• Management Consulting  Interactive Design• Industry-Specific Solutions• Mobile Technology Perficient brings deep solutions expertise and offers a complete set of flexible services to help clients• Security Assessments implement business-driven IT solutions
  6. 6. Our SpeakersMike Panzarella, Director, Financial Services PracticeWith 20 years of experience with Big Four consulting and commercialbanking, Mike has expertise in BI platform architectures for Fortune 100financial service firms with a focus on social media and mobile convergence.Jeff Fisher, Director, FS Practice Operations &Advisory ServicesWith over 20 years of experience as a technology leader with global enterpriseorganizations, Jeff has a proven track record of success leading technologyteams in financial services organizations.
  7. 7. Perspectives onMobile Payments
  8. 8. Evolution of Mobile PaymentsIn 2008: $71 Billion and 43.1 Million UsersIn 2011: $105.9 Billion in transactionsIn 2012: $172 Billion in transactions (61.9% increase)By 2016: $617 Billion and 448 Million Users (359% increase)Source: Gartner May 2012 8
  9. 9. The Future of Mobile Payments 9
  10. 10. The Future of Mobile Banking 10
  11. 11. Banking Challenges Increase Shareholder ROI Financial Strategic Factors Perspective Revenue Net Income Capitalization1. Balancing Consumer Retail Channels Market Share Performing Loans2. Non-Bank Providers3. Levers for Customer Customer Value Proposition Customer Retention • Mobile Banking • Personal Financial • Self-Service • Consumer Perspective Management Lending4. Merchant Pricing Issues (Consumer)5. Selecting Investments Internal Operations • Innovative • Commercial / • Performance • Consumer • Compliance Product Institutional Balancing Management Services Development • Risk • InformationPrioritize Priorities • Mortgage/ Security • Efficiency & • Business Process Management Managementinvestments to Foreclosures • Vendor Scalability • Customer Management • Marketing Servicebalancecustomers, regulat Information Technologyors, employees and Targeted • Improved • Efficient • Third-Party • Data • Self Serviceshareholder needs Investments Workflow Queue Management Processing Quality Analytics 11
  12. 12. Prioritizing Initiatives 12
  13. 13. Prioritizing InitiativesGrowth of mobile is tracking comparable to BigData as a strategic initiative Gartner: Gartner Report Market Insight: Technology Opens Up Opportunities in SMB Vertical Markets - September 2012 13
  14. 14. The Business Case ROI Model Customer Service 27% Efficiencies 69% Reduced Attrition 15.7%1 ROI* Revenue from 3% Cross-sell Reduction inInvestments in the Digital Channel 2% Marketing Spend *ROI varies depending on bank size and other industry variables. [1] Average provided by Forrester’s “The ROI of Mobile Banking” model. 14
  15. 15. Mobile BankingTr e n d s
  16. 16. Mobile Banking Trends Mobile ishere to stay 16
  17. 17. Mobile Payment Trends Banks must expand awareness to incorporate the overall payments ecosystem into their mobile strategy Enhancements to consumer experiences that will effect payments in retail and other channels.Banks need tobridge Mobile Multi-tender: Enabling the capture Loyalty & Rewards: EarningBanking with of all payment types to include loyalty credits real-time and provide for credit, debit, PIN Debit, eCheck, pre- immediate redemption with locationTraditional paid, as well as, splitting payments aware technologies on the mobileWholesale Banking between each type. phone.Channels! Real-time Offers: Influence and Contactless Payments: POS direct consumer shopping behavior based technologies have yielded tablets as on past purchasing trends using location registers - emerging mobile technologiesBe on the Lookout for… aware technologies with QRS couponing will supersede traditional terminal devices capability with consumers (i.e., Retailix). (i.e. PayPass, PayPal, and others).Virtual Currencies: Servicemay include cash/credits /pointswhich can be stored value in a Person2Person: Going beyond Social Payments: Generation M willmobile wallet. Good option for payment transfers, capabilities to enable influence adoption of future paymentmicropayments, but subject to legal one person paying with another person schemes. Services cover mobile payments,laws banks must address. Appeals to buying are essential and will require ‘split the bill’, and pay a friend features, plusyouth and under-banked (i.e. enhanced payments infrastructure. enable social sharing, management andZynga, Facebook, Lindens). check-in updates. 17
  18. 18. Aggregator Wallet Trendsetter Passbook = Hype Reality = More than 120 Known WalletsGift Cards, Coupons, Time and Location-basedTickets and Loyalty Offers 18
  19. 19. E-Commerce Wallet Trendsetters 19
  20. 20. Other Wallet TrendsRetailer Wallet Gatekeeper & Single Feature Wallet  Strengthen existing customer bonds  Wave a mobile phone in front of reader to process payment  Targeted marketing  Requires NFC technology (unclear)  Merchant coupons and discounts  Focused functionality  Suggestions based on purchases 20
  21. 21. Banking Mobile Wallet Trend Existing Functions  Bird’s eye view of personal finances  Online bill payment  Alerts and notifications  Remote deposit capture  Person-to-person payments (P2P)(intrabank)  Merchant offers and discounts  Access to other services “Top of Wallet” Preferences  Personal financial management  P2P payments (interbank)PNC Mobile App  Integrated loyalty and rewards  Augmented reality integration 21
  22. 22. Mobile Banking TrendsBalance.
  23. 23. RecommendationsBanking Mobile Payment Success  Determine what role to play in digital channel strategy (consumer perceived value)  Leverage the bank’s key strengths  Defined strategy and deploy core payment offerings  Continue to expand mobile banking services  Evolve cross-sell capability  Business Intelligence  Analytics (Social, Predictive, Business)  Decide where strategic partnerships make sense  Reduce merchant and customer obstacles for adoption 23
  24. 24. The Customer ExperiencePerficient XD provides demonstrated userexperience excellence in four core marketcompetencies:• Strategy & Ideation• User Research & Analysis• Creative & Interaction Design• Innovation & Implementation
  25. 25. The Customer ExperienceConvenienceSpeed of UseSimplicityEase of UseSense of SecurityAccuracy & Timely Updates 25
  26. 26. 360° Customer SolutionsCustomer Service Pay for Products Email Receipt Features 26
  27. 27. 360° Customer SolutionsStrategic Partnership On-the-fly shopping options through online rewards store Scan item barcodes Redeem AMEX reward points and purchase Takeaway: Can Banks Strengthen Merchant Relationships to Optimize Loyalty & Rewards? 27
  28. 28. 360° Customer SolutionsRaising the Bar with Payments Mini-app “card monitoring dashboard” to align with iPhone 5 & Passbook Personal finance management (Mint.com) Turn mobile devices into remote kiosks Enhanced targeted mobile offers for in-store customers Contactless ATMs FaceTime chat with advisors Takeaway: Draw Parallels to Existing Capabilities with a Mobile Perspective 28
  29. 29. Customer Experience TrendsettersMobile & Payment Features  Merchant cash back deals  Credited to card account  Testing QR mobile payments solution  Augmented reality for location-based merchant offers VS. 29
  30. 30. Leverage ITInvestments 30
  31. 31. Secure Customer DataKey Considerations: Start Thinking About: Information Security Framework:Enterprise Security Management Program: An information Establishing a secure architecture foundationsecurity program provides the foundation for an effective security control underlying your applications and data arestructure. It establishes a framework and continuous cycle of activity for essential to protecting your informationassessing risk, developing and implementing effective security assets. To achieve this, defining a securityprocedures, and monitoring the effectiveness of these procedures. Overall policy and architecture framework must bepolicies and plans, including system and application-specific procedures and step one.controls, implement the enterprise wide policy. Digital Advertising Alliance:Information Security Architecture: As an extension of your Extending beyond current opt-outBank’s information security policy, the architecture should provide for policies, the government is looking at givingpatterns that define who can access applications, data, systems, and consumer’s the ability to create their ownunderlying networks. Privacy preferences.Minimum Security Controls: As a foundation to the security of Transferring Data in the Cloud:your information assets, a set of minimum security controls should be set in Privacy rules are different between the USplace and continuously tested by every bank. Whether it consists of access and the European Union. The EU precludescontrol, information flow control, least privilege access, separation of duties, the transfer of data to “non-adequate” jurisdictions. Where is the cloud in which youphysical access, concurrent session controls, session locks, and others; these store your data?controls should be always monitored and tested.Laptops, Mobile and Personal Devices: Key vulnerabilities to Third-Party Testing: In addition toany bank’s information assets involve the security of any device outside the the testing done by your internal auditphysical premises that can be either lost or stolen. Specific policies should team, think about leveraging a third-party to conduct security reviews and/or to conductbe established and enforced regarding all proprietary bank information that continuous scanning against yourmay be stored on the device to preclude any and all customer account applications., systems and network.information. 31
  32. 32. Key Controls for PCI Compliance POS Terminals: • Networks: Secure networks Laptops, Tablets, and Smart Some Key Facts: • Least Privilege: Restrict access Phones require compliance to systems, applications, and with PCI Mobile Standards. Call Center Recordings: Neither sensitive data Bank nor Processor call centers can store • Back-Office: Control recorded data that contain card Merchants verification value information if those payment application & users records can be queried. Secure Data: Encrypt• Audit Controls: transmission and storage of data. Average Cost of PCI Auditing on host Compliance: In their Retail Security application platform & Compliance Survey 2011, Gartner for access & change ISOs/MSPs reported different merchants spent on mgmt. average – over 2.35 years: Level 2-4 • Strong Access Control: Eliminate un- retailers: $1.1 million; Level 1 Retailers:• Third-Party Testing: necessary access and impose privileged $2.1 million. Test, Accredit and access with monitoring. Certify your Biggest Card Industry Data application Processors Breaches: Publicly known credit card account number data breaches include • Mobile Platform Provider: Is your Global Payments involving as few as Credit Card Co. Partner provider validated? 50,000 credit card account numbers(1), and Heartland Payment Systems in 2009 involving the exposure of data on 130 Mobile Applications: Secure million credit cards. how data is acquired with application security controls – use secure coding practices. Reference www.PCIsecuritystandards.org for more PCI Compliance details. (1) The exact number of exposed credit card accounts is not yet fully been disclosed to the public. 32
  33. 33. Mobile Banking Trends A l i g n i n gC a p a b i l i t i e s
  34. 34. Leverage IT InvestmentsPrioritize Investments to Drive Efficiency Utilize MEAP to optimize mobile development SOA to enable effective data acquisition and pass-through processing Leverage Big Data to optimize cross-sell opportunities, fraud, and real- time segmentation Agile development for enhanced product functionality Effective scalable systems to handle increased volume 34
  35. 35. Strategies to Get StartedService Reusability  Expose existing web services to your banking platform for enhanced functionality  Leverage ESB coupled with your SOA web services to address increased volume 35
  36. 36. Strategies to Get StartedBig Data & Analytics Consolidate the customer view leveraging your transformation capabilities Leverage data warehouses and data marts to build the customer’s “digital experience” Extending the use of customer data for cloud- based social analytics Exploit the mobile banking platform to test and drive cross-sell offerings 36
  37. 37. Strategies to Get StartedRewards Use existing customer loyalty and rewards capabilities integrated into the mobile layer and enhance using real-time data Banks can lease rewards capabilities to get speed-to-market solutions (Retailix, Truaxis, Destination Rewards) 37
  38. 38. Learn More Download OurMobile Payments White Paper Perficient.com/MP
  39. 39. Connect with PerficientSUBSCRIBE TO PERFICIENT BLOGS ONLINEw w w. Perfi ci en t. co m/ So ci al Med iaFOLLOW PERFICIENT ON TWITTERw w w. P erf i ci en t . co m/ P erf i ci en t _F SBECOME A FAN OF PERFICIENT ON FACEBOOKw w w. F aceb o o k. co m/ Perfi ci en tD O W N L O AD P E R F I C I E N T W H I T E PAP E R Sw w w. Perfi ci en t. co m/ W hi tePap ers 39
  40. 40. Connect with Perficient VISIT WITH OUR EXPERTS w w w. Perfi ci en t. co m/ b ai Mike Jeff Fisher Sean Elizabeth Panzarella O’Sullivan DiasQuestions? Matt Abbey Passey Smalley WEBINAR CONTRIBUTORS 40

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