2. Remote Deposit, Remote Service
• Remote Deposit is “un-tethering” customers who have no
other reason to visit the branch
• This large segment of “virtually domiciled” customers,
including both consumers and small businesses, requires
a complete rethinking of the sales and service model
• Banks can take concrete steps to implement a service
model that costs less and is more satisfying for un-
tethered customers
2
3. Customers are making fewer
transactions at branches
Branch Transaction 1-year CAGR
Deposit -7% to -9%
Withdrawal -3% to -6%
Check Cashing (On Us) -12% to -16%
Check Cashing (Off Us) -17% to -19%
Total -4% to -5%
3
Proprietary and Confidential to Novantas, LLC
4. Preferences are also changing for
sales channels
Sales Transactions by Branch Preference (YoY Growth)
-8%
-15%
-21%
-23%
Open a New Open a New Account Purchase Get Financial Advice
Relationship Investment/Insurance
Procuct
Proprietary and Confidential to Novantas 4
5. There are three distinctive banking
segments among US consumers
Branch • Utilize the branch as their primary channel for the majority of their
service and sales interactions
Traditionalists • Value relationship with staff at the branch
• Slightly skewed towards lower income households
(25-40%)
• Heavy users of all channels (branch and remote)
Ultra-Connected • Generally hold larger deposit and loan balances
• Great target for branch transaction migration given they already use
(30-45%) remote channels today
Virtually • Nearly all transactions are conducted virtually, though online, call center
and mobile
Domiciled • Up to 66% cheaper cost to serve
• Similar demographically to other segments, but shows opportunity for
(25-35%) cross-sell
Proprietary and Confidential to Novantas. LLC 5
6. Most small businesses prefer a
virtual sales process
Contact Preference When Considering a Product Solution
Companies under $10mm Companies $10mm-$20mm
Email Email
13% 17%
In-
Email person Email
or In-
31% or
Phone person
Phone
39% 31%
38%
Phone Phone Phone Phone
13% or in- 10% or in-
person person
4% 4%
Source: Novantas 2012 Treasury Management Buying Behaviors Survey conducted with Greenwich Associates 6
Proprietary and Confidential to Novantas, LLC
7. These behaviors lead to significant
differences in cost-to-serve
Cost per Small Business Sale Cost to Serve by Consumer Segment
Values are indexed to average cost to serve
$600 based on benchmark analytics
$500 157
$400
Avg = Index 100
$300 88
$200
43
$100
$0
Field Sales Inside Telesales Inside Telesales
Branch Traditionalist Ultra-Connected Virtually Domiciled
(inbound referral) (outbound cross-
sales)
Proprietary and Confidential to Novantas 7
8. Most customers continue to prefer
branches for deposits
Branch Preference by Transaction
70% 41%
58% 54%
26% 25%
Deposit Funds Withdraw Funds
45% 53%
37% 35%
19%
15%
Transfer Funds Resolve an Issue
2006 2011 2012
8
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9. Image-enabled ATM’s lead to less
branch attachment
ATM Channel Preference for Depositing Funds
41%
36%
21%
18%
Banks with Image-Enabled ATMs Banks without Image-Enabled ATMs
2011 2012
9
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10. RDC promises to further “un-tether”
customers from branches
Consumer Willingness to Use Remote Deposit Capture (RDC)
12%
45%
43%
Currently Using RDC Not Using RDC, Willing to Consider Not Using RDC, Not Willing to Consider
Proprietary and Confidential to Novantas 10
11. Banks have widely different levels of
success with RDC
Remote Deposit Usage
Business Banking
30%
25%
20%
15%
10%
5%
0%
Top Performers Average Lagging
11
12. What are top performers doing to
increase use of RDC?
• Make RDC part of your small business online banking
platform
– No need for a separate online portal
– Fully online application and implementation process
– This makes it easier to sell and easier to use
• Make it easy to get a scanner, or use the scanner you
already have
• Make the pricing simple and predictable
• Give branch bankers an incentive to sell RDC
• Teach branch bankers how to sell RDC
• Have specialist on call to support RDC sales
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