TIAA Direct ePoints

TIAA-CREF INTERNAL — FOR INTERNAL USE ONLY
TIAA Direct ePoints Program
New York City Innovation Intern Team
August 2, 2012

TIAA-CREF INTERNAL — FOR INTERNAL USE ONLY 2
Agenda
► Approach & Market Dynamics
► Program Overview
► Customer Experience: “A Year in the Life”
► Business Case
► Implementation
► Conclusion
► Appendix

We looked at a number of factors impacting today’s financial
institutions and found enormous opportunities
TIAA
Direct’s
Unique
Mission &
Position
Target
Customer
(Millennial)
Attitudes
Banking &
Technology
Trends
OPPORTUNITY FOR GROWTH
Bank frustrations
Charitable giving
Local impact
Not-for-profit
“Financial
services for the
greater good”
Mobile banking
Civic banking
Virtual currency
Gamification
Social media
Online financial
management
(Mint.com, etc.)
Crowdfunding
(Kickstarter,
Crowdrise, etc.)

The data supporting TIAA Direct’s entry into innovative
philanthropic partnerships is substantial
• 70% of Americans give to charity each year
• 60% of people who give have affinity to local charities
• Causes related to children and education are two of the top donor
recipient categories every year
• Americans give to elicit positive feelings and to feel connections to
causes
Giving back to the
community is
important and
influences
consumer decisions
• 75% of Millennials give every year (more than the average)
• 43% of Millennials want to give “in the moment”
• Millennials are the segment most likely to be influenced to buy products
because they offer social benefits
• 32% of the Millennials want to see the tangible progress of organizations
Millennials are
highly influenced by
the needs of their
local communities
• 75% of Millennials share non-profit organized events via social media
• More than 70% of Global 2000 organizations will have at least one
gamified application by 2016
• The amount of money raised by crowdsourcing has increased 91% in the
past year
New technology,
ranging from mobile
to social, is key to
engaging
Millennials
Sources: Mintel Oxygen, TIAA Direct NYC Innovation Intern Team survey; The Millennial
Impact Report

Agenda
► Business Case
► Implementation
► Conclusion
► Appendix

TIAA Direct is uniquely positioned to truly embody the TIAA-
CREF mission to “serve those who serve others”
TIAA Direct ePoints Program
Partnerships
Build relationships with
strategically-aligned non-profit
organizations that will reflect
TIAA-CREF’s mission and
cultivate the next generation of
TIAA Direct customers through
new marketing channels
Community
Develop eCommunity
dashboard that facilitates
engagement with TIAA Direct as
“more than just a bank”,
enabling offline interactions,
transparency, and real
recognition of customers’ value
to the bank
Points
Systematically reward all levels
of value-add customer
engagement with the bank
Allow customers to earn and
track ePoints and allocate to the
charitable project(s) of their
choice – creating an emotional
connection with the customers
Engagement. Education. Empowerment. Every day.
TIAA Direct ePoints.

Rewards can entice customers to open accounts, but none on
the market take our unique approach to giving back
reward customers for
spending on their debit cards.
&
&
reward customers for
saving.
can do both, offering
competitive products while
fostering education and
job creation.

Reward
Recognize
Cultivate
TIAA Direct ePoints reinvent traditional
banking rewards
A next-generation banking rewards program
that allows customers to give back to
individual local community projects and
causes is unprecedented
Celebrate and share in customers’ community impacts
Enable customers to earn and track points to be donated to non-profit partners
Build out a system to reward all levels of customer interaction with the bank, placing
value and emphasis on positive customer engagement
Points Partners Community

Reward customer engagement & build
“virtual equity”
Reward all levels of value-add customer engagement  Build
“virtual equity” that can be tracked via a user’s online account
Customers can earn ePoints through…
Deposits Loans
Banking
Activities
Referrals &
Events
Promotions
ePoints are determined based on an action’s relative profitability
to the bank and/or perceived added customer relationship value*
*Projected actual ePoint values provided in Appendix

How do customers earn ePoints?
Deposits
Opening accounts (high-yield savings, interest checking, money market, CD)
Maintaining average monthly balance of certain predetermined levels
Rationale
Reward customers for initiating a relationship with the bank
Reward customers for depositing and saving money – as opposed to other rewards
programs that primarily reward customers for spending
Save for yourself while doing good for your
local community
Deposits

Loans
Taking out a mortgage
Taking out a Home Equity Line of Credit (HELOC)
Rationale
Reward customers for engaging in high-revenue/high-margin bank product offerings
TIAA Direct is already willing to pay hundreds of dollars if it does not match a
competitor’s rate – why not contribute to a social cause when customers choose TIAA
Direct?
Build a life with a new home or investment,
while helping others do the same
Loans

Banking Activities
Engage in traction-building activities (direct deposit, BillPay)
Engage in cost-cutting and revenue-generating activities (remote deposit)
Rationale
Reward customers for engaging and enrolling in programs that build traction / stickiness
across their accounts, while also generating revenue for TIAA Direct
Stay engaged and simplify your finances
Banking Activities

Referrals & Events
Invite friends and family to open TIAA Direct accounts via word-of-mouth and social media
Register for and attend co-branded events with core non-profit partners via TIAA Direct
Community Page
Rationale
Reward customers for helping build the brand and generate additional TIAA Direct
deposits and revenue
Reward customers for participation in brand-building offline events
Share the experience with friends & family
Referrals & Events

Promotions
Initiate daily/weekly multiplier deals (e.g. 2X points in June for opening a savings
account), account anniversary bonuses for loyalty (e.g. 1.25X on all points after 5 years
with the bank), etc.
Rationale
Implement gamification to build excitement, engagement, and consistent awareness .
Stick around, have fun, and earn more!
Promotions

How do customers use ePoints?
Customer earns
points through
banking actions
Customer
allocates points
to individual
local project(s)
TIAA Direct
converts points
to $ and sends
to partner non-
profit with
specific local
project
allocation
TIAA Direct
adds points to
non-profit’s total
“vote tally” for
end-of-year
grant
competition
Customers can
also gift earned
points to other
TIAA Direct
customers at no
cost
Non-profit with the most ePoints
will win a lump grant on top of
individual contributions
ePoint allocation for each non-
profit throughout the year is
totaled
Customers are reminded to
allocate all earned ePoints, and
TIAA Direct tallies votes
Continuous – “Giving in the Moment” Year-End Award

The program will be built with non-profits
aligned with TIAA-CREF’s mission & values
Mission
Reach
Focus
& Fit
Education, K-12
Teachers, Millennials,
Crowdfunding, Parents
Education, High
School Teachers,
Entrepreneurs, Small
Business, Job
Creation, Parents
Entrepreneurs, Small
Business, Job
Creation,
Unbanked/Newly
Banked Customers
(prepaid/mobile), Int’l
800K participants/
donors, 54K schools
supported, $120M
raised, 6.5M students
helped
Served 450K
students, trained 5K
teachers, 50
countries, Clinton
Global Initiative
$305M invested,
26,500 clients served,
4,250 active clients,
1,300+ jobs created
“An online charity
connecting you to
classrooms in need.”
“Inspiring students to
stay in school, seize
business
opportunities, and
plan for success.”
“Investing in
individuals. Improving
our world.”

The ePoints program creates a new
marketing channel for TIAA Direct
TIAA Direct ePoints program opens up a brand-new, tightly-
targeted, and self-perpetuating 360° marketing channel
TIAA Direct
builds mutually-
beneficial
partnerships and
commits to
community-
based giving
Non-profits market TIAA
Direct’s program directly
to volunteers, donors,
and constituents via
social media,
mailings, email, and
their websites in order
to raise funds
Volunteers, donors, and
constituents build brand
affinity/recognition,
open accounts, and tell
their friends via social
media

Marketing reach to non-participants is
currently limited to traditional channels
Traditional Media
Online Marketing /
Social Media

The ePoints program brings marketing
“closer to home” through a variety of media
Traditional Media
Online Marketing /
Social Media
Community
Events
Affiliate Marketing /
Direct Email

Partner Case Study: DonorsChoose.org
Ms. Smith is a middle school theater teacher in Berwyn, IL, who funded
her classroom through DonorsChoose.org
Opportunity to foster
community through
education and giving
2007
Many students involved with Latin
Kings gang
No stage, costumes, or props
No financial support for the theater
program
Maximum $250 personal tax deduction
for contributions to her classroom
2012
Theater is the school’s most popular
program, with 90 students
Students want to stay after school to
participate
Alumni participate in end-of-year show
to be part of the community again
$10K+ raised through 300+ projects,
with an average of 9 donors each

eCommunity online & mobile dashboard
is an online home for “all things ePoints”
Points
Track earned ePoints balance
and contributions via web or
mobile
Learn about new ePoint-earning
opportunities
Allocate ePoints to local projects
or give them to fellow TIAA Direct
customers
Events
Learn about and register for
upcoming co-branded /
sponsored TIAA Direct non-profit
partner events
Engage with the bank offline to
build a sense of community and
vested interest
Earn ePoints!
Blog & Discussion
Board
Read personal entries written by
TIAA Direct employees and our
partners
Discuss financial topics and
community events with fellow
customers
Acknowledgement
Track funds raised for various
highlighted projects
See how points are being put to
use
Receive personalized messages
from those impacted by
donations
The TIAA Direct
eCommunity
can facilitate
positive
community
impact at no
additional
customer
expense

Agenda
► Business Case
► Implementation
► Conclusion
► Appendix

ePoints will serve as a unique marketing “hook” for attracting
new banking customers
ENGAGE. EDUCATE. EMPOWER.
Through these ePoints non-profit partnerships!
Bank without compromise
Open an account with great rates, no
monthly fees, and convenient ways to
manage your money.
HIGH-
YIELD
SAVINGS
1.25% APY*
TIAA Direct offers a
market-leading
APY, is a trusted
and established
institution, and I
can help the
community by
earning ePoints?

Sign off
Accounts Pay Bills Transfers ePoints eCommunity Enter Keyword(s)
How do
these TIAA
Direct
ePoints
work?
Customers will be able to utilize the TIAA Direct website and
eCommunity to learn about how the ePoints program works

 Open a prepaid card and
high-yield savings account.
Earn 850 ePoints!
 Link phone bill to BillPay
 Link cable bill to BillPay
Earn 200 ePoints!
 Maintain $50K average
daily balance in savings
account.
Earn 150 ePoints!
Customers will be able to earn points through both online &
mobile engagement

Bank
Benefit
Interchange Fees
Stickiness
Retail shopping.
Groceries.
Restaurants.
Gas.
Vacations.
Every time I use my
TIAA Direct prepaid
card, I earn ePoints!
Customers will earn points on every prepaid card purchase

John registers
for a co-
branded non-
profit golf
tournament and
shares it on
Facebook!
Earns 100
points!
Bank
Benefit
Marketing
Awareness
Offline Engagement
The eCommunity will drive online-to-offline engagement with
the overall TIAA Direct banking experience
>
>
>
>
>
GIVE!BlogEvents
Upcoming Registered
Share Event on :
Home Page
Sign off
Accounts Pay Bills Transfers ePoints Enter Keyword(s)eCommunity
Search
By Category
By Location
By Organization
By Name
Earn 100
points
for every
event
you
attend!
Partnered with :

Sign off
Accounts Pay Bills Transfers ePoints Enter Keyword(s)
GIVE
eCommunity
Share us on :
Home Page GIVE!Events Message Board
Learn more!
Learn more!
Learn more!
Engagement with eCommunity
The eCommunity will allow customers to learn about TIAA
Direct’s charitable partners
Over the
course of the
year, John
has collected
2100 ePoints
– and now he
wants to
donate them.
Bank
Benefit

Welcome, John!
You have 2,100 ePoints. How would you like to donate them?
EVERY ePoint can make a difference.
Customize your search:
Enter Zip Code 12508
Sign off
Great news! There are 5
projects in your area.
St. Mary’s School Fishkill
needs $8,500 for their
new gymnasium Donate Points!
St. Columba School needs
$4,500 more for their new
arts program Donate Points!
Click here for more
Enter Category School
The eCommunity portal will allow customers to donate points
to very specific and local projects with immediate needs

Sign off
Accounts Pay Bills Transfers ePoints
Home Page
Enter Keyword(s)eCommunity
GIVE!Events Message Board
Our Partners:
$ 2,910,004.76
Donated to Date
what we do?
The Network for
Teaching
Entrepreneurship
inspires young people
from low-income
communities to find their
paths to success.
I made a
difference!
Customers can observe the tangible progress of local
community projects through the eCommunity portal

Agenda
► Business Case
► Implementation
► Conclusion
► Appendix

Targeting the ePoints core customer base will enable TIAA
Direct to double projected customer accounts in 2013
Core Customers
• TIAA-CREF Participants: Adults
aged 18 – 34
• Students: Adults aged 18 – 34
• Non-Participants: Adults aged 25
– 34 in the K-12 industry,
higher education, or healthcare
Core Customers (23.0M)
Have an Online-Only
Bank Account (8.5M)
Donate to Charity
(5.7M)
Would Switch
Banks for Better
Value (3.0M)
Incremental Customer Opportunity
= 120,000 individuals (184,400
accounts) in Year One
Marketing
Reach

ePoints is a high-ROI marketing and community-building
opportunity for TIAA Direct
$4.8
$20.7
$48.4
$61.2
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
3-year NPV Annual Profit*
2013 2014 2015
• Primary profit drivers are
mortgages and savings
• Projected 2013 Incremental
Revenue = $72.3M
• Projected 2013 Incremental
Accounts = 184.4K
• Recommended 2013
Donation = $4.5M
• $500K year-end grant
• Average donation per
customer = $27.40
• ePoint donation value =
$0.01
• Fixed costs (development
and human resources) = $2M* No discount rate applied
Incremental Profit ($M)

The TIAA Direct ePoints program will incrementally accelerate
both projected account openings and profits in 2013
Expected Incremental Accounts Cash Flows
Year 1 Year 2 Year 3 Year 1 Year 2 Year 3
Checking 41,403 223,068 325,318 ($3,951,088) ($20,450,614) ($26,536,869)
Savings/MMA 76,788 413,713 603,351 $3,532,248 $20,582,677 $36,115,328
CD 5,885 31,707 46,241 $270,710 $1,577,448 $2,767,864
Debit Cards 22,358 120,457 175,672 ($399,251) ($1,700,260) ($708,297)
Mortgage 7,323 17,664 28,121 $11,750,925 $32,708,413 $55,644,388
Home Equity Loan 3,930 15,754 29,941 $1,267,268 $7,383,544 $18,904,262
Prepaid 25,813 82,076 154,694 $645,313 $3,067,632 $7,097,067
Personal Loan 898 1,876 3,101 $80,820 $389,740 $740,571
Variable Profit $15,196,944 $43,558,579 $94,024,314
Fixed Costs ($2,000,000) ($1,500,000) ($1,500,000)
Grant Donations ($4,500,000) ($4,500,000) ($4,500,000)
Net income before taxes $8,696,944 $37,558,579 $88,024,314
Taxes (45%) ($3,913,625) ($16,901,361) ($39,610,941)
Net income after taxes $4,783,319 $20,657,219 $48,413,373
Discounted Cash Flow (r = 12%) $4,783,319 $18,321,309 $38,083,308
Total Accounts 184,397 906,314 1,366,439
ProfitsperAccountType
• Incremental to projected accounts and profits in current five-year growth plan
• Profit per account factors in both new and existing customer cash flows
• Account growth rate matches five-year growth plan
• Attrition rate applied = 21% (industry rate), which is higher than TIAA Direct
• Net income allows for donation amount to grow as program profitability grows

Agenda
► Business Case
► Implementation
► Conclusion
► Appendix

The bank faces low barriers to entry, and can leverage its
strengths to temper risk and discourage market replication
Strengths
•Strong brand name in education
and healthcare industries
•Substantial capital backing
•Established relationships with
educators and administrators
•Current online user experience
easily expandable to create ePoints
platform with nonprofit partner APIs
•High savings APY and diversified
products
Weaknesses
•Limited brand recognition beyond
current base of TIAA-CREF
participants
•Millennials comprise <20% of
current TIAA-CREF participants
•Limited experience creating and
maintaining an online experience
for a user community
•No history to determine the right
amount to give to be profitable and
also relevant to customers
Opportunities
•Leverage brand credibility within
core industries as a differentiator
from other charitable programs
•Leverage existing participant
relationships to create a
community of giving
•Encourage behaviors that
customers would already be
inclined to do instead of asking
them to spend
•Leverage expressed interest of
key nonprofit partners to offer a
unique customer experience
Threats
•ePoints can be replicated in other
rewards offerings
•Competitors historically have
donated broadly to cover a wide
customer base
•Other options / communities for
charitable giving exist and come to
mind before a bank does
InternalExternal
Mitigating Factor: It is costly for
competitors to reconfigure any
currently existing programs. Any
changes also risk upsetting
customers using existing rewards.
Recommendation: Invest in
more marketing in the long run.
Mitigating Factor: They may cover a
wider range of interests but with
fewer opportunities for people to get
engaged at a deeper personal level.
Recommendation: Keep an
open dialogue with engaged
customer and nonprofit
partners to match their
needs with our goals.
Mitigating Factor: TIAA Direct aligns
with the brand and mission of TIAA-
CREF, which has a strong reputation
for doing social good. Our deep
relationships with nonprofit partners will
help to reinforce this message to a
broader audience.

TIAA Direct must allocate resources to a specific set of next
steps in order to ensure a successful ePoints program build
Key Next Steps
Develop front-end user experience (web &
mobile) for assigning, tallying, and allocating
points (gamification techniques)
Develop / acquire database solution for
tracking and converting total points
Build API integrations with partners
(DonorsChoose model) for accurately
distributing points and monetary donations
Hire incremental FTEs for partnership /
program management and back-office
administration (customer service, finance,
operations, etc.)
Key
Considerations
Implement phased deployment (pilot to
determine key drivers of customer
engagement)
Focus on transparency at all levels of
communication with customers and partners
Fully disclose operational costs when
donating to non-profits
Leverage not-for-profit status
Maintain focus on superior customer service
– a major pain point for many banking
customers and a value-add differentiator

The future holds exciting additional opportunities for ePoints
program expansion and increased market leverage
Technology
• Tie card products to foursquare and edRover to leverage check-in
and geo-location technologies
• Giving portal (leverage Network for Good technology platform)
Products & Services
• Charitable donation matching program (i.e. Advanta Kiva credit card
model)
• Explore various revenue stream models related to ATM charges at
40,000+ “free” ATM locations
• Build out additional prepaid card functionalities
ePoints Program
• Partner with a travel company (i.e. Southwest Airlines) to further
incentivize customers in the points-earning process
• Provide option for customers to buy points through community portal
• Integrate small business loans, personal loans, automatic loan
payment plans, P2P, and e-statements in points model

Agenda
► Business Case
► Implementation
► Conclusion
► Appendix

The TIAA Direct ePoints program is a rare triple bottom-line
“win-win-win” for the bank, customers, and local communities
TIAA Direct
Double expected first year
accounts – increase revenue
and profits
Encourage behaviors that
reduce costs
Support brand and mission
Community Reinvestment
Act benefits
Generate data to identify
valuable customers
Customers
A “good bank”: Broad range
of competitive financial
products*
Doing “right”: Giving back to
local communities
seamlessly*
Voice within a trusted
financial institution (virtual
equity)*
Creating “wow”: Fun and
functional everyday banking
experience*
Addresses major pain points*
Community
Support education and job
creation
Leverage talents of
interested Millennials
Increase engagement and
funds to support projects
Support of a trusted financial
institution
*Source: Booz & Company TIAA Direct Strategic Plan, 6/20/12

TIAA Direct has a unique opportunity to build a customer
experience that is truly unique in the financial services market
A new type of rewards program
Recognize and reward every
value-add customer interaction
with the bank, instead of simply
encouraging excessive credit card
spending
A new type of charitable giving
Empower customers to have a
say in TIAA Direct giving
charitable dollars to hyper-local
causes they care about most
A new online community
Learning, sharing experiences
with the bank and fellow
customers, and interacting with
highly-targeted non-profit
organizations
A new and highly scalable
marketing channel
Reach life-long customers who
are fully aligned with the missions
of TIAA Direct and TIAA-CREF

High-impact non-profit partners are already buying in
Charles Best, Founder & CEO,
DonorsChoose.org (one of Fast
Company’s Most Innovative
Companies in the World)
“Nearly all corporate loyalty/rewards
programs invite customers to support
institutions or macro causes. However,
few companies have tapped into the
power of micro-giving, allowing
‘citizen philanthropists’ to support
projects that personally speak to them,
see exactly where their money is going,
and hear back from the people they’re
helping. Your proposal for TIAA Direct
represents the next generation of
cause marketing.”
Jane Walsh, Vice President of
Corporate & Foundation
Relationships, Network for Teaching
Entrepreneurship (NFTE)
“NFTE would be excited to partner in
TIAA Direct’s innovative banking
rewards program. We have experience
leveraging social media, web, and email
to engage a wide variety of
constituents – including students,
teachers, administrators, donors,
and volunteers. The TIAA brand is
certainly one that NFTE would be proud
to be affiliated with. Your banking
rewards/philanthropy program is a
great creative opportunity for NFTE to
raise both financial resources and
awareness, and to do so in ways that
are strongly strategically aligned.”
Erica Dorn, Director of Community
Development, ACCION
“ACCION USA is very supportive of
any program that increases the
bankability of our entrepreneur
clients and supports the mission of
providing microloans to small business
owners in the United States. We look
forward to forging a relationship with
TIAA Direct through the innovative
offering that your team has built.”

thank you!
Questions?

Agenda
► Business Case
► Implementation
► Conclusion
► Appendix

Projected/recommended ePoints structure based on product-
based profitability analyses
Deposits Sign Ups
Average Daily Balance pm
$10K-
$49999.9
$50K -
$199,999.99
$200K+
Interest Checking 250 50 150 300
Money Market 750 50 150 300
High Yield Savings 750 50 150 300
CD 500 50 150 300
Loans $0 - $499,999.99 $500K - $999,999.99 $1M +
Mortgage 1750 3500 7000
HELOC 750 1500 3000
Referrals Bonus ePoints
Interest Checking 25
Money Market 50
High Yield
Savings
50
CD 50
Mortgage 100
HELOC 50
Activity Bonuses Bonus ePoints
Enroll in Direct Deposit 100
Enroll in Bill Pay/eBills 100
Complete Remote Deposit 5
P2P Transfers 5
Register for/Attend Event through
Community Page
100
Promotion Opportunities
Daily/Weekly Multiplier Deals (e.g. 2X
ePoints for opening a savings
account in June 2013)
Account Anniversary Bonus (e.g.
1.25X on all ePoints after 5 years)
Rolling bonus ePoints based total
credit spend ($1 = 1 point)
Rolling bonus ePoints based on total
prepaid spend ($1 = 0.5 points)
Donate to charity through
eCommunity at no cost
Deposits
Open
account
Average Daily Balance Bonus
(Monthly)
$10K-
$49999.9
$50K -
$199,999.99
$200K+
Interest Checking 250 50 150 300
Money Market 750 50 150 300
High Yield Savings 750 50 150 300
CD 500 50 150 300
1 point = $0.01

Sample FAQs
Why wouldn't someone just donate to a non-profit directly instead?
• Customer can facilitate giving to charitable organizations at no cost to themselves, while continuing
his or her normal personal giving routine.
• TIAA Direct community of donors to help generate enthusiasm, tangible progress, gamification.
• Social media interaction with actual educators, healthcare practitioners who are current TIAA-
CREF clients.
Why microfinance?
• Microfinance (in our case ACCION USA) provides a unique opportunity to give back to local
community in ways that a traditional charity do not.
• Appeals to constituents from underserved communities, both domestic and international.
• Microfinance relationships can help bridge the gap between unbanked and newly-banked
entrepreneurs and the underserved international market.
What if a customer does not allocate his/her ePoints?
• The earned ePoints will be automatically evenly distributed amongst the partner organizations on
an institutional level at the end of the year.

TIAA Direct ePoints

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