This document provides an overview of mobile banking for financial institutions. It discusses why institutions implement mobile banking and how mobile affects the entire organization. Key points include measuring adoption and success, understanding the mobile landscape and technologies, connecting to existing infrastructure, considerations for offline customers, and working with existing partners or building solutions internally. The document emphasizes having a clear vision and business case to guide mobile decisions and strategies.

1. 2010 Mobile Banking Summit Mobile Banking 101 David Eads, Founder & CEO david@mobilestrategypartners.com +1 (404) 285-4219

2. Session Abstract Not every financial institution has a smart phone app, a text alert service, or a mobile payments platform. And not every bank has the internal resources to build these services from the ground up. This workshop offers an overview of the types of resources you’ll need to get your mobile program off the ground, and gain an understanding the mobile commerce ecosystem. Confidential

3. Why? What are your overall business goals? Increase market share? Increase profitability? Attract younger customers? (see above) Why do you want to do mobile? Bank/CU president just got an iPhone? Competitors have mobile offerings? You want to achieve your business goals? You personally want to do something to make the institution better? Confidential

4. It’s about you… Mobile requirements seem similar on the surface There are different reasons for doing mobile Every institution has different needs Competitive landscape Infrastructure Budget/Resources Lines of business Market Demographics Everyone is “special” Confidential

5. Entire Institution Mobile affects the entire institution Mobile success depends upon the entire institution Think about: Employee policies (texting, phone use) Branch training Call center training & procedures ATM Marketing, Advertising Monthly statements Confidential

6. It’s a business “If you don’t have enough budget, get a bigger budget” --Jeff Dennes, USAA Mobile success requires more than selecting a vendor and turning it on Detailed Planning & Execution is critical Roadmap & resource decisions Integration hiccups will happen Plan to avoid them Have a team that can handle them Measure success Real customer satisfaction is the ultimate metric Monitor the customer experience Don’t accept mediocrity Lather. Rinse. Repeat. Confidential

8. Mobile means many things Old Fashioned WAP Mobile Web Browser SMS Account Alerts Interactive SMS Native/Hybrid Apps iPhone Android BlackBerry J2ME/ flip phones SMS Mobile Marketing NFC / Contactless payments Mobile Money Transfer (USSD, etc.) P2P Payments IVR Phone banking Confidential

9. Keep in Mind How you implement mobile depends upon why you’re planning to do mobile Mobile is a new channel How many online banking resources do you have? OLB has just one delivery technology – the browser How many mobile technologies will you ultimately implement and maintain over time? How many mobile team resources do you have Mobile is multi-channel Confidential

10. So What Do You Need? Facts. There are a lot of myths about mobile Don’t bet your career on incomplete data – things move fast Clear vision Know what, why, and when you’re doing mobile Build a solid business case & base decisions on it Get experienced help if you can (shameless plug!) Technology Connecting to your infrastructure is the hard part Choosing an existing partner’s mobile partner isn’t always the best or only choice Too often, it takes longer than everyone thinks it will Confidential

11. Facts. Confidential

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13. iPhone Sales by Quarter Confidential Q2 sales are usually much lower than Q1 which includes Christmas Source: Apple Inc. data FY2010 Q2 Announcement April 20,, 2010 2PT

14. Apple iPad 300,000 sold first weekend 2M sold first month (US only) Est.5.5Min 2010, 13M 2011 (Macquarie Group Ltd.) 3,500 new iPad apps 185,000 apps in App Store Will likely affect web expectations, like iPhone did mobile web expectations Confidential

15. iPad is global Confidential

17. Hispanics, Asians more likely to own smartphones

18. Personal use accounts for 2/3 of smartphone purchases

19. 50% use Wi-Fi

20. 3% use for voice onlyMarch 26, 2010

21. iPhone, Android Dominate Usage Confidential Android is 43% of market with Droid, Dream, CLIQ, Magic, etc. Anecdotally, this mirrors what we’re seeing in US Source: Admob 3/25/2010

22. Android Overtakes iPhone Source: Admob U.S. Smartphone usage 12/2009-3/2010 January data wasn’t reported in a comparable format Data excludes data for phones with less that 1% market share Confidential

23. iPhone Dominates Globally Lack of carrier exclusivity a possible explanation Confidential

24. Installs don’t match usage Confidential Blackberry and Microsoft users aren’t using mobile web/apps at the same level as iPhone, Android users Source: comScore 4/5/2010

25. It’s not just young men Confidential

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27. Q3 2009 Mobile User Age Confidential

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30. Q2 2009 Mobile Income Blackberry and iPhone users have similar income demographics Both are ideal customers Blue = iPhone Yellow = Blackberry Gray = All responses (32k+ households) Confidential Source: Nielson, 10/15/09

31. Clear Vision Making mobile decisions using business realities Confidential

32. Building the Business Case Cost Reduction Reduce calls to the call center Balance inquiries are often 70% of calls Stickier Customers/Lower Attrition Mobile customers attrite less Mobile customers are sticky like multi-billpay clients Increased revenue Increased transactions (more interchange) Attract deposits (become the client’s primary FI) Mobile marketing and mobile cross selling can increase revenue across traditional lines of business Confidential

33. ROI Examples 30% reduction in live agent, DDA related call center calls: Huntington Bank 12/09 2% decrease in attrition over online banking :Huntington 12/09 3 more debit card transactions per month:SunTrust 12/09 Mobile customers increased account balances: SunTrust 12/09 More funds on deposit, 50% less likely to churn:NIH FCU 12/09 Confidential

34. Adoption is Key Mobile presents lots of options to grow your business You have to make the right choices to get the return Clients have to use your mobile offering to see benefits Awareness – They have to know it exists Access – They have to be able to enroll Robust – It has to have useful features Referenceable – They should want to tell their friends! Supported – Your staff must use it themselves Useable – Clients must find it easy to use and compelling Confidential

35. Offline Users 60% of customers are offline customers 60% of offline customers show interest in using mobile banking (MCOM/Fiserv/Verisign 10/09) Offline users provide the biggest ROI opportunity Offline customers currently are expensive to support Offline presents the biggest technical challenge Confidential

36. Mobile Banking Traction Source: Luth Research, Mobile Mktg Assn 2/2/10, n=1000 (2010-2011 data ); Mobile Strategy Partners (2008-2009 data) Confidential Online Banking has about 40% adoption

38. Growth is running at 20% now

40. Mobile Adoption Curve First instances of public adoption number announcements BofA 54% growth between Apr 2010 and June 2009 (18% quarterly) Confidential

41. Top Mobile Banking Uses Confidential Source: comScore Mobile Financial Services Survey, 2010, n= 351 70% of smartphone users use some sort of mobile bankingSource: Data Innovation 1/19/2010 (246 smartphone users)

42. Top Mobile Card Uses Confidential Source: comScore Mobile Financial Services Survey, 2010, n= 351

43. More than Balances Confidential Source: Data Innovation 1/19/2010 (246 smartphone users)

44. Mobile Easier for Many Source: Fiserv, Calvin Grimes, 10/2009, Multiple responses allowed from users using mobile banking Confidential

45. Mobile Remote Deposit Key 2o1o feature to consider Increase deposits immediately Turns the tables on competitors with large branch presence Phone is always closer than neighborhood branch or ATM Lets secondary FI become the consumer’s primary FI Product & Integration details critically important. Look closely! Confidential

46. P2P Payments Look for 2010 rollouts from a number of institutions Checks, Cash the ultimate P2P payment – Mobile RDC External Transfers (ACH) viable interim step for some FIS, Fiserv, CashEdge, PayPal,Mastercard/Obopay, pushing various offerings Pricepoint that sticks remains to be seen… $1.50 in Canada, less in US Confidential

47. P2P Momentum PayPal 78m users, many already linked to DDA Broad International coverage Built-in support to address accounts by email, phone CashEdgePOPmoney Three banks already live (PNC, F Hawaiian, FNB Omaha) ~100 others reported “in implementation” Fiserv Mobile Money (3Q2010) Leverages CheckFree Network - goes live with 30+m accts MCOM live with P2P in NZ since 2004 MasterCard MoneySend (using Obopay) EnStreamZoompass initiative in Canada Confidential

48. 2010 Reg E Changes Mobile useful for institutions to comply with new overdraft regulations Mobile can encourage opt-in, document compliance Mobile alerts helpful to alert users to low balances Confidential

49. Technology Confidential

50. How to connect? The devil is in the details OFX Web Services Screen scraping ATM, Payment Networks Supporting all your users 60% of your customers aren’t OLB users How can they log in? Enroll? KYC? Existing partners Which incumbent? Core, OLB partners may or may not offer best mobile for you Has your incumbent partner integrated mobile into an environment like yours? Confidential

51. Deceptively Simple Alerting can be more complex than it looks Monitor all transactions for certain conditions Many systems are batch & isolated from alerting engines Alerting capabilities vary widely across vendors. Beware! Data can kill you (or at least hurt a lot) Functionality is often straightforward Many challenges lie in variations in the real data Mortgages, lines of credit, loans, CDs, etc. SMS is not email. iPhone apps aren’t ecommerce Plan for carrier certification Expect the unexpected from Apple approval process Confidential

52. Offline Customers Integration to support offline customers tricky How do you create credentials for them? Where are the credentials stored? How do external systems (Branch, ATM, etc.) connect? Enrolling every client into OLB a quick fix Many OLB providers charge by enrollment – expensive Feasible for many Homegrown/Customized OLB banks Process from customer perspective requires significant thought and preparation to ensure it’s smooth Many vendor systems support offline customers Middleware, Single-sign-on is the issue typically Confidential

53. Existing Partners WAP, Mobile Web often makes a lot of sense to purchase from OLB vendor WAP, Mobile Web is essentially just another view Infrastructure may be completely the same SMS, Native Apps less well understood by OLB folks Partnerships, Acquisitions require middleware changes at partners Integration into legacy products often slow Speed of startup vendors complicates integration Nevertheless, existing relationships are very helpful – Just pay attention and be careful Confidential

54. Build it Yourself? Sometimes it makes sense to build mobile yourself You want to create something not on the market You have unique, custom built infrastructure Buy vendor solutions for standard stuff Why recreate balance, transaction inquiries? Do POC if you don’t see it running anywhere Look for flexibility to innovate your way Confidential

55. Conclusion Base your decisions on the best facts you can get Market is moving fast, stay up to date Try to keep emotion, politics out of it (yeah, right) Build solid business case for each initiative Inspect technology for a good fit Look for products already in production Look for ways to innovate Confidential

56. Fin. Confidential