Digital Insight discusses how your mobile spending can embrace change with a laser focus on ROI. They take a dive into the future of the mobile channel as a profit engine.

1. 2014 Momentum Webinar Series:
Monetizing the Mobile Channel
Ain’t it About Time?
April 23, 2014

2. • Momentum series
• Polls
• Q/A
Welcome

3. Katherine Jansen is the Senior Manager,
Business Development at Digital Insight, an NCR
subsidiary. She is responsible for identifying and
executing strategic alliances that extend the
company’s mission to its financial institution
customers. Katherine previously served as Digital
Insight’s leader of corporate strategy, Senior Vice
President of Marketing and Senior Manager of
Customer Experience.
Introduction

4. Today
Today’s session will be a success if you:
• Leave thinking that you’ve got to figure out
mobile strategy and where you stand
• Rethink the mobile market
• Rethink channel profitability

6. Source: Federal Reserve, Consumers and Mobile Financial Services 2014
Business as Usual?

7. Source: Bankrate.com © March 2014 The Financial Brand
Let’s look at it from a different perspective

8. Mobile is table stakes
Source: Novarica © April 2014 The Financial Brand

9. And you’ve seen the demographics…
Source: Novarica © March 2014 The Financial Brand

10. What About Retail?
Source: Pew, January 2013

11. Mobile Commerce CAGR 2011-2015
Source: Forrester Research, 2013

12. Mobile POS Payments CAGR 2011-2018
Source: Mercator Advisory Group

13. • Do you have a defined mobile strategy?
– Yes, and it is well-socialized
– Yes, senior management knows it
– I think so
– No
• How frequently is the strategy updated?
– Every quarter
– Once a year
– When the board asks about it
Polling Questions – Mobile Strategy

14. P&L View
• Revenue
• Income
• Expense reduction
Direct or indirect contribution Lifetime Value View
• Customer profitability
• Customer retention
• Infrastructure
Applying the Filter of ROI:
Mobile Investments Should Drive:

15. Showrooming
With mobile device in hand, consumers also
consulted their balances in real time before
making a purchase, and 50 percent decided
against making purchase for lack of
available funds.

16. Consumer Lending
Mobile Offer Acceptance: Easy as…

17. Merchant POS?

18. • Similar benefits as retail
• Offers, promotions,
pre-staging
• Transactional net
promoter
• Appointments and
advance check in
iBeacon in the Branch

19. • Are you evaluating iBeacon for
your branches?
- Yes
- No
Polling Question - iBeacon

20. Reduce Expense
Source: Javelin Strategy & Research, Leveraging an Omnichannel
Approach to Drive 1.5B in Mobile Banking Cost Savings, July 2013

21. Customer Retention
Among younger consumers,
technology and innovation was of
greatest importance, with the reasons
for switching primary banks including:
 "My previous bank didn't offer the
level of technology/innovation that
I wanted”
 "My previous bank didn't offer the
online services that I needed”
 "My previous bank didn't offer the
mobile services that I needed"
Source: AlixPartners (March, 2014)

22. Mobile driving increased engagement and
activity; banking no different
Logins / Month
Debit Purchases / Month
Retention Rate
15
85%
10.51
22
93%
17.35
30
93%
Offline Online without
Mobile
Online with
Mobile
Increase Marketing Traffic:
• Access their financial information
65% more frequently 1
Increase Revenue:
• Conduct 40% more monthly
debit card purchases 2
• 8 additional debit card
purchases/month could equal
$32 additional revenue/year
per customer 2
¹ Internal study of 36 Digital Insight FI customers, July 2009 through March 2014; claim based on comparison to Digital Insight online non-mobile consumers.
²Internal study of 29 Digital Insight FI customers, July 2009 through March 2014; claim based on comparison to Digital Insight online non-mobile consumers
with an estimated interchange fee of $0.35 current as of 2012.

23. • Define, regularly update and
socialize a living, breathing mobile
strategy for your financial institution.
• Identify your points of focus for ROI
– P&L view
– Lifetime value view
– Defensive strategy
– Growth strategy
• Measure, analyze, iterate regularly
What is your mobile strategy?

24. Disruptors

26. Chase “Quick Checkout”

27. Barclays Mobile Wallet

28. Google Mobile Wallet

29. 2929© CELENT
1PayPal’s open wallet
Source: PayPal and the Next Web

30. Coinbase Mobile - SMS

31. WyWallet in Sweden
• Started by 4 largest
mobile companies
• 1.2 million consumers
using (only 9.6 million
in all of Sweden)
• Accepted by 4,600
merchants there,
including McDonald’s
and Burger King.
• Oh – doesn’t run on
card rails.

32. Wearables

33. Millenials….yup, again

34. • There is an opportunity to
out-innovate
• Identify disruptors & partner
with them
– Think about your “silos” and where
disruptors can elevate your game
• Drop a pebble and create a ripple
• Disruptors can be your lunch
• Look for innovative partners
• Embrace & cause disruption
If you can’t beat ‘em, join ‘em?

35. A disruptor/partner story

36. • Online credit delivery
platform with automated
loan application,
underwriting, origination,
packaging and account
management
• Specifically targeted to
smaller SBA loans.
• Small bank generates 50
loans for over $1M since
testing in October.
Small bank & this company jointly create

37. Expansion
• New areas of
revenue/income
• New ways of doing
business that attract
more customers or
reduce expenses
• Brand evolution
Protection
• Customer retention
• Brand importance
• Expense reduction
• Future revenue streams
Applying the Filter of Innovation/Experiments:
Mobile Investments Should Drive:

38. Channel Profitability

40. • Do you measure channel
profitability?
– Yes
– No
• Do you have a way to
measure “contribution”?
– Yes
– No
Channel Profitability – polling question

41. • Income
– Value of increased balances
– Value of retention
– Interest income
– Fee income
• Expenses
– FTEs for creating/maintaining
channel
– Marketing expenses
– Solutions provider’s expense
Channel Profitability: probably looks
something like this

42. Exactly what channel is this?
Before

43. Exactly what channel is this?
After

44. What profitability lever does
interactive teller push?

45. Does iBeacon “contribute” or enable?

46. What Channel is this?
• Decides not to buy yet, but do
more research online . . .
• GPS locator sends a push notification
with a 20% discount
• Your customer visits an
electronics store for
washer and dryer
• He’s convinced, downloads coupon,
returns to the store and makes
purchase with your card
• Goes to OLB to check funds and
finds 20% discount again

48. Apologies to the accountants…
• Take a Return on Investment approach
– Define the expected benefits and time period
– Take a lean start up approach if possible to iterate into a
solution
– Measure, analyze, iterate
• Take a “Test the Hypothesis” approach
– Fund some experiments
– Lean start up, minimum viable product
– Define your learning plan and instrument the experiment
so you can analyze.
• Re-evaluate traditional channel profitability and think
more of contribution.

49. Questions?

50. www.digitalinsight.com
Thank you!
June 2014:
Security & Compliance in the Age of IoE
Alan Akahoshi, Product Manager, Digital Insight
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51. 2014 Momentum Webinar Series:
Monetizing the Mobile Channel
Ain’t it About Time?
April 23, 2014