Tom Neri: Tom Neri examines fintech’s impact on financial services as well as partnerships that are re-imagining customer engagement on smartphones.

1. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Lessons
Learned…
…From FinTech’s Impact
Across Financial Services
© GfK | Innovation In Insurance | October 12, 2016

2. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Tom Neri
Head of
Financial Services
GfK North America
…service providers
must reimagine the
entire customer
engagement to occur
on a smartphone.
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3. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
A
Convergence
of
Phenomena
Capital
Smart-
phones
Millennials &
Underserved
Big Data/
Algorithms
Technology
Regulations
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 3

4. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
The challenge
Common struggle to reimagine
personal financial management for
mobile and determine whether
consumers want to do anything
that complicated on their
small screens
Traditional players
are turning to FinTech
companies to help
solve their issues.
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 4

5. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
FinTech
Nearly
1,400 firms
with $33 billion in
capital, working across
16 financial services
categories
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 5

6. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financially underserved
The Underserved:
a geographically, economically and demographically diverse group of people who, by choice or
circumstance, operate partially or completely outside the traditional banking system.
The Unbanked:
have no checking or savings account
The Underbanked:
have a bank account but also used at least one
non-bank financial service during the past year
The
underserved
consists
primarily of
two main
groups:
25%
68%
7%
Check
cashing
Money
orders
Payday
loan
svcs.
Pawn
shops
Wage
paymts.
Prepaid
cards
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7. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Dave Melnick
Smartphone for Everything Everywhere
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 7

8. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
C2. Which of the following best describes your mobile phone( the one you use the most)?
68% 71% 72% 69% 69%
88%
Smart-
phone
ownership
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9. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
State of US Retail
E-Commerce Growth Fueled by Mobile
• Forrester Research projects mobile commerce sales to generate
a 17% CAGR through 2020, accounting for half of all online sales.
• According to GfK’s Future of Retail reporting, 75% of Americans say
their mobile device is becoming their most important shopping tool.
U.S. E-Commerce Sales
Source: GfK FutureBuy
Advantage Online
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10. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
State of Consumer Engagement
Industry Outlook
EXPERIENCE MARKETING
BIG DATA
EMOTIONAL ENGAGEMENT
OMNI-CHANNEL INTEGRATION
OMNI-CHANNEL COMPONENT DEVELOPMENT
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 10

11. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
A Tale of Innovation in the Age of Millennials
Emergence of Gen Z, Establishment of Gen Y
* Age in 2014
Source: GfK Consumer Trends, 2013
GEN Z
18-24*
GEN Y
25-34*
Social
natives
Book smart
& savvy
Fun &
frugal
Fun first,
work next
Connected Confidence
Global
minder
“Both /
and” stress
Friends =
family
Close to
doting parents
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 11

12. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
22
29 33
39 4345
54
63 60
67
29
37
43
54 58
12
21 25
32 34
5
10 9 13 18
0
10
20
30
40
50
60
70
80
90
100
2011 2012 2013 2014 2015
Total 18-29 30-44 45-59 60+% of Respondents
Mobile banking
usage continues to climb…
Base: n=1000
Source: Consumers and Mobile Financial Services 2016 – The Fed
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13. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Upward trend in smartphone shopping among Gen Z
13% 14%
8%
3%
21%
25%
15%
7%
32%
25%
18%
7%
7% 10%
5%
2%9% 10% 11% 10%12% 11% 9%
12%
Share of All Online
Shopping Activity on
Smartphone (US)
Share of All Online
Shopping Activity on
Tablet (US)
2013 2014 2015
18-24 25-34 35-54 55+
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14. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Generational Divide Evident
In Perceptions of Mobile Payment Utility
Source: GfK FutureBuy®
Mobile payments are:
39% 44% 24% 22%
44% 46% 30% 26%
40% 46% 25% 18%
33% 34%
18% 14%
“Easier”
“Faster”
“More Efficient”
“How I Pay When-
ever Possible”
% US Shoppers Agreeing
(completely / somewhat)
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15. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Millennials & Their Boomer Parents
Influence Each Other
My mom helped me
open my first checking
account when I was 13.
I’ve always had a great
relationship with my bank.
© GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services 15

16. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Lesson 1 for Insurance industry …
Ways to engage consumers
EducationAccessible
Experiences
PersonalizationFinancial
Fitness
Trust & Authenticity
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17. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovations Solutions
Broader Industry Perspective
What’s
working
???
Retail
banking
app
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18. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovations Solutions
FinTech Evolution
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19. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovations Solutions
FinTech Evolution
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20. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Source: GfK FutureBuy® 2016 – Thinking of the last time you used your Smart Phone to Shop- Was it in-store or Online?
Smart Phone
for In-Store Shopping
Europe
APAC
LATAM
Middle East
28%
24%
23%
22%
Percentage of IN-STORE use of MOBILE
PHONE to SHOP GLOBALLY is 26%
US –
37% used their
Smart Phone In-
Store the Last
time they
Shopped
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21. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Source: GfK FutureBuy® 2015, 25 markets
The global MOBILE PAYMENTS
MARKET is COMPLEX
Europe
APAC
LATAM
Middle East
9%
3%
6%
7%
Percentage of PAYMENTS conducted
by mobile phones in-store
US market: 3% estimated
share of all PAYMENT
TRANSACTIONS in 2015
Other
Credit
Card
Cash
Mobile
Device
Debit
Card
3%
38%
29%
4%
27%
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22. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovation Solutions
Payments
Contactless, smartphone wallet based on QSR code
• A “pro-retailer” solution
• Merchants have the advantage of a network that includes
no network/processing fees & no merchant fraud liability
• But they’re also getting shoppers’ data – something that
today’s more privacy-minded consumers are fighting back
against, but often are willing to make tradeoff for benefits
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23. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Beacon-triggered mobile games
create two-way interactions in-store
Via the Macy’s mobile app and
beacon-technology, customers
shopping at more than 700 Macy’s
locations nationwide who have
signed up to participate in the
game will have the chance to
instantly win $1 million in Macy’s
gift codes and prizes, just by
walking in to their local store
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24. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovations Solutions
FinTech Evolution
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25. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
Saving
Pioneered a smart phone banking app that
helps users track their money and improve their
savings by tracking spending and telling customers
how much they can safely spend without running
out of money at the end of the month.
Moven is expanding internationally with
bank alliances and a partnership with Accenture.
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26. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
Payment Transfers
Unipagos is helping the unbanked Spanish-speaking
population on both sides of the US-Mexican border
make payments on their smartphones.
About 75 percent of Mexico's 100 million consumers
don't have bank accounts, but 50 percent of the
country's residents wield smartphones
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27. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
Lending
Vyze develops software for retailers to
process consumer credit at the point of sale
• Proprietary algorithm using existing credit & proxy data,
such as cell phone usage, utility payments, rental history
• Software provides retailer speedy match with willing
lending institution for nearly instant credit/loan approval
• Particular benefits underserved consumers, meeting
regulatory requirements for not using punitive interest rates
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28. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovations Solutions
FinTech Evolution
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29. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
Robo-advisors
Claims to have more customers than all of the
competition combined, thanks in part to its
$0 account minimum
• Powerful combination of goal-based tools & affordable
management fees, particularly for accounts over
$100,000, which pay just 0.15% of assets managed.
• Like other robo-advisors, Betterment uses exchange-
traded funds (ETFs), and clients pay no commissions
or transaction fees.
Other well known players: Wealthfront, Motif & Folio etc.
Betterment has emerged among plenty of competition as the current leader of
independent launches, with more than $3.9 billion in assets under management.
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30. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
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31. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial Innovations Solutions
FinTech Evolution
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32. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
Complete Insurance Coverage
To get people the insurance coverage
they need and make them feel good about it.
The easiest way to get an individual from
point A (no insurance) to point B (insured).
policygenius gained insights into the kind
of experience people would want
and built it from there.
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33. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Financial innovation solutions
Term Life Insurance
A mobile value proposition built around easier & faster access to term life
insurance, using available, permissible data sources to improve the
underwriting process.
Building a value proposition that redefines the traditional
notion of an insurance ladder – a construct that lets
you plan for extra coverage when you’ll need it the
most and taper off coverage at other times –
developing more dynamic, effective
relationships with clients.
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34. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Emerging FinTech Applications

35. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Smart
Home
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36. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services© GfK 2016 | The Connected Consumer
Rethinking our
relationship to
the home…
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37. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
High level of familiarity
of the term “smart home” Consumers
Leading
Edge
Consumers
Mobile Payments
Smart home technology
3D Printing
Wearable Technology
Driverless cars/Autonomous driving
The Internet of Things
Connected Car
Virtual/Augmented Reality
Smart Cities
55%
50%
41%
35%
33%
29%
26%
24%
24%
74%
78%
62%
63%
51%
50%
52%
46%
48%
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38. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
P01. Thinking about the various categories of services that can be part of a ‘smart home’, what type of company would you most expect to offer each service?
Base: All markets=7149
Types of company most expected to deliver smart home services
Electronics Manufacturer
Multinational Tech Company
High Street Retailer/ In street (US)
Utility Company
Online Retailer
Telecoms Provider
Mobile Phone Network
Financial Service Company
Other
Would not trust any company
19%
12%
12%
10%
10%
8%
8%
5%
5%
12%
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39. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Connected
Car
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40. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Not a car but a travel solution. This
app will take complete responsibility
for a trip, identifying the best
transport solution
7. Home to destination
Travel Solution
A car that knows your entertainment preferences
1. Entertainment
A self-driving car that drives
completely autonomously
2. Autonomous Driving
A car that communicates
with other connected
devices in your home
5. Life Manager
4. Ultra Safe
A car that makes driving as
safe as possible. Connectivity
with other cars, cruise control,
integrated cameras
3. Data Tracker
A car that tracks usage , runs
diagnostics, checks repair
costs; records accident data
automatically
6. Self Sufficient
A strong but light
electric car
‘Connected
Car’
Concepts
We asked 5,800 consumers to evaluate 7 concepts
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41. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
General
Consumers
LEC
87%
96%
66%
81%
73%
84%
68%
90%
62%
84%
65%
84%
79%
91%
Ultra
Safe
Data
Tracker Entertainment
Life
Manager
Home to
Destination
Self
Sufficient
Autonomous
Driving
QT1. Concept appeal Scale: 5 Point. Data is Top 3 Box
Leading Edge Consumers
leaning into connected cars…
As expected Ultra Safe concept is the most appealing. As safety is a ‘hygiene’ factor, we want to focus on concepts that follow next.
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42. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Source: GfK FutureBuy® 2015
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43. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Source: GfK FutureBuy® 2015
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44. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Focus
organization
to deliver
consistent
cross-channel
experience
Embrace
collaboration/
partnerships
Engage
consumers
on their needs,
terms &
benefits
Three Key Components…
to Implementing Innovation
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45. © GfK October 11, 2016 | Lessons Learned From FinTech’s Impact Across Financial Services
Thank you.