A New Vision For Payments In Financial Services

© 2013 Blue Panda Interactive. Proprietary And Conﬁdential.! 1!
A New Vision For Financial Services
Jeﬀ
Fleischman,
CEO
Blue
Panda
Interac9ve

June
2013

“Digital channels have transformed the way ﬁrms interact
with their customers. The convergence of mobile, social,
and technology have enabled the creation of value added
products and services that customers increasingly expect.
In order to succeed it is essential to focus on the
convergence of experience, data, and technology to meet
customer expectations.”!
!
Jeffrey Fleischman, CEO 
Blue Panda Interactive!

Executive Summary
• We’ve
become
a
mobile
first
civiliza3on
–
our
smartphones
an
indispensible
part
of
our
lives.

66%

access
use
their
smartphones
to
access
the
web
daily,
buying
goods,
conduct
financial

transac3ons,
find
informa3on,
text
with
others,
etc.

Smartphones
are
an
indispensible
part
of
our
lives

• Social
media
Is
ubiquitous
and
consumed
across
all
channels
with
mobile
becoming
the
dominant

choice
for
global
users.

Social
networks
are
the
most
trusted
source
of
informa3on
and

recommenda3ons
above
all
other
sources.

Social
media
and
social
networks
con3nue
to
drive
engagement

• The
prolifera3on
of
smartphones
and
tablets
have
led
to
widespread
mul3-‐tasking
among

consumers.
Usage
across
these
devices
vary
throughout
the
day,
but
collec3vely
they
are

becoming
a
growing
share
of
media
consump3on
coming
at
the
expense
of
tradi3onal
channels

e.g.
TV,
radio,
newspapers,
magazines.

Mul3-‐screen
usage
con3nues
to
grow

• Adop3on
of
technology
and
user
experience
has
enabled
and
embolden
new
compe3tors
to
make

inroads
in
tradi3onal
banking
ac3vi3es.

Banks
will
con3nue
to
face
pressure
as
technology
and

data
are
used
to
create
targeted
informa3on,
offers,
and
real
3me
decision
algorithms.

Tradi3onal
Banking
is
increasingly
under
pressure
by
new
entrants
and
the

usage
of
technology

The New Financial Services Frontier
Technology

Mobile/

Tablet,
Social

Media

Big
Data

• The
convergence
of
ﬁnancial
services
with
technology
and
plaQorms
has
created
a
new

paradigm
that
is
drama3cally
reshaping
the
banking
model.

Advisory

Wealth

Management

Payments

Banking

Social-‐Mobile

Financial
Services

Technology,

PlaQorms,

&
Data

Products

&

Services

The New Financial Services Frontier – Are Banks Adapting
Fast Enough?
The
convergence

of
financial

services
with

technology
and

plaQorms
has

created
a
new

paradigm

Barriers
to
enter

tradi3onal
banking

markets
are
low

New
compe3tors

have
become

serious
threats

grabbing

marketshare
with

innova3ve

solu3ons

Consumer
trust
of

banks
is
waning

and
they
are

willing
to
use
non-‐
tradi3onal
banking

firms

Millennials
have
no

inhibi3ons
to

conduct
“bank

less”
financial

services

Where
Do
We
Go
From
Here?

eBanking Has Emerged As The Preferred Method For
Consumers To Interact With Their Banks
² Growth
in
electronic
banking
(eBanking)
con3nues
to
accelerate,
increasing

worldwide
in
terms
of
both
users
and
transac3on
levels.

² This
growth
is
not
without
risks
–
banks
face
disintermedia3on
from
innova3ve

compe3tors,
shiing
customer
expecta3ons,
and
price
transparency.

² Mobile
Payments
(mPayments)
is
among
the
fastest
growing
transac3ons,

rapidly
becoming
the
payment
vehicle
of
choice
for
consumers
worldwide

especially
among
the
world’s
unbanked.

² Challenges
remain
for
banks
to
integrate
a
broad
set
of
capabili3es,
plaQorms,

and
data
to
provide
value
added
services.

² Shiing
behavior
to
web
and
mobile
are
crea3ng
cost
beneﬁts
while
opening

the
door
to
higher
revenue
opportuni3es
for
bank
and
bank
compe3tors.

² Mobile
Banking
(mBanking)
provides
the
opportunity
to
capture
a
greater
level

of
detailed
informa3on
on
spend,
payments,
and
loca3ons
for
CRM
ac3vi3es.

Between 2008 – 2015, mBanking Will Grow Over 3000%!
SOURCE: Mobile Financial Services: FISERV and Payments Cards & Mobile
• Global
mBanking
users
are
expected
to
grow
67%
from
150MM
in
2012
to
250MM
by

2015.

• mBanking
transac3ons
will
more
than
double
from
71.9MM
in
2012
to
167.6MM
in
2015.

Global Growth In mPayments Has Grown Exponentially
SOURCE: Mobile Financial Services: FISERV and Payments Cards & Mobile
• Global
mPayments
is
expected
to
grow
to
over
$6T
by
2015.

• Domes3c
and
interna3onal
money
transfers
are
growing
at
a
CAGR
of
137%
and
247%,

respec3vely
between
2008
–
2015.

mBanking Continues To Grow Across All Regions
• Mobile
Banking
has
had
a
profound
impact
on
the
banking
industry,
globally
consumers

are
adop3ng
mobile
banking
at
a
rapid
pace.

Source:
comScore
April
2012

25.8%

43.8%

35.4%

23.0%

16.9%

9.2%

28.7%

45.0%

37.8%

25.1%

22.0%

8.8%

Worldwide

North
America

Europe

La3n
America

Asia
Paciﬁc

Middle
East
-‐
Africa

Apr-‐12
Apr-‐11

-‐0.4
percentage
points

+5.1pp

+2.1pp

+2.4pp

+1.2pp

+2.9pp

China’s mBanking Growth 2010 – 2014E
0%

10%

20%

30%

40%

50%

60%

70%

80%

0

500

1,000

1,500

2,000

2,500

2010
2011
2012
2013E
2014E

Penetra3on
Rate

Transac3ons
(US
$B)

Transac3on
Value
Penetra3on
Rate

Source:
Celent;
CINIC
Jan.
2013

•  In
2012,
users
of
online
banking
reached
221.5MM,
growing
by
33%;
online
payments

reached
220.7MM
growing
at
32%;
mobile
banking
users
reached
150MM.

•  Commercial
banks
had
more
than
100%
growth
in
mobile
banking
users
in
and
by
over

300%
in
transac3on
value
in
2012.

Banks View Of Online And Mobile Channels Demonstrate
The Emerging Importance For Customer Interaction
• Respondents
responded
strongly
that
online
and
mobile
channels
will
play
a
prominent

role
for
transac3ons
and
customer
service.

• Sen3ments
run
much
lower
for
online
and
mobile
as
a
channel
for
sales
and
advice.

Source:
Efma
Digital
Channels
Survey
2013

80%

93%

65%

38%

Complementary
channels
to

branches

Primary
channels
for
transi3ons

Primary
channels
for
customer

service

Primary
channels
for
sales
and

advice

82%
80%

56%

50%

44%
43%

31%

29%

31%

mBanking Ranks Among Top Mobile Activities
Source: Pew Research September 2012
• As
smartphone
growth
con3nues
to
accelerate
there
will
be
a
corresponding
growth
in

banking
transac3ons.

• Fueling
this
growth
will
be
addi3onal
func3onality
and
a
bemer
customer
experience.

2016E

Ac3vi3es
done
on
a
smartphone

mBanking Is The Leading Financial Transaction Conducted By
Smartphone Users
• Accessing
bank
accounts,
credit
cards,
and
conduc3ng
ePayments
have
the
highest

penetra3on
of
smartphone
usage.

38.0%

26.9%

24.3%

21.8%

21.1%

19.9%

17.1%

16.2%

11.9%

9.2%

8.8%

8.5%

Bank
Accounts

Online
Retail

Classiﬁeds

Credit
Cards

Electronic

Auc3on
Sites

Shopping
Guides

Deal-‐a-‐Day

Travel
Service

Stock
Trading

Automo3ve

Insurance

%
Smart
Phone
Owners

Financial
Services
and
Retail/E-‐Commerce
Category
Usage

Source: comScore

Source: Celent
mBanking Functions Performed By Users
• Passive
transac3ons
e.g.
balance
inquiries
and
transac3on
history
con3nue
to
make
up
a

large
por3on
of
mobile
banking
func3ons.

• Approximately
33%
of
users
paid
a
bill
or
transferred
funds
and
these
rates
are
growing

rapidly.

11%

8%

2%

62%

17%

Mobile
Banking
Func9ons

Funds
Transfer

Bill
Payment/Pay
Anyone

Change
Password

Blance
Requests

Transac3on
History

Most Widely Used mBanking Transactions
• mBanking
has
had
the
highest
usage
rates
among
basic
transac3ons,
however,
is

growing
more
rapidly
for
transfers,
payments,
and
purchases.

• Mobile
RDC
capture
will
eliminate
over
1.5B
check
deposit
transac3ons
from
U.S.
bank

branches
by
2014.

Source:
American
Banker
2012;
Berg
Insight

90%

48%

42%

33%

26%

21%

11%

30%

20%

Checked
an
Account
Balance

Download
Your
Bank's
Mobile

Banking
Applica3on

Transferred
Money
Between
Two

Accounts

Received
A
Text
Messge
Alert
From

Your
Bank

Made
A
Bill
Payment
Using
Bank's

Website

Located
the
Closest
in-‐Network

ATM
for
your
Bank

Deposited
a
Check
to
Your
Account

Using
Your
Phone

Refused
to
Answer

Managed
Investments

Despite The Growth In mBanking Transactions, Customers
Have Apprehensions With Its Usage
Source:
American
Banker
2012

• The
largest
concerns
cited
by
customers
are
security,
ability
to
conduct
transac3ons

through
tradi3onal
channels,
and
difficulty
using
a
small
mobile
screen.

1%

2%

3%

9%

10%

13%

17%

18%

22%

48%

57%

Refused
to
Answer

My
bank
charges
a
fee
for
using
mobile
banking

It
is
not
offered
by
my
bank
or
credit
union

Don't
have
a
banking
account
with
which
to
use
mobile

banking

It
is
too
difficult
to
set
up
mobile
banking

Other

It
is
too
difficult
to
see
on
my
mobile
screen

The
cost
of
data
access
is
too
high

I
do
not
trust
the
technology
to
do
bank

I'm
concerned
about
the
security
of
mobile
banking

My
banking
needs
are
being
met
without
mobile

banking

Source: CEB Tower Group
mBanking Is Dramatically Cheaper Than Other Channels
• As
online
and
mobile
con3nue
to
pick
up
share
of
volume,
companies
will
see
average

cost
to
service
customers
decline.

• Although
banks
will
see
marginal
costs
decline,
they
will
incur
the
expense
of
managing

more
plaQorms
and
channels
–
integra3on
will
be
essen3al
to
deliver
a
seamless

customer
experience.

$0.09

$0.17

$0.19

$0.61

$4.00

$4.04

Online

IVR

Mobile

ATM

Branch

Call
Center

Customer
Preference

²  Cost
to
service
decreases

signiﬁcantly
for
online
and

mobile
transac3ons.

²  Customers
prefer
to
use
low
cost

channels
but
have
shown
a

preference
to
have
access
to
all

channels.

²  Banks
will
need
to
integrate

across
channels
to
create
a

seamless
banking
experience.

²  Mobile
banking
via
smartphone

or
tablet
in
the
US
jumped
to

32%
in
2012.


Banks Are Under Increasing Pressure By New Competitors,
Changing Engagement Models, and Technology

eBanking Implications
² The
global

banking
industry
is
facing
increasing
challenges
largely
driven
by

new
compe3tors,
evolving
technologies,
and
changing
consumer
attudes.

² Integra3on
across
channels,
plaQorms,
and
devices
will
be
required
as

ﬁnancial
service
companies
rethink
how
they
engage
their
customers.

² Big
(“unstructured”)
data
is
a
growing
source
of
rich
informa3on
that
can

provide
greater
customer
insights
enabling
banks
to
cra
more
targeted
CRM

capabili3es.

² Banking
services
are
increasing
mobile
based
–
engagement
via
apps
will

become
the
primary
customer
facing
touch
point.

² Technology
plaQorms
will
con3nue
to
grow
in
complexity
largely
driven
by

new
plaQorms
and
devices,
these
must
all
be
integrated
into
exis3ng
systems.

² Non-‐tradi3onal
companies
have
entered
the
tradi3onal
banking
space
and

are
becoming
formidable
compe3tors;
In
the
short
term,
banks
face

disintermedia3on
for
core
transac3ons.

² Voice
ac9vated/natural
language
interac3ons
enable
users
to
transfer
funds,

make
payments,
conduct
customer
service
with
voice
commands;
natural

language
will
allow
customers
to
answer
ques3ons
about
speciﬁc
spending.

² The
merger
of
data
and
experience
will
enable
banks
to
create
new

engagement
models
based
on
real
3me
behavior.

² Mobile/Tablet
dominance
will
displace
computers
and
branches
as
the

primary
access
point
for
the
majority
of
banking
transac3ons.

² Loca9on
based
services
will
enable
banks
to
make
real
3me
oﬀers
and

improve
secure
transac3ons.

² Branch
banking
experience
will
change
with
the
introduc3on
of
tablet,
mobile

devices
–
think
Apple
store
model.

² Video
access
to
bank
employees
via
mobile,
computers
and
ATMs
will
con3nue

to
proliferate.

Future eBanking Trends To Watch
• Technology
and
access
to
rich
data
will
enable
banks
to
create
more

meaningful
and
relevant
interac3ons.

Drivers Of eBanking
eBanking

mPayments

Social

Media

Technology

Unbanked

• The
growth
in
eBanking
has
accelerated
over
the
past
ﬁve
years
largely
driven
by

technology
and
consumer
acceptance
digital
channels.

Drivers Of eBanking
eBanking

mPayments

Social

Media

Technology

Unbanked

The
growth
in
eBanking
has
accelerated
over
the
past
ﬁve
years
largely
driven
by

technology
and
consumer
acceptance
digital
channels.

mPayments Will Continue To Grow At A Rapid Rate Changing
The Way Consumers Transact And Move Money
² Worldwide
mobile
payment
transac3on
volume
will
reach
US
$235B
in
2013,

a
44%
increase
from
$163B
in
2012;
mobile
payment
users
will
reach
245.2M

in
2013,
up
from
200.8M
in
2012.

² Although
Near
Field
Communica3ons
(NFC)
comprise
a
rela3vely
small

por3on
of
mobile
payments
expect
it
to
become
the
emerging
choice
for

users.

² Convenience
and
ease
of
use
of
mobile
capabili3es
has
created
a
seismic
shi

in
the
consumer
acceptance
and
usage
of
mPayments.

² Social
media
coupled
with
mobile
phones
have
been
the
catalyst
to
a

growing
opportunity
to
engage
consumers
and
win
share
for
companies.

² mPayments
con3nue
to
grow
rapidly
as
a
percentage
of
total
payments,

however,
banks
risk
disintermedia3on
by
innova3ve
non-‐bank
compe3tors

and
a
growing
acceptance
by
users
to
adopt
non-‐bank
payment
op3ons.

² A
big
driver
of
mPayments
will
be
the
2.5B
global
unbanked
turning
to
non-‐
bank
mPayment
op3ons.

Source:
Gartner

Late
1970’s

–
Mid
1980’s
1994
1997
Today

Evolution of Electronic Payments
Fric3onless
Finance
–

device,
currency

agnos3c

• Coinciding
with
the
evolu3on
of
payments
has
been
the
development
of
technological

advances
that
have
created
the
ability
to
easily
move
money
anywhere,
any3me.

Rudimentary
Home

Banking
system
based
on

landlines

Online
Banking
and

Bill
Pay.

Ability
to

access
accounts

any3me

First
Mobile

Banking
service

Mobile/Tablet Adoption Has Grown Exponentially In Line With
Functionality, Becoming An Indispensible Part Of Our Lives
Adop3on

Feature/Func3onality

Tablets/
eReaders

Smart
Phones
Feature
Phones
PDA
and
Mobile

First wave of
mobile devices
revolutionized
conversation
Mobile moves beyond
voice; adoption of text/
SMS and functionality
grows e.g. music
Tablets and
eReaders blur
the line between
mobile and
computing.
Touch
interaction is a
design trend
Mobile proliferation
explodes with rich features,
apps, utility. Technology
delivers advanced features –
mobile is now an
indispensible part of our
lives – Nomophobia is a
condition
• Emerging
technologies
such
as
Google
Glasses
are
crea3ng
new
opportuni3es
to

connect
and
engage.

Mobile Payment Ecosystem Is Crowded With Many Firms
Vying For A Place In The Mobile Payment Space

• Are
epayments
an
experience,
a
plaQorm,
or
a
commodity?

• The
prolifera3on
of
new
entrants
into
the
space
demonstrate
the
importance
on
winning

share
for
mPayments.

• Innova3ve
solu3ons
by
non-‐banks
will
take
share
and
proﬁts
from
banks.

The Growth Rate For mPayment Users By Region Is Large
• mPayment
usage
has
had
signiﬁcant
growth
from
2009
through
2013,
growth
rates
will

slow
through
2016
as
penetra3on
rates
reach
satura3on
levels.

• All
regions
will
experience
a
substan3al
shi
to
mobile
devices
which
presents
a
large

opportunity
to
create
meaningful
engagement
opportuni3es.

Source:
Gartner,
TechCrunch

Mobile
Payment
Users
By
Region
(Millions)

2009
2010
2011
2012
2013
2014
2015
2016
CAGR

Western
Europe

4,519

9,418

15,974

22,784

29,734

36,886

44,144

51,514

36%

North
America

1,905

8,260

19,111

32,788

46,518

60,853

75,514

90,653

62%

Asia/Paciﬁc

41,865

55,265

69,622

85,031

102,064

120,822

141,364

163,642

19%

Eastern
Europe

954

1,002

2,226

3,882

5,694

7,729

9,935

12,447

38%

Middle
East

186

524

935

1,527

2,326

3,440

4,710

6,019

54%

Africa

16,559

32,396

45,539

57,751

69,694

80,530

91,034

101,336

25%

La3n
America

4,012

5,578

7,058

8,456

10,479

13,373

17,268

22,314

24%

Total

70,000

112,443

160,465

212,219

266,509

323,633

383,969

447,925

26%

Global mPayment Transaction Growth By Regions
• mPayments
across
all
regions
have
experienced
substan3al
growth
from
2008
to
2012;

rates
will
slow
as
markets
reach
satura3on.

Source:
Arthur
D.
Limle

China mPayments Between 2010 – 2013 Has Accelerated
Payment growth will be fueled by:!
² The share of hours of internet access
on mobile devices is rising rapidly
among all age groups. !
² Growing usage of mobile apps!
² Technology that increases the utility of
mobile devices as a payment option!
² Proliferation of mobile devices and
mobile infrastructure!
² Greater access to the web through
mobile devices!
² Convenience in researching product
information and pricing transparency!
19

48

121

219

102

191

308

481

2010
2011E
2012E
2013E

Mobile
Payments
(Billion
Yuan)

Mobile
Payment
Users
(MM)

Source:
China
Internet
Watch

• mPayments
are
expected
to
grow
by
1132%
and
mobile
payment
users
will
increase
by

472%.

In
2011,
69%
of
users
said
they
used
their
phones
to
access
the
Web—up
30

percentage
points
in
just
three
years.

Mobile Purchases Made On Smartphones Reaches 19.4%
• Frequency
of
mobile
purchases
has
increased
with
14.1%
of
consumers
making
a

purchase
everyday.

Source:
comScore
MobiLens,
3
month
average
ending
Dec.
2011
vs.
Dec.
2010,
US

14.1%

21.0%

54.9%

Almost
Every
Day
At
Least
Once
a
Week
Once
to
Three
Times
a

Month

%
Made
Purchase
with
Smartphone

19.4%
Made
On-‐Device
Purchases
with
Smartphone
in
December
2012

The Emergence Of The mPayment Ecosystem
•  Mobile
phones
have
become
an
indispensible
tool
for
real
3me
research
and
purchasing

behavior
globally.

•  An
increasing
amount
of
purchases
online
and
in-‐store
are
being
driven
from
mobile

devices
–
mobile
apps
are
connec3ng
consumers
real
3me
oﬀers
and
coupons.

16%

18%

21%

24%

26%

29%

In-‐Store
Price

Comparison

Purchased
With
A

Mobile
App

Researched
on
Mobile

and
Bought
Online

Purchased
On
A
Mobile

Website

Researched
on
Mobile

and
Bought
In-‐Store

Researched
Product
on

Mobile

Javelin
Strategy
2009

²  Mobile
applica3ons
and

technology
have
created
complete

pricing
transparency.

²  Nearly
30%
of
consumers
conduct

product
research
on
mobile

devices.

²  Over
20%
that
do
research
on
a

mobile
device
will
buy
products

either
in-‐store
(26%)
or
online

(21%).

²  Purchases
from
mobile
devices
is

on
the
rise
with
consumers
-‐
24%

bought
on
a
mobile
website
and

18%

on
a
mobile
app.

Tablets Have Overtaken Smartphones For A Range Of
Activities Including Research And Purchasing of Products
39.1%

38.7%

38.2%

38.1%

33.2%

30.4%

21.1%

22.6%

23.6%

19.4%

33.7%

22.2%

19.2%

20.9%

Researched
Product
Features

Compared
Product
Prices

Purchased
Goods
or
Services
Online

Found
Store
Loca3on

Found
Coupons
or
Deals

Checked
Product
Availability

Made
Shopping
Lists

Share
of
Smartphone
and
Tablet
Owners
Performing
Mobile
Retail
Ac9vi9es

Tablet
Smartphone

• Smartphones
are
driving
showrooming
(in
store
price
comparison)
frustra3ng
retailers

with
price
transparency
but
empowering
consumers
to
ﬁnd
lowest
prices.

Attitudes Towards Mobile Payments Are Consistent Across
Asia And The West
0%

20%

40%

60%

80%

Privacy
Issues
ID
The
&
Fraud

Concerns

More
Convienent
Prefer
Most
Payments

are
Mobile

Asia
Europe/US

Source:
SapientNitro

• Respondents
have
concerns
regarding
privacy
and
ID
the
although
they
are
oﬀset
by

consumer
preference
and
convenience.

Interest Among US Consumers In Using Mobile Wallet
Technology To Pay For Merchandise In-Store
• Mobile
wallets
have
uphill
climb
for
consumer
acceptance
–
this
will
occur
as
mobile

payment
systems
gain
trac3on
and
retailers
integrate
in-‐store
terminals.

Completely

Disinterested

41%

Very

Interested,

15%

Somewhat

Interested,

10%

Neutral,

17%

Not
Very

Interested,

17%

Source:
eMarketer;
Catapult,
Shopper
Lab,”
April
1,
2012

²  25%
of
respondents
expressed
an

interest
in
using
mobile
wallets.

²  17%
of
respondents
were
not

very
interested
and
41%
stated

they
had
no
interest
at
all
in

using
mobile
wallets.

²  While
the
numbers
of
those
not

interested
were
high
part
of
this

can
be
explained
by
the
wide

spread
acceptance
and
usage
of

credit/debit
cards.

²  Looking
forward
these
opinions

will
change
as
retailers
oﬀer

incen3ves
and
make
it
a
faster

and
more
convenient
payment

method.

US
Consumer
Interest
In
Mobile
Wallets

The Global Players: Several Industry Groups Are Working
On mPayment Solutions
• The
digital
wallet
is
“owned”
by
several
industry
segments
that
each
provide
key

components
for
mPayments
and
digital
wallets.

Financial

Ins3tu3ons

Telecommunica3on

Companies
(1)

Retailers

(1)Telecommunica3on
companies
include
carriers,
handset
makers,
chip
makers,
OEMs

The Global Players: Each Industry Group Has A Unique
Role Within The mPayment Process
• Collec3vely
mPayment
players
each
provide
key
components
for
mPayments
and
digital

wallets.

They
must
work
together
to
create
end-‐to-‐end
experiences.

Financial

Ins3tu3ons

Telecommunica3on

Companies(1)

Retailers

Banking
services

Loans

Payment
Processing

Credit
Card
services

Security
Infrastructure

Wireless
Networks

Handsets

Mobile
Apps

Mobile
Payment
Services

Mobile
Coupon
Services

Security
Infrastructure

Loyalty
Programs

Merchandise

Shopping
Experience

Consumer
Data

Point
of
Sale

Security
Infrastructure

(1)Telecommunica3on
companies
include
carriers,
handset
makers,
chip
makers,
OEMs

The GlobalPlayers: Who Owns The Customer Relationship?
• The
mPayment
customer
rela3onship
is
fragmented
with
each
player
having
a

unique
role
that
will
vary
by
market.

Financial

Ins3tu3ons

Financial
Rela3onship

Telecommunica3on

Companies(1)

Reliability

Retailers

Shopping
Experience

(1)Telecommunica3on
companies
include
carriers,
handset
makers,
chip
makers,
OEMs

Financial

Ins3tu3ons

Telecommunica3on

Companies
(1)

Retailers

² Financial institutions, telecommunication companies, retailers, and
technology companies are all vying for a place in the mPayments
space.!
² The stakes are high – winners will gain the loyalty of customers and
increase revenue for a market size that will exceed $1T in volume.!
² Businesses need to create meaningful experiences through the
integration of data and technology to drive adoption, loyalty, and
retention.!
² mPayment capabilities must also ensure that the end-to-end user
experience is easy to use, intuitive, and seamless.!
² Technology will evolve as cross-platform interaction models evolve.!
The Growing Influence Of mPayments Is Setting The Stage
For Intensive Competitive Pressures To Win Share
(1)Telecommunica3on
companies
include
carriers,
handset
makers,
chip
makers,
OEMs

mPayment Roadmap For Banks – Creating Frictionless
Finance Networks
² Success
will
come
from
con3nued
focus
on
building
new
distribu3on

models
and
capabili3es
to
enable
mPayment
experiences.

² In
order
for
the
mobile
wallet
and
payments
to
grow
in
adop3on,
it
has
to

be
simple,
ubiquitous
and
have
a
compelling
value
to
consumers.

² Proliﬁc
growth
of
smartphones/tablets
and
consumer
acceptance
has
been

the
catalyst
in
driving
annual
double
digit
growth
rates
in
mPayments

volumes.

² Banks
must
invest
in
several
mPayment
technologies
as
standardized

plaQorms
have
yet
to
emerge
and
will
likely
vary
across
geographies.

² Banks
must
rethink
their
rela3onships
with
other
players
in
the
mPayment

space
to
build
and
protect
their
payment
marketshare
from
new

compe3tors.

² Data
will
play
an
important
role
to
enable
banks
to
provide
personalized

content
and
oﬀers
to
their
customers.

Drivers Of eBanking
eBanking

mPayments

Social

Media

Technology

Unbanked

The
growth
in
eBanking
has
accelerated
over
the
past
ﬁve
years
largely
driven
by

technology
and
consumer
acceptance
digital
channels.

² Social
networking
accounted
for
50%
of
all
page
views
on
mobile
phones
in

2011.

² Facebook
total
ac3ve
users
reached
1
billion
and
its
mobile
users
quadrupled
in

2
years
from
50MM
to
200MM.

² More
people
access
Twimer
and
Facebook
on
mobile
devices
than
on
desktop

computers.

² There
are
200MM
mobile
video
playbacks
from
YouTube
every
day
and
48

hours
of
video
are
uploaded
every
second.

² There
are
1.2B
internet
connected
smartphones
and
77%
of
individuals
use

mobile
phones
for
search.

² Nearly
30%
of
consumers
conduct
product
research
on
mobile
devices.

² Over
500,000
apps
have
been
developed
in
the
past
3
years
and
downloaded

more
than
14B
3mes.

SOURCE: Mobile Banking News
Drivers of mPayment Growth - Social Media
• Social
media’s
popularity,
smart
phone
sales,
and
app
prolifera3on
have
combined
to

create
an
organic
and
seismic
shi
in
mobile-‐social
media.

Social Media Usage Has Grown Exponentially As Has The
Frequency In Its Usage
Every
second
on
social
media:

²  100,000
tweets

²  685,000
items
shared
on
Facebook

²  2
million
Google
search
queries

²  48
hours
of
YouTube
uploads

²  47,000
applica3ons
downloaded
from
app

store

²  3,600
Instagram
photos
shared

²  571
websites
created

²  $272k
spent
on
line

²  31,250
Facebook
Likes

• 23%
of
Facebook’s
users
check
their
account
ﬁve
or
more
3mes
every
day.

• 40%
of
people
spend
more
3me
socializing
online
than
they
do
face-‐to-‐face.

• Facebook
posted
a
67%
year-‐over-‐year
mobile
growth
rate.

Source:
Bricat,
March
2013;
The
Social
Habit;
Twimer;
Facebook

Top 15 Social Media Sites Worldwide, Q1 2013
Source: Lifelong Learners Journal; GlobalWebIndex “Stream Social: Quarterly Social Platforms Update Q1 2013, April 26, 2013
51%

26%

25%

22%

21%

21%

20%

19%

12%

10%

9%

8%

6%

4%

4%

Facebook

Google+

YouTube

Twimer

Sina
Weibo

Qzone

Tencent

Tencent
Weibo

Youku

RenREn

Tudou

LinkedIn

Kalxin

Pinterest

51.com

Top
15
Social
Media
Websites

Percent
Of
Ac3ve
Web
Users

• American
and
Chinese
ﬁrms
dominate
the
top
social
media
sites.

Smartphone Usage In Both China and the U.S. Continues
to Grow Across Activities

Source: McKinsey, 2012
Smartphone
social
media
browsers

Visit
social
networks

Visit
at
least
once
a
day

Expect
to
make
more
mobile
purchases

Watch
video

Use
video
at
least
once
a
day

58%

92%

49%

56%

85%

24%

43%

80%

55%

31%

76%

25%

• Both
countries
have
high
penetra3on
and
ac3ve
rates
among
their
ci3zens
and
usage

rates
con3nue
to
climb.

Multi-Tasking Is Prevalent Among Smartphones Users
• In
both
the
US
and
China
consumers
are
using
their
smartphones
when
doing
everyday

ac3vi3es.

• Mul3-‐plaQorm
consump3on
has
grown
strongly
–
33%
of
minutes
spent
online
is
now

spent
beyond
the
PC.

People
Who
Use
Smartphones

While
Doing
Other
Ac3vi3es

16%
28%

86%

51%

52%

43%

34%

17%

83%

42%

42%

34%

32%

29%

18%
24%

Source: Google

Top Chinese Online Activities
Top
Online
Ac3vi3es

Fasted
Growing
Online
Ac3vi3es

83%
80%
77%
66%
66%

Instant

Messaging

Search

Engine

Online

Music

Blogs
and

Social

Media

Online

Videos

33%
32%
29%
25%
24%

Online

Banking

Online

Payments

Group

Buying

Online

Shopping

Weibo
and

Microblog

Source:
China
Internet
Network
Informa3on
Centre,
January
2013

•  Although
ﬁnancial
transac3ons
are
not
among
the
top
online
ac3vi3es,
online
banking

and
online
payments
are
the
two
fastest
growing
ac3vi3es
at
33%
and
32%,
respec3vely.

Case Study: Advisory & Wealth Management
The Rise Of The Social Financial Advisor

Over The Next 3-5 Years Expect A Major Shift In How Financial
Advisors Interact With Clients and Prospects
² Acknowledgement
in
the
growing
influence
of
social
media
and
mobile

usage
in
the
financial
advisor
community.

² Skep3cism
exists
that
digital
touch
points
can
be
used
to
build
rela3onships

in
an
industry
that
has
tradi3onally
been
a
high
touch,
personal
service.

² Firms/financial
advisors
will
need
to
figure
out
how
to
increase
their
social

media
presence
in
order
engage
prospects
and
clients.

² Companies
need
to
navigate
the
regulatory
and
privacy
hurdles
that
exist

internally
and
externally.

² Generally,
advisors
need
to
build
up
their
social-‐mobile
skills
to
be
more

effec3ve
in
engaging
a
growing
digital-‐first
audience

² Social-‐mobile
ini3a3ves
should
not
be
managed
in
isola3on,
integra3on
with

exis3ng
channels
is
cri3cal.

Firms Are Gradually Introducing Their Financial Advisors To Social
Media, But Within Three Years It Will Be Commonplace
Morgan
Stanley
Smith
Barney
plans
to
give

par9al
access
to
Twiber
and
LinkedIn
for
it’s

17,000
financial
advisors
which
amounts
to
a

bet
that
social
media
can
be
an
effec9ve

business
tool
for
financial
advisers.”

“Morgan
Stanley’s
retail
brokerage

unit,
using
Twiber
and
LinkedIn
has

helped
financial
advisers
win
more

business
over
the
past
year.”

“Goldman
Sachs,
which
recently
said

it
was
looking
to
hire
a
‘social
media

community
manager,’
has
taken
to

Twiber
to
post
news
about
the
firm.”

“The
Blackstone
Group
also
maintains

a
Twiber
account.”

“AllianceBernstein,
has
given

employees
access
to
LinkedIn.”

“Putnam
investments
launches
video
blog
to

help
financial
advisors
tap
social
media”

Source:
The
Securi3es
Industry
and
Financial
Markets
Associa3on

Advisors Are Increasingly Using Social Media Although Its Use
For Business Purposes Lags Personal Use
Source:
Registered
Rep
and
Wealthmanagement.com

Percentofadvisorsusingsocialmedia!
• Approximately
30%
-‐
40%
of
advisors
do
not
use
social
media
for
business
purposes.

LinkedIn Is The Leading Social Network Among Advisors
• Among
advisors
using
at
least
one
social
network
for
business,
90%
use
LinkedIn
and
are

more
than
three
3mes
as
likely
to
use
it
over
other
social
networks.

• Facebook
is
the
dominant
social
network
for
personal
use
at
71%.

Source:
LinkedIn
Marke3ng
Solu3ons
and
FTI
Consul3ng,
May
2012

Total
Usage

78%

75%

38%

37%

Social
Networks
Used
for
Business

Among
ﬁnancial
advisors
who
use
at
least

one
for
business

Overall
Social
Network
Usage
for
Business/
Personal

Purposes

Active Rates And Frequency In The Usage Of Social Networks
Among Advisors Is Increasing
²  Nine
out
of
10
advisors
now
have
a
social

media
profile
or
account
and
56%
are
ac3ve

(vs.
51%
in
2011).

²  Among
advisors
with
social
network

accounts,
LinkedIn
and
Facebook
have

highest
penetra3on
rates
but
Twimer
is

growing
at
the
fastest
pace.

²  Although
most
advisors
report
that
their

social
media
use
is
restricted,
it
has
not

deterred
the
overall
adop3on
rate
of
social

media.

²  Twimer
can
be
an
effec3ve
high
frequency

communica3ons
tool
to
lead
users
to

specific
sites
and
content.

Source:
Registered
Rep
and
American
Century;
LinkedIn
Marke3ng
Solu3ons
and
FTI
Consul3ng,
May
2012

Used
Social
Network
Foe

Business
Purposes
At
Least

1x
Week
1x
Month

LinkedIn
53%
74%

Facebook
37%
48%

Twimer
31%
37%

Google+
20%
27%

%
Of
Advisors
With
An
Account(1)

(1)
Source:
American
Century

Advisors Believe That Using LinkedIn For Prospecting Has Led
To New Client Acquisition And AUM
• Advisors
that
gained
clients
from
LinkedIn
were
2-‐2.5X
more
successful
in
engaging
and

cul3va3ng
client
rela3onships
than
those
who
did
not
acquire
clients
on
LinkedIn.

Source:
LinkedIn
Marke3ng
Solu3ons
and
FTI
Consul3ng,
May
2012

The “Social-Advisor” Era Has Begun To Take Shape – Are You
Ready?
Source:
Registered
Rep
and
WealthManagement.com

FACTS
&
STATS
IMPLICATIONS

Social
networking
usage
increased
10%+
in
2012
and
is

approaching
or
exceeding
50%
at
many
firms

Laggards
in
adop3ng
a
social
strategy
will
be
at
a

compe33ve
disadvantage

25%
of
advisors
acquired
clients
through
social
media
efforts

following
a
tradi3onal
first
contact

Its
impera3ve
that
firms
to
adopt
an
integrated

channel
strategy

Social
media
usage
among
advisors:
LinkedIn
84%,
Facebook

28%,
Twimer
16%

Each
social
network
has
a
specific
amributes
and
its

usage
should
be
clearly
defined

43%
of
advisors
do
not
use
social
media
for
business

purposes,
but
74%
are
interested
in
it
for
prospec3ng,

marke3ng
and
communica3ons

Companies
and
advisors
need
a
coordinated

strategy
and
training
to
develop
the
appropriate

social
skills
to
engage
prospects
and
customers

For
those
with
policies
in
place,
nearly
67%
of
firms
prohibit

the
use
of
Facebook,
YouTube
and
Twimer
for
business

purposes;
25%
prohibit
the
use
of
LinkedIn

There
is
a
large
gap
between
the
personal
usage

and
business
prohibi3on
of
social
media
needs
to

be
resolved
to
minimize
compliance
and

reputa3onal
risks

Among
advisors,
compliance
and
regulatory
concerns
are

considered
to
be
the
primary
challenge
when
using
social

media;
specific
areas
of
uncertainty
are
how
to
answer

ques3ons
and
permissibility
in
sharing
opinions
or
advice

with
clients

Coordina3on
needed
among
advisors
and

compliance
teams
to
understand
regula3ons.

Policies
need
to
outline
permissible
usage
of
social

media
by
advisors.

Advisor Social Media Playbook – Building A Personal Brand
In A Socially Connected World
Build Your Social Media Profile!
² Ensure a LinkedIn profile articulates and highlights experience and expertise.
Recommendations and endorsements add credibility. !
² Create a Facebook profile that highlights a personal side, interests, include content
that will garner attention and sharing among your followers.!
² Use Twitter as a communication platform to connect with websites and other social
media platforms.!
!
Expand Your Circle Of Influence!
² Facebook, LinkedIn, and other social media platforms provide a window into personal
events/milestones that an advisor can connect to with relevant, targeted content. !
² LinkedIn and Facebook enables an advisor to scan a clients' network for potential
prospects. Engaging with one’s network provides exposure to contacts and potential
leads, but avoid overt selling tactics, take a consultative approach.!
Broadcast To Your Network And Their Connections!
² It’s important to publish useful, relevant information, research papers, etc. Sharing
this information across LinkedIn Groups, Facebook, email will expand reach. !
² Twitter is a good way to broadcast to your network and lead them to relevant
information.!
² Every client is a sphere of influence and social media is an efficient and effective
method to connect with them and their network.!

Case Study: American Express
The Emergence Of The Social eCommerce Model
• American
Express
is
arguably
one
of
the
most
innova3ve
companies
to
generate
sales

and
engagement
from
the
integra3on
of
web,
mobile,
and
social
media.

The Emergence Of Social eCommerce Model
"Go
Social"
Tool
for
Small
Business
Merchants
-‐
Launched
May
14,
2012

The
new
"Go
Social"
offer
tool
is
a
virtual

one-‐stop
shop
that
allows
American

Express
merchants
to:

²  Create
and
manage
coupon-‐less
offers

into
digital
channels
such
as
Facebook

and
other
plaQorms.

²  Track
offer
campaign
results
across

mul3ple
social
networks
and
loca3ons.

²  Help
merchants
to
build
their
business

and
evaluate
their
social
offer

campaigns
with
detailed
reports
that

they
can
access
through
their
own

secure
dashboards.

²  The
plaQorm
is
built
upon
American

Express'
Smart
Offer
API.

“Link,
Like,
Love”
Facebook
Ini3a3ve
Launched
July
2011

² On
the
American
Express
Facebook

page,
cardmembers
can
link
their
cards

to
the
program
and
choose
their

favorite
deals.

² American
Express
will
send
statement

credits
to
cardmembers'
accounts
as

they
shop
online
or
in
stores,
without

the
need
to
pre-‐purchase
anything,

print
out
or
show
a
coupon
at
the

point
of
sale.

² Delivers
deals
and
oﬀers
based
on

cardmember
Facebook
ac3vity,
pages

they
like
and
share,
as
well
as
the

ac3vi3es
of
Facebook
friends.

² When
the
related
transac3on
is
made

with
the
American
Express
card
within

a
speciﬁc
3me
period,
the
discount
is

credited
to
cardmember
account.

“Sync,
Tweet,
Save”
Twimer
Ini3a3ve
–
Launched
March
2012

American
Express
uses
twimer
#hashtags
to
create
couponless
na3onal
merchant
offers
and

Cardmember
savings
using
its
smart
offer
API.
Cardmembers
can
sync
their
cards
with
Twimer,

tweet,
and
save
at
na3onal
merchant
partners
including
Best
Buy®,
McDonald’s,
Whole
Foods

Market,
Zappos.Com.

The
campaign
generated
over
US
$12.8MM
in
it’s
first
two

months.

Extending
Twimer
Synch
with
“Pay
By
Tweets”
–
Launched
February
2013

²  American
Express
has
integrated
payments

into
Twimer.

²  Payments
are
made
by
twee3ng
a
purchase

hashtag,
and
retwee3ng
the
conﬁrma3on

tweet
from
Amex
within
15
minutes
of

receiving
it.
The
product
will
then
be

shipped
to
the
account
billing
address

synced
with
Twimer,
and
payment
taken

from
your
synced
Amex
account.

²  The
payment
service
is
ini3ally
limited
to

par3cipa3ng
merchants
and
products
for

for
a
limited
number
of
American
Express

Gi
Cards,
and
products
from
Amazon,

Sony,
Urban
Zen
and
Xbox
360.
The
$25

American
Express
Gi
Card
was
made

available
yesterday,
at
a
discounted
price
of

$15
and
the
hashtag
#BuyAmexGiCard25.

Social Media Implications For Financial Services
² Banks
are
aware
of
the
prevalence
in
social
media
usage
and
are
slowly

adap3ng
it
as
a
customer
engagement
medium.

² Many
firms
are
using
social
media
as
a
listening
tool
to
bemer
understand

customer
complaints
and
address
customer
service
issues
directly.

² Social
Media
is
not
a
random
ac3vity,
firms
need
clear
business
objec3ves
for

what
they
want
to
achieve
from
social
media
ini3a3ves.

² Ensure
social
media
ac3vi3es
are
part
of
a
larger
customer
engagement

strategy;
cra
a
social
media
content
calendar
to
coincide
with
marke3ng

ac3vi3es.

² Communicate
with
customers
in
a
holis3c
manner
that
is
integrated
across

plaQorms
to
provide
a
consistent
message.

² Tailor
specific
social
media
efforts
appropriately
across
different
plaQorms
–

Twimer
is
different
than
Facebook.

² Invest
more
in
social
media
analy3cs,
monitoring,
and
social
intelligence
to

bemer
understand
customer
needs
and
trends.

Drivers Of eBanking
eBanking

mPayments

Social

Media

Technology

Unbanked

• The
growth
in
eBanking
has
accelerated
over
the
past
ﬁve
years
largely
driven
by

technology
and
consumer
acceptance
digital
channels

²  High speed cellular and Wi-Fi network coverage have seen dramatic growth
across the globe – reaching a vast audience of consumers.!
²  Mobile subscriptions surpassed the number of landlines in 2002 and is now is 3
times larger globally.!
²  Smartphone sales continue to grow rapidly now accounting for a large share of
all mobile device shipments; approximately 5.9B people use mobile phones
globally!
²  iPad/tablets have the fastest adoption rate in history – outstripping iPhone
adoption by over 300% and driving a sizable amount of purchases.!
²  There are a number of disparate mobile platforms that have emerged and
companies are investing in multiple ones as they gauge which of these will
survive.!
²  Video continues to make inroads in a number of ﬁnancial service areas such as
customer service – the adoption will be slow but will become an important part
of the overall engagement model.!
Technology Has Been An Enabler In The Growth Of
mPayments, Social Media Platforms, And New Capabilities

The Emergence Of The Mobile Web As The Dominant
Channel Of Choice
Social networking accounted for
of all page views on mobile phones in 2011!
Facebook mobile users have!
from 50MM in 2009 to 200MM in 2011!
There are mobile video
playbacks from YouTube every day!
Over 775k apps have been developed in the
past 3 years and downloaded more than 50B
times!
Nearly 30% of consumers conduct product
research on mobile devices !
As of December 2011 China had
internet users – world’s largest !
Twitter has over active users
sending over tweets a day!
86% of mobile internet users use their mobile
phone while watching TV !
90% of the largest retailers have a mobile site
or smartphone app!

Technology Is Enabling Banks To Create Interactive, Seamless
Cross-Channel Experiences
Alipay
has
launched
a
new
payment
system
in

the
Beijing
subway
that
uses
sound
waves
to

connect
smartphones
with
vending
machines.

The
sound
wave
payment
system
was

introduced
with
the
Alipay
Wallet
mobile
app
in

January
and
uses
white
noise
(link
via
Google

Translate)
generated
by
a
smartphone
to
carry

digital
informa3on
to
another
device.

A
Canadian
bank
has
launched
a
‘personal

assistant
teller’—PAT—an
innova3ve
ATM

that
enables
customers
to
speak
‘face
to
face’

with
real
bank
assistants.
Live
streaming

connects
customers
via
the
ATM
to
on-‐screen

tellers
so
that
they
can
carry
out
a
wide
range

of
rou3ne
banking
ac3vi3es
such
as
making

deposits,
opening
an
account
or
arranging
a

loan.
Users
are
able
to
transact
business
by

exchanging
and
signing
documents
on
the

ATM’s
screen.

A
global
UK
based
bank
has
launched
an

innova3ve
online
consulta3on
service
for
its

premier
customers.
This
allows
them
to
access

the
Live
Connect
service
through
the
bank’s

website
gives
video
access
to
their
rela3onship

manager.

Customers
can
ask
ques3ons,
get

instant
ﬁnancial
advice
on
products
and

markets.

• Financial
Service
companies
have
begun
to
merge
video
and
technology
into
ﬁnancial

transac3ons
to
provide
convenience
and
usage.

SOURCE: Tech Crunch, Accenture
Select
Examples

Global Content Grew 900%+ Between 2006 and 2012 to 2.4
Zettabytes
• Content
has
evolved
into
more
a
useful
form
–
it
is
increasingly
tagged,
labeled,

searchable,
shared.

• Content
crea3on
has
broadened
widely
across
all
age
groups,
video
and
photos
will
lead

the
way.

1
ZB
=
1
000
000
000
000
000
000
000
bytes

or
1
trillion
gigabytes

Source: KCPB, IDC, Wikipedia

Approximately 71% Of Financial Service Companies Are
Planning Or Implementing/Piloting Big Data
• 71% of banking and ﬁnancial ﬁrms believe that the use of insight and analytics creates a
competitive advantage, compared with 63% of cross-industry respondents. !
• Only 36% cited this as an advantage in 2010, representing a 97% increase in two years.!
Source:
IBM/Said
Business
School,
Analytics: The Real World Use of Big Data in Financial Services, 2012

24%

26%

47%

47%

28%

27%

Cross

Industry

Banking
/Fin

Services

Not
Started
Planned
Pilot/Implementa3on

Data Sources Continue to Proliferate, Integration Will Become
A Primary Objective For Firms
88%

73%

59%

57%

43%

42%

42%

41%

41%

92%

81%

70%

65%

27%

19%

36%

47%

42%

Transac3ons

Log
Data

Events

Emails

Social
Media

Sensors

External
Feeds

RFID/POS
Data

Free
Form
Test

All

Banking

• Firms are challenged to integrate data across a broad set of platforms and sources.!

Photos And Video Continue To Gain Momentum In Usage
• Over
500MM
photos
are
uploaded
and
shared
on
a
daily
basis
and
the
growth
rate

con3nues
remain
strong.

Source: KCPB,

Video Growth Will Continue To Accelerate As It Becomes A
Primary Medium For Users
Source: KCPB, YouTube
• 100
hours
of
video
are
uploaded
to
YouTube
every
minute,
up
500%
from
the
20

hours
per
minute
in
2009.

Hours
of
video
uploaded
per
minute
on
YouTube

Source: KPCB; Apple
iPad
vs.
iPhone
=
3x

Apple Has Sustained Exponential Growth With Each
Successive Product Launch
First 8 Quarters Cumulative Unit Shipments!

• Personal
computers
con3nue
to
grow
at
a
slow
rate,
being
outpaced
by
very
high

adop3on
rates
for
smartphones
and
tablets.

• Experience
and
engagement
priori3es
for
companies
must
also
shi
to
these
devices
if

companies
want
to
stay
connected
to
their
customers

Source: Gartner, IDC, Strategy Analytics, BI Intelligence
iPad
vs.
iPhone
=
3x

Tablets And Smartphones Will Continue To Grow Exponentially

Tablet Shipments Have Grown Exponentially And Now Out
Sell Desktop Their Inception Than PCs
Source:
KPCB;
Morgan
Stanley
Research,
Gartner

• In
3
years
tablets
have
achieved
a
level
of
adop3on
that
took
a
decade
for
smartphones.

• Tablets
have
opened
up
a
new
medium
with
rich
interac3ve
experiences
on
a
mobile

plaQorm.

US Smartphone Ownership Continues to Rise As Does
Penetration Of Total New Mobile Device Sales
41.8%

45.6%
47.4%

51.0%
53.8%

Dec-‐11
Mar-‐12
Jun-‐12
Sep-‐12
Dec-‐12

%
Total
Market

U.S.
Smartphone
Penetra9on

125.9
million

Smartphone

users

+29%
YOY

59.5%
62.9%
62.1%
66.9%
72.2%

40.5%
37.1%
37.9%
33.1%
27.8%

11-‐Dec
12-‐Mar
12-‐Jun
12-‐Sep
Dec

%
Newly
Acquired
Devices

72%
of
All
Newly

Acquired
Devices

were

Smartphones

+12.7

percentage

points

Source: ComScore

Tablets And eReaders Are Growing Rapidly And Have Become
A Third Screen For Consumers
• Tablets
will
play
an
increasingly
integral
role
for
digital
consumers
–
banks
and
retailers

will
need
to
adjust
their
strategy
and
experiences
speciﬁcally
for
them.

*Estimate Source: Pew Research; Independent Research
0%

10%

20%

30%

40%

50%

60%

2%
3%
4%
5%
6%

14%

16%

18%

29%

55%*
%
Ownership
US
Adults
With
A
Tablet
or
eReader

The Emergence Of The US Mobile Only Household
• 60%
of
US
households
with
adults
aged
25
–
29
years
old
only
have
a
wireless
phone.

• 58%
of
all
adults
that
rent
do
not
have
a
landline.

Source: Gigacom; CDC/NCHS

Web Traffic From Mobile Devices Is Growing At A 150% Rate
Source: KPCB; StatCounter Global Stats, May 2013

Smartphone Usage Is Repetitive And Growing In Activities
Source:
KPCB

• Frequency
in
usage
of
mobile
devices
is
growing
across
an
increasing
number
of

ac3vi3es.

• Messaging
and
tradi3onal
calling
are
the
top
ac3vi3es,
social
media
is
gaining
trac3on.

23

22

18

13

12

9

8

8

6

5

3

3

14

Messaging

Voice
Call

Checking
Time

Music

Gaming

Social
Media

Camera

Alarm

News
&
Alerts

Calendar

Web

Search

Other

#
of
Times
Typical
User
Checks
Phone
per
Day

Smartphone Usage Growth Rates
Top 10 Smartphone Usage Categories!
% year-over-year growth, December 2012!
Source: ComScore MobiLens, December 2012
45.2%

44.4%

43.5%

42.9%

41.2%

40.9%

40.7%

40.5%

40.1%

40.0%

Instant
Messaging

Social
Networking
with
Checkin-‐In

Insurance
Service

Electronic
Payments

digital
Books/Magazines

Online
Retail

Photo/Video
Sharing

Home/Lifestyle

Adult
entertainment

Da3ng
Services

Smartphones Are An Integral Part Of The Retail Experience
42.5%

34.9%

32.7%

30.4%

22.4%

18.5%

18.1%

15.4%

10.2%

5.6%

Took
Picture
of
a
Product

Texted
or
Called
Friends/Family
About
a

Sent
Picture
of
Product
to
Family/Friends

Scanned
a
Product
Barcode

Compared
Product
Prices

Found
Coupons
or
Deals

Found
Store
Loca3on

Researched
Product
Features

Checked
Product
Availability

Purchased
Goods
or
Services
(Online)

%
Performed
Shopping
Ac9vity
in
Store
with
Smartphone

Ac9vi9es
Performed
in
Retail
Store
with
Smartphone

98%

89%

79%
74%

64%

At
Home
On
The
Go
Shopping
At
Work
Commu3ng

Mobile Consumer Behavior
• Mobile
devices
have
become
indispensible
part
of
our
lives.

Over 775k apps have been developed in the past 3
years and downloaded more than 50B times!
Where
People
Use
Mobile
Devices

Smartphones Play A Prominent Role In Showrooming,
While Tablets Are Driving Purchases
39%

39%

38%

38%

33%

30%

21%

23%

24%

19%

34%

22%

19%

21%

Researched
Product
Features

Compared
Product
Prices

Purchased
goods
or
services
Online

Found
Store
Loca3on

Found
Coupons
or
Deals

Checked
Product
Availability

Made
Shopping
Lists

Tablet
Smartphone

Source: comScore MobiLens, December 2012

• Tablet
owners
are
twice
as
likely
to
purchase
items
at
38%
than
smartphone
owners
at

19%.

Over Half Of Users Use Tablets While Watching TV; Multi-
tasking Across Devices Continues To Grow
Source:
ComScore

• Tablets
have
mass
appeal
and
have
become
an
integral
part
of
our
rou3nes
–
we
use

them
for
many
ac3vi3es
especially
when
watching
TV

53%

52%

30%

24%

13%

12%

3%

3%

Accessed
Social
Networking

Played
a
Video
Game

Shopped
Online

Read
a
Book

Read
a
newspaper

Read
a
Magaine

Other
(Please
Specify)

Did
Not
Do
Any
Ac3vi3es

TV
Watcher
Tablet
Ac9vity

Not

Related

44%

Related

Ac9vi9es

56%

Used
Tablet
While
Watching
TV

Yes

53%

No

47%

Source:
ComScore

Apps Dominate in Most Categories
US Top Smartphone Properties, % Share of Time Spent by Access Method
Directories/Resources

Lifestyles

News/Informa3on

Portals

Retail

Business/Finance

Games

Entertainment

Services

Social
Media

19%

49%

64%

72%

75%

76%

94%

95%

96%

97%

81%

51%

36%

28%

25%

24%

60%

50%

40%

30%

App
Browser

Three Core Types Of mPayments Have Emerged
mCommerce

Mobile
Web
Browser
(online

wallets,
web
ecommerce)

mPayments

Uses
contactless,
mobile

capabili3es

mWallets

Virtual
Wallet

How
It
Works

Types

1.  Add
items
to
Cart

2.  Fill
out
informa3on

3.  Purchase
and

confirma3on

1.  Add
items
to
Cart

2.  Click
to
buy

3.  Purchase
and

confirma3on

1.  Funds
loaded
on
device
e.g.

mobile
phone

2.  Scan
barcode

3.  Purchase
made,
new

account
balance
displayed

1.  Credit
card
info
stored
on

phone

2.  Enter
PIN
to
purchase

3.  Tap
your
phone
to
POS
,

authen3ca3on,
approval

Or

1.  Money
loaded
into
account

2.  Purchase
made
via
SMS

3.  Purchase
and
confirma3on
to

merchant

Or

• Availability
for
specific
mPayment
type
will
vary
based
on
cultural
acceptance,

technology,
and
financial
provider
access.

Starbucks Is A Retailing Pioneer In The mPayments Space
Starbucks Card Mobile App!
² Mobile bar codes that are delivered to the app and
scanned at retail store.!
² Weekly, Starbucks is seeing close to 4 million
mobile payment transactions, up from 2 million
near the end of 2012. Mobile now accounts for
approximately 10% of Starbuck’s total U.S. sales.!
² The company also reports that My Starbucks
Rewards is seeing similar growth rates outside the
U.S. in countries such as China, Korea and
Canada.!
² The app also includes a store locator and is
integrated into its rewards program and
promotions.!
² Starbucks accounted for over 50% of the $500
million in mobile wallet spend in 2012.!
• Mobile
ini3a3ves
allow
retailers
to
monitor
and
analyze
purchase
pamerns,
providing
new

insights
to
customer
behavior.

• The
ability
to
create
highly
personalized
experiences
will
con3nue
to
drive
retailers
entry

into
the
mobile
space.

²  Over
the
past
12
months,
25%
of
PayPal
account
holders
made
at
least
one
purchase

through
mobile

²  The
net
total
payment
volume
through
PayPal
during
Q1
totaled
$41
billion,
up
21%

and
was
driven
by
consumer
and
merchant
use
of
PayPal
both
on
and
off
eBay

²  In
the
first
quarter,
PayPal
gained
five
million
ac3ve
registered
accounts,
ending
the

quarter
with
128
million
ac3ve
users,
up
16%

²  During
the
first
quarter
the
iPad
version
of
PayPal
Here
–
a
mobile
payment
solu3on

for
small
businesses
–
was
launched
in
the
U.S.

²  PayPal
Here
also
became
available
for
sale
at
more
than
2,700
SoBank
loca3ons
in

Japan
while
the
chip
and
PIN
version
was
announced
for
roll
out
this
summer
in

Britain

²  PayPal’s
offline
ini3a3ves
are
now
live
in
almost
20,000
major
retail
loca3ons
in
the

U.S.

²  Log
In
With
PayPal
allows
a
user
to
sign
up
on
a
retailers
site
with
a
PayPal
account

which
would
include
all
financial,
shipping
and
billing
informa3on,
as
well
as

purchase
history
–
and
has
now
been
extended
to
mobile
sites

PayPal Has Transformed Into A Global, Multichannel
Payment Company With Mobile Leading Strong Growth

PayPal Has Aggressively Forged Partnerships With Retailers
And Point Of Sale Developers
²  First mobile payment partner, Home Depot, rolled out to
2,000 locations. Customers make purchases with their
PayPal accounts by typing in their mobile phone number
and PIN. Customer receives an electronic receipt on their
mobile device after making a purchase.!
²  May 2012 announced additional 15 retail partners some of
which include: Abercrombie & Fitch, Barnes & Noble, Foot
Locker, JC Penney, Ofﬁce Depot, and Toys "R" Us.!
²  Redesigned website has cross-sell space for promoting
mobile payments. The site is also designed to be touch-
friendly for use with tablets and smartphones. !
²  Signed deals with point of sale systems developers and
point of sale terminal manufacturers. These partnerships
give PayPal access to over 40 million payment terminals
across the world.!
²  PayPal is also testing a new app in Britain that enables
users to make purchases via a unique bar code linked to
their account.!
²  Launched a joint venture in Japan and has plans to enter
India, China and other global markets.!
PayPal Here

• PayPal
is
quickly
becoming
a
formidable
player
in
the
payments
industry
and
mobile
is
a

major
component
of
that
strategy

Source:
Mobileburn,
TechCrunch

Several Different mPayment Models Have Emerged And Are
Competing To Gain Global Acceptance
Payment

Models

CONTACTLESS

NFC,
RFID,

FeliCa

MOBILE
APPS

Internet

SMS

Text

Messaging

WEB

Mobile

Browser

USSD

Similar
to

SMS

• There
has
been
a
prolifera3on
in
proprietary
mPayment
oﬀerings
that
vary
in

func3onality
and
standards.

NFC Estimates - Key Statistics and Figures
²  Current
barriers
to
growth
include
availability
of
NFC
mobile
phones
and
POS

contactless
readers
but
both
are
expected
to
see
strong
growth
entering
2016.

²  NFC
payments
accounted
for
2%
of
total
transac3on
value
in
2013
and
will
grow
to
5%

of
the
total
transac3on
value
in
2017.

²  According
to
ABI
Research,
a
total
of
125
million
NFC
phones
were
shipped
in
2012

and
500
million
NFC
devices
will
be
in
use
in
2014.

This
number
will
grow
to
over
800

million
units
by
2016.

²  Between
2012
and
2017
NFC-‐enabled
phones
will
increase
at
a
65%
CAGR
to
2.1bn

units
and
will
reach
32%
of
all
mobile
devices
by
2017.

²  47
million
Japanese
have
adopted
tap-‐and-‐go
phones
in
three
years
–
making
it
one
of

the
fastest
roll
outs
of
electronic
products
driven
by
a
broad
set
of
usage
capabili3es.

²  There
will
be
169
million
users
of
mobile
contactless
payment
in
China
in
2013.
Total

number
of
mPayment
users
will
be
410
million,
making
China
the
world’s
largest

mPayments
market.

Source:
Berg
Insight,
ABI
Research,
Mobile
Commerce
Daily;
Gartner

• Although
expert’s
opinions
vary,
all
agree
that
NFC
mPayments
will
become
a
major

source
of
payment
transac3ons.

FeliCa Products and Applications Are A Glimpse Into The
Future Of Mobile Contactless Functionality
Source:
Wikipedia
and
NitroSapient

²  The Bank of Tokyo-Mitsubishi UFJ: ”Super IC Card” !
The “Super IC Card” rolled out by the Bank of Tokyo-
Mitsubishi UFJ is a dual-interface (contact and contactless),
3-in-l IC card designed for security, ﬂexibility and customer
convenience. Multi-functional with prepaid (“Edy” e-money),
debit (cash card) and charge (credit card) payments
features.!
!
²  Wallet Phones !
FeliCa compatible wallet phones, referred to as “Osaifu-
Keitai” and marketed by NTT DoCoMo, KDDI and Softbank
Mobile, are used increasingly in Japan for a wide variety of
applications including e-money, credit cards, payments.
Additional companies are adopting usage of FeliCa based
payment products.!
²  Non-Financial Applications!
e-tickets, membership IDs, airline tickets, airport check in,
entertainment, loyalty programs, reward membership, PC/
online encryption, home security. New functionality is
continuously being added to the FeliCa platform!

FeliCa Functionality Has Become Ubiquitous In Japan And
Is Spreading Globally
• 50%
of
Japanese
mobile
users
have
a
FeliCa
phone
and
20%
of
users
have
used
a
mobile

wallet
to
make
a
purchase
Mobile.

• FeliCa
is
more
than
a
mobile
payment
service,
it
provides
a
wide
range
of
user
needs

including
the
use
as
a
secure
ID.

Source:
Wikipedia,
SONY,
Smartnfc

Boarding

Pass

Consumer

Electronics

Transit

Ticket

IC
Card

Vending

Machine

Access

Control

Internet

Credit

Service

Retailers

ID
Card

eTicket

mPayment Platform Summary
² Although mPayments have seen signiﬁcant growth, the market in terms
of technology, standards, and payment providers vary widely by market!
² The key players in the space are banks, ﬁnancial service companies
(e.g. credit card companies, telecoms, specialist web payment
companies, online service providers, retailers/merchants, and
technology companies.)!
² Companies have created multiple partnerships/alliances and networks
as they test and promote these platforms !
² Although the market is nascent it is rapidly maturing and there will be
an emergence of a few dominant players and platforms that will led to
a few global platforms.!
² It is likely that multiple technologies will co-exist on mobile devices and
cards which are being pushed by giants such as VISA and FeliCa!

Drivers Of eBanking
eBanking

mPayments

Social

Media

Technology

Unbanked

• The
growth
in
eBanking
has
accelerated
over
the
past
ﬁve
years
largely
driven
by

technology
and
consumer
acceptance
digital
channels.

² There
are
over
2.5B
unbanked
people
globally,
many
of
which
are
in
Africa,

Asia,
and
La3n
America.

² Because
most
of
the
unbanked
currently
own
a
mobile
phone
they
are

readily
adop3ng
payment
op3ons
based
on
mobile
ownership
and

distribu3on.

² Mobile
payments
are
bringing
disparate
players
together
in
collabora3on
to

provide
new
payment
op3ons
to
the
unbanked.

² The
majority
of
mobile
payments
are
focused
on
retail
and
person-‐to-‐person

(P2P)
payments.

² The
ability
to
enhance
the
unbanked
regions
will
vastly
improve
the
ﬂow
of

funds
and
ul3mately
spur
economic
growth
that
would
otherwise
be
diﬃcult

to
obtain.

² Consumers
in
Africa,
the
Middle
East,
and
India
rely
on
telecoms
including

Vodafone
and
MTN
to
provide
mobile
money
op3ons.

Source: Mobile Banking News
The World’s Unbanked Are Rapidly Adopting mPayments,
Banks Will Face Stiff Competition To Win Marketshare

Source: Demirguc-Kunt and Klapper 2012
Many Parts Of The World Have A Large Percentage Of The
Population That Is Unbanked
• mPayments
will
provide
access
to
a
more
eﬃcient
and
lower
cost
payment
system

fueling
new
economic
prosperity
for
the
world’s
unbanked.

89%

55%

45%
39%
33%

24%
18%

11%

45%

55%
61%
67%

76%
82%

High
Income

Economies

East
Asia
&

Paciﬁc

Europe
&

Central
Asia

La3n
America

&
Caribbean

South
Asia
Sub-‐Saharan

Africa

Middle
East
&

North
Africa

Unbanked
Banked

Source: Hoohan, World Bank; McKinsey; Federal Reserve Board Survey 2011
Unbanked Adults Who Do Not Use Formal Financial Services
²  2.5
billion
adults
do
not
use

formal
financial
services
to

save
or
borrow.

²  Of
the
1.2
billion
adults
who

use
formal
financial
services
in

Africa,
Asia,
and
the
Middle

East,
at
least
two-‐thirds,
a

limle
more
than
800
million,

live
on
less
than
$5
per
day.

²  8.2%
of
US
households
(10

million)
are
unbanked.
20.1%

of
US
households
(24
million)

are
under
banked.

• Among
the
90%
of
under
banked
consumers
with
mobile
phones,
49%
had
used
mobile

banking
type
services
in
2012,
up
from
29%
in
2011

• The
unbanked
are
rapidly
adop3ng
payment
services
from
non-‐banks,
as
their
affluence

grows
they
will
be
less
likely
to
use
Banks
for
tradi3onal
products

2,455

876

60

136

193

250

326

612

Total

High
Income
OECD

Arab
States

Central
Asia/Eastern

La3n
America

Sub-‐Saran
Africa

South
Asia

East
Asia

Unbanked
Popula3on
By
Region
(MM)

India Is The World’s Second Most Populous Nation And Has
Over 450MM Unbanked People
• In
a
country
where
cash
is
used
in
65%
of
retail
transac3ons
and
mobile
phones
are

common,
mPayments
are
poised
to
grow.

India
Facts
&
Figures

²  Mobile
phone
connec3ons
outnumber
bank
accounts

by
more
than
a
factor
of
three:
893MM
mobile
phone

subscribers
and
250MM
bank
accounts.

²  The
Na3onal
Payment
Council
of
India
(NPCI)

launched
the
Interbank
Mobile
Payment
Service

(IMPS).
IMPS
allows
a
person
to
pay/remit
money
to
a

merchant
or
an
individual
in
real-‐3me
using
a
mobile

phone
number
and
a
mobile
phone
iden3ﬁer.

²  India's
leading
m-‐commerce
player,
ngpay,
has
over

1.5
million
registered
users
who
can
purchase

products
through
their
mobile
phones.

²  Western
Union
has
announced
that
State
Bank
of

India
(SBI)
bank
accountholders
will
be
able
to
receive

cross-‐border
money
transfers
using
their
mobile

phones.

Unbanked Usage of SMS And USSD Has Grown Rapidly in
Certain Regions And Will Continue To Grow Globally
• Consumers
in
Africa,
the
Middle
East,
and
India
rely
on
telecoms
including
Vodafone
and

MTN
to
provide
mobile
money
op3ons.

Kenya

M-‐Pesa
Facts
&
Figures

²  M-‐Pesa,
Swahili
for
money
is
a
mobile-‐phone
based

money
transfer
and
microfinancing
service
for

Safaricom
and
Vodacom
launched
in
2007.

²  By
2011
68%
of
adults
use
mobile
money;
average

transac3on
size
is
$30

²  M-‐PESA
now
has
10.5
million
ac3ve
users.

²  There
are
65.5k
M-‐PESA
agents.
26k
M-‐PESA
agents

were
added
in
the
last
financial
year.

²  Users
give
cash
to
agent,
money
is
loaded
onto

account,
payment
made
via
SMS,
confirm
given
to

merchant
via
SMS

²  M-‐PESA
now
Contributes
18%
of
Safaricom’s
total

revenue;
revenue
grew
by
29.5%
to
21.84
billion.

²  Kshs
522bn
was
transacted
between
customers

within
M-‐PESA,
Kshs
444bn
was
deposited,
Kshs

390bn
was
withdrawn
from
M-‐PESA
via
agent.

A New Vision For Payments In Financial Services

A New Vision For Payments In Financial Services

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