New frontier in mobile banking value proposal for online electronic financial services

1. Telenor Direct Bank
By Miodrag Kondić 2013.

2. Aligning business with 21st century
• Digital financial services together with Telco rampant industry, are the most expanding
and innovative markets today
There is a great need for mobile and online banking services, and in particular
self management of own financial services, as country enters long awaited financial
liberation of conservative legislation of electronic payments (June ’14)
A "virtual" bank gives an initial competitive advantage of creating less operational costs,
therefore making profitable loans and deposits which are less than couple of percent
cheaper for an average consumer, but more than that how very low number of fees in
quantity and quality
• Offering bundled packages of online savings and checking accounts and mobile
payment plans towards competitor banks, would be very cost efficient to operate
• ATM network with cash deposit option would be additional innovation in the local
market
• Mobile payments on rich enabled mobile browsers nowadays would allow for full
customer experience and set of services for the client – i.e. Storage of the profile data,
account and card details, transfers, deposit/loan payment and currency exchange

3. Direct banking
• Top 3 candidates in terms of assets portfolio, satisfaction of clients and diversity of
products
A Dutch multinational banking and financial services corporation ING Direct has been
around longer than most (since 2000) and has developed a strong base of loyal
customers. The 2012 merger with CAPITAL ONE bank has introduced some benefits
such as access to Capital One ATMs and CheckMate, a remote-deposit service that
accepts scanned checks and deposit them electronically from PC or mobile device
Minimum needed to open account: None, monthly Fees: None
ATM Fees: Free at 43,000 Allpoint-affiliated ATMs, otherwise fees from the ATM-
owning bank apply
Interest Checking: Yes (called Electric Orange Checking) – 0.19% interest on
average monthly balance under $50,000; 1.05% interest on balance over $50,000;
1.10% over $100,000
Online Savings: 0.90% variable APY
Other Fees: A nominal 3.1₵ a day on over draft balance of $100
Electric Orange Checking comes with free transfers for up to three linked bank accounts,
free online bill payment and a MasterCard debit card.
ING also offers mortgage services, but no car loans.
ING has a modern equivalent—eight ING Direct Cafés in major cities
ING Direct also has free iOS apps for banking and finding ATMs.

4. Bank of Internet BofI
• Minimum needed to open account: $100 to open an account
Monthly Fees: None
ATM Fees: Unlimited ATM reimbursement with Rewards Checking; up to $8 a
month with High Interest Checking
Interest Checking: Yes – either 0.71% APY (High Interest) or 1.25% APY
(Rewards Checking) with usage caveats
Online Savings: High Yield Savings is 0.80% APY with no fees and no min
"America's Oldest and Most Trusted Internet Bank,“
• It funds exchange (same as Ally's), free bill pay, banking by phone/email/SMS
alert
• Quicken-powered tool called FinanceWorks for budgeting, and purchase
rewards for using clients VISA debit card
• $500 minimum opening deposit for no maint and monthly fees
• To get the full 1.25% APY, direct deposit from employer is needed, pay up to
three bills, and use the debit card seven times per month.
• Overdraft, either from a line of credit or from a linked account, costs nothing—
$50 application fee to activate it

5. ZUNO - LESS BANK, MORE LIFE
intuitive banking with consistent pricing
• Started at 2012 as a sister company from RBI in Bratislava, Slovakia
• Raiffeisen Bank International AG (RBI) posted a consolidated profit of € 541
million in the first quarter of 2012, which represents an increase of 100.4 per
cent compared to the first quarter of the preceding year (Q1 2011: € 270
million).
• Very innovative and inspiring branding and communication to customers
(r)evolutionize – coming closer to young adult and proffesional market segment
- becoming accessible via living room ambient
• It has reached 100,000th client in 2012 and 1 billion of euros of deposits
• The key is simplicity and transparence in servicing – for opening an account
you only need to send a photo of your ID
• ZUNO product online wallet combines current account, savings and deposits. It
has built-in option to have funds available, and maximized interest earned - by
distribution between ACCOUNT and SAVINGS
• No opening hours, no holidays - 24/7 control of client’s money the whole year
round
• IT HAS ATTRACTED CLIENT IN EVERY 8 MINUTES

6. Delivery channels and product features
• Provide the conduit for activities that involve business and IT
• use of Internet as sales channel
ZUNO mobile application:
• do the balance check
• check standing order
• check direct debit
• open ACCOUNT in ZUNO by simply taking a photo of ID and submitting it
• pay an invoice by scanning it
• run domestic transfers
• block the card
• change the card limit
• see history of transactions
• use the the ATM locator, which allows devices with a camera mode to search for ATMs
in augmented reality

7. STRATEGY OF THE GREEN FIELD BANK
• ZUNO makes extensive use of online and social media, including Facebook
and Twitter, and hosts its own blog where customers share money-saving tips
Customers are also asked to suggest merchants and categories for cash back
points; choices rotate
• Even those who don't have an account can sign up for free e-mail based
courses on financial management.
• The processes, systems, design, IT architecture, implemented and integrated
in that way that all services are delivered online
• A right blend of multicultural people speaking english with different access and
right personality, know-how and skills.
• 78 per cent said loyalty or rewards offerings would be “very” or “somewhat”
likely to make a difference in their purchase decisions – millenial segment
• Aiming to keep consumers as they move through life stages – packages wether
Telenor tariff plans, Internet or Banking
• Focus shifted to client need and consumer-driven insight

8. Value proposition
• Customer expectations are exploding. Today, almost everyone wants
customized products -- right away and bundled with convenient services.
Customer-based activity as opposed to transaction-based activity analysis,
became the foundation for brand bonding and awareness
Convient IT system for setting up and tweaking various parameters
online, customers really create and manage their own financial products
• A customer loyalty program that will collect points on their bills they hand over
for cable television, Internet connections, and landline and wireless services
each month. Those with higher overall spending on Telenor services will
receive more points per dinar, which are than redeemed for rewards such as
long-distance calling, upgrades on Internet packages and even expanded TV
content
• LOYALTY programs are all about DATA – data science and customer
experience
• Havel simple and clear products and enable special accounts to integrate
social networking to help people save money

9. CURRENT AND SAVINGS ACCOUNTS – 2 IN 1
• All usual fees are zero (account maintenance, opening and cancel the account,
early termination deposit100% interest to the date of cancellation100% interest
to the date of cancellation)
• Monthly SMS, statement via e-mail or by snail mail is free
• CREDIT CARD is CONTACTLESS MASTERCARD with 55 days grace period
and no monthly fees
• All usual ATMs fees exist but are fixed to 1.2 to 1.8 €, and for CREDIT CARDS
are fixed to 3€
• VISA ZUNO is typical eletron debit card with
some special characteristic:
- The number of the card and account is the
same
- PayPass service for payments to 20 € without
PIN

10. LOANS
Up to 20,000 €
without fees again
Apply online
6.9% per annum
Sms about the
upcoming installment

11. Operational model follows Service delivery loop
• Distribution channel from short (coffe shops) to long (merchant outlets)
online, banking, extending the current services, m-banking payments, Acquiring
cards VISA and MasterCard online

12. Bank’s strategic goals
 To be CEE top Direct Bank
– All segments of clients
– Wide range of products
– With a focus on high margin
 To develop the bank’s image
– Through online banking
– Through the Long channel
– Through mobile banking
– non-personalized cards
– Loyalty schemes and large

13. Bank’s transformation
• As banks try other ways to raise more millions—such as new checking account
fees, fees for excessive withdrawals from savings, and, of course, credit card
interest increases — the number of migrations to lower-cost Internet banks will
skyrocket
• As many as 39 percent of respondents chose accessing the Internet via a
desktop or laptop computer as their preferred way to conduct banking business
• Another 18 percent of respondents chose visiting
a bank branch while 11 percent selected ATMs
as their favorite way to access banking services

14. • LOYALTY NOVI SAD - Co-branded contactless prepaid
MasterCard
- first cashbank card on the market, increase in ppp 20%
- socially responsible company– humanitarean fund for socially challenged
groups
- strong bond branding with a local community

15. Turnover and ROI

16. Promotional activities at EXIT FESTIVAL 2014
• With advent of anonymous prepaid card sold at merchant outlets and kiosk
• Contactless card for small purchases at Festival (budget 5 mio €)
• Profitability from banking services offered to 200,000 visitors
• Focus on young adults and students
• Income for the festival operating bank partner Fees Forecast €
Transfers 5,400
Exchange 16,250
Current
Account
2,000
TOTAL 23,650
Goodwill inflow Forecast €
Loans 15,000
Corporate
services
20,000
TOTAL 35,000

17. Cooperation of
EXIT and
livestream.com
Exit pages are
integrated with
twitter and
Facebook
1.600.000
minutes/ viewers of
the entire festival
EXIT Cloud / Live – telecommunication activities
EXITFestival Petrovaradinska tvrđava
9 -13 Jul14

18. Thank you 