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Three Things You Don’t Know

Why They Matter & What to Do Next

June 18, 2011

1

©2011 Jack Henry & Associates, Inc. All Rights Reserved.

@leewetherington

Lee Wetherington, AAP Director of Strategic InsightProfitStars ®



Lee WetheringtonDirector of Strategic Insight

2

• Develops actionable insight and strategyfor the financial services industry

• Delivers keynotes nationwide

• Serves as the Technology Faculty Chairfor several regional banking schools

• Published in many industry trades

• Degrees in Economics and Englishfrom Duke University

• Accredited ACH Professional (AAP)

Presenter

@leewetherington



Macro Trends



Pace of Change/Convergence

Radio38 Years

TV13 Years

Cable10 Years

Digital Camera8 Years Internet4 Years Smart Phone

2 Years

Reaching 50 million users…

FaceBookLast 6 Months



Challenges of Convergence

1. Usability

2. Security

3. Saturation



Our 100,000 Words a Day…

“Data Overload: Americans in the Digital Age” by Bill Morris; www.sphere.com; 12/16/2009



Too Many Choices



8



How much

is simplicity

worth?



U.S. consumerswill pay a 4%

premium for

simplicity.--Siegel+Gale

“ B a n k C u s t o m

e r s S a y M a k e I t S i m p l e – W

e ’ l l P a y Y o u F o r I t ”

A m e r i c a n

B a n k e r ; M a r c h 1 6 ,

2 0 1 1 ; B y

H e a t h e r L a n d y



What Consumers Want

1.Security

2.Personalized experiences

3.Proactive communication



What Businesses Want

1.Ease

2.Control

3.Cost Reduction



What Financial Institutions Want



What Governments Want

1. Efficiency

2. Cost reduction (without massive

capital outlays upfront)3. Better collections/distributions

4. Improved service for constituents



Agenda

• 3 Things You Should Know – Online; Mobile; Social

• What You Should Do Next

– Prioritize Usability

– Mobile Moves

– Simplify & Nudge

• The Future

– One App Everywhere



17



The onlinechannel rules.



Transaction Costs by Channel

Fiserv White Paper: “How to Achieve a Compelling ROI

from Mobile Financial Services” ; www.checkfree.com



How do you

capitalize uponthe online/mobile

channels?



Improveself-service

21



Improve Self-Directed Service

• Usability, usability, usability• Easy to find

• Easy to use

• Visualize data

• One-step enrollments (email/online)

• Online live chat/support

• Mobile alerts/services22



Mobile: Cost Savings/Call Deflection

23

Preemptive text alerts can prevent…

• In-Person Customer Calls

– Bank cost: $3.00 to $15.00

• Automated Calls (IVR)

– Bank cost: 3¢ to 30¢



How can we

make digital

more concrete?24



Countering the Abstraction of $

25

http://eco.media.mit.edu/static/proverbialwallets/wallet-fat.jpg

http://eco.media.mit.edu/static/proverbialwallets/wallet-hinge.jpg



Visualizing Data



A Better Balance

27



Question:

Where doeseveryone

gather online?



More Time Spent on Facebook

29

http://www.businessinsider.com/chart-of-the-day-time-spent-facebook-google-yahoo-aol-microsoft-2011-2



Social Media Roundup

30

http://blog.socialware.com/2011/02/06/2010-social-media-financial-services-a-look-back/



• To be easy to find, youmust top search rank

• To top search rank, youneed real site traffic

• To get real site traffic,

you must tap intosocial networks

The Link Between SMO & SEO



Social Media: 2 Questions

1. Privy to conversationsabout your organization?

2. Party to conversationsabout your organization?



The Bottom Line: Social Media

• Build trust first, sell later – You’ll be more successful

– Eliminates most compliance burdens

• Be personal, not institutional

• Be responsive and contribute regularly

• Welcome feedback, even criticism, tobuild respect, trust and brand

• Tremendous benefits, little costs



34



By the end of the year,

over 50% of all U.S.mobile phones will be

smartphones.



E i /E t ti



Experience/Expectations



Smartphone Marketshare

38

www.marketcharts.com



Mobile phoneswill be most

common deviceused for browsing

the web by 2013!http://www.engadget.com/2010/01/15/gartner-forecasts-phones-overtaking-pcs-

as-most-common-web-brows?icid=sphere_blogsmith_inpage_engadget



Smartphone Marketshare

40www.marketcharts.com



Usability First



It’s not what, it’s how…



By the way,

why are mobiledevices getting

bigger?



June 18, 2011


45

MobilePayments



Mobile Payments Projections

46William Mills’ “Bankers As Buyers 2011”

SOURCE: Aite Group



Mobile Payments Coming?

• AT&T, Verizon, T-Mobile, and Discover form Isismobile-payments venture

• Verifone buys Hypercom

• Verifone announces all new POS terminals will beNFC capable

• Verifone/Google team on mobile payments

• Verifone attacks Square

• Lee soils pants with excitement



Mobile Card Acceptance

• VeriFone’s PAYware Mobile• Intuit GoPayment

• Square

• North American Bancard’s Pay Anywhere

• Ingenico

• Sage Mobile Payments (no transx fees!)

48

“VeriFone Quietly Shifts PayWare Mobile Pricing” American Banker ; ebruary 14, 2011; By Kevin Woodward



VeriFone PAYware Mobile

49

http://www.paywaremobile.com

http://www.verifone.com/

http://www.paywaremobile.com/en




50





51




Pricing: VeriFone PAYware Mobile

• Low-volume (<1500 transx/month)

– 2.75% plus 15¢, no monthly fee.

– $99 for card reader (retails for $149.95)

• High-volume (>1500 transx/month) – 1.65% plus 20¢, $19.99 monthly fee

– Free card reader w/ 2-year commitment, but $29

activation fee

52

“VeriFone Quietly Shifts PayWare Mobile Pricing” American Banker ; ebruary 14, 2011; By Kevin Woodward



Intuit GoPayment: Mobile Payments

53

http://intuit-gopayment.com



Intuit GoPayment: Mobile Payments

54

h t t p : / / i n t u i t - g o p a y m

e n t . c o m



Intuit’s GoPayment

55 http://intuit-gopayment.com



Finger Signature: Intuit GoPayment

56




Pricing: Intuit GoPayment

57




www.squareup.com



Mobile: Credit Card Terminal

59



iPad: Card Terminal

60



61



June 18, 2011


63

Mobile Security



Smartphonesare mobile

PCs.



DroidDream

• Google pulls 60+malware apps fromAndroid Market

• Exploit code breaks out

of Android app“sandbox”

• Roots phone andsends sensitive info to

remote server

65

“Google yanks over 50 infected apps from Android Market” By Gregg Keizer; www.computerworld.com

March 2, 2011 01:08 PM ET



What’s the

biggest mobile

phone risk?



Losing it!



How long torealize a card is

lost/stolen?



How long to

realize amobile phoneis lost/stolen?



70



Demographics

71

Who is Gen Y?



Who is Gen Y?

Gen Y…



Gen Y…

• …largest demographic.

• …income will surpass both Gen X and

Boomers within 10 years.

• 1 in 5 switched FIs in the last 12months (vs. 13% of all consumers)

• Judge FIs by quality and extent ofonline and mobile services.

Javelin’s “Gen Y: How to Engage and Service the New Mobile Generation”; April 2011

Smartphone Ownership by Age



Smartphone Ownership by Age

Source: “Javelin’s 2010 Mobile Banking Behaviors: Fewer Handsets in the U.S., yet Smartphone Growth Exceeds Expectations”; June 2010

G Y F t M bil B k



Gen Y: Frequent Mobile Bankers

75

Source: “Javelin’s 2010 Mobile Banking Behaviors: Fewer Handsets in the U.S., yet Smartphone Growth

Exceeds Expectations”; June 2010

Gen Y Trusts Social Networks



Gen Y Trusts Social Networks

Javelin Study: “Social Media and Banking: Financial Brand Opportunity, Risk or Complete Waste of Time?”; March 2009



Gen Y likesprepaid.

Gen Y Uses Prepaid



Gen Y Uses Prepaid

78

11%

16%

0% 5% 10% 15% 20%

Prepaid card or payroll

card usable anywhere

Percent of Consumers by Segment

Gen Y (1979-1999)

All consumers

Q1. Do you personally have any of the following financial or

payments products? Other options available.

September 2010, n= 1,133, 4,998

Base: All Gen Y consumers; All consumers.

©2011 Javelin Strategy & Research



What to Do Next

Saturation: The Remedy



Saturation: The Remedy

1.Simplify

2.Nudge



The Future



How can you be

everywhere yourconstituents

want you to be?

One App All Platforms



One App, All Platforms



Lee Wetherington, [email protected]

http://discover.profitstars.com/leewetherington

http://twitter.com/leewetherington

http://www linkedin com/in/leewetherington

3 Things You Don't Know - ton - MDGFOA - 06-16-11 - HANDOUT

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