NEW PARADIGM

HOW BANKERS WILL BATTLE

FOR CUSTOMERS IN 2019

LENDING ANALYTIC S AND PRODUC T MANAGER C SI

Brent McKown

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Western Bankers Association // March 2019

Survey Says? Your Peers Weigh in on 2019 Strategy

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Brent McKownProduct Manager – Lending Analytics

Computer Services, Inc. (CSI)

• More than 16 years of experience in financial services industry as product manager and banker

• Manages solutions used to monitor the health of customer bank lending portfolios

• Participates in R&D and the implementation of credit-based integration initiatives

• Previous experience as retail business banker and commercial lender

• Holds business administration degree and MBA

• Enjoys spending time with his wife and three children outdoors, playing sports and hiking

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TODAY’S AGENDA

DIGITALBANKING

CUSTOMER AQUISITION

CYBERSECURITY REGUALTORY COMPLIANCE

LENDING

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2019 BANKING PRIORITIES SURVEY

The survey was sent to banking executives across the United States.

x

Where Do Banking Exes’Priorities Lie in 2019?

22220 BANKERS RESPONDED

Respondents were diverse, representing banks ranging from $100 million to greater

than $1 billion in assets.

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1 SOCIAL MEDIA ENGAGEMENT

2 CUSTOMER ONBOARDING

3 MOBILE BANKING APP

How would you rate the following at your bank? (1-5, with 5 being the highest)

BANKERS’ SELF-ASSESSMENT

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Dan LatimoreSVP/Head of Banking, Celent

“I would emphasize, in looking at this data, that you’re really looking for the overall customer experience, which is the sum total of all the different touchpoints that you have with the bank. If you want to improve the overall customer experience, each of these is important at different levels.”

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CUSTOMER ACQUISITION

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Of bankers stated that new customer acquisition will be a major tactic toward reaching revenue goals in 2019.71%

44%Adding self-service options like

online account opening

17%Adding ITMs/ILTs

23%Adding more branches

19%Pursuing M&A activity

CUSTOMER AQUISITION

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24%MOBILE APP

39%LOANS

18%SELF-SERVICE ACCOUNT

OPENING

What will be your single-most important channel for attracting new customers in 2019?

CUSTOMER AQUISITION

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CALLS TO ACTION:

• Consider adding an online account-opening solution to your product mix.

• Basic loans and deposits are a commodity, but it is very important to be present in the spaces that your customers dwell: digital.

• Be mindful of the many avenues available for expanding your customer base.

CUSTOMER AQUISITION

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DIGITAL BANKING

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Digital BankingDoes your institution plan to offer some form of

P2P service in 2019?

44%

YES

26%

NO

30%My institution

already offers P2P

$100B

P2Ps

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72%Expansion of digital channels

5%Stated they would not pursue omnichannel strategies

32%Automated customer onboarding

Digital BankingWhich omnichannel strategies will you implement in the

coming year to improve the customer experience?

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DIGITAL BANKINGDigital banking alone isn’t enough: here’s how bankers plan to go beyond

digital to fulfil an omnichannel vision in 2019.

18% plan to remodel

existing branches

20% will adopt a

universal banker model

23% will utilize analytics

technologies

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Incorporate P2P payments into your strategy. If you don’t provide this service to your customers, they will seek it out

elsewhere.

Don’t only focus on digital: ensure your customers get a consistent

experience in all channels with a solid omnichannel strategy.

Leverage your mobile banking app when reaching beyond their customer base.

CALLS TO ACTION:

DIGITAL BANKING

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CYBERSECURITY

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KEY POINT

44% of bankers believe cybersecurity will be the number one issue that affects the

financial industry in 2019.

72% of bankers said they will spend up to 20% of their budget on cybersecurity

this year.

CYBERSECURITY

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2 83% Network Security

479%Social Engineering/Pen Testing

6 77%Cybersecurity Assessment

872%Information Security Review

196%Employee Education

380%

Customer Education

576%

Anti-malware Software

775%

Vulnerability Assessment

Tactics

CYBERSECURITYWhich tactics will you implement in 2019 to protect against

cybercriminals or data breaches (check all that apply)?

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CALLS TO ACTION:

Prioritize employee and consumer education to ensure your institution

and customers remain safe from data breaches.

Perform regular testing, assessments and reviews.

CYBERSECURITY

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REGULATORY COMPLIANCE

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4%

16%

14%

GDPR/Consumer Data Protection

Laws

Regulatory Relief Act

CECL

REGULATORY COMPLIANCE

Which one issue will most affect the financial industry in 2019?

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42%

21%

33%

Spend Under 15%

Spend Under 30%

Spend Under 20%

What percentage of your annual budget will you spend on regulatory compliance in 2019?

REGULATORY COMPLIANCE

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CALLS TO ACTION:

Per regulators, perform adequate due diligence and on-going monitoring of

third-party relationships.

Consider deploying automated solutions to help reduce compliance spending.

REGULATORY COMPLIANCE

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LENDING

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40% of bankers identified loans as the single-most important channel for attracting new customers in 2019.

Digital lending has paved the way for high-margin, short-term loans delivered

through your bank’s digital channels.

In addition, 39% of respondents’ customers are small businesses.

LENDING

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CALLS TO ACTION:

Invest in digital lending: capitalize on small consumer loans that would be otherwise be unprofitable with traditional underwriting

Effectively manage your small-business portfolio

LENDING

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SURVEY RECAP

DIGITALBANKING

CUSTOMER AQUISITION

CYBERSECURITY REGUALTORY COMPLIANCE

LENDING

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Q&A

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GET THE FULL EXECUTIVE REPORT!

Want to read the full report, complete with additional insight on the survey data?

VISIT CSIWEB.COM/PRIORITIES2019

You will receive a full copy of the report, complete with bankers’ comments and

industry experts’ analysis.

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THANK YOUPlease Contact Me with Questions:

Brent McKown

brent.mckown@csiweb.com

(270) 442-7361, ext. 10296