Banking to the Future Financial Mainstream

Betsy Flynn President/CEO Community Financial Services Bank

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Who are Unbanked and Underbanked? Unbanked: No checking or savings account. Underbanked: Have an account, but

continues to rely on alternative financial services, like check-cashing services, payday loans, rent-to-own agreements or pawn shops.

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National Statistics on Unbanked and Underbanked 7.7% of U.S. households are unbanked 17.9% of U.S. households are underbanked 43% of households with a yearly income below

$30,000 are either unbanked or underbanked 54% of black households and 43% of Hispanic

households are unbanked or underbanked, compared to only 18% of white households

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Unbanked and Underbanked in Kentucky 11.9% of households in Kentucky are

unbanked 23.7% of households in Kentucky are

underbanked

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Unbanked and Underbanked in Marshall County 8.7% of households in Marshall County

are unbanked 18.8% of households in Marshall County

are underbanked

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How to Reach Unbanked and Underbanked?

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How to Reach Unbanked? Mobile Websites and Devices Mobile Payments Checking accounts that have varied rewards

ATM Refunds Rewards for Debit Card Usage

Marketing towards International Demographics

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How to Reach Underbanked? Extended Mobile Services Varied Payment Options Free/No Minimum Balance Checking/Savings

with Debit Card Access Second chance accounts Grass roots campaigns

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Reaching Unbanked and Underbanked Through Technology

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Reaching Unbanked and Underbanked Through Mobile

0%

20%

40%

60%

80%

$100M or Less $100M to$250M

$250M to$500M

More Than$500M

Banks with Mobile BankingYes No, But Plan to Within 24 Months No Interest

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Do you plan to offer Mobile Banking?15%

47%

38%

Yes No, but plan to within 24 months No, not planning to

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Reaching Unbanked and Underbanked Through Mobile

0% 20% 40% 60% 80% 100%

DownloadableApp

SMS/TextMessage

Mobile Web

Method of Mobile Banking

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Mobile Payments

26%

56%

18%

23%

51%

27%

10%

55%

35%

6%

28%

66%

0% 20% 40% 60% 80%

Currently offer

Plan to offerbefore 2013

Not planning tooffer before

2013

Over $500million$251 - $500million$101 - $250million

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Mobile Payments

85.1%

40.4%

4.3%

0.0%

0% 20% 40% 60% 80% 100%

Mobile web payments (WAP)

SMS based/text message payments

Other:

Contactless NFC (Near FieldCommunication)

What type of mobile payments do you support?

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Mobile Payments

50%

75%

15%

100%

33%

87%

67%

73%

0% 20% 40% 60% 80%100%

SMS based/textmessage payments

Mobile webpayments

Over $500 million$251 - $500 million$101 - $250 millionUnder $100 million

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Emerging Payment Products

14.0%

25.2%

27.4%

48.8%

69.6%

0% 10%20%30%40%50%60%70%80%

Mobile payments

Consumer RDC

Electronic P2P payments

Prepaid cards

Consumer international payments

Currently Offer

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Emerging Payment Products

47.30%

33.40%

20.70%

13.80%

5.10%

0% 10% 20% 30% 40% 50%

Mobile payments

Electronic P2P payments

Consumer RDC

Prepaid cards

Consumer international payments

Plan to offer before 2013

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Emerging Payment Products

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CFSB Current Actions to Reach Unbanked and Underbanked

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Mobile Technology

0% 20% 40% 60% 80% 100%

Online Users

Online Acive

Bill Pay Users

Bill Pay Active

Online Banking and Bill Pay Users

2009 2010 2011

Online Active

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Debit Card Transactions PIN (Debit) NON-PIN (Credit)

2009 – 587,967 2009 – 1,162,557

2010 – 690,323 2010 – 1,340,548

2011 – 767,152 2011 – 1,532,948

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ATM Transactions On-Us Transactions Foreign Transactions

2009 – 138,194 2009 – 20,503

2010 – 144,630 2010 – 19,384

2011 – 154,055 2011 – 22,413

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Mobile Banking Live November 1, 2011 912 current users

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Future Goals to Reach Unbanked and Underbanked

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Mobile Applications Mobile Website Mobile Remote Deposit Mobile App for Merchant to Process Credit

Cards Mobile Online Financial Management Alerts

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New Website Online Loan Payment Option for Credit/Debit

Cards New Website Translation in Spanish Online Account Opening Live Chat with Call Center Staff Online Financial Management Tool

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International Customer Base Website translation in Spanish Translated brochures Student accounts tailored to International

students at Murray State University Bilingual Call Center team member

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Banking Centers Relationship Banking International Communication Capabilities Video Conferencing Digital Media

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Information gathered from: Bank On – joinbankon.org

2010 ICBA Technology Survey 2011 ICBA Payments Survey

CFSB Data March 2012

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