From the Future Backwards - CUNA Councils · Top Trends in 2013: Javelin . 1. New alternatives at...
Transcript of From the Future Backwards - CUNA Councils · Top Trends in 2013: Javelin . 1. New alternatives at...
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From the Future Backwards
©2011 Jack Henry & Associates, Inc. All Rights Reserved.
…knowing next now.
Lee Wetherington, AAP Director of Strategic Insight, ProfitStars®
@leewetherington
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Lee Wetherington Director of Strategic Insight
2
• Develops actionable insight and strategy for the financial services industry
• Delivers keynotes nationwide • Technology Faculty Chair for Southwest
CUNA Management School • Authors articles for industry trades • Degrees in Economics and English
from Duke University • Accredited ACH Professional (AAP)
Presenter
@leewetherington
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Agenda
• Trends 2013 – Mobile; Churn; Demographics; “FPM” – The Future in 1, 2, 3
• Mobile Payments – Things We Know – Things We Don’t
• How CUs Win the Mobile Wars – Leveraging Data You Have That They Don’t – What That Looks Like (It’s Already Here) – Integrity, Integrity, Integrity
May 3, 2013
©2011 Jack Henry & Associates, Inc. All Rights Reserved.
3
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Top Trends in 2013: Javelin
1. New alternatives at the Point-of-Sale 2. CUs’ position of trust threatened 3. Mobile banking = “Smartphone Banking” 4. Google surpasses Apple 5. Mobile wallets will be hybrids (NFC/cloud) 6. “Omnichannel” banking necessary, not just nice 7. Retailers challenge payments stakeholders 8. CUs must master their data S
OU
RC
E: J
avel
in S
trate
gy &
Res
earc
h; “1
0 Tr
ends
for F
inan
cial
Ser
vice
s in
201
3:
Forg
ing
a N
ew F
ront
ier f
or B
anki
ng, P
aym
ents
, Mob
ile, a
nd S
ecur
ity”;
Janu
ary
2013
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The future is always already
here…if you know where to look.
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The future is about better enabling
natural behavior…
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…and nudging against behavior that is financially
harmful.
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The key to your role in this future
is data…
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Big Data?
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Big Data? No, CU Data!
• CUs must begin to understand their own data. – That’s where the value is.
• Transaction data can tell a CU... – …what other financials institutions members use. – …what financial products/services they use. – …how much they pay to use other financial services. – …where they shop, how often, and how much they spend.
• Behavioral analysis is already necessary to bolster security, why not tap the same analysis to better understand and serve members?
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Death of Checking Emergence of the “DeBanked” & the Rise of “NeoChecking”
12
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Check Use Declines
61% 56 %
51 % 47 %
38 % 34 %
31 % 30 % 26%
23 %
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Fiserv 2011 Consumer Trends Survey
Percent of payments paid by check
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Overdraft Volumes Remain High
Source: Moebs Services, FDIC, NCUA, OCC, Federal Reserve
$0
$10
$20
$30
$40
2007 2008 2009 2010 2011
Overdraft Revenue (US$ billions)
SO
UR
CE
: Aite
; “Tr
ends
in R
etai
l Ban
king
”; R
on S
hevl
in; M
arch
201
3
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2009: Worth Switching to Prepaid?
$(2,100)
$(1,600)
$(1,100)
$(600)
$(100)
$400
$900
$1,400
$1,900
Potential savings to checking account holders from switching to prepaid debit cards
18% would save
Median savings (US$)
Source: Aite Group
82% would be worse off
SO
UR
CE
: Aite
; “Tr
ends
in R
etai
l Ban
king
”; R
on S
hevl
in; M
arch
201
3
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Monthly Account Fees Up…
Source: Bankrate.com
$ -
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
1998 2000 2002 2004 2006 2008 2010 2012
Average Monthly Service Fees on Checking Accounts
SO
UR
CE
: Aite
; “Tr
ends
in R
etai
l Ban
king
”; R
on S
hevl
in; M
arch
201
3
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ATM Fees Up…
Average ATM Fees on Non-Members
$ -
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
Source: Bankrate.com
1998 2000 2002 2004 2006 2008 2010 2012
SO
UR
CE
: Aite
; “Tr
ends
in R
etai
l Ban
king
”; R
on S
hevl
in; M
arch
201
3
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…And Interest Rates Are Down
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
2001 2003 2005 2007 2009 2011
0.79%
0.08%
Source: Bankrate.com
Average Checking Account Yield
SO
UR
CE
: Aite
; “Tr
ends
in R
etai
l Ban
king
”; R
on S
hevl
in; M
arch
201
3
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The “Debanked”
Mainstream consumers who willingly opt out of the traditional banking system
SOURCE: Aite; “Trends in Retail Banking”; Ron Shevlin; March 2013
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Characteristics of “NeoChecking”
• Mobile-first design • PFM the focus, not the add-on • Blending prepaid, debit, and credit
– Functions/transitions from one to the other do not require closing/opening of accounts
SOURCE: Aite; “Trends in Retail Banking”; Ron Shevlin; March 2013
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Branch Facts
• Self-service reduces branch traffic dramatically
• Deposits are 25-30% of image ATM transactions
– 40% of deposit-taking ATMs are image enabled
• Daily per-branch deposits will decline from 250/day to 50/day by 2016. (Celent)
• 23% of banks expect branch contraction over the next five years
– No credit unions expect branch contraction
SOU
RC
E: C
elen
t; “T
OP
TREN
DS
IN R
ETAI
L B
ANK
ING
201
3”
By
Bar
t Nar
ter a
nd th
e C
elen
t Ban
king
Tea
m; D
ecem
ber 1
2, 2
012
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Online Banking & BillPay Forecast
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“201
2 O
nlin
e B
anki
ng a
nd B
ill-P
aym
ent
Fore
cast
:: H
ow to
Boo
st P
rofit
abili
ty W
hen
Faci
ng F
lat-L
inin
g A
dopt
ion”
; Aug
ust 2
012
60
81
92
32
44 52 41
47
-
10
20
30
40
50
60
70
80
90
100
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Milli
ons o
f Onl
ine
Hou
seho
lds
Actual Forecast© 2012 Javelin Strategy & Research
Banked online
Actual Forecast© 2012 Javelin Strategy & Research
Paid at biller site
Paid at FI site
Banked online
53
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Mobile Banking
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77% Adults Own Smartphones by 2017
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“201
2 M
obile
Ban
king
, Sm
artp
hone
, and
Tab
let F
orec
ast:
M
obile
Ban
king
Gai
ns 1
0 M
illio
n U
sers
as
Sm
artp
hone
and
Tab
let A
dopt
ion
Soa
rs”;
Dec
embe
r 201
2
Forecast of U.S. Adults’ Smartphone Adoption, 2009–2012
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Mobile Banking Rides Smartphone Rev
Jave
lin S
trate
gy &
Res
earc
h: “2
011
Mob
ile B
anki
ng, S
mar
tpho
ne a
nd T
able
t For
ecas
t: M
obile
Ban
king
Mov
es M
ains
tream
to M
id-s
ized
, Com
mun
ity B
anks
and
Cre
dit U
nion
s”; D
ecem
ber 2
011
202182
202 205 209 212 216 219
36 35
5768
7989
99111
43
66
90102
114127
142158
0
50
100
150
200
250
2009 2010 2011 2012 2013 2014 2015 2016
Mobile users (in millions)
Mobile banking users in the last 12 months
Smartphone owners
Base: US adults with mobile phone.© 2011 Javelin Strategy & Research
Actual Forecast
Num
ber o
f mob
ile p
hone
use
rs (i
n m
illio
ns)
U.S. Mobile and Mobile-Banking Users, 2009–2016
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Android Widens Lead in Mobile OS
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“201
2 M
obile
Ban
king
, Sm
artp
hone
, and
Tab
let F
orec
ast:
M
obile
Ban
king
Gai
ns 1
0 M
illio
n U
sers
as
Sm
artp
hone
and
Tab
let A
dopt
ion
Soa
rs”;
Dec
embe
r 201
2
Forecast of U.S. Adult Smartphone Owners by Device OS Type, 2009–2017
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Mobile Bankers Double in Next 5 Years
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“201
2 M
obile
Ban
king
, Sm
artp
hone
, and
Tab
let F
orec
ast:
M
obile
Ban
king
Gai
ns 1
0 M
illio
n U
sers
as
Sm
artp
hone
and
Tab
let A
dopt
ion
Soa
rs”;
Dec
embe
r 201
2 Forecast of U.S. Adults’ Mobile Banking Adoption, 2009–2017
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Tablets: 52% of Mobile Adults by 2017
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“201
2 M
obile
Ban
king
, Sm
artp
hone
, and
Tab
let F
orec
ast:
M
obile
Ban
king
Gai
ns 1
0 M
illio
n U
sers
as
Sm
artp
hone
and
Tab
let A
dopt
ion
Soa
rs”;
Dec
embe
r 201
2 Forecast of U.S. Mobile Adults Who Use Tablets, 2011–2017
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Switchers: Sizing Churn
& Opportunity
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Big Banks Vulnerable to Switching
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“Onl
ine
Ban
king
and
Bill
Pay
For
ecas
t Rev
iew
201
2”; S
epte
mbe
r 201
2
Javelin Benchmark™: Likelihood to Switch Primary FIs in Next 12
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Potential Switchers • 11% of consumers in 2012 plan to switch FIs
– 25% of Citibank customers; 21% of BoA customers
• Maintain 30% more deposits than consumers who do not plan to switch – Represent $675B in deposits
• Willing to pay $92M in fees – Money orders; cashier’s checks, safe deposit boxes, and
mobile remote deposit.
• Place a premium on personal finance and simplicity (Javelin Strategy & Research)
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“201
2 O
nlin
e B
anki
ng a
nd B
ill-P
aym
ent
Fore
cast
:: H
ow to
Boo
st P
rofit
abili
ty W
hen
Faci
ng F
lat-L
inin
g A
dopt
ion”
; Aug
ust 2
012
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“Generations impact the economy.” John Augustine, CFA Chief Market Strategist Fifth Third Bank
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Gen Y.1 Gen Y.2
18-24 25-34
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PFM Demand by Age
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SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“21s
t-Cen
tury
PFM
for a
Mas
s A
udie
nce:
H
ow to
Bui
ld E
very
day
Onl
ine
and
Mob
ile P
FM’;
Febr
uary
201
3
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PFM Demand by Income
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SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“21s
t-Cen
tury
PFM
for a
Mas
s A
udie
nce:
H
ow to
Bui
ld E
very
day
Onl
ine
and
Mob
ile P
FM’;
Febr
uary
201
3
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PFM or FPM?
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SOURCE: Ron Shevlin’s Snarketing 2.0 Blog; “PFM is Dead, Long Live FPM”; http://snarketing2dot0.com/2012/09/24/pfm-is-dead-long-live-fpm/
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“Account aggregation and budget creation/tracking is great, but unless it changes behavior…then the potential impact of PFM is unfulfilled. Too many consumer advocates focus on financial literacy. Knowledge without action, or change in behavior, is useless.”
SOURCE: Ron Shevlin; Snarketing 2.0; “Finance Dot Data Dot Gov”; http://snarketing2dot0.com/2012/09/28/finance-dot-data-dot-gov/
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SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“21s
t-Cen
tury
PFM
for a
Mas
s A
udie
nce:
H
ow to
Bui
ld E
very
day
Onl
ine
and
Mob
ile P
FM’;
Febr
uary
201
3
16%20%
21%23%
29%29%30%30%31%31%
34%36%37%38%38%38%
49%
0% 10% 20% 30% 40% 50% 60%
Social-network shopping recommendations Archive business expenses
Investment toolsMotivational alerts
Automatic budget categorizationFinancial plannning tools
Cash-flow estimatorGPS-based merchant discountsCard-reward recommendations
Record cash purchasesPrice-change alerts
View finances on a calendar Comparison pricing
Personal finance alertsRewards reminders
Earn points or enter sweepstakes View all account balances
Percent of consumersQ17: Please indicate your likelihood of using the following products or services if they were available to you. Q18: Please indicate your likelihood of using the following products or services if they were available to you. Q19: New applications and services are becoming available, Please indicate your likelihood of using the following products or services if they were available to you.
August 2012, n = 3,000Base: All consumers.
© 2013 Javelin Strategy & Research
Tier 1
Q17: Please indicate your likelihood of using the following products or services if they were available to you. Q18: Please indicate your likelihood of using the following products or services if they were available to you. Q19: New applications and services are becoming available, Please indicate your likelihood of using the following products or services if they were available to you.
August 2012, n = 3,000Base: All consumers.
© 2013 Javelin Strategy & Research
Tier 4
Tier 3
Tier 2
Most Desireable PFM Features
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SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“21s
t-Cen
tury
PFM
for a
Mas
s A
udie
nce:
H
ow to
Bui
ld E
very
day
Onl
ine
and
Mob
ile P
FM’;
Febr
uary
201
3
38
50
52
58
0 10 20 30 40 50 60 70
Plan
Buy
Shop
Spend
Points (100-point scale)
Q21: Please rank the categories based on your likelihood of using the types of products and services included under them.
August 2012, n = 3,000Base: All consumers.
© 2013 Javelin Strategy & Research
Spend, Shop, Buy, Plan PFM Features Ranked by Financial Chores
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SOURCE: Javelin Strategy & Research; “21st-Century PFM for a Mass Audience: How to Build Everyday Online and Mobile PFM’; February 2013
Spend, Shop, Buy, Plan
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SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“21s
t-Cen
tury
PFM
for a
Mas
s A
udie
nce:
H
ow to
Bui
ld E
very
day
Onl
ine
and
Mob
ile P
FM’;
Febr
uary
201
3
38%44%44%45%
51%50%
53%51%
52%53%54%56%56%57%
56%57%
62%
0% 20% 40% 60% 80%
Social-network shopping recommendations Archive business expenses
Investment toolsMotivational alerts
Automatic budget categorizationFinancial plannning tools
Cash-flow estimatorGPS-based merchant discountsCard-reward recommendations
Record cash purchasesPrice-change alerts
View finances on a calendar Comparison pricing
Personal finance alertsRewards reminders
Earn points or enter sweepstakes View all account balances
Percent of consumers
Moneyhawks
Gen Y.2
$100,000 - $149,999
All consumers
Tier 1
Tier 2
Tier 3
Tier 4
Q17: Please indicate your likelihood of using the following products or services if they were available to you. Q18: Please indicate your likelihood of using the following products or services if they were available to you. Q19: New applications and services are becoming available, Please indicate your likelihood of using the following products or services if they were available to you.
August 2012, n varies: 548 - 3,000Base: Moneyhawks; Consumers aged 25 - 34;
Consumers a household income of $100,000 -$149,999; All consumers.
© 2013 Javelin Strategy & Research
Moneyhawks: Highest PFM Interest
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SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“21s
t-Cen
tury
PFM
for a
Mas
s A
udie
nce:
H
ow to
Bui
ld E
very
day
Onl
ine
and
Mob
ile P
FM’;
Febr
uary
201
3
![Page 47: From the Future Backwards - CUNA Councils · Top Trends in 2013: Javelin . 1. New alternatives at the Point-of-Sale 2. CUs’ position of trust threatened 3. Mobile banking = “Smartphone](https://reader034.fdocuments.us/reader034/viewer/2022042221/5ec775e361bfcf20dd1a7b0f/html5/thumbnails/47.jpg)
Post-Durbin Payments
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Lemons and Lemonade
• The Lemons – Dodd-Frank increases regulatory burden – Recession raises unemployment – Durbin amendment shifts power to merchants – Non-FI 3rd parties lead mobile payments evolution
• The Lemonade – Dodd-Frank targets biggest FIs – Unemployment creates churn in banking – Durbin creates competitive carve-out for FIs under $10B – Consumers prefer primary FI for mobile wallets/payments
IMAGE SOURCE: www.shutterstock.com
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Interchange Wars: Drivers
• Interchange Lawsuit Settlement – A clear win for MasterCard and Visa networks
• Prevents future legal action against the 2 networks
• Enables merchant surcharging at the POS in 40 states where allowed
– Likely to deter further legal regulatory action – Merchants must address interchange expense
management in the marketplace
• Shifts in consumer and merchant behaviors – Movement to digital channel and mobile payments – Creates a conduit for new competitive entry at the POS
SO
UR
CE
: Aite
; “Tr
ends
in R
etai
l Ban
king
”; R
on S
hevl
in; M
arch
201
3
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Interchange Wars: Outcomes
• Alternative payment acceptance providers gain traction in retail locations
• Merchants drop the surcharge banter
• Merchant MCX network formed
• Merchants will try to take control of the digital wallet environment
SO
UR
CE
: Aite
; “Tr
ends
in R
etai
l Ban
king
”; R
on S
hevl
in; M
arch
201
3
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Payments Revenue
SO
UR
CE
: FD
IC =
Com
mer
cial
Ban
king
; Fi
rm P
aym
ents
Map
= P
aym
ents
; B
EA
= A
gric
ultu
re, H
otel
s, A
irlin
es, I
T, F
ilm/M
usic
1 Payments revenues are from 2011
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Consumer DDA Profit Margins Down
SO
UR
CE
: McK
inse
y U
S P
aym
ents
Map
, Q3-
11 re
leas
e, B
ase
Cas
e sc
enar
io
![Page 53: From the Future Backwards - CUNA Councils · Top Trends in 2013: Javelin . 1. New alternatives at the Point-of-Sale 2. CUs’ position of trust threatened 3. Mobile banking = “Smartphone](https://reader034.fdocuments.us/reader034/viewer/2022042221/5ec775e361bfcf20dd1a7b0f/html5/thumbnails/53.jpg)
Regs Cut $120B in Revenue thru 2016
SO
UR
CE
: McK
inse
y U
S P
aym
ents
Map
, Rel
ease
Q1
2012
; Bas
e C
ase
scen
ario
1 Lost revenue assumes pre-regulatory interchange rates and NSF/OD occurrences
next
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Can’t Close Rev Gap w/ Tweaks SOURCE: McKinsey US Payments Map, Release Q1 2012; Base Case scenario
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Exemption Spawns Innovation
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What class of payments networks were specifically exempted from Durbin?
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Name the three companies who’ve made the biggest headlines in payments innovation in recent months.
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• Visa’s PIN-Authenticated Visa Debit (PAVD) • Fixed Acquirer Network Fees (FANF) • EMV • Credit Card Surcharging • $7B “Swipe Fee” Settlement • Merchant Customer Exchange (MCX) • PayPal at the POS (via Discover partnership) • Discover in the News
– To power Facebook Gift Card; MCX? – Offer Checking Accounts?
Headwinds and Wildcards
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Mobile Payments?
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Evolution and The End Game
Mobile Banking
Mobile Payments
Mobile Marketing
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Things We Know
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Mobile Bankers Open to Mobile Wallets
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“Bat
tle fo
r Con
trol o
f the
Mob
ile W
alle
t”; S
epte
mbe
r 201
2
10%
25%
21%
38%
31%
27%
14%
6%
24%
4%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
All mobile consumers
Mobile bankers past
90 days
Percent of Mobile Consumers
Very likely Somewhat Likely Neutral (neither unlikely nor likely) Somewhat Unlikely Very unlikely
Q29_B: If a mobile wallet were made available to you, how likely would you be to adopt this technology in the next twelve months?
June 2012, n= 872, 3,492.Base: A consumers who have mobile banked in
the past 90 days, all mobile phone owners.©2012 Javelin Strategy & Research
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Mobile Buys of Physical Goods Triples
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“Bat
tle fo
r Con
trol o
f the
Mob
ile W
alle
t”; S
epte
mbe
r 201
2
Purchasing Pattern on Mobile Devices
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Mobile POS to Grow 25% Annually
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“Bat
tle fo
r Con
trol o
f the
Mob
ile W
alle
t”; S
epte
mbe
r 201
2 Mobile POS Purchase Dollar Volume Forecast, 2011–2017
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Financial, mobile, and retail ecosystems are converging…
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SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“Bat
tle fo
r Con
trol o
f the
Mob
ile W
alle
t”; S
epte
mbe
r 201
2
Note: The trust, innovation, and privacy scores for Isis were derived from averaging the scores for the three mobile network operators involved in the project, AT&T, T-Mobile and Verizon.
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Physical and virtual worlds are converging…
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Mobile Converges Physical & Virtual
Physical Virtual
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Physical & Virtual Collide!
Physical Virtual
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Preference for Wallet Providers
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“Bat
tle fo
r Con
trol o
f the
Mob
ile W
alle
t”; S
epte
mbe
r 201
2
1%1%1%
2%2%
3%3%3%3%
4%4%4%
5%5%
6%6%
8%9%
13%15%
0% 10% 20%
FacebookCitibank
MicrosoftWal-MartU.S. Bank
AmazonDiscover
GoogleSprint
T-MobileApple
American ExpressWells FargoMasterCard
Bank of AmericaChaseAT&T
VerizonPayPal
Visa
All Mobile Phone Owners
Q29_A: If you were choosing a mobile wallet provider, which of the following would you be most likely to choose?
June 2012, n=3,492.Base: All mobile phone owners.
©2012 Javelin Strategy & Research
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Consumer Use of PayPal Grows
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“Bat
tle fo
r Con
trol o
f the
Mob
ile W
alle
t”; S
epte
mbe
r 201
2
47%
52%
0% 10% 20% 30% 40% 50% 60%
2010
2011
Percent of Consumers
Q38. Which of the following types of alternative payments have you used for an online purchase? PayPal
August 2011, n=2,304, 4,998.Base: All consumers.
©2012 Javelin Strategy & Research
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Things We Don’t Know
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Which mobile payments techs, channels, and functions will prevail?
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CU’s Role in Mobile POS?
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“Bat
tle fo
r Con
trol o
f the
Mob
ile W
alle
t”; S
epte
mbe
r 201
2
FIs Play Different Roles in Different NFC Solutions
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PROBLEM 1: Most likely NFC models
do not put CUs in control.
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PROBLEM 2: Complexity of NFC
models forestall their adoption.
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NFC Requires Complex Collaboration
SO
UR
CE
: Jav
elin
Stra
tegy
& R
esea
rch;
“Bat
tle fo
r Con
trol o
f the
Mob
ile W
alle
t”; S
epte
mbe
r 201
2
© 2012 Javelin Strategy & Research 4
Secure Element(Credentialing)
NFC Chip(SIM or
Embedded)
Wallet(Rewards, Loyalty, Payments, Keys,
Tickets)
Merchant POS
Payment Networks
Issuer TSM
Secure Element
TSM
© 2012 Javelin Strategy & Research
NFC (SIM or Embedded) Model
Transact
Load
Acquiring Bank
Issuing Bank
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PROBLEM 3: So what to do
before/while/if NFC arrives?
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Mobile Wallet Tech Trajectory
Cloud NFC
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The
BIG Question
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Who will control and monetize mobile marketing of payments data?
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Isis Wallet
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Google Wallet
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How much is at stake?
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$1 Trillion
SOU
RC
E: “
The
Gre
at M
obile
Alli
ance
” by
Ste
ve M
ott;
Dig
ital T
rans
actio
ns; J
uly
& S
epte
mbe
r, 20
12
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Mobile Wallet Demand Weak…
Source: Aite Group survey of 1,115 US consumers, Q2 2012
Discover
American Express
Apple
MasterCard
PayPal
Visa
Amazon
Very interested Somewhat interested
Q. How interested are you in having a mobile wallet from the following companies?
18%
18%
16%
15%
14%
12%
11%
11%
10%
21%
22%
22%
19%
19%
15%
16%
16%
17% SO
UR
CE
: Aite
; “Tr
ends
in R
etai
l Ban
king
”; R
on S
hevl
in; M
arch
201
3
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…But Mobile Shopping Demand Strong
Source: Aite Group survey of 1,115 US consumers, Q2 2012
Q. Which of the following mobile shopping capabilities are important to you?
Connects to social networks
Offered by my primary FI
Shows product reviews
Offered by company I know/trust
Offered by stores I shop at
Offered by company I know/trust
Provides very steep discounts
Finds the lowest price 72%
72%
70%
70%
67%
62%
50%
34%
SO
UR
CE
: Aite
; “Tr
ends
in R
etai
l Ban
king
”; R
on S
hevl
in; M
arch
201
3
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• 33% of all households and 50 percent of smartphone users are aware of e-wallet products.
• 25% of households hold positive views of e-wallets, 33% are neutral, the remainder are negative — generally due to concerns about e-wallet security.
• 20% of households that were previously aware of the products and 25% of existing smartphone users would use a digital wallet.
• More than 75% of interested consumers would prefer e-wallet services from their primary financial institution.
Digital Wallet Stats
89
SO
UR
CE
: “S
ettin
g th
e S
tage
for t
he M
-Com
mer
ce O
ppor
tuni
ty” b
y D
ebor
ah M
atth
ews
Phi
llips
, AA
P; J
HA
Mob
ile P
aym
ents
For
um; J
anua
ry 1
1, 2
013
Source: Study: Customers want their banks to offer e-wallets Mobile Payments Today
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The future of payments is more about data than
payments…
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Payments Data = New Revenue
SO
UR
CE
: McK
inse
y P
aym
ents
Pra
ctic
e
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What does that future look like?
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Beware what happens to your
data.
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Google Wallet: Merchant of Record SOURCE: Citi GPS: Global Perspectives & Solutions; “UPWARDLY MOBILE II A
Long and Winding Roadfor Mobile Payments – Eight Crucial Questions,
Answered”; November 2012
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PayPal: Merchant of Record
SOURCE: Citi GPS: Global Perspectives & Solutions; “UPWARDLY MOBILE II A
Long and Winding Roadfor Mobile Payments – Eight Crucial Questions,
Answered”; November 2012
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Your data uniquely enables you to provide value with
integrity…
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…integrity
wins the race…
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Who Wins the Mobile/Data Wars?
• Google? – “Here’s a business who sells what you’re looking for.”
• Amazon? – “Buy whatever you’re looking for from us.”
• Merchants? – “Buy, Buy, Buy!!!”
• Credit Unions? – “We’ll help you decide whether, when, and where it
makes sense to buy the stuff you want…in real time.”
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Lee Wetherington, AAP [email protected] http://discover.profitstars.com/leewetherington
http://twitter.com/leewetherington
http://www.linkedin.com/in/leewetherington