Piper Jaffray Retail & Financial Services Symposium
-
Upload
quarterlyearningsreports3 -
Category
Economy & Finance
-
view
617 -
download
0
description
Transcript of Piper Jaffray Retail & Financial Services Symposium
#1 Online Bank: Service, Sales and Security
Sanjay GuptaE-Commerce & ATM ExecutiveBank of America
June 20, 2006
2
Forward-Looking Statements
This presentation contains forward-looking statements, including statements about the financial conditions, results of operations and earnings outlook of Bank of America Corporation. The forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results or earnings to differ materially from such forward-looking statements include, among others, the following: 1) projected business increases following process changes and other investments are lower than expected; 2) competitive pressure among financial services companies increases significantly; 3) general economic conditions are less favorable than expected; 4) political conditions including the threat of future terrorist activity and related actions by the United States abroad may adversely affect the company’s businesses and economic conditions as a whole; 5) changes in the interest rate environment reduce interest margins and impact funding sources; 6) changes in foreign exchange rates increases exposure; 7) changes in market rates and prices may adversely impact the value of financial products; 8) legislation or regulatory environments, requirements or changes adversely affect the businesses in which the company is engaged; 9) changes in accounting standards, rules or interpretations, 10) litigation liabilities, including costs, expenses, settlements and judgments, may adversely affect the company or its businesses; 11) mergers and acquisitions and their integration into the company; and 12) decisions to downsize, sell or close units or otherwise change the business mix of any of the company. For further information regarding Bank of America Corporation, please read the Bank of America reports filed with the SEC and available at www.sec.gov.
3
Growth of online U.S. households
Broadband penetration
Online banking household growth
Online bill pay growth
Key Industry Trends
Industry Landscape
4
Leading Market Share
No. 1 Retail deposits 13.5 %
34.6 %
4Q05 Market Share
No. 5 First mortgage 3.3 %
No. 1 Home equity 8.4 %
No. 1 Online Banking
58.6 %No. 1 Online Bill Pay
22.4 %No. 1 Small Business Banking
21.5 %No. 1 Credit Card
No. 1 Debit Card* 15.5 %
*2004 Total Purchase volume, The Nilson Report
No. 2 Merchant Services 16.0 %
5
Online Banking Growth
* 1Q06 includes MBNA
19.6 Million Online Banking Active Users
Bill Pay users
7.2
12.414.7
19.6*
4.0 6.6 7.4 9.53.2
5.87.3
10.1
Q4 2003 Q4 2004 Q4 2005 Q1 2006
6
Incremental Online Customer Relationship Value*
DepositBalances
LoanBalances
Profitability
Why Online Banking Is Important
*Three years after going online, combined access-onlyand bill pay customers
15%
28% 27%
7
Among Top 30 U.S. Properties: Unique Visitors
May 2006 (000s)
15,500
Disney online (No. 30) 21,400
48,300Amazon (No. 8)
25,900Wal-Mart (No. 20)
Bank of America (No. 26) 23,000
Source: comScore Media Metrix
14,000
Orbitz.com (No. 39)
Overstock.com (No. 50)
• No. 1 among financial services companies
8
Service Into Sales: Rapid Growth
2002 2003 2004 2005
90%
Sales of online products% increase
66%
161%Growth
9
0
50
100
150
200
250
Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05
Bank of America
Chase/Bank One
Citibank
INGDirect
National City
SunTrust
USBank
Wachovia
Wamu
Wells Fargo
Com
plet
ed A
pplic
atio
ns (0
00)
Application Completion Rate – Best in Class
Number of Unique Visitors Completing Online Applications
comScore Networks, Q305
Those visitors receiving acknowledgment from the domain of successful completion of the application process (e.g., "Thank you for applying for a credit card...").
10
Diversifying Distribution and Lowering Costs
Channel Diversification
29.5MM32.3MM
36.5MM
Product Sales Mix % by Channel(Units MM)
13.4%9.6% 13.6%
14.1%
7.7% 11.9%
67.8%
68.4%
65.7%
4.7%
14.3%
8.9%
0
4
8
12
16
20
24
28
32
36
40
44
48
2004 2005 2006E
Direct Mail
Banking Center
E-Commerce
Other$30
$140
$50
Credit Card Origination Costs$113 $98 $78Avg. cost
10% 10%16%
2% 7%
8%22%
34%
52%
65%
49%
24%
2004 2005 1Q06
11
Diversifying: Home Equity and Mortgage Sales
1Q05 1Q06
4.6%
9.2%
Home Equity Sales Mix: % Online
9.2%
First Mortgage Sales Mix: % Online
1Q05 1Q06
0.6%
5.2%
12
Growth Opportunities: Affinity Relationships
• More than 5,000 organizations endorse our products including:
– 1,400 professional organizations
– 900 colleges and universities
– 600 sports-related organizations
13
Small Business Opportunities
• Online invoicing
• Online payments
• Online payroll
• Cross-sell on consumer pages
• New “storefront” for lending
• New “storefront” for merchant card processing
14
Web-based ATM Opportunities
• Low-cost channel
• Reduce teller lines
• Targeted cross-sell
• Customer channel choice
• Same “look and feel”
• Customer satisfaction
15
E-Commerce Threats
No longer open emails that say they are from my financial provider
Not enroll in online banking or bill pay
Not apply online for a financial product
Stop using online banking or bill pay
“To what extent do you agree with the following statement: Concern about phishing has caused me to …”
Source: Forrester. Base: US online consumers who answered “agree” or “strongly agree”
14%
19%
20%
26%
16
Best-in-class: SiteKey
17
Recognition: SiteKey
“THANK YOU for the extra level of protection via the SiteKey.”
“I feel more confident knowing that I am accessing a ‘true’ Bank of America site.”
18
E-Alerts: Balance, Payments, Security
19
Recognition: Service, Sales and Security
20
Questions and Answers
www.bankofamerica.com