Mobile Banking Payments by murplelake81

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									Mobile Banking & Payments

                    Kelly Buday
          Director of Marketing, Firethorn
Firethorn: Who We Are
 • A mobile banking and payment service enabler headquartered in Atlanta

 • Firethorn links or “federates” financial institutions and wireless carriers through
   a secure and scalable technology platform

 • Firethorn enables common banking and payment functions on virtually any cell
   phone, PDA or other wireless device

 • Founded and led by experienced professionals from Internet banking,
   payments, technology and wireless communications industries

 • Carrier partnerships announced with AT&T (Firethorn is the exclusive
   provider) and Verizon Wireless

 • Exclusive partnership with CheckFree; hosting provider, referral partner, bill
   payment integration

 • Bank deals announced with Wachovia, SunTrust Bank, Regions Bank,
   BancorpSouth and Synovus, among others
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Keys to Success…The Federation

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The Time is Now…

• Emergence of “third screen” phenomenon
   • 242 million mobile phones in the US

• Explosive Growth of Wireless Broadband Data Networks

• Exponential demand for mobile data and applications
   • Data ARPU Growth (Average Revenue Per User)

• Increasing adoption for online financial services
   • Online usage drives overall customer profitability

• Growing consumer demand for convenience = need for 5th delivery channel
   • 61 percent of adults between 25 to 34 say they are interested in making
     purchases with their mobile phone*

• Punchline: mobile banking is prime for market adoption
 *Source: Bank System & Technology, June 25, 2006/ Visa USA (San Francisco) Research), CTIA 2007

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Mobile Banking is the News

                                US Banker Magazine
                                         June 2007

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Consumers Expect Convenience & Control

                                                         A Device


                                        address                Bank Card
                                       Pay to

                                        123345634 2345

                                          Checkbook             Wallet
                                                               234 124 2345

                                                                 Credit                          Loyalty

                                                                234 124 2345
                                                                  Debit             GYM

                                                                Sky Miles

                                 MP3                             Points
                                                                 Sam’s Club

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Consumer Need Access to Finances

                                                        • Four (4) retail banking relationships1
                                                        • One (1) or two (2) accounts with their primary
                                                        financial institution1
                                                        • Thirteen (13) credit obligations; nine (9) likely to
                                                        be credit cards 2
                                                        • Make fifty-eight (58) individual payment choices
                                                        monthly, 46 of which are in-store (check, cash,
                                                        credit/debit, gift card)3
                                                        • Cash and check constitute 47% of payments
                                                        (57% in ’01)3
                                                        • Two thirds (66%) of families need their next
1 A.T. Kearney, “How does your financial institution    paycheck to meet expenses4
2 Fair Isaac Corporation, “Average Credit Statistics”   • Consumers will not log on to more than three (3)
3 ABA; Dove Consulting, 2005/2006 Study of
Consumer Payment Preferences
                                                        sites to view their financial information
4 Josh Hyatt, Money Magazine, American Payroll
Association, “Scraping by on $150,000 a year”

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Consumers Want Mobile Financial Services

                                               • 49% would be willing to use mobile banking and
                                                payments via their wireless device1

                                               • 40% of US adults would access or manage bank
                                                 accounts from their mobile phone (eMarketer 2006)

                                               • 75% of online bankers would likely adopt the solution1

                                               • Celent estimates 10% of online bankers will be using
                                                 mobile banking by the end of 2007 (WSJ 21, Feb ’07)

                                               • 86% would check credit card and account balances
                                                 a median of four times per month1

                                               • 70% would prefer to obtain mobile banking service
1. MQA Research, Mobile Finance Survey, 1023     from their Financial Institution versus a cell phone
respondents, March 2006
                                                 provider or an alternative payment vendor1

                                               • 1 in 4 customers would consider switching banks if
                                                 offered free mobile banking (Forrester 2005)

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What Are “Mobile Financial
  • Mobile Financial Services are wirelessly enabled applications
    and services, accessible through or operated on the handset,
    that facilitate financial transactions and/or the management of
    financial services.
    Banking                    Retail            Sending             Mobile            Mobile
   On the Go                 Purchasing           Money        Internet Commerce      Marketing

Check balances,           Purchase goods      Pay personal      Purchase hard
                          and services at    debts, transfer      goods and        Present, access
                          retail locations   money abroad       services via a     and/or redeem
history and pay
                          using payment      or send money       WAP browse         offers at the
 bills anytime -
                              accounts        to the kids -        shopping            point of
                           embedded in          wirelessly       experience           purchase
                            the handset

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Why Mobile Will Change Money

 •       80% U.S. Market Penetration and Growing

 •       Cultural Phenomena – Ever Increasing Value &

 •       Highly Personal, Trusted and Ever-Present           “Swiss Army Knife
                                                            of the 21st Century”
 •       Unique Attributes:
                                                     Mobile Gives Money…
                                                     • Graphical User Interface

                                    +          =     • Robust Computing Platform
                                                     • Secure Storage
                                                     • Interactive Data Network
                                                     • Unprecedented Convenience

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Complexity of Mobile Commerce

  • 21” + Monitor               • 2.5” Screen

  • Browser                     • Thousands of Devices

  • Desktop Usability           • Mobile Usability

  • Open Network                • Proprietary Network
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Internet Banking vs. Payment Networks

                Internet Banking                  Payments Networks

Cost Center ($B)/Free Customer Access       Profit Center ($B)/Interchange

   Brand and Differentiation is Key     Access, Distribution, Ease Of Use is Key

    Highly Custom Branded UI/UX             Universal UI/UX Across Brands

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Decisions. Decisions. Decisions.

 • WAP

 • SMS

 • Individual Application

 • Carrier Supported Application

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Which way is WAP?
 • Suitable for viewing balances and transaction history, but not for
   secure financial transactions
    – Unmanaged security experience
    – Browser security patches require device replacement
    – Consumer usability issues; slowness, timeouts, loss of signal

 • Expiring technology that will not support future functionality like
   contactless payments

 • Misperception WAP is faster to market and mirror of Internet banking
   – Mobile banking is not Internet banking
   – Application development/device management still required
   – Incumbent on institution to manage devices and usability

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Sending out an SMS

 • Suitable for balance inquiries and transfers but little else

 • Does not provide for bank recognition

 • Does not drive new account openings and/or cross-selling

 • Expensive for the customer, drives down banks’ profitability

 • Prone to security breaches, namely man-in-middle attacks

 • Will not support future functions, such as contactless

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I Did It My App
 • Incumbent on institution to:
    – Build, host and maintain their own application
    – Certify its application on wireless carriers’ networks
    – Develop future functionality
    – Insure sufficient security and compliance
    – Market solution and educate users

 • Is cost, labor and resource intensive

 • Creates silo effect around institution as market evolves

 • This approach not supported by most wireless carriers

 • Lack of support for ongoing device management

 • No carrier marketing support
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Individual Mobile Application Analogies

                                Number of                    Brand Names
                Email               10+ majors           Hotmail, GMail, AOL, AIM, Yahoo!,
                                 Hundreds of minors       Earthlink, Comcast, Charter, Time
        Instant Messaging             8 Majors          MSN, Google Talk, AIM, ICQ, Yahoo!,
                                                              LCS, Sametime, Reuters

                Media                 Hundreds           CBS, NBC, Fox, CNN, ESPN MTV,

                Sports                NFL: 32            Panthers, Patriots, Giants, Yankees,
                                     MLB: 30             Mets, Braves, Spurs, Suns, Mavericks,
                                     NBA: 30            Rangers, Ducks, Capitals, Tiger Woods,
                                                             Phil Mickelson, Vijay Singh
                                     NHL: 30
                                   Golf: Hundreds

       Banking & Payments            25+ Majors         Wachovia, SunTrust, Regions, Synovus,
                                Thousands of “Minors”              BancorpSouth

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Firethorn Mobile Consumer Wallet
• Includes everything in consumers’ wallets today
   – Debit/Credit Cards
   – Loyalty/Membership Cards
   – Insurance Cards
• Single, secure downloadable application…bank-branded
   – Managed by Firethorn for financial institutions
   – Authorized by wireless carriers
   – Controlled by the consumer
• Vision supported by leading financial institutions
   – Wachovia, Regions, SunTrust, BancorpSouth, Synovus, among
• Vision supported by wireless carriers
   – Firethorn only mobile banking and payments application
      authorized on AT&T network; also partnered with Verizon
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Driving Mass Adoption
•     Distribution & Discoverability
            • Discoverability and ease of use is critical

•      Simplicity and Consistency
           • Mobile applications for new services must be
                      – Intuitive
                      – Easy to learn/explore
                      – Deliver perceived value quickly
               • Consumers will not adopt disparate “islands of service” en masse

•      Integrated Service and Support
            • Wireless subscribers expect coordinated support from wireless operators for
              wireless service, devices, as well content/other service providers
            • Ability to call one number if device is lost or stolen will be expected

•     Security
           • Customer Expectations: introduce services with sensitive information in
              controlled fashion to avoid high profile security events (undermines trust)
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Embedded Apps Drive Adoption
The “Front Door” Approach
AT&T intends to create an embedded “wallet platform” through
which trusted providers offer their branded services. Advantages

  • Promotes significantly greater consumer adoption due to
    discoverability and increased trust

  • Application and service providers pre-certified by AT&T prior to

  • Consumers not required to download various applications from
    multiple, potentially untrusted providers (but can at customer

AT&T does not intend to support disparate third party applications
for MFS

  • Introduces unmanageable risks

  • Limited resources to secure and improve the core wallet
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Mobile Banking as a starting point
 •Aggregated banking solution
    – Server integrating with Financial Institutions
    – Contains financial institution’s branding
    – Future plans to support different account types

 •Java client w/ built-in security
    – Downloaded from FI’s Online Banking Web Site
    – Requires PIN upon client invocation
    – Local storage is encrypted and stores no sensitive
      personal data
    – Remote client de-activation in the event of a loss
    – AT&T authorized/certified

 •Service features include:
    – Account Balance Inquiry, Funds Transfer, Bill View/
      Payment, Transaction History

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Co-Branded Marketing Example

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BancorpSouth Co-branded Statement

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BancorpSouth Co-branded POS Poster

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BancorpSouth Co-branded Banner Ad and
Online Banking Login Page Ad

 • Banner Ad

 • Online Banking Login

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Thank You.

              June 27, 2007

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