Retail Mobile Channel
Market Assessment & Strategy
Eskander Matta
Senior Vice President
Internet Services Group
Footer to be provided by the WF PR
Overview of Wells Fargo
Wells Fargo Bank
Powerful distribution approximately 6,000 stores, the Internet and other channels across North America and elsewhere internationally
Wells Fargo Online
9.46 million active online consumer customers, up 14.3 percent from prior year, serving 64 percent of consumer checking accounts
$549 billion in assets
167,500+ team members across 80+ businesses The United States’ 25th largest employer
4.7 Online Money Movement customers, up 19.3 percent from prior year
950,000 active online small business customers, up 19.4 percent from prior year
The most heavily used channel by our customers with 70mm online sessions per month
Accolades: #1 in overall online retirement experience, Change Sciences Group (September 2007) Received 2007 Business Banking Award from Greenwich Associates for excellence in customer satisfaction with online banking services for small businesses (September 2007)
Named a top 10 online innovator in Institutional Investor’s Online Finance 40 (August 2007
Received Best Integrated Consumer Bank Site and Best Corporate/Institutional Web Site Design, regional sub-category awards, Global Finance (July 2007)
Deposit Footprint
23 States
Mortgage Footprint All 50 States
Note: Wells Fargo Figures as of Q3 2007
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Increasingly ubiquitous and always with you, mobile devices are able to do more and more
Mobile Phone Penetration as % of U.S. Population 2003 - 2011
Mobile Data Penetration is ~60% of mobile subscriber base
100% 90% 80%
Key Trends
Mobile phones are ubiquitous with 80% mobile penetration Always with you, it takes only 6 min to realize a mobile phone is missing vs 18 hours for a credit card Competitors (BofA, Citibank, Wachovia, and Chase) have launched mobile banking services in 2007
8 in 10 Americans have a mobile phone
Percent of the U.S. Population
70% 60% 50% 40% 30% 20% 10% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011
The mobile channel could extend our reach into certain customer segments
– – – – Diversity Youth/Student Underbanked Mobile professional
Source: Qualcomm / Celent 2007, Forrester, Informa Telecoms
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There are three primary ways customers are accessing data using their mobile phone Texting (SMS)
Usage
(as % of US mobile users)
Mobile Browser
Downloadable Application
~50%
~25%
~17%
Capable Phones What people are doing… Examples
~100%
Messaging, P2P payments, Marketing, Search, Entertainment
> 60%
(88% of new phones)
> 60%
Location based services, Maps, Search, Comparison Shopping, RSS Feeds, Games, Banking, VoIP
Search, Maps, News / Sports, email, stocks
In Q1 ’07 > 17 mil Premium SMS Most visited websites – Jan’ 07 transactions processed for NBC’s (unique visitors): In Q2 ’07, 13 mil mobile consumers Deal or no Deal – Yahoo! – 15.8M downloaded a mobile application
– MSN Windows Live – 9M
28.8B SMS sent in June 2007. Almost 1B per day
Source: Telephia, Celent 2007, Telephia / ComScore, CTIA
– Google – 8.8M – The Weather Channel – 6.6M
Location Based Services (GPS) most downloaded
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Each has strengths and weaknesses – which drives differences in usage
High Application
Pros Cons
Device mgmt. Carrier control
Complexity of Task + Security
Security Faster
User experience Downloading
Browser
Pros
Ubiquity UI Familiarity No customer upgrades
Cons
Sign-on Complex nav. Lack of awareness
Good for:
Complex tasks Tasks requiring higher auth
Good for:
Diverse tasks Occasional tasks Multi-step
SMS
Pros
Ubiquity
Quick to initiate Carrier agnostic
Cons
Simplistic UI
Security Plain text (161)
Good for:
Simple tasks
Urgent notifications Alerts
Low
Low
Reach
High
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In 2007, Wells Fargo moved quickly to attain market leadership and gain learnings
Overall Approach
Deliver all three modalities that customers use and expect
| Text
| Browser
| Downloadable Application
Enablers for rapid delivery
Focus on limited but key functionality
Dedicated team
Rapid iterative development environment
Browser
Account summary
Simplified integration with 3 rd party technology
Mobile Contactless Pilot
POS contactless mobile payments In partnership with Visa utilizing payWave platform WF employees 10/07
Account activity
Balance detail Transaction detail
Text Banking
Account Balance Account Activity
Me2Me Transfers
Launches
12/06
06/07
7/07
9/07
12/07
Text Banking Team Member Pilot
Mobile Contactless Pilot
Browser Consumer
Browser – Small Business
Text Banking
Downloadable Application Pilot
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Early Mobile Banking results are encouraging
Mobile Browser
Customer - July 24, 2007 Small Business – Sep 17, 2007
Text Banking
October 22, 2007
Active 66% Browser Users Average browser sessions/user/week = 2.3
83% of all customers enrolling in mobile banking after the 10/19 launch included the Text Banking Service.
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Customers find Mobile Banking very useful “Killing time”
“I am waiting for the bus. This is where some nice mobile budgeting tools mentioned on the features list would come in handy so I could kill the time efficiently.”
Top of mind
“On the bus checking to see if direct deposit went through yet.”
When 24/7
Location Sensitive
“I was at my spa when I decided to check my account to see if I could splurge on a $45 upgrade of my services that morning.”
Time Sensitive
“Checking account to see if I can afford an expensive bottle of wine/also not having to use the Citibank ATM and pay fee.”
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This year there has been a lot of buzz, negative & positive, around mobile banking – the truth is somewhere in the middle
Future of Mobile Banking and Payments
Empty
“We hate to rain on this parade, but here’s the reality: Today’s consumers still aren’t very interested in mobile banking.” Forrester, Sept 2007 "Sit on the sidelines. There’s no rush to bring a mobile offering to market.“ Forrester, Sept 2007
Our Perspective
Can deepen and extend reach in some segments
Half Full? Or Half Empty?
Beginning to be expected by some segments for basic servicing Relevant to enhance existing channel relationships
Customer preference convenience
Full
“We consider that the active base of mobile banking users in the US will rise to nearly 35 million users by the end of 2010.” Aite Group, 2007
“In 2010, the equivalent of 17 million households will use some form of mobile banking.“ Celent, Sept 2007
Like online, people don’t see it as necessary until they start using it
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Potential value proposition of Mobile Banking
Customer Retention
– Providing convenience
– Competitive parity
Customer Acquisition
– Youth / Students
– Underbanked – Others . . .
Reduced servicing costs by less use of the phone channel
– Check balance via mobile vs calling
Usage revenue
– P2P
– Quick Payment
Reduced risk & fraud loss
– One-time password (out-of-band)
– Mobile Contactless
– Strong downloadable auth
– Fraud Alerts
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The strategic value of Mobile to Wells Fargo – Delivering on When, Where & How
WHY
WHEN
“24/7”
Time sensitive activity
Top of mind
Motivators for adopting
Free or inexpensive
Convenience of access Available to me 24/ 7
“Killing time”
Location sensitive
25% 15% 15% 16% 5% 9% 30% 27%
29% 45% 42%
54%
Secure transfer of banking data
On the commuter train
In line at the retail store
Easy to use Gives me more control over my banking Easier than calling Faster Preference for instant access Time commitment to use it is minimal
11% 27% 22% 15% 27% 24% 22% 17%
WHERE
“Anywhere”
On break from work
Between classes While traveling
4% 18% 14%
11% 15% 10% 12%
HOW
Based on a customer’s preference for Text, Browser or Application
Top-box ranking
Dependence on your mobile handheld device for information
6% 8% 8% 9%
2nd or 3rd ranking Net top-3 ranking
Some other factor Q: Which are the 3 most important reasons that explain why you are likely to set up and use this service in the first 12 months?
Source: Wells Fargo Research, March 2007.
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Wells Fargo and external research shows that there is adoption interest
Research Activities & Adoption Interest
Wells Fargo Survey: 46% “Very or somewhat interested” External Survey: 29% “Definitely or probably use”
Wells Fargo Customer Adoption Survey
Q: How interested or disinterested are you in performing these banking tasks via your mobile handheld device?
External Adoption Survey
N=1,056
Very or somewhat interested Definitely or probably would fulfill a need Very or somewhat likely to set up & use in first 12 months
Source: Wells Fargo Research, March 2007.
46%
25%
34%
Source: Compete, May 2007
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Customers are most interested in doing basic banking tasks via mobile
Wells Fargo Customer Survey: Likely Adopters
Top Ranked Activities
– Checking balances – Monitoring recent account activity – Funds Transfers
Very interested Somewhat interested
Q: How interested or disinterested are you in performing these banking tasks via your mobile handheld device?
Source: Wells Fargo Research, March 2007
Source: Javelin, October 2007
Source: Forrester, September 2007
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We believe that mobile banking could allow us to deepen & extend our reach into certain segments
Segment
Diversity
Opportunity
Almost 8 out of 10 African American subscribers are mobile data users More than 7 in 10 Asians 67 % of Hispanic 59 % of White Six out of ten of the overall population
90% of Gen Y are mobile data users
– One third more than overall population
Modality
Overall Population Bank App - 38% Browser - 36% SMS – 14% 3rd Party App - 12%
Youth / Student
80% Use SMS (~73% daily)
– Almost two times more than mainstream
22% Use Mobile Web One in five downloaded an application 69% of mobile subscribers earning less than $25K are mobile data users 66% of those earning $25 - $34K 62% of mobile subscribers earning more than $200K are mobile data users 60% of mobile subscribers earning $100-$124K are mobile data users
Browser - 39% SMS – 26%
Unbanked / Underbanked
Downloadable Application from the bank - 35% SMS 27% (Overrepresented)
Downloadable Application from the bank - 46% Browser – 31%
Mobile Professional
Source: Telephia, Q4 2006, Celent May 2007, Javelin, Oct. 2007, Forrester, Feb 2007
Mobile Data – Everything non voice: SMS/MMS, Mobile Web, IM, VoIP, Downloadable application, etc.
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Mobile is also attractive for the small business segment Possible Small Business Customer Functionality Needs Multiple users with different access levels
Expense tracking with CFO / controller log-in for approvals
Workflow tracking Information retrieval (can be real-time)
Currency exchange
Example: Approve, edit and review payments on the fly.
Source: Barlow Research Associates
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In the future, browser & download will also be ubiquitous and the three will be tightly integrated
• Get text message – “click on it” to launch application to address servicing need • Download application for a specific task from mobile browser
• P2P via app triggers text message notification to the recipient
Application
Get text message – “click on it” to launch application to address servicing need
• Receive text message with link to download application
SMS
Browser
Signup for text alerts from a browser
Receive actionable text with a link to browser to check real time status
Call me
VOICE
Push to talk
Voice to text
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The Next Stage: this is what our customers could be doing in the future.
Youth Jones Family
• Receive allowance via P2P. • Pay friends via P2P. • Spend using payWave functionality. • Look forward to Merchant Specific offers for discounts. • Holds phone to smart posters at the movie theater to download movie previews.
Day to Day User Mrs. Mahal
•Wells Fargo Mobile for managing accounts, global remittances back home and bill payments. •Pays for goods and services using Visa payWave.
Road Warrior Mr. Smith
•Wells Fargo Mobile for managing accounts and paying bills online.
•Mobile mySpending Report (big picture view of account activity by mobile phone). •Pays for goods and services using Visa payWave.
•Receives electronic receipts from merchants while on the road. •Mobile boarding pass. •Allows entry into the offices he supports and hotel rooms.
•Uses phone for access into her office. •Holds phone to smart posters to obtain latest train schedules for commute and fare payment.
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