Sponsored by: WEBINAR: Mobile Messaging Addresses the Convenience Conundrum of Digital Banking

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1 Sponsored by: WEBINAR: Mobile Messaging Addresses the Convenience Conundrum of Digital Banking February 11, 2016

2 Today s Presenters Mark Schwanhausser Director Omnichannel Financial Services Tim Fujita-Yuhas Director, Product Management & New Product Strategy OpenMarket 2

3 Today s Agenda Mobile Messaging Redefines Personal Banking and Financial Security Serve the Mobile-First Mindset Essential Tools for Targeting High-Value Customers Use Mobile Messaging to Target Consumers Most Effectively Recommendations The Emergence of E2P Messaging for Financial Services SMS Use Cases for Your Customers OpenMarket Recommendations 3

4 Mobile Messaging Redefines Personal Banking and Financial Security 4

5 The Convenience Conundrum Convenience: Digital banking technology enables customers to conduct transactions when they want, where they want, without ever interacting with a banker. Less interaction: Digital convenience threatens to erode personal banking relationships. Reactive mode: Bankers increasingly are in reactive mode How can I help you? 5

6 Alerts and Mobile Messaging Can Redefine Personal Service Proactive personal interaction Initiate daily conversations Connect customers directly with call center reps Initiate one-on-one advisory conversations Face to face Facetime to Facetime Voice to voice Enable customers to start the conversation, too 6

7 Mobile Messaging Must Evolve to Deepen Banking Relationships, Put Your FI Into an Advisory Role Status Insight Advice Yup, I bought that. That, too. Yup. Yup (yawn) There s no way I m spending that much! I ve got to change my behavior. My bank is really looking out for me 7

8 Mobile Engagement Can Be Tailored to Target High-Value Customer Segments Moneyhawks Traditionalists Emergents Gen Y.1 (age 18-24) Gen Y.2 (25-34) Affluent customers Women Micro or small business owners 8

9 Empower Your Customers and Let Them Decide Many variables influence how consumers prefer to interact with an FI and their ultimate satisfaction Channel Device Urgency Ease of use Their location 9

10 Serve the Mobile-First Mindset 10

11 The Omnichannel Experience Requires Integrating Channels, Not Eliminating Them Banking Channel Usage (Past 30 Days) FORECAST 11

12 Consumers Use a Mix of Text, , Notifications Forecast of Alerts ( ) Overall Push Text 12

13 1 in 5 Consumers Receives Text Alerts Was this you? NO! HOURS? Until 6 p.m. Currently, about 22% of consumers receive text alerts from their bank or credit union. That translates to 47 million U.S. adults. Key factors: New banking alerts and features Text popularity Capability of every mobile phone 13 13

14 Essential Tools for Targeting High-Value Customers 14

15 Job 1: Target Your Most Profitable Customers Consumers are not one-dimensional. Moneyhawks segmentation Demographics Who they are Behaviors What they do Attitudes Why they do it Key segment discriminators Smartphone and tablet banking adoption High deposits and assets First adopter status High income Mobile bill pay adoption Online account opening Fully employed Number of bills Younger age Smartphone banking adoption E-statement adoption First adopter status Short tenure at primary FI Low income Non-bank financial services usage 15 Middle age Online banking centric Tablet banking users High deposits, assets Long tenure at primary FI Reluctant attitude toward new technology Important to feel secure Value traditional way of doing things Older age Doesn t use online or mobile banking Prefer dealing with people Distrust security of digital banking Lower income Retired Important to feel secure Value traditional way of doing things

16 Moneyhawks Buy More Products, Pioneer the Use of Emerging Digital Services Alerts: 3 times as likely as consumers overall to actively mix and match all types of alerts Yup, I bought that. PFM: They That, are 2-3 too. times more likely to use desktop Yup. PFM, bank PFM, and thirdparty PFM Yup (yawn) Account opening: 2 in 3 intended to open a checking, savings, or credit card in 2015 Mobile bill pay: They were responsible for nearly half the dollars that moved through mobile bill payments in

17 Percentage of financial managers Use Text Messaging to Target Key Customers Alerts Adoption (by Moneyhawks Segment) More than 1/3 of Moneyhawks receive all three types of alerts and 55% receive text alerts 80% 70% 60% 50% 40% 30% 20% 10% 0% 68% 61% 55% 44% 52% 46% 31% Any alert SMS Push 19% 30% 27% 10% 86% of Emergents use mobile banking and 31% receive text Text alerts can introduce valuable online-centric Traditionalists to mobile banking 3% 8% 7% 3% 1% 40% 36% Moneyhawks Emergents Traditionalists Offline Loyalists All financial managers 22% 14% Q62. Please indicate the last time you received any of the following financial alerts from (primary FI). 17 November 2014; n = varies: 616-7,378 Base: All financial managers, by segment 2015 Javelin Strategy & Research

18 Tailor Alerts for the Customers You Want to Target Heat Map of Highly Valued Alerts (By Age and Gender) 18

19 Use Mobile Messaging to Target Consumers Most Effectively 19

20 Consumers Already Cobble Together Text, , and Notifications So, What s the Best Mix? Consumers Who Received Alerts in One or More Channels (Past 12 Months) 45% 40% 35% 30% 29% 1 channel 40% All 3 channels 40% of consumers receive text, , or notifications and more than half rely on at least two types 25% 20% 18% 2 channels 2 channels 15% 10% 5% 1 channel 1 channel 1 channel 0% 1 channel 2 channels 3 channels 20

21 Pros and Cons: Alerts Highest adoption They are passive High risk of being ignored, overlooked, or deleted Lengthy legal language 21

22 Pros and Cons: Push Notifications Integrated into app experience, notification tray, and wearables Customers must download apps, turn on notifications, and develop the habit of monitoring them 57% of consumers don t receive notifications from any smartphone apps Must compete with clutter from other notifications Hard to make fraud alerts stand out. Uncertainty over whether customers receive them 22

23 Pros and Cons: Text Alerts Nearly every consumer has a mobile device, and all mobile devices receive text Consumers respond fast Consumers can take immediate action Customers can initiate conversations Widely used for two-factor authentication Easier to verify receipt 23

24 Moneyhawks and Emergents Prefer to Receive Fraud Alerts by Text Preferred Method of Receiving Fraud Alerts (by Moneyhawks Segments) SMS Push Automated phone call Live rep phone call I do not consider this valuable Moneyhawks 26% 35% 14% 7% 16% 3% Emergents 28% 30% 7% 6% 25% 5% Traditionalists 40% 16% 2% 6% 32% 4% Offline Loyalists 17% 6% 1% 10% 49% 16% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 24

25 Recommendations 25

26 1 Redefine personal banking in the digital era by initiating conversations and letting customers start them, too Use mobile messaging to upgrade customer service, and position your FI as an adviser and financial watchdog Serve the mobile-first mindset 2 Recommendations 4 Converse with your highest-value customers in the channels they prefer and consider most effective 3 26

27 The Emergence of E2P Messaging for Financial Services Tim Fujita-Yuhas Director, Product Management & New Product Strategy OpenMarket 27

28 SMS is the Most Frequently Used Aspect of the Mobile Phone of US mobile subscribers have SMS bundled in their plan prefer SMS over voice for customer service are read within 3 minutes of consumers are frustrated being tied to voice calls for customer service 28 Proprietary and to OpenMarket

29 Emergence of Enterprise to Person (E2P) Messaging Enterprise to Person (E2P) SMS Messaging is texting between businesses and people using 10 digit message originators Call or Text us at YOURNUMBER Customer Support via SMS with Live Agent User responds in a conversational format That uh-oh moment Response is conversational 29 Proprietary and to OpenMarket

30 Research Findings On Toll-Free Numbers Consumers attempted to send more than 400,000 SMS messages to Fortune 100 toll-free numbers during a one-year period. of the total attempted messages were sent to financial services companies Five of the top 10 Fortune 100 companies that received the most messages were financial services companies Conclusion: Consumers want to text their financial services companies using the toll-free numbers even though this isn t a supported channel! 30 Proprietary and to OpenMarket

31 SMS Use Cases for Your Customers 31

32 SMS Use Case for Traditionalists SMS Two Factor Authentication Message for Secure Login Middle age Online banking centric Tablet banking users High deposits, assets Long tenure at primary FI Reluctant attitude toward new technology Important to feel secure Value traditional way of doing things 32 Proprietary and to OpenMarket

33 SMS Use Case for Emergents Gift Credit & Debit Cards Younger age Smartphone banking adoption E-statement adoption First adopter status Short tenure at primary FI Low income Non-bank financial services usage 33 Proprietary and to OpenMarket

34 SMS Use Case for Moneyhawks SMS Credit Card Transaction Alert Smartphone and tablet banking adoption High deposits and assets First adopter status High income Mobile bill pay adoption Online account opening Fully employed Number of bills 34 Proprietary and to OpenMarket

35 Virtual Assistants (Machine Learning) Natural Language processing in action 35 Proprietary and to OpenMarket

36 OpenMarket Recommendations 36

37 1 Redefine personal banking with customers by text enabling your customer service toll-free phone numbers 2 Recommendations Use mobile messaging for both customer service chat and self service use cases Serve the mobile-first mindset: supporting self service solutions with live agents as well as natural language processing Converse with your highest-value customers in the channels they prefer: SMS marketing as well as customer support agent chat in addition to e- mail, mobile apps, and IVR Proprietary and to OpenMarket

38 Thank You! E2P Whitepaper? Call or Text E2P to (877) Interested to know how many customers attempted to text your company s toll-free number? sales-us@openmarket.com Want copy of today s slide deck? marketing@javelinstrategy.com 38

39 Questions? Mark Schwanhausser Director, Omnichannel Financial Services Tim Fujita-Yuhas Director, Product Management & New Product Strategy OpenMarket GA Javelin LLC, a Greenwich Associates LLC company. All rights reserved. No portion of these materials may be copied, reproduced, distributed or transmitted, electronically or otherwise, to external parties or publicly without the permission of GA Javelin LLC. Licensors may display or print the content for their internal use only, and may not sell, publish, distribute, re-transmit or otherwise provide access to the content of this report without permission. 39