Presented by Eunice Harris

Landmark Bank, N.A.

DEFINING A DIGITAL STRATEGY October 7, 2014

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Agenda

Introductions to Landmark Bank and Eunice Harris

Background and History of Digital Touch Points

Customer Engagement, Channels-of-Choice, Behavior,

Expectations

The Process to a Strategy

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Eunice Perry HarrisVP of Product Development & Management for Digital Strategies

• Originally an educator – Business Education B.S. and MBA

• Hired in 1999 to launched Internet Banking and “we will see where it

goes from there”

• 15 years with Landmark Bank

• Based out of my home office in St Louis, Missouri since 2004

• Home of my favorite boys and the Cards!

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Landmark Bank, N.A.1865 Charter based in Columbia, Missouri

*All of the services above are hosted by the vendors

• Financial Institution with $2.1 Billion in Assets

• 42 Locations in 28 Communities across MO, OK, TX

• Core: FIS Bankway

• ACH Processing: FIS Bankway (avg 742,834/yr)

• Images: FIS ImageCentre

• Statements: PrintMail Systems

• Bill Payment: Fiserv CheckFree

• Wires: Fundtech GFX

• Merchant RDC: FIS CCX

• Consumer RDC: FIS FXD >> contract just signed!

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Historical Timeline for Landmark Digital

• 1997 – Our first Columbia, MO Bank website launched

• 2000 – Launched Internet Banking (Qup) with 5 Banks

• 2000 – Bank website redesigned and 3 sites launched

• 2001 – Began merging Bank charters

• 2003 – Converted from Princeton to Fiserv CheckFree Bill Pay

• 2005 – WebConnect to Intuit products (Windows, Mac)

• 2008 – Website redesigned with Content Management System (CMS)

• 2009 – Launched Real-Time Interface to Bankway

• 2009 – Merged final 3 Bank charters into 1 with one website

• 2009 – Andera online account opening application

• 2010 – Mobile website launched

• 2011 – Launched ACI Mobile Banking (iPhone, Android, Blackberry Apps)

• 2011 – Launched Popmoney (P2P) and Overnight Checks

• 2011 – Converted to eStatements “pull” to IB instead of email “push”

• 2012 – Mobile ‘Real Estate Tools’ App (iPhone, Android)

• 2012 – Launched IronKey Trusted Access security for BIB customers

• 2013 – Converted to SSB Business Internet Banking with Real-Time Wire Adapter

• 2014 – Converted to SSB Retail Internet Banking with Auto Enrollment

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Landmark’s ACI Product Mix

• Self-Service Banking (RIB and BIB): v6.3 20140902 HF3

– 49,698 Retail / Free Business Users (RIB) – 67.4% of CK HHs with IB

– 422 Business Companies / 1,057 Users (BIB)

– Bill Pay: Fiserv CheckFree SSO (5,499 Subscribers / 37,689 Pmts/Mo)

– eStatements: PrintMail Systems SSO (31,829 eS > 28% of Statements)

– BIB Real-Time Wire Adapter: Fundtech GFX System

• Features turned on in Production; Not to Customers

– OOBA (transactions/administration only)

– Business Mobile Banking

– External Transfers with Micro Deposits

• Mobile Banking

– 14,044 Mobile Users (28% of RIB users)

– 19,700 iOS App Downloads / 17,441 Google Downloads (10,132 Current Installs)

– Mobile Banking: Gen2 Apps including new iPad App (current project)

– mRDC: Certification Bank for ACI Mobile to FIS FXD (Oct kickoff)

Across Desktop, Tablet, and Mobile Touch Points

DEFINING A COMPREHENSIVE DIGITAL STRATEGY

Jim Miller, director of banking services at J.D. Power

“MIDSIZE BANKS ARE FALLING BEHIND IN MEETING THE NEEDS

OF THE FASTEST GROWING DEMOGRAPHIC GROUPS,

MILLENNIALS AND MINORITIES, ESPECIALLY IN ONLINE, MOBILE

AND PROBLEM RESOLUTION,”

“IF MIDSIZE BANKS DON’T CHANGE THEIR FOCUS TO ADJUST TO

DEMOGRAPHIC SHIFTS, THEY ARE EXTREMELY VULNERABLE

AND RISK LOSING MARKET SHARE TO COMPETITORS AND

BECOMING IRRELEVANT.”

J.D. Power 2014 Press Release: May 1, 2014 titled “Customer Satisfaction with Banks at All-Time High, but Areas of Weakness Signal Competitive Vulnerability.”

Announcing their J.D. Power 2014 U.S. Retail Banking Satisfaction Survey. http://www.jdpower.com/press-releases/2014-us-retail-banking-satisfaction-study

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Background and HistoryThe evolution of customer touch points within the banking industry

• From branch to ATM to Call Centers to Internet to Mobile to Mobile

Internet to Social Networks

• Today’s challenge is seamless integration across all touch points

(physical & digital)

• New Buzzword = “Omnichannel” …everywhere, non-stop, all the

time in real-time

• One approach to reaching seamless integration is to look customer-

inward vs enterprise-outward

– Customer Engagement (Build Advocates)

– Customer Channels-of-Choice

– Customer Behavior

– Customer Expectations

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Customer EngagementBuild advocates for your bank.

1The Gallop Blog “The Financial and Emotional Benefits of Fully Engaged Bank Customers” published on March 7, 2014 by Jon Hughes & Beth Youra.

http://thegallupblog.gallup.com/2014/03/the-financial-and-emotional-benefits-of.html

• Gallup’s U.S. Retail Banking study1 identified tangible benefits of a

strong service program

– Fully Engaged (loyal/emotionally attached) vs Actively Disengaged (lacking any

kind of strong connection)

– Fully Engaged are more profitable, use more services, will consider their bank for

future needs

– The question is no longer ‘how do we make the branch experience better’ but ‘how

do we engage our customers wherever they choose, whenever they want, and by

whatever communication method they prefer’?

• Achieving seamless interaction will be a process mapped out in

phases prioritized by whichever channels generate the greatest

customer engagement.

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Customer Channels-of-ChoiceMobile adoption is on the rise.

2The Gallop Blog “Every Channel Matters When Engaging Bank Customers” published on March 28, 2014 by Jon Hughes.

http://thegallupblog.gallup.com/2014/03/every-channel-matters-when-engaging.html3Raddon Financial webinar “What Do Consumers Want from Online and Mobile Banking” by Bob O’Meara, VP of Research. April 22, 2014.

• 2013 Gallup Retail Banking Study2

– 3 dominant channels remain Branch, ATM, Online (desktop, tablet/mobile) with

46% using that combination within a 6 month period

– As Mobile adoption continues to rise, it will become a differentiator in terms of

functionality, usability, and financial integration when choosing a bank

– The more favorable experience customers have with Mobile, the more likely they

are to become fully engaged

• Raddon3 research shows customers are already migrating to self-

service channels (2012 to 2013: ATM 13% to 17% and Mobile 1% to

4% vs the branch 86% to 79%)

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Customer BehaviorDigital touch points are changing customer behavior.

4Visa Client Consulting webinar “Advancing Digital Channels for Growth” on April 15, 2014.5ComScore presentation “Digital Banking Industry Trends and Observations” at the Fiserv Client Conference on June 11, 2014.

http://www.comscore.com/Insights/Presentations-and-Whitepapers/2014/Digital-Banking-Industry-Trends-and-Observations6Gigaom Research Report “Forecast: Global tablet shipments, 2012-2017” by Peter Crocker on February 27, 2014.

http://research.gigaom.com/report/forecast-global-tablet-shipments-2012-2017/

• In April 2014 Visa reported4 2016 estimated channel interactions by

consumers weighing heavily in favor of the digital touch points:

– Mobile – 13-20 times per month

– Web / Tablet – 7-10 times per month

– ATM – 3-5 times per month

– Call Center / IVR – 5-10 times per year

– Branch – 1-2 times per year

• ComScore reports5 2013-2014 growth in sales of smartphones up

24% and tablets up 57%

• Gigamo predicts6 Tablet sales will exceed PC sales in 2015,

reaching over 140 million in 2017

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Customer BehaviorLandmark Bank’s own site visits support the research.

June 2012 to 2014

• Website visits year-over-year

– Tablets have seen a 235% two-year lift

and a 125% one-year lift

– Mobile devices report lifts of 87% for two-

year and 43% for one-year

– While desktop visits has decreased -22%

over two-years

• Andera Online Account Opening

Application

– Tablets visits have seen a 525% two year

lift since 2012

– Mobile visits have seen a 224% lift

– While desktop sessions have remained

relatively flat

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Customer BehaviorCustomer behavior is driving development change.

7MoneyDesktop presentation “Landmark Bank Mobile Discussion” by Sean Clark, VP of Enterprise Accounts. June 11, 2014.

• This influx of electronic devices drives development costs up as

developers struggle to ensure their solutions work across the 8

platforms, 22 Operating Systems, 700 screen sizes7

• ComScore reports

– Customers use all three digital channels – desktop, tablet, mobile to conduct

financial business

– Customers tend to favor different touch points per device – applications on

smartphones; browser on tablets/desktops

• Developers response to the struggle:

– Exploring the move of Applications to an Open Architecture build (one app to

deploy across platforms)

– Converging the architecture of Browser solutions for a Responsive Design (one

site that adapts to screen size)

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Customer ExpectationsTo build an omnichannel infrastructure requires knowing customer expectations.

8Accenture 2014 North America Consumer Digital Banking Survey report “The Digital Disruption in Banking”.

http://www.accenture.com/microsite/everydaybank/Documents/media/Accenture-2014-NA-Consumer-Digita-Banking-Survey-Online.pdf9Javelin Strategy & Research webinar “How to Hook a Moneyhawk: Digital Account Opening is Key to an Omnichannel Strategy” by Mark Schwanhausser,

Director of Omnichannel Financial Services. March 2014.

• Accenture’s retail banking survey8 found:

– Customers desire banks to be nimble and proactive in offering new online services

27% would consider a branchless digital bank

71% consider their banking relationship to be transactional rather than relationship driven

51% want their bank to proactively recommend products & services for their financial needs

48% are interested in real-time and forward-looking spending analysis

• Millennials (under age 30): Active users of online (94%), mobile

banking (72%) & social media (92%)

• Moneyhawks™ (a term coined by Javelin9)

– Moneyhawks are the 37 million Americans representing 19% of consumers who actively use

all three services: Online Banking, Mobile Banking and Bill Payment

– Profitable customers

– Demand the best of every digital and physical channel at their discretion, they do not want an

either/or

– Early adopters of new technology (90% own smartphones; 68% tablets)

If new online and mobile services don’t arrive, Moneyhawks will look

elsewhere with 72% of them not afraid to look to non-financial service

companies for their financial needs.

MONEYHAWKS

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The Process to a StrategyWhere do you begin?

• Acknowledge the progress made over the past 24-36 months

– Integrated online and mobile platform providing the same data at each touch point

Account Listings

Account Balances (Current, Available, Available Overdraft Protection, Available

with Overdraft Funds,)

Real-Time Transactions with pending memo postings

– Security Alerts (real-time)

– Current Balance Alerts (not real-time)

– Bill Payment with eBills; P2P; Overnight Checks

– eStatements (pulling into IB to SSO)

– Auto Enrollments

– Mobile Banking: SMS, Browser, Native Apps

– Full and Mobile Websites

– Online Account Opening (desktop only)

– Active Presence in Social Media

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The Process to a StrategyWhat are your digital strategy goals?

• Define the Digital Touch Points = Desktop, Tablet, Mobile

• Define the objective of a Digital Strategy

– To develop a strategy that provides a focus to your digital solutions roadmap

– To aim your development efforts in a direction that aligns with your corporate

strategy

– To ensure you are communicating your plan to the organization so that everyone

is on the same page

A Senior Manager to their Web Strategists

“That has nothing to do with our corporate strategy and

the direction we are going”

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The Process to a StrategyWhere do you want to go?

• Do your research to develop a list of potential new features to

include in the strategy

– Attend Finovate or other industry innovation conference

– Read industry news and attend webinars

– Ask bankers what they see/use at other financial service providers

– Engage with vendors and discuss their strategic roadmaps for innovation to

assess the direction they are moving in order to align yourself with the partners

that believe in the same forward-looking direction in which you want to embark

• Define a 2-3 year strategy and how you plan to execute

– Recommended approach with projects identified

– Projected timeline for projects with estimated costs

– Conclude with the vision of where your digital services will be upon this strategic

execution

– Obtain management buy-in and approval

– Spread the word within your organization!

Any Questions?

IGNITE THE EXCITEMENT AND INNOVATE.