Remote Deposit, Remote

Service

It Changes Everything

Remote Deposit, Remote Service

• Remote Deposit is “un-tethering” customers who have no

other reason to visit the branch

• This large segment of “virtually domiciled” customers,

including both consumers and small businesses, requires

a complete rethinking of the sales and service model

• Banks can take concrete steps to implement a service

model that costs less and is more satisfying for un-

tethered customers

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Customers are making fewer

transactions at branches

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Deposit

Withdrawal

Check Cashing (On Us)

Check Cashing (Off Us)

Total

-7% to -9%

-3% to -6%

-12% to -16%

-17% to -19%

-4% to -5%

Branch Transaction 1-year CAGR

Proprietary and Confidential to Novantas, LLC

Proprietary and Confidential to Novantas

Preferences are also changing for sales channels

Open a New Relationship

Open a New Account

-8%

-21%

-23%

Purchase Investment/Insurance

Procuct

-15%

Get Financial Advice

Sales Transactions by Branch Preference (YoY Growth)

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• Utilize the branch as their primary channel for the majority of their service and sales interactions

• Value relationship with staff at the branch

• Slightly skewed towards lower income households

Branch Traditionalists

(25-40%)

• Heavy users of all channels (branch and remote)

• Generally hold larger deposit and loan balances

• Great target for branch transaction migration given they already use remote channels today

Ultra-Connected (30-45%)

• Nearly all transactions are conducted virtually, though online, call center and mobile

• Up to 66% cheaper cost to serve

• Similar demographically to other segments, but shows opportunity for cross-sell

Virtually Domiciled

(25-35%)

5 Proprietary and Confidential to Novantas. LLC

There are three distinctive banking

segments among US consumers

Most small businesses prefer a

virtual sales process

Proprietary and Confidential to Novantas, LLC

Contact Preference When Considering a Product Solution

Source: Novantas 2012 Treasury Management Buying Behaviors Survey conducted with Greenwich Associates 6

Email or

Phone 39%

Email 13%

In-person

31%

Phone or in-

person 4%

Phone 13%

Email or

Phone 38%

Email 17%

In-person

31%

Phone or in-

person 4%

Phone 10%

Companies under $10mm Companies $10mm-$20mm

These behaviors lead to significant

differences in cost-to-serve

7 Proprietary and Confidential to Novantas

Cost to Serve by Consumer Segment Values are indexed to average cost to serve

based on benchmark analytics

43

157

88

Ultra-Connected Branch Traditionalist Virtually Domiciled

Avg = Index 100

$0

$100

$200

$300

$400

$500

$600

Field Sales Inside Telesales(inbound referral)

Inside Telesales(outbound cross-

sales)

Cost per Small Business Sale

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Most customers continue to prefer

branches for deposits

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Proprietary and Confidential to Novantas, LLC

Branch Preference by Transaction

54% 58%

70%

Deposit Funds

2006 2012 2011

25% 26%

41%

Withdraw Funds

15% 19%

45%

Transfer Funds

35% 37%

53%

Resolve an Issue

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Image-enabled ATM’s lead to less branch attachment

Proprietary and Confidential to Novantas, LLC

Banks with Image-Enabled ATMs Banks without Image-Enabled ATMs

36%

41%

18% 21%

ATM Channel Preference for Depositing Funds

2012 2011

RDC promises to further “un-tether”

customers from branches

10 Proprietary and Confidential to Novantas

12%

43%

45%

Currently Using RDC Not Using RDC, Willing to Consider Not Using RDC, Not Willing to Consider

Consumer Willingness to Use Remote Deposit Capture (RDC)

Banks have widely different levels of

success with RDC

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0%

5%

10%

15%

20%

25%

30%

Top Performers Average Lagging

Remote Deposit Usage Business Banking

What are top performers doing to

increase use of RDC?

• Make RDC part of your small business online banking

platform

– No need for a separate online portal

– Fully online application and implementation process

– This makes it easier to sell and easier to use

• Make it easy to get a scanner, or use the scanner you

already have

• Make the pricing simple and predictable

• Give branch bankers an incentive to sell RDC

• Teach branch bankers how to sell RDC

• Have specialist on call to support RDC sales

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