Connecting with Customers in the Digital Age: Taking Engagement to a New Level

[D IGITAL CHANNELS FORUM]

Neff HudsonAssistant Vice President, Emerging ChannelsUSAA Bank

Michael J. McEvoyManaging Directorath Power Consulting

Presented by:

Connecting with Customers in the Digital Age: Taking Engagement to a New Level

Mobile Goes Mainstream:Increasing Frequency of Contacts

How often do you use mobile banking?

48%

• The ‘audience’ is already there. Are banks there for them?

Multiple Times a Day

Daily

2-3 Times a Week

Once a Week

1-2 Times a Month

Less than Once a Month

4%

14%

30%

21%

23%

8%

Source: The 2013 ath Power Mobile Banking Study™

Mobile Goes Mainstream:Consumers Already Doing the ‘Basics’


Transfer Funds Outside Bank

RDC

Check Credit Available

ATM / Branch Locator

Receive Account Alerts

Pay Bills

Check Cleared / Payment Received

Transfer Funds Inside Bank

View Recent Transactions

Check Balances

21%

23%

33%

36%

41%

47%

51%

61%

71%

86%

Please indicate the banking transactions you conduct using your mobile device

Which of the following banking functions would you do on your mobile device, were it a possibility?

Mobile Goes Mainstream:Banks Can Cut Expenses, Improve Satisfaction

Access Consolidated View of Accounts

Reset UserId / Password

Create and Track a Budget

P2P Payments

Mobile Payment at Merchant

Stop Payment

Activate Credit / Debit Card

Receive, Store Rewards Points

Report Lost / Stolen Card

28%

29%

33%

42%

44%

44%

44%

46%

55%X

X

X


Mobile Goes Mainstream:USAA Mobile by the Numbers

$7Bdeposits

22%monthly

penetration

334Mcontacts

48%transfers

5.5Mapps

Source: USAA 2012 usage statistics. USAA Mobile includes mobile.usaa.com, plus apps for iPhone, Android, iPad

20%bills

Which mobile devices do you use to access your mobile banking account?

Regular Cellphone

Tablet

Smartphone

7%

37%

90%

Mobile is More than a Smartphone: 1 in 3 Using Tablet to Access Mobile Banking:


Do you typically use your Tablet only at home, or do you often take it with you

when you leave home?

It Varies22%

Generally Bring it with

Me23%

Mainly Home Use55%

Tablet Use Mostly Occurs at Home: Implications for Desired, Useful Functionality


Tablet Banking: Your Next Sales Channel?

• Rich Media

• Real Advice

• Tap to Transact

Screenshot: USAA App for iPad

How likely would you be to switch banks if you found another bank with a superior mobile banking offering?

Unlikely

Likely

0% 10% 20% 30% 40% 50% 60%

22%

9%

35%

35%

Very Somewhat

Challenge: Almost 1 in 2 Mobile Users Will Consider Switching to a Bank with ‘Better’ Mobile Banking


Using your mobile phone or tablet, have you done any of the following in the past 12 months?

Made Purchases Through a Mobile App.

Made Purchases Through a Mobile Website

Researched Product on Mobile Device and Purchased In-Store

Researched Product on Mobile Device and Purchased Online Using Computer

In-Store Price Comparison

Researched Product on Mobile Device

36%

38%

39%

39%

52%

63%

Challenge: Mobile Becoming “End–to-End” Solution in Mind of Consumer: Are Banks Missing Out?

• Growing proportion of Google searches starting through mobile• Consumers seeing mobile as end-to-end solution


Other

Credit Card Companies

Retailers

Banks

Smartphone Manufacturers

Software / Technology Firms

1%

26%

27%

28%

35%

39%

Challenge: Consumers, Technology Firms, Not Banks, are Driving Innovation and Industry Direction

Who do you think is most likely to develop next generation payment solutions?

• Gap between industry focus and customer interests / behaviors?• American Banker ‘Innovator of the Year 2012’: founder of Square• Future competitors from outside the industry – Simple, Movenbank?


Center of Gravity: Geolocation

Center of Gravity: Voice-based Assistants

• Example: USAA Virtual Assistant – Nuance and USAA

Center of Gravity: Imaging - RDC 3.0

• Example: USAA Video Capture, Augmented Reality

Using your mobile phone or tablet, have you done any of the following in the past 12 months?

Made Charitable Donation via Text Message

Received Money From Another Person

Transferred Money Directly to Another Person's Bank, Credit Card or PayPal Account

Paid Bills Using Mobile

Made Online Purchases

11%

12%

32%

47%

57%

Center of Gravity: PaymentsConnecting the Virtual and the Physical


How likely do you think it is that mobile contactless payments will become a major form of payment

in the next 3 years? Very Likely

28%

Likely50%

Un-likely18%

Very Unlikely5%

Almost 80 Percent Think “Contactless” Payments Will Become Common Within 3 Years

• Consumers accept “contactless” payments are on the way – do banks?• What role will banks play?


If offered the option of using a “contactless” payment service, how likely

would you be to use it?

I Already Use It6%

Very Likely25%

Likely37%

Unlikely20%

Very Unlikely13%

Strong Majority Would Use ‘Contactless’ Payments Option, if Offered


So Who’s (arguably) Winning the Race?

Source: https://www.thepaypalblog.com/2011/09/paypal-unveils-the-future-of-shopping/

Takeaways

Mobile Has Gone MainstreamInnovation is Expected“Hang Together, or Hang Separately”• Interoperability

– Person-2-Person Payments– Mobile Wallets

• Customer Focus– Account Switching– Advice

“End of the Beginning”

[D IGITAL CHANNELS FORUM]

Neff HudsonAssistant Vice President, Emerging ChannelsUSAA Bank

Michael J. McEvoyManaging Directorath Power Consulting

Presented by:

Questions???

Economy & Finance

Connecting with Customers in the Digital Age: Taking Engagement to a New Level