comscore Mobile Financial Services Webinar

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1 comscore Mobile Financial Services Webinar July 2009 Presented By: Marc Trudeau, Sr. Director Phone:

2 Agenda comscore Overview State Of Mobile Industry And Mobile Media Mobile Financial Services Users Opportunities For Tomorrow 2

3 What We Do. We provide a digital marketing intelligence platform that helps our customers make better-informed business decisions and implement more effective digital business strategies Computer Measurement: 2MM opt-in panelists, 1MM in the US, who have given permission to have their Internet usage tracked. Our consumer panel is a representative cross-section of the U.S. population and across ISPs as well as worldwide regions and individual countries We also have permission to survey panelists, match to thirdparty databases, and append offline data Mobile Measurement (m:metrics): Provides a comprehensive understanding of mobile phone owner characteristics and behavior. Connects mobile consumer behavior, content merchandising, and device capabilities to provide the most comprehensive, trusted mobile market intelligence in the industry. Our products and solutions provide our customers deep insights into consumer and competitor behavior, both online and offline 3

4 comscore Mobile Financial Services: Sources and Methodology MobiLens Monthly survey of 10,000+ individuals in US, UK and EU connecting consumer behavior, content merchandising and device capabilities. Data is derived from the three-month average ending Feb 2009 with a sample size of approx. 39,500. Mobile Metrix An opt-in direct measurement panel of 4,000+ smartphone users in the US and UK providing a deep dive into smartphone content and media consumption. comscore Mobile Financial Services Survey Re-contact survey dedicated to a subset of the MobiLens Survey. 1,700+ respondents surveyed in March comscore Online Panel 2 million+ global consumers that allow comscore to passively observe their online behavior. 4

5 Some Important Definitions Mobile Media User A mobile phone subscriber that has used a mobile device for data services, such as mobile browsing or downloading music or applications Smartphone/smart device A device that can install software that runs at the OS level, an open OS, and not in a middleware sandbox such as Java or BREW. This includes Windows Mobile, Symbian, Google, BlackBerry OS, Apple OSX and Palm OS Mobile Financial Services User A mobile phone subscriber that has used a mobile device to access a financial services account 5

6 Executive Summary Despite a decade of investment and innovation, the promise of the mobile platform has remained largely unrealized Three significant, interdependent factors are driving the success and potential of this channel for FIs: Proliferation of smartphone devices Deployment of high bandwidth (3G) networks accompanied with all-you-caneat data plans A vibrant mobile application ecosystem These three factors create a rich user experience which, combined with the demographics and usage patterns of the target market, results in a attractive marketing opportunity for FIs The installed mobile base of 232MM and FIs desire to reduce costs by migrating to lower cost channels, make investment financially viable Though overall industry movement is slow, a few firms are moving quickly so the window of opportunity will not stay open for long 6

7 Agenda comscore Overview State Of Mobile Industry And Mobile Media Mobile Financial Services Users Opportunities For Tomorrow 7

8 Subscribers in Millions (MM) Age Definitely Skews Young But Mobile Penetration Is High Across All Age Groups 50 Mobile Subscribers by Age (MM) Product: MobiLens Data: Three month average ending March 09 Country: US - N= 39,241

9 % Penetration The PC Internet Took Off When People Moved From Dial-Up to Broadband Mobile Is Seeing The Same Growth From 3G 40% Penetration of 3G Device and Unlimited Data Plan 35% 30% 3G Device 25% 20% 15% Unlimited Data Plan 10% 5% 0% 9 Product: MobiLens Data: Three month average ending March 09 Country: US - N= 39,241

10 % mobile users Mobile Media Users Are The Most Important Subset Given Their Technology Affinity, Demographics And Growth Potential Market Segments Mobile Media Users as a % Total Mobile 35% Mobile Media, 35% Just Voice, 36% 30% 25% 20% SMS (and not mobile media), 29% 15% 10% 10 Product: MobiLens Data: Three month average ending March 09 Country: US - N= 39,241

11 Mobile Media Users % Mobile Media Users AT&T and Verizon Dominate the Market For Mobile Media Users Mobile Media Users by Operator 25,000,000 50% 45% 20,000,000 40% 35% 15,000,000 30% 25% 10,000,000 20% 15% 5,000,000 10% 5% 0 AT&T (Cingular) Verizon Sprint T-Mobile Alltel Wireless Cricket Virgin Mobile US Cellular Tracfone other 0% Mobile Media Users % Mobile Media 11 Product: MobiLens Data: Three month average ending March 09 Country: US - N= 39,241

12 % Mobile Market Smartphone Owners Are Changing the Game... And They re Growing 164% Year on Year 12% Smartphone Penetration 10% 8% 6% 4% 2% 0% Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar Product: MobiLens Data: Three month average ending March 09 Country: US - N= 39,241

13 There are 1026 Different Devices Being Used to Access Mobile Media in US Product: MobiLens Data: Three month average ending March Country: US - N= 39,241

14 % Female Different Services are Used by Different Demographics. Mobile Media Users Older and More Female Than Many Think Data service (unlimited) 49% Made own ringtone Played a game 47% Purchased Ringtone 45% 43% Listened to music Social Networking Ringback subscription Used 41% Downloaded Song OTA Purchased Game Browsed for News and Info 39% 37% Used an application Higher on chart = more female Further to right = older Size of bubbles = # of users 35% Median Age Product: MobiLens Data: Three month average ending March Country: US - N= 39,241

15 Social Networking and Community Services Provide the Stickiest Services for Smartphone Owners Ranking Domain Company Unique Users Page Views Per Person 1 google.com Google Inc. 3,857, yahoo.com Yahoo! Inc. 1,679, facebook.com facebook.com 1,494, live.com Microsoft Corporation 1,326, sprintpcs.com Sprint Communications Company L.P. 1,308, myspace.com MySpace, Inc. 969, msn.com Microsoft Corporation 968, youtube.com YouTube, Inc. 874, go.com The Walt Disney Company 869, wikipedia.org Wikimedia Foundation, Inc. 788, sprint.com Sprint Communications Company L.P. 752, cingular.com Cingular Wireless II, LLC 729, craigslist.org Craigslist, Inc. 686, weather.com The Weather Channel Interactive, Inc. 646, microsoft.com Microsoft Corporation 587, ebay.com ebay Inc. 563, home AT&T Inc. 535, cnn.com Turner Broadcasting 460, device.home AT&T Inc. 457, vzw.com Verizon Trademark Services LLC 429, Product: Mobile Metrix Smartphone Panel Data: Feb 09 Country: US - N= 1,000+

16 Maps And Local Information Are Prominent Browser Activities But Financial Sites Are Also Popular Top Mobile Browsing Genres For Mobile Media Users (excl. social networking, MM) Shopping guides Online retail Comics or humor Electronic payments Auction sites Dating service Job listings Television guides Gaming information Traffic reports Classifieds General reference Bank accounts Restaurant information Business directories Brokerage or Financial Account Tech news Movie information Stock quotes or financial news Maps Sports information Entertainment news News Weather Web search Product: MobiLens Data: Three month average ending March 09 Country: US - N= 39,241

17 Agenda comscore Overview State Of Mobile Industry And Mobile Media Mobile Financial Services Users Opportunities For Tomorrow 17

18 Overall Interest In Mobile Financial Services May Seem Modest At First Look Are you interested in any of the following services which would enable you to use your mobile device to: 11.4% 10.6% 7.1% 6.9% 6.8% 6.1% Accessing Primary Bank Account Accessing Credit Card Account Charge bills to your credit card Accessing Brokerage Account Pay for items at checkout like a credit card Pay for items at checkout by adding them to your phone bill Percent of respondents saying they currently use or plan to use 18 Source: comscore Mobile Financial Services Survey, 2009

19 However, The Mobile FS Market Is Already Sizeable And Growing Quickly, More Than Doubling In The Last Year Alone 18 Mobile Users Accessing Financial or Stock Account (MM) Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb Source: comscore Mobile Financial Services Survey, 2009

20 Though Skewed Slightly Toward Younger Consumers, Mobile FS Is Well-represented In All Age Groups And Across Both Sexes Age of Mobile Financial Users Gender of Mobile Financial Users 10% 5% 14% Male 17% 31% Older 50% 50% Female 23% 20 Source: comscore Mobile Financial Services Survey, 2009

21 They Tend To Be More Educated And Therefore Have Higher Income Potential Education Attainment of Mobile Financial Users 2% Income of Mobile Financial Users 34% 10% 12% 15% 26% Less than High School Completed High School / GED Some College Associates Degree Bachelors Degree Post Graduate Degree 16% 16% 23% 11% 34% Less than $25,000 $25,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 $100,000 plus 21 Source: comscore Mobile Financial Services Survey, 2009

22 AT&T And Verizon Dominate The Market For Mobile FS Customers OEM of Mobile Financial Users Operator of Mobile Financial Users 15% 3% 3% 7% 13% 26% 19% Motorola Samsung LG Nokia RIM OR Blackberry Apple Kyocera 2% 15% 11% 13% 35% AT&T Verizon T-Mobile Sprint PCS Nextel Other 14% Other 24% 22 Source: comscore Mobile Financial Services Survey, 2009

23 Nearly One-fifth Of Mobile Financial Users Have A Smartphone Device Smartphone Penetration of Mobile Financial Users 17% Smartphone 83% Not Smartphone 23 Source: comscore Mobile Financial Services Survey, 2009

24 Irrespective Of Access Medium, 3G Access Is The Biggest Driver Of Mobile FS Usage How Customers are Accessing Their Financial Accounts Mobile Banking Access Method by Device Technology 53% Browser % 45.4% SMS % 44% 41% 48% 41% 2.7% 2.5% 1.1% 25% Apps % Via Browser Via Application Via SMS % Smartphone % 3G 24 Source: comscore Mobile Financial Services Survey, 2009

25 Location Of Mobile FS Usage Is Not Nearly As Glamorous As We Might Think Where do you primarily access your financial accounts via your mobile phone? 31% 25% 15% 11% 9% 8% At home Running errands Commuting At work Away on vacation Away on business travel 25 Source: comscore Mobile Financial Services Survey, 2009

26 Satisfaction With Mobile Banking And Credit Card Is High And Better Than Other Channels Mobile FS Satisfaction (% satisfied or very satisfied) 84% 78% Mobile Banking Mobile Credit Card 26 Source: comscore Mobile Financial Services Survey, 2009

27 Unsurprisingly, Web Is The Dominant Channel But Mobile Is Poised To Grow As Awareness And The Experience Improve How would you prefer to access your banking or credit card account? Via the Internet on my personal computer 59% 60% Via your mobile phone 22% 26% Mobile Banking Mobile Credit Card I am just as likely to use my mobile phone or my personal computer to access my bank account 16% 18% 27 Source: comscore Mobile Financial Services Survey, 2009

28 Perhaps Contributing To Low Awareness, Customers Seem To Be Getting Most Of Their Information Proactively How did you first learn that you could access your financial accounts using your mobile phone? 13% 14% 17% 16% 16% 16% 8% 10% 7% 7% 10% 9% 10% 11% Newspaper or TV advertisement from financial/insurance institution Letter from financial/insurance institution Online advertisement My mobile phone carrier My friends/family Financial/insurance institution s website Mobile Banking Mobile Credit Card 28 Source: comscore Mobile Financial Services Survey, 2009

29 As Sizeable As The Market Already Is, There Is Considerable Inertia Against Mobile FS Among Some Consumers Which of the following would encourage you to use mobile services offered by your financial institution/insurance provider? (Select all that apply) Nothing. I am not interested in using my mobile phone for this 75% Cash incentive from my institution/provider to try mobile services 34% Other offers such as free checking, better rates, rewards points, etc Faster connection speed 18% 22% More information about mobile services 17% Better interface for accessing my account/policy 14% Increased technical support about mobile services 11% Other (please specify) 5% 29 Source: comscore Mobile Financial Services Survey, 2009

30 The Reasons For Not Using Mobile FS Vary Considerably But Cell Plans/Devices Are Key Barriers You said that you currently do not access your personal financial accounts via your mobile phone. Why do you not use these services? In general I do not use the Internet on my mobile device 51% I do not trust the security associated with this 44% I do not have Internet access on my mobile device I do not want to be charged extra to use this service I prefer to conducting my transactions online I prefer my local branch/office It costs too much to access the Internet on my mobile device 35% 35% 33% 31% 31% I find it difficult to read my FI s website on my mobile device s screen I rarely use the Internet to access my bank account, so wouldn t with my mobile device. I did not know that I could access my accounts through my mobile phone It is only available through certain types of mobile phones Accessing my account through my cell phone is too slow 13% 12% 12% 11% 11% My financial institution does not offer mobile services Other (Please specify.) 4% 6% 30 Source: comscore Mobile Financial Services Survey, 2009

31 Most Mobile Banking Customers Are Using The Platform For Relatively Simple Transactions Which of the following mobile banking services do you currently use? Check my balance View my account transactions 65% 68% Find the nearest banking location Transfer money 50% 49% Account alerts Pay my bill 40% 44% Edit my bank account information Speak to a banking representative 32% 34% Open a new account Dispute a transaction 23% 25% 31 Source: comscore Mobile Financial Services Survey, 2009

32 BOA, Chase and Wells Fargo Currently Dominate The Mobile Banking Market Share of Mobile Banking Customers 1% 2% 2% 2% 4% 5% 19% 9% 9% 12% 35% Bank of America Chase/Washington Mutual Wachovia/Wells Fargo Credit Union Citibank Capital One PNC Bank/National City BB&T US Bank Suntrust Other 32 Source: comscore Mobile Financial Services Survey, 2009

33 As With Banking, Most Mobile Credit Card Activity Is Convenience-driven Transactions Which of the following mobile credit card services do you currently use? Check my balance Transfer funds Account alerts View my account transactions 68% 65% 65% 65% Redeem/view my rewards points Pay my bill 50% 49% Request a line of credit increase Check my available credit 40% 44% Edit my credit card account info Speak to a credit card company representative 34% 32% Open a new credit card Dispute a charge 25% 23% 33 Source: comscore Mobile Financial Services Survey, 2009

34 The Same Three Firms Lead The Mobile Credit Card Market Share of Mobile Credit Card Customers 24% 32% Bank of America Chase/Washington Mutual 1% 1% 3% Wachovia/Wells Fargo Credit Union Citibank Capital One 4% 5% 7% 10% 14% PNC Bank/National City BB&T US Bank Other 34 Source: comscore Mobile Financial Services Survey, 2009

35 For Mobile Insurance, The Focus Remains On Connecting With The Company Which services would you be interested in using on your mobile phone in the future? Report an accident Find contact information for my insurance agent Find the nearest insurance agent/office Find useful tips and tools (ie- in case of an accident) Track a current claim Access my insurance policy Receive policy alerts Update my personal information Speak to an insurance agent (via text message/chat) Pay my bill Receive an insurance quote (quick or full quote) Change my insurance coverage, limits or deductibles 73% 73% 72% 71% 69% 68% 68% 67% 66% 65% 62% 58% 35 Source: comscore Mobile Financial Services Survey, 2009

36 Customer Preferences In Brokerage Suggest That It Is Poised For Significant Growth With The Right Value Proposition How would you prefer to access your brokerage account? I am just as likely to use my mobile phone or my personal computer to access my bank account 20% Via the Internet on my personal computer 51% Via your mobile phone 29% 36 Source: comscore Mobile Financial Services Survey, 2009

37 Agenda comscore Overview State Of Mobile Industry And Mobile Media Mobile Financial Services Users Opportunities For Tomorrow 37

38 The Virtuous Cycle Between The Drivers Of Mobile FS Penetration Is Just Beginning Smartphone Growth Mobile FS Growth Application Development 3G Data Plan Evolution 38

39 Growing At Over 130% In Just The Five Months To May 2009, iphone Apps Are One Of The Most Attractive Opportunities 800,000 itunes Downloads of Banking Applications 700, , , , , , ,000 0 DEC 2008 JAN 2009 FEB 2009 MAR 2009 APR 2009 MAY Product: Mobile Metrix Data: May 09 Country: US

40 Social Networking Sites Are Highly Penetrated By Mobile FS Customers Top Mobile Community Sites for Mobile FS Users eharmony 10% 9% % of customers Match.com MSN / Windows Live Spaces Photobucket Craigslist Yahoo! 10% 11% 15% 14% 15% 14% 15% 16% 19% 17% Flickr YouTube 28% 30% 32% 32% MySpace 51% 55% Facebook 59% 63% Mobile Credit Card Users Mobile Bankers 40 Product: MobiLens Data: Three month average ending March 09 Country: US - N= 39,241

41 Financial Services Firms Have Yet To Leverage The Rapidly Growing Mobile Ad Medium % Share of Mobile Ads Integrated Oil & Gas Investment Banking & Brokerage Construction & Engineering Electronic Equipment Manufacturers Consumer Finance Consumer Electronics Leisure Facilities Systems Software Insurance Brokers Homebuilding Leisure Products Publishing Soft Drinks Food Retail Household Products Apparel Retail Aerospace & Defense Specialized Consumer Services Advertising Internet Retail Apparel, Accessories & Luxury Goods Diversified Banks Automotive Retail Computer Hardware Internet Software & Services Computer & Electronics Retail Education Services Hotels, Resorts & Cruise Lines Application Software Movies & Entertainment Wireless Telecommunication Services Personal Products Communications Equipment Automobile Manufacturers Broadcasting & Cable TV 0.6% 0.6% 0.6% 0.7% 0.7% 0.8% 0.8% 0.9% 0.9% 0.9% 0.9% 1.0% 1.0% 1.0% 1.0% 1.3% 1.3% 1.3% 1.3% 1.4% 1.5% 1.5% 1.7% 2.4% 2.6% 2.6% 2.7% 3.4% 3.9% 5.4% 6.2% 7.3% 8.1% 11.9% 16.4% 41 Product: Ad Metrix Mobile Data: May 09 Country: US

42 Unique Users % Penetration Mobile Provides Excellent Opportunity to Target The Critical Affluent Demographic 14,000,000 Devices Owners with Income $100, % 12,000,000 10,000,000 40% 35% 30% 8,000,000 6,000,000 4,000,000 2,000, % 20% 15% 10% 5% 0% Unique Users - Income $100,000+ % Income $100,000+ Product: MobiLens Data: Three month average ending March Country: US - N= 39,241

43 Unique Users % Penetration Targeting Offers And Ads To Financial News And Tech News Provides The Greatest % Of Browsers With Income $100k+ 7,000,000 Mobile Browsers with Income $100, % 6,000,000 35% 5,000,000 30% 4,000,000 3,000,000 2,000,000 25% 20% 15% 10% 1,000,000 5% 0 Web search News Weather Sports information Financial news Entertainment news Tech news 0% Unique Users - Income $100,000+ % Income $100,000+ Product: MobiLens Data: Three month average ending March Country: US - N= 39,241

44 Thank You. THE GLOBAL SOURCE OF DIGITAL MARKET INTELLIGENCE For more information, please contact Marc Trudeau

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