Corporate Mobile Banking: A Treasury Perspective

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1 Corporate Mobile Banking: A Treasury Perspective AFPA Education Day August 20, 2014 Howard N. Forman Senior Vice President Head of Online Treasury Solutions

2 Session Outline Mobile Landscape Data Points Mobile Payments Corporate Mobile Banking Value Proposition Delivery Security 2

3 Mobile Landscape

4 The numbers Mobile penetration among American adults: 90% have a cell phone 58% have a smart phone 42% have a tablet 63% of adult cell phone owners access the Internet on their mobile device 34% of these people say they access the Internet mostly using their cell phone Source: Pew Internet & American Life Project, Pew Internet Mobile Commentary 4

5 More numbers 67% of cell phone owners find themselves checking their phone for messages, alerts or calls even when its not ringing/vibrating 44% of cell owners have slept with their phone next to their bed because they wanted to make sure they didn t miss any calls, text messages or other updates during the night 29% of cell owners describe their phone as something they can t imagine living without. Source: Pew Internet & American Life Project, Pew Internet Mobile Commentary 5

6 More numbers Source: Pew Internet & American Life Tracking and Omnibus Surveys,

7 Making a payment with a mobile device is not necessarily mobile banking 2D Bar Codes Near Field Communications (NFC) 7

8 Making a payment with a mobile device is not necessarily mobile banking Mobile Card Readers (Mobile POS) 8

9 The intersection of mobile banking and mobile payments Digital Wallets Card Acceptance (Mobile POS) NFC/Mobile Contactless Bar Codes Bill-to-Mobile NFC/Mobile Contactless (bank-centric) QR Codes for BillPay or P2P Bump Kix Balance Inquiries Transaction Details BillPay Investments/ Trading Text Banking Remote Deposit (Mobile) 9

10 Corporate Mobile Banking

11 While not yet an essential offering, customer demand for mobile is on the rise Source: Aite Group s June 2013 survey of the top 50 U.S. banks 11

12 The ability to offer mobile banking is increasingly being considered when selecting bank partners Source: Aite Group Survey of 1,003 Businesses Generating Less Than US$20 million in Revenue, September

13 Benefits Convenience/Productivity Any time/anywhere access Matching information availability to lifestyle patterns New solutions to business problems Portability Business resiliency 13

14 Barriers to Entry 48% of financial professionals (surveyed at the 2013 AFP Conference) said their company plans to implement new treasury management tools 12% said they would implement Corporate Mobile Banking tools 66% noted Security Challenges as the biggest barrier 10% (of respondents) of Corporate treasurers need to access information that is inconvenient to display on a small device Users don t have device supported by their bank Company does not supply devices Services offered are not what the user needs 14

15 Corporate mobile initiatives have been slower to come to fruition than initially expected The largest banks have been the fastest adopters Most have seen adoption levels below 10% to date Early adopters still enjoy first mover advantage Source: Aite Group Estimates based on June 2013 survey of top 50 US banks 15

16 yet almost one-third of small-businesses bank via a mobile device Source: Aite Group Survey of 1,003 Businesses Generating Less Than US$20 million in Revenue, September

17 Mobile Delivery

18 Mobile Banking Access Modes Mobile Web Uses device s browser capabilities Often a scaled-down version of a site Full site may be available via tablet Native App Tailored to the device Optimized user experience Access to device s native capabilities Tighter security and controls 18

19 Design Considerations Operating system: ios, Android, both? Form factors: phones, tablets, both? Must relate to and be an extension of the desktop site Style Entitlements Preferences Must create new solutions to existing customer challenges 19

20 Key Features and Functions Alerts/Notifications Information Reporting Current Day (Cash Position) Previous Day (transaction detail) Multibank Reporting Transaction Searches Administration New operator approvals Password reset Enable/Disable operator 20

21 Key Features and Functions Transaction Approvals Positive Pay Exceptions (check and ACH) ACH Batches Wire Transfers Transaction Initiation ACH Batches Wire Transfers Repetitive/Templates Account Transfers Mobile Remote Deposit 21

22 What about fees? 49% of treasurers are at least willing to consider paying for the service Most early movers are not charging for it The next round of banks to roll out mobile are more likely to look for a revenue stream Source: Aite Group s June 2013 survey of the top 50 U.S. banks 22

23 Mobile Security

24 Security concerns remain a hurdle for mobile adoption Source: Aite Group Survey of 1,003 Businesses Generating Less Than US$20 million in Revenue, September

25 Security Approaches Token authentication Secondary authentication via random security code Usually leverage the same physical token used for Web access or soft tokens Device Fingerprinting Recognize the device by certain attributes Require additional authentication for unrecognized devices Risk-Based Authentication Recognition of typical behavior for the customer and similarly situated customers 25

26 Security Approaches Embedded malware protection within the App Scan for jailbroken devices and malware on the device and prevent login Common sense practices Shorter idle timeouts Account masking Data not stored on the device Entitlement controls CUSTOMER EDUCATION IS CRITICAL 26