Gearing up for a mobile world. Naresh Vyas Global Head, Channels Group Technology and Operations Standard Chartered Bank

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1 Gearing up for a mobile world Naresh Vyas Global Head, Channels Group Technology and Operations Standard Chartered Bank

2 2 Content Market Landscape & Technology Enabler Opportunities & Differentiation Our Approach Result

3 3 Mobile: the largest channel in our footprint Mobile operators have spent more than $234 Billion USD building networks since 2002 There are 3.3 billion GSM connections worldwide with 1.2 million new connections everyday By 2013, mobile phones will overtake PCs as the most common Web access device worldwide 64% of mobile users are in emerging markets The world s biggest GSM markets are China (483m), India (176m) and Russia (168m) By 2013, mobile payments are expected to cross $ 600 Billion USD By 2015, context will be as influential to mobile consumer services and relationships as search engines are to the Web Nearly 7 billion text messages are sent daily By 2014, more than three billion of the world s adult population will be able to transact electronically via mobile and Internet technology Source: GSMA

4 4 with aggressive growth forecasted Number of mobile phone users (in Million) 4,487 The fastest growing channel in our markets 65% of mobile users will be based in Asia, Africa & the Middle East by end of ,328 2,717 3,808 1,880 1, West Europe East Europe Asia USA Africa & Middle East Total Europe Americas Australia for every 1 internet connection 7.4 mobile connections there are in China & India

5 5 and Technological Advancement Under lying Technology Enhanced Display resolution support Enhanced Multi-Media functionality Updated WEB Technologies QWERTY keyboard Device Evolution Easy Navigation Touch Element Intuitive sensor technologies Improved Security

6 6 Content Market Landscape & Technology Enabler Opportunities & Differentiation Our Approach Result

7 7 Walking in the Customer s Shoes Fast paced lifestyle Need for round-the-clock banking. Unproductive Wait Time at branch, ATMs, phone banking, traffic jams, airport lounge etc. Keeping track of payments on the move. For example, utility bills, school fees. Concern about security. For example, instantaneous fraud notifications of transactions

8 FUNCTIONALITY Basic / Hygiene Emerging 8 Mobile Services cover a broad spectrum MOBILE SERVICES Banking & Alerts Payments & Transactions Investment Services mcommerce Sales & Marketing Balance Enquiry Mini-statements Check Book/ Card Request Account Activity Alert Own Account Funds Transfer Credit card payment 3 rd Party Funds Transfer Portfolio View FX Alerts Differentiation limited to usability Not Applicable SMS Marketing Apply via SMS ATM Locator Alerts from other systems like loans, mortgages Alerts on cards/loan processing and approval Mobile Top Up s Bill Payment Bill presentment P2P Payment International Remittance Micro payments Online Stock Trading Real-time Stock Quotes & Alerts Strong Potential to Differentiate Movie and airline ticketing Integration with local ecosystems.eg. NETS (SG), Octupus(HK) Contact less payments e.g. NFC Location based services Enabling application data capture on PDA s for sales teams and DSA s

9 9 across a range of solutions Push: Widely adopted with SMS alerts standard offering. Pull: four competing technologies with no clear winner to date SMS: Simplest solution. Security concerns and usability limit potential beyond basic transactions USSD: More secure than SMS. Menu driven with high dependency on mobile operator. Limited usability. Popular in Africa markets Push Pull Touch Smart Client: Highly user friendly, secure solution capable of meeting Banking, payments and mcommerce needs. High dependency on customers downloading clients (still unproven with mass usage). Mobile Browser: Always on connectivity via internet banking optimized for mobile screen. High dependency on data packages and mobile network sophistication. Touch: Emerging technology based on Near Field Communication (NFC). Used most widely in Japan (Mobile esuica) & Korea. Pilots running in select markets focused on mass transport & retail POS.

10 Customer Value Proposition 10 Value Creation Opportunities with Mobile MOBILE SERVICES OUR APPROACH Significant potential once regulatory concerns are addressed HIGH Payments & Transactions Banking & Alerts Bank Value Proposition HIGH Investment Services Potential for customer value if integrated into their lifestyle needs Sales & Marketing LOW Focus on completing rollout of basic Banking & Alerts to drive tx convenience & reduce call centre volume Enhance payments and bill pay functionality across markets Unclear monitization model for Banks other than customer stickiness mcommerce LOW Exploring options for launch of a smart client that integrates mcommerce & has P2P payments in its roadmap.

11 11 Content Market Landscape & Technology Enabler Opportunities & Differentiation Our Approach Result

12 Network Sophistication Classification of Markets based on mobile readiness 4G/ Wi Fi / WiMax EDGE GPRS High 3G INTERMEDIATE Mobile Markets IN ADVANCED Mobile Markets ID CN AE TH MY SG HK TW KR Advanced Mobile markets Advanced regulatory environment High network reliability and data access speeds Intermediate Mobile Markets Intermediate-Advanced regulatory environment Low data access speeds Basic Mobile Markets WAP No Data AF PK VN PH BASIC Mobile Markets Basic-Intermediate regulatory environment Low network reliability and data access speeds Low Handset Complexity High Legend Regulated markets 12

13 13 Mobile Services Update: Banking & Alerts Banking & Alerts Payments & Transactions Investment Services mcommerce Sales & Marketing Benefit Proactive customer communication, reduced call volumes at call centers and cost savings through reduction in paper notifications MARKET TRENDS OUR APPROACH Fraud prevention is driving banks to offer alerts services. Increasingly regulators are advising banks to use this channel for pro-active customer communication. Core focus of our Mobile Offering. Our SMS Banking and Alerts offer up to 120 alerts and 18 SMS banking functionalities Next plan is to increase usage by simplifying registration and focusing on marketing & promotional activities. Differentiation LOW Hygiene functionality offered increasingly by all Banks with limited points of differentiation outside usability and ease of registration and sign up.

14 14 Mobile Services Update: Payments & Tx s Banking & Alerts Payments & Transactions Investment Services mcommerce Sales & Marketing Benefit Provides transactional convenience which helps makes us the Main Bank for our customers MARKET TRENDS This service has been very popular in Emerging Markets where the level of regulation is low Emergence of non-banks like non-bank financial institutions, telcos and payment Aggregators OUR APPROACH Currently offer own account fund transfer and card payment and bill payments and inter-bank funds transfer Pilot with Local Telecom in Africa to offer P2P payments including cross border transfers Offer bill payments and inter bank funds transfer In future engage with partners to provide crossborder transfers & P2P payments Differentiation MED TO HIGH Remittances and P2P payments offer significant opportunity for banks but are currently disallowed in many markets by regulators. In the near future, as regulations ease with tighter controls on end-users of the service, the market is expected to grow rapidly.

15 15 Mobile Services Update: Investments Banking & Alerts Payments & Transactions Investment Services mcommerce Sales & Marketing Benefit New revenue stream for bank which complements the wealth management offering MARKET TRENDS The focus of banks has been to offer online stock trading Most amount of progress has been made in making trade/stock information available on mobile device OUR APPROACH Focus on investment and FX alerts. Smart Client rollout in HK for Market Data and Investment Trading capabilities Requirements of real time information and fast processing makes this viable only in markets with high mobile data speeds (3G and above) like KR,HK,SG and AU Differentiation HIGH Requires significant initial investment and customer education for the successful rollout

16 16 Mobile Services Update: mcommerce Banking & Alerts Payments & Transactions Investment Services mcommerce Sales & Marketing Benefit Ability to increase our share of customer wallet and also deepen our customer relationship MARKET TRENDS Increase in adoption of contact-less payments using mobile device for retail POS and transportation Discussions on integration between mass transport vendors and banks to offer NFC based payments Banking the unbanked through Mwallet OUR APPROACH Participate in partnerships in high potential markets. Examples: Partnership with Paymate in India and Zain telecom in Africa Smart client rollout in HK and IN to offer utility payments, funds transfers and mcommerce transactions Differentiation LOW to MEDIUM Can be achieved by forging local partnerships with right ecosystem players (telcos/aggregators)

17 17 Mobile Services Update: Sales & Marketing Banking & Alerts Payments & Transactions Investment Services mcommerce Sales & Marketing Benefit Potential low cost customer acquisition channel and allows for targeted marketing MARKET TRENDS Increased customer propensity to use SMS and high cost of traditional sales channels (like telesales) have led to increased use of SMS as a marketing channel Success of IPhone apps has opened up potential for location-based marketing OUR APPROACH Our approach is to continue to use SMS marketing, with an increased focus on lead/consent capture in 2010 Due to complexity, location based services are still expensive to develop and deploy and would only be applicable to a small percentage of our customer base due to limited penetration of GPS-enabled phones. Differentiation LOW to MEDIUM Can be achieved by using SMS to provide relevant offers in a non-intrusive manner and leveraging SMS as part of cross-channel marketing campaigns

18 18 Content Market Landscape & Technology Enabler Opportunities & Differentiation Our Approach Result

19 19 We have grown our mobile footprint rapidly.. Mobile Middle East Dec Dec Dec Dec Bahrain Jordan Lebanon Oman Qatar UAE NE Asia China Hong Kong Korea Taiwan SE Asia Indonesia Malaysia Region Africa Nigeria Botswana Kenya South Asia Bangladesh India Pakistan Sri Lanka Philippines Singapore Thailand Vietnam Live/ Pilot Development Tanzania Zambia Ghana Uganda

20 20 Mobile solution (Wholesale Bkg) Fully integrated channels catered to Corporate clients needs Transaction authorizations on-the-go Trade enquiry and authorisation High sensitive transactions alerts RMs Portal Limit approval, Clearing authorisation, Dispute resolutions Corporate Mobile Banking will be limited to Alerts, Authorisation, MIS, Risk and operations Best Integrated Corporate Bank site in Asia, Middle East and Africa Best Online Cash Management in Middle East and Africa Best Trade Finance Services in Middle East and Africa Best Information and Security Initiatives in Middle East and Africa Best Corporate/ Institutional Internet bank in China, Ghana, India, Kenya, Malaysia, Nigeria, Singapore, UAE

21 Industry Recognition

22 Industry Recognition

23 23 Mobile solution (Consumer Bkg) Fully integrated channels catered to Retail clients needs Browser based Mobile Banking Smart Client based Mobile Banking (Breeze) Instantaneous Alerts Breeze Best Internet Banking in the World Best Investment Management Services Best Online Consumer Credit Site Best Web Site Design Best Integrated Consumer Bank Site

24 24 Innovative Staff Mobility Solutions Won 14 th Annual Webby Award The Oscars of the Web People s Choice for Integrated Mobile Experience Over 10K entries Beat stiff competition from Vodafone and Honda Elite list with ebay, Facebook, and Yahoo! Featured by Apple for Enterprise Mobility

25 However 25

26 26 industry challenges do exist TECHNICAL Multiple operating systems and industry standards Wide range in terms of handset sophistication (testing) Country / region specific settings with mobile operators and issues with inter-connectivity Operators charging for mobile services to be offered to their customers and over their networks Customer data protection and information security REGULATORY Recent tightening of controls by regulators (e.g. recent standards issued by RBI, HKMA, MAS) KYC and AML concerns with involvement of Non Banking Financial Institutions (NBFI s) &Telcos in value chain BEHAVIORAL Individual Mobile Banking users expect rich and fanciful features Corporate Mobile Banking remains transactional usage Prospective Individual Mobile Banking users could be deterred by additional internet cost

27 Thank you 27