15. Consumers take control…….
Consumer Preference is Evolving
(Percentage of Population)
Bank Online 60%
Purchase Online 61%
Prefer Internet for Financial
66%
Information
Pay Bills Online 41%
16. Untethered Interactions with Consumers and Businesses
425,000
ATMs 3,000,000,000
Devices
114,000
Branches
16,000
FIs
20. Key Insights on the Branch of the Future
Branches will remain a relationship cornerstone for acquiring and
retaining deposits and growing profitably.
Fewer transactions in branches - focus shifts to advice, loans and small
business services.
The implementation of self-service technology in branches will free branch
staff to spend more time with members.
Branches must be tightly integrated with other delivery channels, giving
members channel choice that best meets their needs.
Credit unions must focus on providing an outstanding experience in each
branch, by phone and on-line (including mobile)
26. The U.S. is undergoing rapid population aging
Number of people
(millions)
90 25%
80 20.46%
70 20%
16.53%
60
12.71% 15%
50
11.31%
40 9.24%
10%
30 6.81%
20 5%
10
9.0 16.7 25.7 35.0 53.7 77.2
0 0%
1940 1960 1980 2000 2020 2040
US Population 65+ (left axis) Percentage of US Population 65+ (right axis)
Source: Government reports
30. By 2020, nearly half of the U.S. adult population
will have been born after 1981………
WW II Gen: Up to 1945 Baby Boom: 1946 to 1964 Gen X: 1965 to 1980 Gen Y: 1981 to 2001 Gen Z: After 2001
100% Gen Z 4%
Gen Y
26% Gen Y
80% Gen Y
37%
43%
60% Gen X
34% Gen X
40% 33% Gen X
32%
Baby Boom
20% Baby Boom
39% Baby Boom
WW II Gen. 1% 30%
20%
0%
2010 2015 2020
Total: 197.4 MM 0.7% CAGR Total: 204.0 MM 0.5% CAGR Total: 208.8 MM
Generational Cohort Share of Population 18 - 65 by Year
Source: 2008 National Population Projections.
36. Important Millennial Behavior
• 39% Use debit card 15+ times/month
• 60% Bank and pay bills online
• 76% Use instant messaging
• 97% Have a Facebook profile or other social profile
39. Social Change
1 in 8 couples married last year met online
39
40. The Business of Social Networking…..
Blockbuster News Today!
www.YouTwitFace.com
41. Meet Ray’s Virtual Watercooler!
“With so much misinformation out there about where food
comes from and how it's produced, farmers have a responsibility
to speak up and set the record straight. And with social media,
they now have a tool to help them reach virtually anybody, anywhere.
”
41
42. Meet Jeff Fowle, Cattle Rancher and Twitter Guru!
“When I installed pivot sprinklers on my
farm, I posted a tweet about it because
I felt it was important to show how
farmers and ranchers are continually
trying to improve water efficiency.”
42
45. Wells Fargo: Sample of Customer Service
1) Direct message (DM) sent from user to @Ask_WellsFargo. DM makes
private message only seen by Wells.
2) Wells Fargo rep responds directly to user within 20 minutes with
a number (direct to live person) and case #.
3) Wells Fargo rep follows up with user to ensure issue was addressed.
46. Payments Feature Prominently for Social Media Users
Among all respondents using at least one social networking site.
46
47. Business and Technology Trends Reshaping our Industry
Digital Era
Payments Social Change/
Demographic Shifts
“Mobiliti”
47
49. Mobile Has Impacted Consumers’ Daily Habits
More Deeply and More Quickly Than Most Expected
Voice Organizer
SMS/Alerts Budgets Banking Payment
Commerce
Email/MMS
Communicate Control
Ticketing
Transit
IM/chat Social Maps
Create Consume
Search
Blogs
Mobile web
Pictures
Video Games News
TV Music
49
53. Evolution of Mobile Financial Services
Mobile Banking Mobile Transactions Mobile Commerce
Creates the foundation Gain consumer
to expose transaction confidence and
services build behavior
patterns
• Info services • Bill payments, ebills • Point of sale
• Balances • Account transfers • Remote
• Transaction history • Person to person • Offers and coupons
• Alerts • Deposit capture • Loyalty and rewards
• Small business • Stored-value cards
User Adoption/Time
53
57. Thought for the Day
Within 10 years, service quality will
be measured – to a large degree -
by how much self-service you
provide your members
57
58. Business and Technology Trends Reshaping our Industry
Digital Era
Payments Social Change/
Demographic Shifts
“Mobiliti”
58
59. Digital Transformation Is Fueling Electronic Payments
11 Billion
transactions shifting from
paper to electronic in the
next five years
39% 34%
46% 54%
61% 66%
2004 2009 2014
Cash and check Electronic
Source: First Annapolis Consulting 2009.
62. The Durbin Affect
• Bank of America:
• Interchange revenue fell from $1.494Bn in 3Q11 to $1.052Bn in 4Q11
• Wells Fargo:
• Interchange revenue fell from $948M in 3Q11 to $611M in 4Q11.
• JPMC:
• Interchange revenue fell by $263M on a sequential basis in 4Q11
• BB&T:
• Interchange revenue fell from $208.4M in 3Q11 to $63.2M in 4Q11
89. What are the critical challenges facing Credit Unions?
Business Model
Change
Non-Traditional Capital Preservation
Players/ New Entrants & Creation
Technological
A New Economy
Advances
- Slower Growth
Shifting Regulatory
Demographics Change
Payments Risk & Fraud
Transformation Management
Empowered
Consumers