REVVING UP RDC TO MAKE BUSINESS MOBILE DEPOSITS PRESENTED BY JON MICHELSEN, FISERV BRIAN COLLINS, ENTERPRISE BANK

Transcription

1 REVVING UP RDC TO MAKE BUSINESS MOBILE DEPOSITS PRESENTED BY JON MICHELSEN, FISERV BRIAN COLLINS, ENTERPRISE BANK

2 AGENDA Industry Trends Jon Michelsen, Vice President, Business Development Director, Fiserv Revenue Opportunities Jon Michelsen Business Needs for Mobile Banking Jon Michelsen Enterprise Bank Experience Brian Collins, Director of Operations, Senior Vice President, Enterprise Bank

3 INDUSTRY TRENDS

4

5 MORE FINANCIAL INSTITUTIONS ROLLING OUT BUSINESS MOBILE Q. Which of the following are/were drivers for your institution to roll out mobile banking capabilities to your cash management customers? (N=32) Necessary to remain competitive Presents increased 97% 94% Assists with customer retention 78% Helps meet customer demand Presents bank as being Provides differentiation in my 44% 44% 41% Offers a potential new stream of 22% Source: Aite Group s survey of 32 of the top 50 U.S. banks, June 2013

6 MOBILE BANKING FUNCTIONALITY Q. On a scale of 1 to 5 (with 5 being extremely likely ), how likely is your bank to roll out each of the following mobile banking capabilities to your cash management customers over the next 2 years? (N=32) Check balances 44% 53% Account transfers 41% 38% 13% Approve wires 41% 44% 13% Approve ACH payments 28% 50% 16% Mobile capture 22% 41% 19% Positive Pay decisioning 19% 50% 19% Initiate repetitive payments 19% 22% 22% Password reset 16% 34% 6% Trade finance capabilities 9% Perform FX transactions (i.e., locking in rates) 6% Already offer Extremely likely (5) Likely (4) Source: Aite Group s survey of 32 of the top 50 U.S. banks, June 2013

7 REVENUE OPPORTUNITIES

8 KEY VALUE DRIVERS Maximizing mobile business users will maximize your ROI High cost channel reduction Customer acquisition & retention Cross-sell opportunities Revenue generating opportunities

9 CUSTOMER ACQUISITION & RETENTION MOBILE IS AN IMPORTANT CRITERIA IN NEW BANK SELECTION Q: Regardless of whether your business plans to switch financial institutions, if you were to look for a new banking relationship, how important a consideration would mobile banking (smartphone or tablet) capabilities be? Not important at all 21% Very important 22% Over 50% of businesses consider mobile banking an important offering Only a little important 7% Important 29% Neutral 21% Source: Aite Group survey of 1,003 U.S. businesses generating less than US $20 million in annual revenue, September 2013

10 CUSTOMER ACQUISITION & RETENTION MOBILE BANKING CUSTOMERS SPEND MORE ON BANKING Q: Approximately how much does your company spend monthly with your bank or credit union on products and services such as online banking and payroll (not including interest on credit products)? Already use mobile banking (n=321) 16% 12% 13% 15% 19% 26% Likely to use mobile banking over the next year (n=311) 19% 14% 16% 16% 16% 20% Not likely to use mobile banking (n=371) 47% 24% 9% 6% 3% 11% $0 Less than $10 Between $10 and $25 Between $26 and $50 Between $51 and $100 Greater than $100 Source: Aite Group survey of 1,003 U.S. businesses generating less than US $20 million in annual revenue, September 2013

11 CUSTOMER ACQUISITION & RETENTION MOBILE BANKING CUSTOMERS HAVE MORE ACCOUNTS Q: Approximately how many accounts does your business have with its primary institution? (Segmented by likelihood to use mobile banking) Already use (n=321) 23% 54% 19% 4% Likely to use (n=311) 30% 54% 12% 3% Not likely to use (n=371) 54% 38% 5% 3% One account Two to three accounts Four to five accounts More than five accounts Source: Aite Group survey of 1,003 U.S. businesses generating less than US $20 million in annual revenue, September 2013

12 CROSS-SELL OPPORTUNITIES Q: How likely would your business be to look to its primary financial institution for each of the following if they were offered? (Percentages represent those stating they would) Back up data 11% 41% 51% Store images of important documents Ability to create and store legal documents 12% 10% 38% 39% 48% 47% Not likely to use mobile banking (n=371) Likely to use mobile banking over the next year (n=311) Already use mobile banking (n=321) Assistance with retirement planning for employees 9% 32% 42% Source: Aite Group survey of 1,003 U.S. businesses generating less than US$20 million in annual revenue, September 2013

13 REVENUE-GENERATING OPPORTUNITIES BUSINESS BANKING: FEES OR NO FEES? Q: Which of the following best describes your current or planned pricing model for corporate mobile? (N=32) Rather than charge a separate fee, we will bundle mobile with online banking and bump up the total monthly fee 44% 41% We do not currently or plan to charge for it (77% of these banks are already live with mobile) Undecided 3% 6% We will charge a monthly fee 6% We will not charge a monthly fee but will charge on a per-transaction basis Source: Aite Group s survey of 32 of the top 50 U.S. banks, June 2013

14 BUSINESS BANKING: FEES OR NO FEES? While many banks offer the mobile component of business banking for free, some banks do see potential revenue gain Forty-four percent of top 50 banks plan to bump up their monthly fees charged for online cash management Some financial institutions plan to charge fees in the $7- to $15-per-month range, with a new line item being added to online cash management fees for "channel access."

15 REVENUE-GENERATING OPPORTUNITIES SAMPLE FEE RANGES Type Range of fees Small business Description/ examples D. Mobile Native app $5-25/year To charge fees, there must be Two-way messaging $5-10/month features beyond standard account lookup. For example, Real-time transaction $2-10/month so-called actionable alerts confirmations (debit/credit) where subscribers can respond Positive pay: advanced $10-30/month directly to text messages to checking account item view take actions, such as transfer funds, approve a transaction, Receipt capture, scan and $5-10/month flag a fraudulent one and so store per user on. Remote check deposit $15-25/month for 25 items; then $0.50 each Source: Online Banking Report, The Finovate Group, September 2013

16 BUSINESS NEEDS FOR MOBILE BANKING

17 KEY DIFFERENCES FROM RETAIL MOBILE Owner Approver Administrator

18 SMALL TO MID-MARKET BUSINESSES FEATURES DESIRED Q: Please rate the importance of the following features when using a mobile device: Online banking users Mobile banking feature importance Top priority/very important ratings Small business $100K- <$10MM Middle market $10MM- <$500MM Ability to check business account balances 38% 22% Ability to photograph and deposit checks via mobile device 36% 13% Ability to transfer funds between accounts 34% 15% Ability to initiate an online bill payment via mobile device 31% 11% Ability to add or edit a bill payee via mobile phone (new) 30% 11% Ability to approve an electronic payment 26% 17% Ability to view and make decisions on positive pay exception items via mobile phone (new) 25% 13% Ability to initiate an online ACH payment via mobile device 23% 12% Ability to initiate an online wire transfer via mobile device 20% 12% Source: 2014 Business Internet Banking Report, Barlow Research Associates, Inc.

19 Percent very/somewhat likely to use mobile check deposit in next 12 months BUSINESS DEMAND FOR MOBILE DEPOSIT 100% 80% 60% 40% 20% 43% 26% 25% 40% 33% 21% 21% 22% 0% <25 25-< < Monthly average # of checks deposited Small business $100K-<$10MM Middle market $10MM-<$500MM Source: 2013 Business Internet Banking Report, Barlow Research Associates, Inc.

20 REQUIRE FLEXIBILITY TO SERVE GROWING BUSINESSES Small Business Lifecycle Investing Expanding Maturing Starting Up Stabilizing

21 ENTERPRISE BANK BRIAN COLLINS

22 ABOUT ENTERPRISE BANK Enterprise Bancorp, Inc. (NASDAQ: EBTC) is a Massachusetts corporation that conducts a substantial amount of its operations through Enterprise Bank. Headquartered in Lowell, MA, opened in Total assets = $2.0 billion Total deposits = $1.7 billion Primary market area is northern Massachusetts, where it has 16 branches, and Southern New Hampshire, where it has 6 branches

23 TRADITIONAL BUSINESS RDC TIMELINE & HISTORY 2006: RDC program launched 2010: Single Feed Scanner introduced to product line 2011 Celent Model Bank Award 2012: Reached over 1 million items deposited 2014: 838 clients with 586 scanners deployed 33% are single feed with 60% of deployments this type since % of all deposited items come in from the RDC channel

24 PERSONAL MOBILE BANKING IS GIVEN NEW LIFE In Q4 2012, Enterprise Bank re-launched its Personal Mobile Banking platform and began offering an app based solution for Apple and Android devices. An Amazon Kindle app was launched later in Q

25 PERSONAL MOBILE BANKING RESULTS Penetration jumped from 13% to 41% of personal online banking users with 97% choosing the app vs the SMS or browser options 22% of the active app users made a mobile deposit Penetration has reached 68% of personal online banking users with 98% having chosen the app vs the SMS or browser options 40% of the active app users made a mobile deposit

26 SUCCESS LEADS TO NEW OPPORTUNITIES When can we have this for business? Action: In 2013 > small business checking linked to retail online banking Product had a flat monthly fee for unlimited free mobile deposits with a cap of $5,000 per day Lessons learned: Small businesses think like consumers in desire for services but also in desire for similar fee structures! Did not like a flat monthly fee rather, they would like to pay for the services when they use them Needed other cash management services that were not available in retail online led to confusion

27 STOP, RESET, BEGIN AGAIN Sunset the small business checking initiative Signed on as a beta with Fiserv in Q for Mobiliti Business, a business mobile app with mrdc that integrates with Business Online banking Began pilot of app in Q Launched app in Q Open to all business customers Mobile deposit with higher default daily limit Expanded the business RDC product line High Speed Mobile RDC Single Feed

28 Questions? Jon Michelsen, Vice President, Business Development Director, Fiserv Brian Collins, Director of Operations, Senior Vice President, Enterprise Bank