Retail Banking Consumer Channel Preferences

1. Retail Banking Consumer Channel Preferences Statistics to Know

2. Statistics to know about… The State of Retail Banking

3. Over the Last 10 Years U.S banks have been acquired, merged, or failed. Source: FDIC Historical Statistics on Banking, 2013

4. Competition likely to remain intense Number of banks in the United States Source: FDIC Historical Statistics on Banking, 2013

5. Interest rates likely to remain low Source: Federal Reserve Bank of St. Louis Economic Research, 2013

6. Consumer sentiment is mixed The Good: The Bad: 50% of U.S. adults favor a plan to break up the top 12 big banks 71% say the government should let troubled banks go out of of business 36% support more government regulation of the financial industry • 2013 U.S. retail banking customer satisfaction up 10 points from 2012, to 763 out of 1,000 • 33% of customers say they “completely” understand their fee structure, compared with 26% in 2012 Source: JD Power 2013 US Retail Banking Satisfaction Study, 2013; Rasmussen Reports Survey, 2013

7. Statistics to know about… Mobile Technology in Banking

8. Smartphone users check their phones times each day. Source: Infosys Report “Engaging with Digital Customers,” 2013

9. Device multiplication Percent of American Adults 18+ Who Own Each Device Source: Pew Research Center, Internet and American Life Project, 2006-2013

10. Reaching consumers where they are Device Share of Website Traffic Source: Infosys Report “Engaging with Digital Customers,” 2013

11. Almost 1/3 of all online banking users access it via their mobile devices Young adults (aged 18-32) are 3x more likely to use mobile banking Consumers tend to interact with their financial institution 45% more often if they use a combination of both mobile and online tools Mobile banking: present Source: Digital Insight Report, “The Future of Financial Services,” 2011

12. By 2016 the number of US consumers using mobile banking will increase from 33 to 96 million Balance queries from tablets is expected to jump from 14 to 27 million by 2013 and to 55 million by 2016 Credit unions are outperforming community banks in mobile banking, with 9 out of 10 offering web-based mobile banking Mobile banking: future Source: Aite Group Report, “Mobile Banking Forecast: Smartphone and Tablet Use in the United States,” 2012

13. Statistics to know about… How Consumers Shop for Financial Products

14. of consumers research financial products online. Source: Andera and Novarica Report, “How Consumers Select and Purchase Financial Products,” 2013

15. Behavioral segments have emerged • They rely on the branch as their primary channel and tend to make 3-4 visits per month • They tend to value relationships with branch staff more than the average consumer • They are slightly lower income than the average consumer • They rely on both the branch and the online channel to conduct transactions, visiting the branch about as often as the branch traditionalist but also interacting through digital channels • They tend to keep slightly larger deposit and loan balances • They tend to be slightly younger than the other two consumer segments • They conduct most of their transactions either online or via a mobile device • They are, on average, cheaper to serve because they require less staff time • They can only be cross-sold through digital channels • Virtual Domiciles • 25-35% of consumers • Branch Traditionalists • 25-40% of consumers • Multi-Channel Consumers • 35-45% of consumers Source: Novantas Report, “U.S. Multi-Channel Customer Research 2012: The Rise of the Virtually Domiciled,” 2012

16. Where consumers prefer to shop Research channel preferences by product type Source: Andera and Novarica Report, “How Consumers Select and Purchase Financial Products,” 2013

17. Cross-sell is an opportunity Percent of US household financial products held… Source: Deloitte, “Kicking it up a notch: Taking retail bank cross-selling to the next level,” 2013

18. Advice is differentiator “What product or service is most effective at attracting NEW clients in 2012?” “What product or service is most effective at engaging EXISTING clients in 2012?” Source: WISE Gateway Executive Survey, 2012 via Clientific 2013

19. Statistics to know about… Online Account Opening

20. In 2012 Million People Attempted to Open an Account Online. Source: Javelin Strategy & Research Report, “How to Upgrade Online and Mobile Account Opening for an Omnichannel Era,” 2013

21. Online account openers are different Younger Wealthier Source: Andera Report, “The Future of Account Opening,” 2012

22. Online account opening is cheaper Average cost of acquisition by channel Source: Andera Report, “The Future of Account Opening,” 2012

23. Up to 75% of don’t make it through Average applicant abandonment Source: Andera Report, “Seven Reasons Applicants Quit,” 2013

24. Mobile account opening Source: Andera Report, “Mobility Trends 2013” 2013

25. Statistics to know about… The Evolution of the Branch

26. Branch transaction volumes have declined by: Since 1992 Financial Management Solutions Inc., Teller Line Survey, 2013

27. Channel preferences for transactions Consumers prefer the branch for higher-touch services Source: Novantas Report, “U.S. Multi-Channel Customer Research 2012: The Rise of the Virtually Domiciled,” 2012

28. Today there is approximately one bank branch for every 1,000 households in the U.S. The total number of branches peaked in 2009 and has declined by 1,600 since then Performance of recently openedbranches has been declining; median deposit volume for branches opened in the last 5 years was $19 Million Branch facts Source: Bancography Report, “The Branch in the Age of Automated Banking,” 2012

29. Mortgage shopper channel preference Branch still plays an important role for complex products Preferred Research Channel Preferred Channel to Open Branch Phone Source: Andera and Novarica Report, “How Consumers Select and Purchase Financial Products,” 2013 Online Advice Mail Visit Branch Online Phone

30. Sources & Links • Andera and Novarica Report, “How Consumers Select and Purchase Financial Products,” 2013 • Andera Report, “Mobility Trends 2013” 2013 • Andera Report “Seven Reasons Applicants Quit,” 2013 • Andera Report, “The Future of Account Opening,” 2012 • BancographyReport, “The Branch in the Age of Automated Banking,” 2012 • Digital Insight Report, “The Future of Financial Services,” 2011 • Deloitte Center for Financial Services Report, “Kicking it up a notch: Taking retail bank cross-selling to the next level,” 2013 • Federal Reserve Bank of St. Louis Economic Research, 2013 • Financial Management Solutions Inc., Teller Line Survey, 2013 • Infosys Report, “Engaging Digital Customers,” 2013 • Javelin Strategy & Research Report, “How to Upgrade Online and Mobile Account Opening for an Omnichannel Era,” 2013 • JD Power, 2013 US Retail Banking Satisfaction Study, 2013 • NovantasReport, “U.S. Multi-Channel Customer Research 2012: The Rise of the Virtually Domiciled,” 2012 • Pew Research Center, Internet and American Life Project, 2006-2013 • Rasmussen Reports Survey, 2013 • WISE Gateway Executive Survey, 2012 via Clientific2013

31. About Andera • We opened the first deposit account online in 2004 • Today we provide a multichannel account opening and loan application called oFlows • oFlows won “Best of Show” at Finovate four times • We serve 550+ banks & credit unions, including: