1409 evolution of branch banking final - fis...
TRANSCRIPT
Evolution of Branch Banking
May 2017
Jeanette Garrett, Senior Director Debit Strategy
Kevin Kerridge, President/CEO, SeeTek, LLC
1920s style of banking
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1980s style of banking
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Current branch transformationsDriving consumers to digital
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Brick & Mortar Transformation is not enough
The Challenge
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Solving the Growing Bank Desert Challenge Across America!
Bringing basic banking to the people where traditional branches are no
longer viable
Reaching out to an untapped market of 150 million Bank Challenged
Americans
Bank Challenged Households by Region and State
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Bank Deserts
Bank Deserts – What are they?
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• Geographical gaps with inadequate banking services
• Especially vulnerable are low-income residents and elderly.
• Derived from the notion of “food deserts” or areas “without access to fresh, healthy, and affordable food” – USDA, n.d.
• Small towns and inner-city neighborhoods are losing their access to financial services.
• Lack of depository institutions may force residents to pay higher prices for lower-quality products
• Zip codes that contain no or a limited number of bank branches as a proportion of the population
• Analyses separates urban and rural areas (population cut off of 5,000 for rural areas)
University of Wisconsin, Whitewater Study - 2015
Urban and Rural Bank Desert States
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Top Desert StatesUrban Bank
Deserts
Rural Bank
Deserts
California 62 48
Texas 36 46
New York 32 18
Pennsylvania 21 35
Ohio 18
Florida 17 63
Illinois 13
New Jersey 13 11
Missouri 11
South Carolina 20 20
Tennessee 19 19
Virginia 19 19
Bank Desert Examples
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Nevada – Shaded zip codes with no banks Kentucky – Shaded zip codes with no banks
Banks compared to payday lenders in California
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Cost to be Bank Challenged
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• Alternative Financial Services Generated $320 Billion in Volume Including Interest, Fees and Penalties ($98mm)
• National Average to Cash Check $40.00
• National Average to use Check Cashers
=10% of income/year ($3500-$4500/yr)
• Composed of people:• 30 million using FISCA check cashers now
• $106 Billion worth of checks/year
• 80-90% Payroll checks
• 180 million checks
• Average check $420.00
• Family income of $35,000 to $45,000+/year
FDIC, October 2014
Thinking outside the box!
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Leveraging new technology
Mini Branch Terminals
The Trusted Gate Keeper for the FI
A new untapped Bank Challenged market awaits…
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Next Evolution of Branch Banking
Why a “Mini Branch” and why now? Your competition knows!
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• Businesses must evolve or become obsolete. Such is the case with
traditional bank branches.
• Check Cashers and Pay Day Loan businesses know these 3 KEY business
practices:
– Location, go to the people
– Customer Service, smile at the people
– Products, that are easy to understand for the people
• RESULT: 13-15% Growth Rates into Bank Desert Regions and FISCA has
grown at a whopping 30% since 2000.
Partnering with SeeTek to bring a GROW strategy to Debit 2.0
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STARTFlavors of
Instant
Issuance
SAVECompetitor
insights for
cross sell
PAYTokenization
and Mobile
Wallets
GIVEEngage with
Charitable
giving
GROWAddress
Under and
Unbanked
Paradigm shift in banking
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Bridging the gap between bankable and unbankable markets
• Go to the people
– Connect with retailers in bank deserts where consumers shop/cash
checks or in the same community with check cashing services
• Customer Service at its best
– Retailers are providing an in-person shopping experience
– Familiar staff making referral to open an account
• Full service experience
– Utilize technology to streamline account opening while mitigating risk
– Provide debit card on site
– Online Banking suite with options to assist lower income consumers
Mini Branch = Customer Service
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Consumer Benefits
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• Banking relationship – having a relationship with a financial institution allows the consumer to feel important and a place to go for other financial services.
• Lower financial servicing fees - no more check cashing fees
• Online Bill Payment – no more money orders and cash payments to deliver for utilities/rent
• Online Money Transfers – send money to family members nationally/internationally
• Prepaid Long Distance – easy access to purchase minutes
• Cell Phone Top Up – easy access to keep phone turned on
Bank Challenged Market Size
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• 150 mil unbanked/underbanked (FDIC Oct ‘14)
• $2.4 Trillion of Economic Market Value
• $320 Billion of Alternative Financial Svcs Volume
• $39 Billion of Prepaid Card Volume 2009
• $57 Billion of Prepaid Card Volume 2011
• $77 Billion of Prepaid Card Volume 2012
• $167 Billion of Prepaid Card Volume for 2014
• $417 Billion Projected PPC Volume for 2017
• Prepaid Card Life Span of ONLY 2 - <6 months
Bank Account/Debit Card Life Span of 8-10 years
Mini Branch Captures a $320 Billion Bank Challenged Market
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SWORD the Trusted Gate Keeper
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• Delivering a basic bank account with debit card only access.
• The DebitBankAccount™ (checkless checking) that is simple and
easy to understand.
• No checks, no NSF fees, no credit cards, no complex paperwork,
no mailed statement, no confusion
=NO PROBLEMS.
SWORD® TechnologyPro-Active Fraud Elimination
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• Forensic Authentication of Prospects ID using Light & OCR* to Prevent Fraud
– Authenticates 3200+ Gov’t Issued ID Cards Domestic & Foreign
• Forensic Authentication of Person
– Database of 28 International Watch Lists (OFAC’s, 5 FBI lists, Interpol, etc), a world wide
list of 3.4 billion people in 157 nations in 43 industrialized countries
• Forensic Authentication of the Check using OCR to Prevent Fraud
– Database of Personal & Corporate Checking Accounts
*OCR: Optical Character Recognition
Patented SWORD Technology
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• Pro-Active “Forensic KYC” of ID and Check before the fraud enters your systems!
• Meets and exceeds all US Treasury, FinCEN & FDIC rules and regulations.
• Certified on VISA, MC, AMEX, Discover, Star and soon NYCE.
• Satisfies the banks “wish list” for branch of the future!
• Inexpensive branch distribution without any legacy costs!
• Provides basic banking to a NEW UNTAPPED market of 150 million American’s.
Financial Institution Benefits
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• Expand footprint with lower investment
• Increase deposit accounts
• Increase debit card transactions
• Increase revenue
• Potential to cross-sell savings account and small loans
• Providing services to an underserved market
Making a difference in the lives of
people living in a bank desert!
More ??
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Visit SeeTek Booth # 33
to see a Mini Branch demo and
Learn More!
