Building the eBank Value Proposition

TonyTorero.com Consulting, LLC

Contact: (913) 538-1572

February 2011

Building the eBank Value Proposition

Agenda 1. Objective Definition

2. Facts and Figures

3. The eBank Value Proposition - Scope

4. The 7 eBank Commandments Explained

5. Tools of Execution

6. Summary & Game Plan

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• The Community FI is at NO disadvantage to the large,

national box banks with their online presence. Quite the

opposite actually; they have the ability to leverage

strategic technology vendors to offer a combination of

technology and human attention to their needs that box

banks are unable to match.

• What they often lack are the resources to leverage this

advantage to the fullest. This is the gap we will fill;

allowing them to be bankers while we also allow them to

maximize the investment in their online presence and

make use of a team that will offer a unique skill set that

most Community FI’s can’t afford to keep on payroll.

Objective Definition

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Facts and Figures – Part I

• Banks see online banking as a value-added customer service, and are taking great

pains to create user experiences that reinforce customer trust and a recognition of

what every online customer wants: convenience and speed at low cost. ¹

• While about 95 million U.S. households use the Internet, 72.5 million of those

households participate in online banking, with 36.4 million using online bill pay.

Those numbers represent a 51 percent increase in Internet usage per household

since 2000, and an even larger increase of 84 percent in online banking and 78

percent in online bill pay.

• One area of weakness could be among Generation Y, consumers born between the

late-1970s and the late 1990s, who are adopting new technology at a high pace, but

are more likely to pay through a biller direct service.

• Online banking and bill payment are no longer "early adopter" technologies, and

often lead to increased customer loyalty.

• While consumers often hear about online options through word of mouth, bank

branches have the best opportunity to educate customers on the services they

provide.

• Online banking and mobile payments are growing at a faster pace than the Internet. ²

¹ http://www.forbes.com/bow/b2c/category.jhtml?id=3

² http://www.banktech.com/channels/showArticle.jhtml?articleID=225200064

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Facts and Figures – Part II

• 72% of North American bank technology executives expect their budgets to

stay the same or decrease in 2010, according to a recent Aite Group report.

As a result, banks seeking to improve efficiencies, reduce costs and free up

capital are increasingly turning to outsourcing, according to reports.

• Thanks to a combination of demographic trends, technology capabilities and

uncertainty in the banking competitive arena, personal financial management

(PFM) tools -- online resources geared toward helping consumers and small

businesses manage their finances -- really took off in 2009 and are likely to

present an even greater opportunity (or threat) to banks in 2010. PFM looks

to be an ideal way for banks to improve customer experience and loyalty and

to leverage their online banking platforms. Banks are in a prime position to

help customers take more control over their finances. But PFM's growing

popularity also raises the specter of disintermediation. The leading PFM

players, including Mint (acquired recently by Intuit), Geezeo and Yodlee, are

simultaneously potential partners and competitors to banks. ¹ ¹ http://www.banktech.com/management-

strategies/showArticle.jhtml;jsessionid=GF45KRBAEQHCZQE1GHPSKHWATMY32JVN?articleID=2220

02892&pgno=2

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The eBank Value Proposition - Scope

• Just as the community FI value proposition consists of offering an

unparalleled combination of human and technological contact &

service, the online channels can offer the same marriage of old

(traditional) and new.

• In other words, we will offer our customers a strategic framework that

leverages the bank’s investment in their Technological Infrastructure

as well as opening up new web & Marketing opportunities by applying

a series of 7 eBanking commandments that will:

– Put eBanking controls firmly into the customer’s hands.

– Empower customers to communicate with their bank

when, where & how they want.

– Provide simple, easy to use tools that let customers

control their money, their finances and how they

communicate economically with the world.

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The 7 eBank Commandments Explained

1.Listen to me & Respond accordingly (Make me

feel important) Just like a branch customer, an eBanker wants to feel

important. They like to influence their eBanking experience.

They want the eBank to listen to their concerns and

suggestions and respond accordingly. They compare the

bank’s Web experience to every non-bank experience and

transfer those expectations from company to company. The

serious eBanker seeks a partner that appreciates new ideas

from a wide range of sources. Therefore, in designing the

eBank experience for our clients, we must compete against

a wide range of user expectations in terms of ease of use

and functionality and pursue continuing research on user

preferences.

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The 7 eBank Commandments

Explained

2.Personal Touch

eBankers do not see the Web experience as a separate

service or a replacement for the branch necessarily, but

as an extension of the overall bank experience. They

perceive relationship banking as an integrated

experience that works seamlessly, regardless of how

they choose to interact with the bank. They see the Web

as an integral part of all their personal relationships and

a way to enrich those relationships. They see no real

distinction between visiting a branch and researching or

interacting with a bank online. Therefore, we need to

intertwine the Web experience for our customers into all

the aspects of personal relationship banking rather than

treat it as a distinct channel.

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The 7 eBank Commandments

Explained

3.Seamless Assistance with my Banking Needs

eBankers want to be able to conduct a full range of

transactions online, from opening accounts to chatting

with a customer support person. They are likely to seize

upon a range of imbedded functionality that will put them

in direct, real-time contact with eBank support staff as

well as their personal banker. These users see email,

texting or instant messaging in the same light and view

them as largely interchangeable. The eBanker now

expects their online tools to give them the power to

manage their finances, budget for current & future needs,

financially forecast and give them the option of taking as

firm control of their finances as they wish, whether

they’re on their computer or mobile device.

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The 7 eBank Commandments

Explained

4.Banking my way (Let me choose how to

use/customize web tools)

The more advanced eBankers want to be able to

customize their Web experience. Every eBanker is

concerned about security but this group is even

more aware of the paramount importance of proper

online security. They even prefer to be able to set

their own security levels based on their personal

risk assessment to meet their unique needs. They

want to add features at their discretion and add or

delete optional services on demand. Consumers

want choices and the ability to customize the Web

experience. 10

The 7 eBank Commandments

Explained

5.Tools to better manage my money (PFM

Tools) The advent of online Personal Financial Management (PFM)

services has put a dent into Quicken’s stronghold within the

PFM market. Many more users are seeking a simple set of

tools to better manage their personal finances. A basic,

integrated PFM capability has become increasingly

important with the ability to set up and track budgets and

expenditures. In these difficult economic times, users are

seeking an easy way to better manage their finances and

build net worth. eBankers are seeking impartial and helpful

financial advice from a reliable source. Therefore, we need

to encourage our customer to leverage their trusted

relationship with the bank, which has historically occurred

as a result of our branch presence. 11

The 7 eBank Commandments

Explained

6.Social Networking For many eBankers, social media sites, such as Facebook, have become an

integral component of their day to day lives. They develop or nurture

relationships that impact their business decisions, as well as their friendships

and professional ties within these social spheres. Increasingly, these sites

have become an influential source of impartial information, advice, and

guidance. Business Reputations & Brand Equity are made or broken with

feedback from customers. Referrals are generated between network members

based on past experiences. This form of word of mouth marketing is always

the best, and the least expensive, marketing. Therefore, we need to help our

customers understand the vital importance of tapping into these networks,

monitoring this feedback and encouraging positive “viral’ marketing where

possible. Simply put, when it comes to social networking, forward thinking FI’s

should strongly consider testing this blue ocean while its still blue because:

– It costs little if any to introduce your business within this sphere.

– If you don’t protect your brand on the social networking airwaves,

somebody else is liable to do it for you!

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The 7 eBank Commandments

Explained

7.Viral Marketing A true community bank has a unique ability to differentiate

itself in the local market by adding a personal touch that a

large, box bank cannot replicate. In that sense, the driving

philosophy behind eBanking is really no different than the

branding and positioning we apply to the FI’s overall image.

Some examples of Viral Marketing on the web may include:

offering a humorous twist to financial advice via a blog or

micro-site or highlight local events in a unique and

distinctive manner via social networking sites. Since we

know each eBanker when they log-in, we have a unique

ability to deliver a level of personal response, on a mass

basis, that is unprecedented in banking. Our strategy

should look to highlight opportunities to add a personal or

local touch wherever possible. 13

Tools of Execution

• It is Crucial to note that the 7 eBank Commandments

represent a framework and strategy. The actual tactics

employed to address the needs of each bank under the holding

company will vary depending upon their individual eBank

strategy that is developed & agreed upon.

• The tools employed to execute the tactics that will be developed

with customers will include, among others:

– eBank Site & Platform Strategic Planning, Design & Implementation

– Online Marketing Efficiency & Profitability Reporting & Analysis

– Social Media Integration with Web Marketing Strategy

– SEO & SEM Consulting and Strategy

– Sophisticated Analytics

– Website Usability Studies

– Concentrated eMail Marketing (e.g. Drip & Custom Campaigns)

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Summary & Game Plan – Part I

• Part web development, part eMarketing, part product and

services discovery & optimization… we will work tirelessly

with a hands on, exhaustive approach to help the bank’s

create a unique customer experience & realize the full

technological potential that is available to them.

• We will develop a standardized, yet dynamic series of lists of

tactics our team will offer under each strategic area we will

offer our banks though one size will most definitely not fit all!

• We will review each bank’s web marketing presence,

analytical data as well as the overarching online banking

suite to best gauge how the 7 eBank commandments can

best help each institution reach their communities.

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Summary & Game Plan – Part II

• Advanced Mobile & Tablet devices will usher in a blue ocean

opportunity centering around mobile payments. We will

discover the best opportunities for partnership, resonance &

ubiquity.

• Social Media doesn’t end with Facebook. We will leverage

the infinite tools within the SM Universe to communicate &

engage customers in new ways.

• Determine what emerging eBanking technology areas we

lack or underutilize today that could be worth making a

strategic focus for growth & penetration?

• How do we get our internal customer/employee base

engaged and euphoric in evangelizing our message and

excited about our presence & product suite? 16

Conclusion

• Thank you for the opportunity to present this

framework. I believe we could use it to

accomplish something special!

“The Web as I envisaged it, we have not seen it yet.

The future is still so much bigger than the past.”

“You affect the world by what you browse.”

- Tim Berners-Lee: Creator of the World Wide Web

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