mobile application: mobile banking – pda project

Mobile Application:Mobile Banking – PDA Project

Subjects

BANCO DO BRASIL Brazil The “Banco do Brasil” Mobile phone service Mobile Project Available Platforms Next steps

CITIBANK BRAZIL

Citibank - Brazil

Why wireless technology?

How it was born

Main Benefits

Investments / Payback

Brazil

The “Banco do Brasil”

Mobile phone Service

Mobile Project

Available Platforms

Next Steps

Gabriela Zinn Salvucci

Subjects

Population – 184,1 million inhabitantsPopulation – 184,1 million inhabitants

Produto Interno Bruto – R$ 1,500 billiionProduto Interno Bruto – R$ 1,500 billiion

PIB per capta – R$ 9,1 thousandPIB per capta – R$ 9,1 thousand

Telephones quantity – 41,4 millionTelephones quantity – 41,4 million

Cellphones quantity – 76,6 millionCellphones quantity – 76,6 million

Internet home users – 18,5 millionInternet home users – 18,5 million

Broadband connections – 3,1 millionBroadband connections – 3,1 million

Summary of Brazil

Brazil

The “Banco do Brasil”

Mobile phone Service

Mobile Project

Available Platforms

Next Steps

Subjects

Leadership in assets – R$ 233,7 billion.Leadership in assets – R$ 233,7 billion.

1st in total deposits – R$ 154 billion.1st in total deposits – R$ 154 billion.

Greatest credit portfolio – R$ 96,1 billion.Greatest credit portfolio – R$ 96,1 billion.

Greatest service-delivery network in Brazil – 14,6 thousand service Greatest service-delivery network in Brazil – 14,6 thousand service outlets.outlets.

Greatest ATM network in Latin America – 39 thousand terminals.Greatest ATM network in Latin America – 39 thousand terminals.

Greatest client base: 21,9 million.Greatest client base: 21,9 million.

Network abroad – Network abroad – 37 branches.37 branches.

Leader in Internet services – 6,9 million clients.Leader in Internet services – 6,9 million clients.

Leader in the management of third-party resources – R$ 144,8 billion.Leader in the management of third-party resources – R$ 144,8 billion.

Leader in the foreign-exchange and export commercial segment – Leader in the foreign-exchange and export commercial segment – 27,9% market share.27,9% market share.

Leader in credit and debit card billing – Leader in credit and debit card billing – R$ 11,1 billion.R$ 11,1 billion.

Main financial agent for agrobusiness.Main financial agent for agrobusiness.

Source: Banco do Brasil Report Performance Analysis and Accounting Statements 2005 of Performance Banco do Brasil – 2st quarter of 2005

“Banco do Brasil”: Figures that foster development

Brazil

The “Banco do Brasil”

Mobile phone Service

Mobile Project

Available Platforms

Next Steps

Subjects

Argentina Chile

México

Source: Agências Regulatórias, Ministérios e Operadoras Internacionais – publicado no Site Teleco

4

5

6

7

8

9

2001 2002 2003

Population: 37 milhõesCellphones : 8,3 milhões

Participation: 22% México0

2

4

6

8

1999 2000 2001 2002

Population : 15 milhõesCellphones : 7,3 milhões

Participation : 50%

China

0

50

100

150

200

250

300

1998 1999 2000 2001 2002 2003

Population : 1,3 bilhãoCellphones : 257 milhões Participation : 20%

Phones Cellphones

0

10

20

30

40

1995 1997 1999 2001 2003

Population : 103 milhõesCellphones: 30 milhões Participation : 29%

International Mobile phones market share

0,00 0,01 0,03 0,19 0,76 1,42 2,74 4,557,37

15,03

23,19

28,75

34,88

46,37

65,61

89,00

0

10

20

30

40

50

60

70

80

90

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Brazil is the 5th mobile phones market share in the world and the 2nd in America (1st USA).Brazil is the 5th mobile phones market share in the world and the 2nd in America (1st USA). 38 cellphones for 100 inhabitants (Distrito Federal level = 101).38 cellphones for 100 inhabitants (Distrito Federal level = 101). 80% prepaid cellphones.80% prepaid cellphones. 11,2% of the families have cellphones as the only way to comunicate (IBGE)11,2% of the families have cellphones as the only way to comunicate (IBGE)..

Source: Anatel2005 – Estimate from “Teleco”

89 MILLION CELLPHONESESTIMATE FOR DEC/05

Brazilian mobile phones market share

Brazil

The “Banco do Brasil”

Mobile phone Service

Mobile Project

Available Platforms

Next Steps

Subjects

The increase of cellphones users.The increase of cellphones users.

Mobile Banking has a greater potential in terms of market penetration.

compared to Internet Banking, mainly for the low level population.

New mobile technologies advance, which provides secutrity and performance New mobile technologies advance, which provides secutrity and performance

requirements.requirements.

Searching for safe, comfort and low cost self-service channels.

The successful case in BB using alternative channels.The successful case in BB using alternative channels.

86%89%

90%

2002

Agency transactions

83%

2003 2004 2005

Alternative Channels

Why Mobile Project was created at “Banco do Brasil”

Aug/2000 SMS messages project release

Mobile Banking service using WAP 1.0 platform release

Sep/2003 Mobile Banking was released in partnership with Mobile GSM Operator

(Telemar/Oi) (pioneer in using GSM platform – the begginning of a complete mobile banking)

Sep/2004 Mobile Banking was released with the “Brasil Telecom” GSM Operator

(pioneer in using dinamic menus template)

Mar/2005 Mobile Banking was released with the VIVO operator

(pioneer in using download banking template with the CDMA/Brew Platform)

Mobile Banking at “Banco do Brasil”

More convenient and safe transactions.

Cost reduction – migration or evolution to low-cost

mobile channels.

Mobile Banking is available anywhere in Brazil.

Does not represent a cultural or economic barrier for

new users of electronic banking. It’s easier to learn to

use and to buy the cellphone than the PC.

Advantages in using Mobile Banking

Internet Banking

Mobile Banking

R$ 1.500,00

R$ 52,90R$ 38,00 + R 14,90

Telephone contract + internet provider

R$ 0,33**at least 12 minutes using Internet

4 minutes cost: R$ 0,11

R$ 149,00 Varejo

R$ 1,00 Corporate

R$ 37,90Oi contract 40

R$ 49,90Corporate Oi

contract

DEVICE

COMUNICATION

TRANSACTIONS R$ 0,15/Trans.

R$ 0,15/Trans.

Users costs

¿Why using Mobile Banking?

Account balances

Account extracts

Savings balance

Payment of accounts and bills.

Transfers between “Banco do Brasil” accounts.

Transfers between accounts from other banks.

Prepaid cellphones credit recharge.

Donations for “Fome Zero" program.

Loans.

Bank account holder can achieve the following transactions

Participation % of transactions

Prepaid recharges21,45%

Account balance35,26%

Transfers betw een BB accounts

2,67%

Transfers betw een BB and other banks

0,13%

Others0,27%

Payments1,27%

Savings balance0,16%

Account extract38,79%

Mobile Banking BB – transactions access

Mobile Banking BB - Performance

Brazil

The “Banco do Brasil”

Mobile phone Service

Mobile Project

Available Platforms

Next Steps

Subjects

Each Chip has a BB key to develop criptography.Each Chip has a BB key to develop criptography. Only BB can has access to information sent by customers.Only BB can has access to information sent by customers. All transactions use short message system (SMS) to carry information forward “Banco do All transactions use short message system (SMS) to carry information forward “Banco do

Brasil” and the operator.Brasil” and the operator. No Internet connection required.No Internet connection required.

Oi chip sample, which holds the mobile banking solution of “Banco do Brasil”

GSM Platform (SIM Card)

Vivo/Brew

2nd mobile banking case in the world and 1st

being used.

The solution was one of the greatest finalists at

the Brew Developers 2005 award, which

chooses the best and most innovate projects

developed using wireless technology.

How to use: download the application at the

Vivo Operator website, using the cellphone.

Safe transactions that use peer to peer

criptography.

CDMA / Brew Platform

Used both in GSM and CDMA platform cellphones.

The customer connects to the Internet WAP2 website of “Banco do Brasil” to have access to the bank account, or through the Operator website.

WAP2 platform provides Internet security, through proper mobile devices criptography (based in SSL).

WAP 2.0 Platform

Operator accepts cellphone number and

sends an SMS containing the transaction

information to the customer

Customer receives SMS containing information about the transaction

performed at the alternative channels

“Banco do Brasil” performs the

transaction asked by the customer and

returns information to the operator

Customer performs any transaction through

any alternative channel

SMS Banking Platform – sending information

Operator accepts cellphone number and sends information to

“Banco do Brasil”

Customer sends SMS asking for a Ballance (B),

an Extract (E) or a Recharge (R)

“Banco do Brasil” performs transactions

asked by the customers and returns information

to the Operator

Operator delivers the information and/or confirmation of the

transaction

Customer receives SMScontaining the Balance or Extract information

or Recharge confirmation

SMS banking can be used through any cellphone, regardless of the technology SMS banking can be used through any cellphone, regardless of the technology

and/or platform.and/or platform.

It’s a perfect platform to the most usual and low complexity level transactions.It’s a perfect platform to the most usual and low complexity level transactions.

SMS Banking Platform – ask for transactions

Brazil

The “Banco do Brasil”

Mobile phone Service

Mobile Project

Available Platforms

Next Steps

Subjects

Make solution enabled for other Mobile Operators in Brazil.

SMS Banking:

Prepaid recharges through SMS project (still going)

SMS alerts (tests still going)

Mobile payments (still being studied)

Next Steps…

¿Any Questions ?

Citibank - Brazil

Why wireless technology?

How it was born

Main Benefits

Investments / Payback

Rogerio Vargas

Subjects

Continents

Countries

Currencies

Employees

190 years in the World

5

102

128

230,000US$ 700 bi

US$ 1,232 millionTotal Assets

Net Equity

Presence in the World

Presence in Brazil

Customers

Employees1.1 million

2,30010

51

US$ 5 bi

Cities

Branches

Total Assets

Citi has been present 90 years in Brazil.Business: Banking Area, Cards and Finance.

The 2nd biggest business card in the world (outside of the USA).

Citi has been present 90 years in Brazil.Business: Banking Area, Cards and Finance.

The 2nd biggest business card in the world (outside of the USA).

Citibank - Brazil

Why wireless technology?

How it was born

Main Benefits

Investments / Payback

Subjects

44

5 5 5

9

13 13

1113

1415 15 15

14

-5 -5 -5-7

-5 -5 -5 -5 -5 -6 -6-7 -7 -7

14

-7-6

148

148

148

147

146 15

0 159 16

7 173 18

0

192

229

222

207

21520

0

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

40

90

140

190

240New DDA Accounts Attrition EOP DDA Net

2002 2003 2004 2005

Current MYF

Why was the Direct Sales created ?

Started with 110 people and today more than 400 people.

We are present in 10 cities in Brazil.

The core of Direct Sales Area is to bring in new customers (created Jan/2003).

This business is done totally out of offices (wireless solution).

Main strategic objectives:

1. To develop an acquisition model.

2. To multiply the initial structure.

A few words about this business area…

Belo HorizonteSavassiMangabeiras

RecifeBoa Viagem

Ribeirão Preto AssembléiaIpanemaTijucaBarra da TijucaIpanema IIRio Office ParkBotafogoLeblonNiteróiJd,. Botânico

CuritibaBatel

SalvadorFarol da Barra

BrasíliaAsa SulLago Sul

Campinas

PaulistaIpirangaMoemaFaria LimaLapaTatuapéVila MarianaWTCHigienópolisPinheirosSumaré Real Park Mooca JKCampo BeloAlphavilleJardim EuropaBerriniSantanaChac.Sto.AntonioIndianópolisSto AndreV N Conceição

June 2005June 2005

MoinhosCarlos GomesSete de Setembro

Opened before 1998 (22)

Opened in 1998 (04)

Opened in 1999 (03)

Opened in 2000 (05)

Opened in 2002 (02)

Opened in 2003 (00)

Opened in 2004 (08)

Opened in 2005 (03)

TOTAL in 2005 (50)

What cities is the Direct Sales present?

What’s the importance of Direct Sales for the retail Citibank Brazil ??

The Direct Sales Area…

In 2 years the Direct Sales brought more than 77,000 customers, 40% with

monthly salary over US$ 3,000. And more ….

In 2 years it has achieved 9% share in the total revenues

of retail Citibank Brazil.

This area has 30% of Sales Managers and brings ...

70% of new customers

55% of new cards

22% of volume of personal loans

15% of volume of life insurance

15% of volume of on-shore investments

There are 5 steps in the People Pillar:

To implement this strategy, we need TECHNOLOGY.

To be able to multiply the initial structure several times, we need TECHNOLOGY.

To have information and communication (foundation to develop people), again only

with TECHNOLOGY.

INFORMATION COMMUNICATION INNOVATION ENTREPRENEURISM

KNOWLEDGE

Why Wireless Solution…

The Strategy of Direc Sales Area is based on 3 pillars:

1. People1. People

2. Process2. Process

3. Control & Quality3. Control & Quality

There are 5 steps in the People Pillar:

To implement this strategy, we need TECHNOLOGY.

To be able to multiply the initial structure several times, we need TECHNOLOGY.

To have information and communication (foundation to develop people), again only

with TECHNOLOGY.

INFORMATION COMMUNICATION INNOVATION ENTREPRENEURISM

KNOWLEDGE

The strategy of Direct Sales Area is based on 3 pillars:

1. PEOPLE

2. PROCESS

3. CONTROL & QUALITY

Why wireless solution…

Citibank - Brazil

Why wireless technology?

How it was born

Main Benefits

Investments / Payback

Subjects

The business area saw this opportunity through a competitor ...

Dec/2002:

We knew about a tool of a competitor with little development (only for data and no wireless)

Jan/2003:

We developed a wireless prototype with the following features:

1. Fill prospect’s information and send wireless

2. Follow-up sales performance.

3. Products Catalogue .

4. Messages: a communication channel real time.PLAY

How it was born…

The second most important step ... Find people in the Company with an

open-mind and empowerment.

Oct/2003:

Meetings with People with empowerment in Technology, Compliance, Legal and

Infosec to decide the development of this wireless solution and break paradigms. It

would be the 1st PDA application and the 1st wireless solution in CitiGroup in the world

(at that time, the PDA wasn’t recognized as equipment in Citibank, only desktops and

notebooks could be used).

How it was born…

The third most important step ... Look for companies with wireless know-how

to improve the knowledge of the Company.

Oct/nov 2003

Several meetings with companies to understand the technical feasibility of this wireless solution.

Dec/2003 Jan/2004

Opened bidding to vendors.

Feb/2004

Started the development of wireless solution.

Feb/2005

Put in production.

How it was born…

Citibank - Brazil

Why wireless technology?

How it was born

Main Benefits

Investments / Payback

Subjects

Reduce costs: Eliminates part of operational process and reduction of the whole

operation cycle-time.

(There will be no investment in assets from Citibank, all equipment provided in

“comodatum”). Improve business. e.g.: Tool for selling personal loan. More profitability: The sales managers have more time during each visit to offer

other products (Cards / Life Insurance / Investments) and enhance sales

productivity accelerating the activation process of the new customers.

Shareholder

Benefits

Clean Process. Paperless in mid-term with digital certification. Less bureaucracy. Without copies of documents in mid-term. Reduce time of opening banking account.

Customer

Development of People: Implement a quick and effective communication

channel. Development of People: Handling a high technology tool. Motivation: Provide in real time data and information to improve sales. e.g.:

Opportunities focusing on bulk acquisition such as niches and payroll

Companies.

Employee

CALL CENTER PROSPECT

SCHEDULING VISIT

PV

DATA RECEIVEDAGENDA, STATUS

MANAGER

MANAGER

UPDATES THE AGENDA OF PDA

EXCHANGEMESSAGES

VISIT

SENDS THE FORM

• CONSULT FORM• CONSOLIDATION DOCUMENTS

TO DO CHECKLIST OF DOCUMENTS

BUREAU CONSULTING

OPERATIONAL AREA

WEB

AUTHORIZINGMANAGER

EO

PROCESS AND INPUTFORM

DMS PM

DOCUMENTS LIST

UPDATE

FINCON

TYPINGMANAGER

EFFECTIVE

MAINFRAME

SUPERVISOR

REGIONAL MANAGER

WEB

How it works

Internet

Firewall Firewall

AuthenticationCryptography

Fusion-Sync Fusion Server

FusionDatabaseTELCOS

CryptographyAES

HTTPS SSL 3.0

GPRSCDMA 1xRTT

CryptographyAlgorithm

HTTPS SSL 3.0 HTTPS

SSL 3.0

CryptographyAlgorithm

CryptographyAlgorithm

Security application components

Database Cryptography Digital Certificates - SSL End to end transmission Cryptography Two different authentication processes Ethical Hacking Test (Vulnerability Assessment) Self destruction in case of loss, theft or a password mistake. User vs personal device (only a specific user ID can use a specific device) Kiosk (This application does not allow anyone to install, remove, download, change or use any other application different than the one defined by Citigroup policies and standards of information security)

How it works – Security Standards

This solution has the same security standards as other applications of Citibank.

Citibank - Brazil

Why wireless technology?

How it was born

Main Benefits

Investments / Payback

Subjects

Investment (Infrastructure / development): US$ 232,000

12 months

Costs per PDA

Cost per New Customer

Break-even

Payback

5 months

Additional Cost per new customer: US$ 6

Cost per PDA per month: US$ 100 (including: rent, fee software license, mobile bill)

Which are the investments…

¿Any Questions ?