| Tytuł Prezentacji | 1

mBank Mobile Strategy

Krzysztof PałuszyńskiDeputy Director, Digital Channels Department

krzysztof.paluszynski@mbank.pl

Banking Summit - Millan22 September 2016

2

about mBank

strong market player with a nearly 5-million customer base

Source: mBank

mBANK RETAIL MARKET COVERAGE Q3 2016

4.2 M individual & business clients

0.2 M clients

0.6 M clients

POLANDsince 2000

CZECH REPUBLICsince 2007

SLOVAKIAsince 2007

mBANK RETAIL KEY MARKET SHARES 2015

# of individual

clients

# of SOHO clients

3rd 2nd4thMARKET POSITION

# of individual clients

POLAND CZ SK

mBank is the only retail bank in Poland with an international strategy

The 1st Polish pure-play online bank

9%

15% 15%

23%

7,4% 6,3%

Category 1# of online

banking clients

# of mobile banking clients

1st

3

Since 2013 we have redesigned all channels…

TRANSACTIONAL SYSTEM CONTACT CENTER

light BRANCH NETWORKMOBILE APPLICATION

4

Our efforts gain global recognition

Source: mBank

London AmsterdamParis Barcelona Chicago London

Feb’13 Oct’13 Oct’14 Nov’ 14 Feb’15 Oct’15

Light branchDistribution

channelsLoan processMobile

bankingOrange Finanse

Transactional platform

New York

Insurance distribution

Digital marketing

Mar’15

Online banking

mDEALS

Barcelona

Digital marketing

Oct’15

5

What will be the meaning of mobile banking in 5 years?

Can we observe any analogy?

2000

2016

2021

▪ Decreasing

traffic

▪ Sales

▪ Advisory

▪ Service

(decreasing)

▪ Highest

traffic

▪ Sales

▪ Advisory

▪ Service

▪ Supporting

channel

▪ Transactions

▪ Simple

operations

▪ Decreasing

traffic

▪ Sales

▪ Advisory

▪ Service

(decreasing)

▪ Highest

traffic

▪ Sales

▪ Advisory

▪ Service

PRIMARY CHANNEL SECONDARY CHANNEL

▪ Highest

traffic

▪ Sales

▪ Advisory

▪ Service

▪ Supporting

channel

▪ Transactions

▪ Simple

operations

6

Mobile way we went …

2003-2004

2013-20152011-2012

WAP, SMS

Native Mobile apps 1.0Mobile app & Web light

Native apps 2.0Usability

MOBILE UX

MULTI-CHANNEL

MOBILE CHANNEL FIRST APPROACH

FIRST SMARTPHONE APPROACH

UX REDESIGN

7

Operational plan in mobile is building competitive

strengths and aligning the whole organization to mobilityC

om

peti

tive

Str

en

gth

sG

oals

Adoption AcquisitionReasons for use

Monetization

Success Foundations

IT DedicatedChannel Owner Rhythm

How to align

the whole

organization

to mobility ?

9

Our advantage is built on dedicated IT resources, business

channel ownership, best practices and commitment

• Business/IT/UX teams

• SCRUM teams

• high engagement

• platform native apps

• dedicated product owners

• prototyping

• customers surveys

• eye tracking

• alfa/beta tests

RHYTHM & AGILITY

Featureset

• best score banking app

(target 4.5-5*)

• usability & convenience

• every 2-3 months

release cycle

• time to market

• customer feed back

CHANNEL OWNERSHIPMOBILE TEAMS

10

Results : Best app score comparing to other

banking apps in Poland

Source: Google Play

11

Mobility is not about miniaturization

12

It’s about simplicity

MONEY TRANSFER FORM MONEY TRANSFER OPTIONS

13

Is about „red light scenarios” and convenience

Mobile banking is even about business model

transformation

Mobile = Design-driven

change management

Loan process in 30 s?

BusinessIT

Risk management

Legal unit

Compliance

SecurityAudit

KNF

ZBP

Others

15

Example 1: Additional money in just 30 seconds

via one-click credit application

Money bar with individual credit limit

One-click loan application

One input field

Confirmation

One finger tap

Done

16

Example 2: combining digital and physical world –

quick connection with call center

No client number

No IVR

No password

CC advisor on 1 finger tap

How to

increase

Adoption ?

18

Quick adoption will leverage mBank investment in mobile

channels and neutralize possible threat from competitors

BRANCHES ARE ACTIVELY BOARDING NEW AND EXISTING CUSTOMERS

MOBILE-DEDICATED CALL CENTER CAMPAIGNS

MOBILE BOARDING CAMPAIGNS WITH HIGH PRIORITY IN INTERNAL MARKETING

ECONOMIC BENEFITS FOR CUSTOMERS TO START MOBILE BANKING

PLN 50GIFT

FOR NEW ACTIVE MOBILE BANKING USERS

19

Example 1: How to increase adoption in mobile

1. What’s new?

New version - after first launch information about new features

2. Active onboarding

After contextual action (login) phone model is validated and suggest new way of login TouchID

3. Action triggered onboarding

After customer positive experience (selected customer scenario) we ask customer to do some additional action (evaluate app).

20

Example 2: Touch ID login

One step registration

Touch ID default

3 seconds login

PIN primary

21

Results: Dynamic growth of mobile banking usage.

Leader position in 2015 regarding active mobile customers.

42%

19%

38%

31%

mBank PL Mobile

Leaders

Digital Banks

MOBILE ACTIVITY GLOBAL BENCHMARK2 [%]LOGINS TO mBANK BY CHANNEL1 [%]

Desktop

Mobile

1H 20162H 20152H 2015 2H 2015

x 2,8

48%

1H 2015

17% 24%32%

40%

Source: 1) mBank, Mobile logins include app and internet banking light mobile version

2) Finalta, 12 2015, mobile users as % of active customers, 145 banks globally, TOP 6 in PL

How to

increase

acquisition ?

23

Mobile onboarding process embedded in the app

C/A opening process

Source: mBank

- The Customer Journey may now start in app store – a natural starting point for„there is an app for everything” reality

- Business model of the mobile acquisition in progress- Future Actions: (i) Marketing Mix, (ii) Key Feature, (iii) Seamless Process

Transfer from another bank

1 2 3

Welcome Screen Application Form ID confirmation transfer

mBank Mobileadd

Key mobilefeature

Pre-installed app

Mobile CentricCustomer

Reasons for joining the bank through the app

pote

ntial

24

Customers can activate all access channels on their

smartphones without crack in their mobile customer journey

1 2 3 4

Listen to voice message and enter activation code

Generate your activation code

In a moment you will get a voice message with activation code

Listen to the voice message and enter a

code

• In the mobile ecosystem little things make difference. With the new resourceful procedure customer can activate all access channels using their mobile device only

• Since the launch of the new system, 45% of apps are activated with the call back procedure

Reasons for use Monetization

26

Mobile banking is not only about checking current

account balance or transaction history

CENTRAL CHANNEL

GATE

(Omnichannel

strategy)USABILITY,

LOOK & FEEL

(photo, HCE, touch,

swype, GPS, etc.)

INNOVATION

(habit and

engagement)

INDEPENDENT

ACCESS CHANNEL

(functional gap

reduction)

MOBILE FIRST

APPROACH

(sales and

communication)

27

Example: Travel insurance made for mobile

Only 3 inputs

Only one tap to report an accident

Only 30 seconds process

Push campaigns based on

Geofencing & Big Data

28

Mobile

Mobile is not cannibalizations

Mobile vs. Internet Banking OneClick cash loan sales

Source: mBank

Feb 2016 Jun 2016 Aug 2016Mar 2016 Jul 2016May 2016Apr 2016Jan 2016

Month

ly s

ale

s (

appro

ved c

redit lim

it)

Desktop

29

Mobile banking gives real business impact

Source: 1) Fiserv, Jan 2016, 1 year study across 17 banks and credit unions in the US, 70k mobile users

2) UBS Global research, Jul 2015

1,3 1,5

PRODUCT HOLDINGS1 [pcs.]

+12%

550 800

POS TRANSACTIONS1 [USD / month]

+46%

9,8%4,9%

ATTRICTION RATE1 [%]

-50%

RECOMMEND TO A FRIEND SCORE2 [0-10]

6,6 7,1

+8%

mBank means mobile bank

and this obliges …

• To be leader on mobile banking

• To offer the best mobile application

• To increase active customer base

• To monetize mobile application

| Tytuł Prezentacji | 31

Thank you!