Promoting growth through direct banking: anywhere,

anytime, and device.

by Chris Smith

General Manager, Digital

Direct Banking, NAB

chris.x.smith@nab.com.au

23 August 2010

NAB Multi-channel Approach

Create Customer Benefit -> Build Value Proposition -> Create Capability -> Drive Shareholder Value

Mobile @ NAB

• Five Key Trends

• Strategies for success

• Recommendations

Predictions

“Within 5 years the Mobile

Channel will become the

most significant channel

for the banking industry”

However: we all know the problem with predictions…

“I think there’s maybe a

world market for 5

computers”

Thomas Watson,

Chairman IBM (1943)

Trends: Mobile Internet Outpaces Adoption of Desktop Internet

Source: Morgan Stanley, Economy + Internet Trends, October 09

• Capability and usage of mobile devices will equal that of PC.

Traditional thinking held that this convergence would result in the

mobile internet becoming a subset of the traditional internet.Online

Mobile

• However there are a number of factors , unique to mobile devices that

deliver MORE capability than desktop/tethered devices.

• Capabilities such as GPS, personalisation, messaging, presence,

device intimacy (always with you), presence and context, app stores,

contactless billing mean that RICHER interactions are possible with

DOES THE FUTURE LOOK LIKE THIS?

Trends: Mobile as a subset of online?

Mobile

contactless billing mean that RICHER interactions are possible with

mobile devices than desktop devices.

• Gartner has forecast that by 2013 more internet usage will be from

mobile devices than non-mobiles.

• Recent study from global media agency Initiative showed that 60% of

mobile internet activity occurred INSIDE the home.

• Features added to online should be added to mobile as well if cost

effective and appropriate to user experience. However mobile-led

feature enhancements (ie those which don’t apply to online) will also

be critical

Online

OR THIS?

Trends: Moore’s Law: Computing speed doubles every two years

iMac – 2000 iPhone 4 - 2010

Processor 500 MHz 1GHz

Memory 128MB 512MB

Graphics capability 8 million triangles per second 28 million triangles per second

Screen resolution 786k pixels 614K pixels

Max data transfer rate 12.5MB/s 20MB/s

Storage 30GB HD 32GB Flash Drive

Size 38.1cm x 38.1cm x 43.4cm 11.4cmx 5.9cm x 0.8cm

Weight 15.8kg 0.08kgWeight 15.8kg 0.08kg

Camera No 5 Mega Pixel still/video

GPS No Yes

Phone No Yes

Compass No Yes

Accelerometer No Yes

Apps “Shrink-wrapped”software 225,000+ in App Store

Downloads of these apps N/A 5,000,000,000+ since 10 July 2008

10 years is not a long time in banking – but it’s a heck of a long time in digital media usage.

Trends: Social Media is Mainstream

Source: Morgan Stanley, Internet Trends, June 2010

Trends: Social Media is Mainstream

• Social Media is now mainstream – in fact it’s beyond the

mainstream.

• If Facebook were a country it would be the third largest in

the world – behind only China and India.

• Facebook is targeting >1bn users in next 12-18mths, and

mobile is likely to be a key factor in delivering this growth.

• 50% of Facebook users are aged 35+

• Australia leads the world in Social Media use. In December

09 the average Australian spent almost six hours on social

media sites.

• 29% of all time spent by Australian’s on the internet is spent

on Facebook.

• 60% of mobile internet usage in the US is spent on social

media sites – only 9% on carrier portals.

Mobile customers are also social media customers. They are vocal about their customer

experience to their network.

Trends: Fragmentation vs Consolidation

• Multitude of systems in use. They include iPhone,

Android, BlackBerry, Symbian, Windows Mobile.

• There is no interoperability between these platforms

for “native” applications.

• Developers are torn between supporting all of these

platforms to offer the best consumer experience

possible

• This causes problems in the medium term, however

this is a cyclical issue

• Web developers experienced the same issue in the

mid-90s with browsers (Netscape vs IE)

A clearly articulated Device Management Strategy is vital to the ongoing

success of mobile implementations.

Trends: Mobile Advertising is experiencing rapid growth

Source: Sensis, January 2010

Mobile Banking: Ten Strategic Reasons for Making Banking Investments

Top Ten Reasons

— Improve Brand Image— Increase debit/credit card usage— Improve your market share— Displace telephone calls— Reach customers in real-time— Improve overall banking experience— Improve overall banking experience— Save customers money while

shopping in retail stores— Help customers evaluate big-ticket

items— Enable person to person payments— Support specific business lines

Source: Online Banking Report, no. 177, March 2010

Mobile Banking: Ensuring success for mobile initiatives

• Establish a framework for measuring

economic contribution

— Establish a framework or proxy that

allows you to demonstrate how the

advances you are making today will

deliver tangible and meaningful benefits

to the bank when usage reaches critical

mass.

• Be an evangelist

— Use the excitement generated by rapidly

changing environment to communicate the

benefits your team is delivering

• Set clear targets and communicate

your success

— Ensure that the targets and deliverables

you set as a result of initial funding are

measurable, achievable and able to be

communicated.

• Link to strategy

— Be able to communicate how each of the

projects that is funded links directly to

the BU strategy

Final thoughts

• Mobile channel is a critical element and unique element of a multi-channel strategy

• Mobile internet is more than the computer unwired— What are the possibilities for interaction with your customers in this paradigm

• Technology is driving rapid change, but not unmanageable change— As per the comparison between the iPhone today and the iMac in 2000 – things are

moving fast

• New paradigms = new business models— The fact that mobility is more than “unwired” means that there are new modes of

transaction that simply may not have made sense in the past.

• Exciting future ahead, but initiatives must be grounded to strategic and commercial drivers to fulfill multi-channel vision.