1

DIGITAL / MOBILE BANKING TRENDS

Prepared by: Infocus Mekong ResearchRalf Matthaes – Managing DirectorRalf.matthaes@infocusmekong.com

Global Mobile Growth

2

▪ Largest banking channel for majority of banks by volume of transaction

▪ Adoption rate = highest in so-called developing countries - up to 60 - 70% in China and India

▪ Not in developed nations: US, UK, Canada

▪ Number of mobile users set to rise…

▪ 0.8 to 1.8 Billion in 2019

Source: KPMG Mobile Report 2015

Global Mobile Trends

3

▪ Generally banking services led by developed world

▪ Largely by telco’s in the developing world

▪ Some banks = MOBILE ONLY

▪ Jibun bank in Japan, JV (Bank of Tokyo-Mitsubishi UFJ and KDDI mobile phone network)

▪ Security is still a major hindrance

▪ Lack of trust in banks / lack of confidence of bankers

Source: KPMG Mobile Report 2015

Global Mobile Profile

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▪ Age - mid to late thirties

▪ Income: Higher income groups

▪ Selection: Searching for mobile capable banks

▪ key selection criteria for switching banks

Source: KPMG Mobile Report 2015

Vietnam’s Smartphone mobile explosion

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Daily activity you do most, when not working?

29%

5%9%

Using Smart PhoneUsing Laptop / PCWatching TVOthers

Source: Infocus CCI Base: n = 512

2%

26%

25%

18%

29%

0% 10% 20% 30%

1 hour or less /day

1-2 hours / day

2-3 hours / day

3-4 hours / day

4 plus hours /day

Most popular daily activity (%)

Major shift in consumers activities to smartphones. Over half of urban consumers note mobile usage as #1 activity, of which almost half spend 3 plus hours daily.

57%

Time spent on your smartphone(%)

The growth of smartphone opportunity in Vietnam

6857

4939

32 43 51 61

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 est.

Smart vs Feature phone share growth

Feature Phone Smartphones

Smartphone is the single largest consumer growth opportunity in Vietnam, with an average growth rate of over 30% annually. Computer penetration under 60% nationally

Source:

With urban Vietnam already over 80% penetration, the last conquest is rural Vietnam, changing the face of communication forever…

Are you READY!

Smartphone user profile: Vietnam case study for SEA

All data from Infocus Mekong Mobile Panel N = 33,123

www.ifmresearch.com 9

Mobile banking target consumers

Segment Vietnam Smartphone user profile

Both / single-married, as opposed to web, dominated by males & singles

60% 25-35 years old, much younger than global average of 36.1

70% plus highly educated

80% plus in urban, under 30% in rural, less than 60% own computer

Professionals, but penetrating all occupations

43% 25M VND plus / month HH income

Much higher financial product ownership than none smartphone users

Source: IFM Panel N = 33,123

www.ifmresearch.com 10

Mobile Banking in Vietnam – 100% bank account owners

All Data from IFM MoBank Survey N = 400

www.ifmresearch.com 11

Main means of banking

7%

10% 11%

30%

42%

0

5

10

15

20

25

30

35

40

45

mostly Smartphone mosty go to bank mostly internet mostly ATM card all of the above

Source: IFM MoBank survey N = 400

On-line and Mobile banking is becoming mainstream in vietnam, but huge opportunity exists for more growth as new means of transaction.

www.ifmresearch.com 12

Criteria for selecting a bank

13.6

13.6

13.8

14.4

14.9

Others

Good customer service attitude

Provides fast and efficient service

Online banking and mobile features

Offers better value (interest rates)

Large network that is close to work and home

Good reputation for safety/ security

Source: IFM MoBank survey N = 400

Good Reputation is still the most important banking selection criteria, but followed closely by Large network, Interest rates and On-line / mobile offers

11.1

18.6

www.ifmresearch.com 13

86

76

14

24

Intenet banking

Mobile Banking

Yes No

Internet / Mobile banking penetration

Source: IFM MoBank survey N = 400

Over 75% use Internet / mobile banking services regularly

www.ifmresearch.com 14

41%

35%

17%

7%

Time saving

Convenient

access all myinformation

Have proof oftransaction

37%

31%

19%

7%

6%

Poor internetconnection

Unsafe - do not trust

Prefer people contactand interaction

Difficult tonavigatewebsites

Not offered by mybank

Pros and cons of Internet banking

Ironically the factors which drive the benefits of digital banking are the inverse of the factors which hinder Digital banking growth, Time savings versus security, connectivity.

Source: IFM MoBank survey N = 400

www.ifmresearch.com 15

Frequency of future usage of Mobile banking

5% 11% 37% 39% 8%

Much less Less Same More Much More

Source: IFM MoBank survey N = 102

47% note using More in the future, indicating potential double growth over next 24 months.

www.ifmresearch.com 16

48% 17% 11% 10% 8% 6%

Unsafe - do not trust Difficult to navigate websites

Poor internet connection / access Prefer people contact and interaction

Not offered by my bank Others

Why Non-users do not use Mobile banking?

Source: IFM MoBank survey N = 102

Overall security and trust are the key barriers to mobile growth, while hygiene factors such as web design and wifi connectivity also play a roll.

www.ifmresearch.com 17

What’s missing?

VIETNAM’S Problem

▪ 500 ads – none are memorable about banking

▪ Set in your way – do not have to try hard

▪ Confidence is gone…

▪ We are hard done by , everyone hates us?

▪ Regulations, Governance, WTF %$^&##W^&@#

VIETNAM’S SOLUTION

SPEAK TO CONSUMER NOT

AT THEM

NGHE

CONSUMER NEEDS AT THE HEART

www.ifmresearch.com 18

Mobile Banking – positioning for success?

Promote

Target urban 24-35 year olds, wealthier

and educated male/ female consumers

Build trust and highlight security

measures via technology driven

innovations

Communicate convenience as a key

Benefit

Potentially offer free wifi service with

account to address connectivity

Negate

Do not communicate gender free.

Males and females have different

banking needs

Negate negative security issues via

testimonials, etc

Negate fraud stigma via technology

Provide easier to navigate banking

sites

Ralf Matthaes Managing DirectorTel: +84-8 2262-7627Mobile: +84-903-949-531Website: www.ifmresearch.comifmpanel website: www.ifmpanel.com

Email: Ralf.matthaes@infocusmekong.com1 Dang Huu Pho Street, Thao Dien, An Phu, HCMC, Vietnam

The future is now! Focused - Faster – Far reaching