VeriSign Mobile Banking Survey

Wally Palmer

President, Palmer Research

www.palmerresearchgroup.com

2

Objectives/Methodology

+  VeriSign commissioned Palmer Research to conduct a major study on mobile phone banking working in conjunction with Fiserv and M-con.

+  The objective: determine awareness of and interest in using mobile banking among US consumers as a technology to assist them in better managing their finances.

Survey Format 50% phone/50% email panel

Questionnaire Design Palmer Research with input from VeriSign, Fiserv, M-con

List Source Phone: BRG Research Services, Email: E-rewards panel

Incentive Phone: None, Email: airline/hotel points from E-rewards Respondents 501 US consumers with mobile phones and not active

regular users of online banking. Field work Executed: June 29 to July 8 2009 by Palmer Research Margin of Error +/- 4.5%

Survey Highlights

4

Mobile Phone Banking: Efficient and Cost Effective

+  US consumers are micro-managing their money, looking for ways to enhance and speed up the reporting and receipt of their financial information. §  Almost 2/3rds of consumers surveyed are contacting their financial institution

once a week or more.

+  Mobile banking appears to have strong potential as a new way for consumers to stay on top of their finances. §  Nearly ½ of respondents chose receiving their financial information anytime and

anyplace as a key benefit of mobile banking.

+  Traditional means offered by financial institutions to connect with their customers are far more costly than mobile banking.* §  Tower Group estimates that banks pay $4 per customer visit, $3.75 per call

center connection, $1.25 per IVR call, $.85 per ATM use.

*M-Con a major system integrator, estimates a mobile phone connection costs only $.08.

5

Core Target and Barriers to Adoption

+  Financial institutions should target the growing audience of smart phone users as early adopters for mobile phone banking.

§  While only 6% of the survey respondents use mobile phone banking, 21% of smart phone/high end device owners are using it.

+  Transaction security is a major concern among consumers and could be a potential barrier to increased penetration.

§  Over 50% of consumers polled cited “fear transactions are not secure” as a reason that would prevent them from doing mobile phone banking.

Survey Details

7

93%

68%

41% 38%

23%

4%0%

20%

40%

60%

80%

100%

Checking/Savin

gs

Credit Card

Mortgage

Investment A

ccount

Home Equity

LineOther

Consumer Account Services By Type

Consumers surveyed had many different types of relationships with their financial institutions

Which of the following types of relationships do you have with financial institutions such as banks, credit unions, or savings and loans? Check as many as apply.

8

$0.17

$4.00

$0.85

$3.75

$0.08

$1.25

0%

10%

20%

30%

40%

50%

Mail Stat

emen

ts

Online

Bank T

eller IVR

ATM

Contac

t Cen

ter

Employe

r

Mobile

Phone

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

% Use to Check Balances Cost Per Transaction

Channels Used to Check Balances vs. Cost

40%

33%

26% 26% 24%

10%

1%

41%

Data Sources: M-con for mobile costs and Tower Group 2009 Survey for all others How do you currently check your account balances and review recent transactions? Check all that apply.

9

11%

6%

22%

36% 36%

0%

20%

40%

Daily 4-6x/Week 2-3x/Week Weekly < Weekly

Frequency of Consumer Bank Interactions

Consumers are micro-managing their money---they interact with their bank on average twice a week

How often do you interact with your bank through any of the channels it provides?

10

Reasons for Consumer Banking Contact

Nearly half of the survey respondents have contacted their bank’s call center or IVR to help control their finances

Did you contact your bank’s call center or automated voice response system to help you control your finances in any of the following ways? Check all that apply.

6%

9%

10%

21%

31%

0% 10% 20% 30% 40%

Locate ATM

Receive/Pay Bills

Transfer Money

Contact CustomerService

Check AccountBalances

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High Growth of Smart Phones/High End Devices

Smart phones/high end device ownership will more than double within the next two years to 43% of consumers

What kind of mobile/cell phone do you primarily use? Do you anticipate upgrading to a smart phone or high end device? If so, indicate the time frame you would upgrade. If not, indicate you have no plans to upgrade.

22% 8% 6% 7%

0% 10% 20% 30% 40% 50%

Use SmartPhone/High End

Device

Use now Within 6 months 7 to 12 month upgrade 1 - 2 year upgrade

12

52%

26%18% 18% 15%

11% 10%3%

39%

0%

20%

40%

60%

Text Messa

ging

InternetEmail IM

Downloaded Rington

es

Downloaded othe

r apps

Downloaded Games

OtherNone

Mobile Phone Features Used – Past 30 Days

Which of the following features of your cell/mobile phone did you use in the past month? Check all that apply.

13

Frequency of Text Messaging

Do you use your mobile phone for sending or receiving text messages? If yes, please indicate approximately how many messages you send and receive per month. If no, answer “I do not text”.

25%

7%

9%

6%7%2%

44%

1 to 5051 to 100101 to 249250 to 499Over 500Don't KnowNone

On average, mobile phone users send/receive 171 texts/month Smart phone/high end device users average of 212 texts/month

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Mobile Phone Banking Awareness & Usage

Mobile phone banking is only in the “2nd inning” and shows tremendous potential for growth

What is your awareness of mobile/cell phone banking? Please check only one.

1%

30%

46%

10%

6%

6%

0% 10% 20% 30% 40% 50%

Other

Not aware

Aware of, notinterested

Aware of, didn'tknow offered

Aware of, want tolearn more

Aware of and use

15

Interest in Mobile Phone Banking Activities

Mobile Phone Banking Activity % Yes/Maybe % Will Do Base = 501

% Will Do Base = 327

Check account balances 55% 41% 71%

Check credit card balances/ available credit 42% 37% 46%

Contact customer service 52% 37% 57%

Locate ATM 41% 30% 47%

Transfer money 37% 24% 37%

Receive/pay bills 30% 16% 24%

Send/receive money 16% 6% 9%

Consumers are highly enthusiastic about the banking activities they would engage in within a typical month on their mobile phones

Indicate which of the following banking activities you would carry out in a typical month using a mobile phone? Check yes, maybe or no for each activity listed. Which of these activities do you think you would

want to do through a mobile device? Check all that apply.

16

Likelihood of Using Mobile Phone vs. Debit Cards

Not Very/At All LikelyVery/Somewhat likely

Not Very/At All LikelyVery/Somewhat likely

Most consumers are not likely to use their mobile phone for making/receiving payments, but smart phones users are more inclined to do so.

72%

29%

48% 52%

How likely would you to be to use your mobile phone to make/accept a payment if it were possible instead of using a cash (debit) card? Check only one.

17

Perceived Benefits of Mobile Phone Banking

The top two perceived benefits associated with mobile phone banking are rapid access to information and receiving messages anytime or anywhere

Please indicate the perceived benefits of mobile banking. Check all that apply.

36%

10%

30%

31%

46%

46%

0% 10% 20% 30% 40% 50%

None

Greater security vs. online

More time sensitive

Faster Analysis of Finances

Receive messages anytime, anywhere

Speed of receiving/sending info

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Concerns About Mobile Phone Banking

Bankers need to mitigate the fear consumers have about the lack of security associated with mobile phone banking

What are the major reasons that would prevent you from doing mobile banking. Check all that apply.

12%

12%

35%

42%

52%

53%

0% 10% 20% 30% 40% 50% 60%

None

Not comfortablelearning about

Not convinced ofbenefits

Prefer bankstatements by mail

Can get alongwithout

Fear transactions notsecure

Conclusions & Demographics

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Conclusions

+  Mobile phone banking will deliver financial information to consumers in a more timely and accessible manner, enabling them to better manage their finances.

+  By adding mobile phone banking to the traditional means of how consumers connect with them, banks will be able to reduce the costs associated with servicing their accounts.

+  Smart phone and high-end devices users represent a fast growing market and a prime target for mobile phone banking services.

+  Banks must strive to mitigate the fear that consumers have about inadequate security related to mobile phone banking.

21

Survey Demographics

Gender

50%

50%

HH Income

Median: $57.5k Mean: $66.9k

US Citizenship

Yes: 97% No: 2% Refused: 1%

Age

Median: 44.6 Mean: 44.8

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Survey Demographics

Geographic Region

18% West

32% Midwest

34% South

14% East

Ethnicity

80%

6%3%3%1%3%

6%

White

African-AmericanHispanic

Asian

AmericanIndianOther

Declined

23

Questions + Answers

Thank You