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The Intelligent Payments Experience:

How Banks Can Win the Payments Race

Virginia Heyburn, VP of Strategy, Fiserv

GBA 2020, Operations and Technology Conference

February 27, 2020

© 2020 Fiserv, Inc. or its affiliates. | CONFIDENTIAL – INTERNAL

FORTUNE Magazine World's Most Admired Companies®

2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

The Time is Now to Embrace New Strategies

1. Celent, From Challenged to Challenger: Becoming a 21st Century Bank in an Open Banking World; 2. Wall Street Journal, 3. Raddon; 4. IDC Financial Insights, 2018

2

The banking industry will continue to be

challenged and disrupted by digital

giants and Fintechs.

Bank of America already has a

relationship with 1in5 Gen Z customers3

$1.2 billion More funds than

many U.S. banks

U.S. banking industry is losing

4 banks / week4

Gen Z and Millennials

are digital natives with

a new set of expectations

At the same time it’s in the strongest position yet to reverse the dynamic. - Celent1

is loaded on the Starbucks app at any time2

More than



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 3



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

75% of Generation Z Cohorts Say “I Want to Be an Entrepreneur”

4

The lines between personal and business banking will blur – as will the lines between generations, as improvements delight all.



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 5

Digitally social

Mobile natives

Split taskers

Entrepreneurial

Prefer images/video

Prize individuality

Curate personal brands

Financial anxiety Global

The iGeneration Custom, Conversational and Connected Now



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

#crushingit with Payment Services that Make Lives Easier

Digital natives who crave personal connection

Instagram lifestyles undercut by student debt

Entrepreneurs who want to give back

Brand enthusiasts overwhelmed by too much choice

Banks still have a lot of work to do to connect with younger customers.

6



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

85% of Consumer Interactions Will Be Managed Digitally by 2020

Sources: Domo, IBM, Google

7

2,500,000,000,000,000,000 bytes of data created per day

90% of the world’s data created in just the last two years

40K searches per second just on Google

Exponential growth continues IOT will change everything again



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

Bank Consolidation 2011-2019

3,615

2,551

683

566

107

2,625 (-990)

1,231 (-1,320)

656 (-10)

656 (-27)

144 (+37)

$500M-1B $1-10B

>$10B

$100 -500M

<$100M

Number of Banks 2009

Number of Banks 2019

8

Asset Size

• Source: FDIC



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

Global Fintech Investments Top $39 Billion

9

885 Deals

1,153Deals

1,254Deals

1,480Deals

$39.57B Annual Global Fintech Deals and Financing 2014-2018 ($B)

$18.00B $19.29B $16.30B

$8.34B

1,707Deals

2014 2015 2016 2017 2018



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

2019 Fintech Trends to watch - CBINSIGHTS

10



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

Tech Companies Are Gaining Ground in Financial Services

11

Would you be using a [INSERT COMPANY TYPE] to perform the specific banking needs below? / Note: In the data reported here, “comfort” is defined as the net of those selecting “somewhat comfortable” or “very comfortable” in response to the survey question.

Comfort with tech companies for transactions (among those who don’t currently use tech companies for listed services)

2017 2018

40%

55%

29%

39%

34%

43% 41%

54%

38%

52%

Pay bills Take out a loan Manage money Track budget Transfer money to others



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

Disruptors Come in All Shapes and Sizes

12

Attributes

• Large base of digital consumers

• Strong digital experiences

• Financial services as an extension of broader relationship

• Niche customer / member segments

• Incremental banking products

• Digitally native, purpose built for today’s digital world

• Open APIs; integration with various Fintech providers

Big Tech

Niche Tech

Digital Banks



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

How are we going to put the FUN into Banking?

13



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

Banks Still Hold the Key To Consumer Trust

Source: Bain & Company, Saleforce and MaritzCX Open Banking Survey of Customers, 2017 (n = >4,000)

78

63

43

0

10

20

30

40

50

60

70

80

90

Primary bank Another bank Non-bank

Percentage of customers willing to share personal data for a better current account offer

14



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

More Banks Looking to Launch Digital-Only Brands

“Retail banks’ top proposition for innovation is building a new digital bank says new report released by Temenos,” Temenos press release, July 3, 2019, Survey was conducted by the Economist Intelligence Unit.

15

According to a 2019 survey of global banking executives…

of banks are looking

to build a greenfield

digital bank

36%



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Increased Efficiency

Faster Innovation

Cycles

16

%

Fiserv Proprietary and Confidential – Limited Distribution

Smarter, Simpler

Payments

Payments Modernization is a Survival Priority

Faster Payments

Everywhere



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Expectations & Experiences: Consumer Payments,

Fiserv, 2017

Real-Time Payments Are Now Expected As a Standard

76%

What matters to consumers?

Say real-time

payment delivery

is at least somewhat important

Younger consumers are most likely to say real-time is important 93% of millennials

Survey question to all qualified respondents: How important is it to you that payments you make are delivered in real-time (that is, within a few seconds)?



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

59% 65%

53% 58%

45% 51%

Paid a bill online through

a financial organization

Accessed electronic

bills Made automatic

payment online

Banking Services Used in the Past 30 Days

2017 2018

Survey question to all qualified respondents: In the past 30 days, approximately how many times have you or your household used the following banking services?

Selected behaviors displayed showing significant increases from prior year.

Reverse Mentoring is Getting All Generations to Pay Digitally



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

Survey question to all qualified respondents: Which of the following would you consider to be the benefits of using your voice to perform banking

functions via a voice-activated device? Please select all that apply. Not all responses shown.

Voice-Activated Banking Gaining Consumers’ Attention

Perception of Voice

Banking Benefits Growing

See any benefit

to voice banking

51%

2019 Total

41%

47%

2018 Total

2017 Total

Channels and New Entrants



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

Tech Spend Reflects Focus on CX and Efficiency

Source: BankDirector 2019 Tech Survey August 2019

Bank Asset Size > $10B* 1B - $10B $500 - 1B < $500M Total

1. Improving the customer experience 75% 75% 72% 85% 78%

2. Creating a more efficient operation 88% 63% 84% 71% 72%

3. Enhancing online and mobile platforms 75% 43% 52% 38% 46%

4. Enhancing the bank’s top-line growth

(revenue and/or sales) 50% 30% 24% 29% 30%

20



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

What are the Essential Innovation Strategies for Banks?

21



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

New Expectations Demand New Success Strategies

22

Snackable To allow customers

to shift easily from

task to task and

channel to channel

Conversational Engage in dialogue

with customers and

avoid the monologue

Embedded within customers’

daily activities for easy

financial services

Fast with 24/7 service

excellence, rapid

transactions, offers,

and decision-making



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

Customer Experience is Omni-Channel

Source: BankDirector 2019 Tech Survey August 2019 (*Numbers do not add up to 100% due to rounding)

60%

51% Digital and the branch are equally important

38% Digital

11% Branch

1% Other

When asked which delivery channel is more

critical to your bank’s growth strategy:

of respondents say the bank relies on the core

provider to introduce innovative solutions

23



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

Widen Your Digital Footprint

24

Digital Strategy for an Always-On World

Money Service Deposits Loans



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

View Money Movement as a Brand Builder

25

who how

much when Invisible payments Payments apps Interoperable networks

Sender’s Bank Receiver’s Bank

Sender Receiver

Payment Network



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

Real Time Value Proposition

26

Reduced

fraud and credit risk

Increased

back-office efficiency

Enhanced

customer experience

Evolution of

faster payments



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

Deliver One Experience Across Touchpoints

27

Initiate

Continue

Finish

Seamless movement across touchpoints

New: Chat/App/Voice/Augmented/Virtual Reality



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Open Banking is About Helping Banks Solve the Struggle to Differentiate

28

Share data to create more engaging experiences

• Create more intuitive and frictionless customer journeys

• Co-innovate with third parties to expand their service offerings

• Pursue new business models and revenue streams

• Compete with Fintech challengers and the big banks

• Accelerate growth and expand into new markets

• Increase speed to market without inviting additional risk

Help people bank

the way they want to bank...



2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020

The Future of Banking is Fast with 5G

29

Cloud Driven

Artificial Intelligence

Virtual Reality

Augmented Reality

Multimodal Audio

Live-Stream Video

Real-time Language Translation

Ambient Computing



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#goals #healthylife #happy

#love #instagood



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Thank You!

31

The Intelligent Payments Experience:

How Banks Can Win the Payments Race

Virginia Heyburn, VP of Strategy, Fiserv

February 27, 2020

Date post:	21-May-2020
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