Post on 02-Jun-2018
8/10/2019 SCJ Presentation v5[3]
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Ankit DhawanMatthew Hunt
Jakub KufelWilliam Eric Overbey
Amy Wang
Keyi Zhang
8/10/2019 SCJ Presentation v5[3]
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8/10/2019 SCJ Presentation v5[3]
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BofA Online Banking Assessment
• Advantages• Improved customer metrics
• Cost reduction• Increased customer interactions
• Customer behavior
• Challenges• Cost of development• Brand risk to traditional customers
• Security concerns
8/10/2019 SCJ Presentation v5[3]
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Mobile Banking: Critical to BofA Success
• Growth• Smartphone users – est. 46% of U.S. mobile by 2012
• Transactions - $2 billion in U.S. by 2014• Deposits – revenue driver
• Innovation• Branding
• Functional differentiation• Competitive relevancy
• Cost savings
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Mobile Banking
• Benefits to customers• Accessibility
• Convenience• Mobile features
• Challenges with adoption• Perceived value
• Security• Cost of data
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Strategy Evaluation
• #1: App development
• #2: SMS
• #3: Entering new categories
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Evaluation Criteria
• Improve users’ value perception
• Brand symmetry
• Increase awareness and adoption of BofA mobile
• Grow revenue and improve retention
• Address internal mobile requests
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App development: Building on Rich Experience
• Advantages• Personalized customer experience
•Branding opportunities
• Limitless functionality
• Challenges• Complexity
• Smaller customer reach• Costly development
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SMS: Reaching broadest audience
• Advantages• Largest market opportunity
•Proactive engagement
• Customizable notifications
• Challenges• Shrinking market
• User cost associated• Aging technology
• Competitive positioning
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Enter New Category: Direct Mobile eCommerce
• Advantages• Innovation alignment•
Lower data cost• Market opportunity• Strategic timing
• Challenges• Competitive market• High-risk entry• Cost of development• Low-hanging fruit
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Recommendations:
1. Customizable App
2. Promotional Strategies
3. Mobile Commerce
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Same App – Different Experience
Customer 1 Customer 2
14
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Customer Channel Mix
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2010 2011 2012 2013 2014
Traditional Customer %
Mobile Customer %
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Bank of America Mobile Adoption Cost Savings
Mobile Adoption Rate
5.0% 15.0% 25.0% 35.0% 45.0%
Transaction
VolumeGrowth
2.00 $49 $147 $244 $342 $440
4.00 $48 $143 $239 $335 $430
6.00 $47 $140 $234 $327 $421
8.00 $46 $137 $228 $320 $411
10.00 $45 $134 $223 $312 $401
Savings in
$mm(est. 2014)
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Promotional Strategies
• In-store app training
• Instructional videos
• Marketing campaigns to increase customer adoption
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Promotional Gift Cards
• Incentivize users with $20 gift cards
• Target companies with strong online spending
• Example: Amazon
• Download BofA app – fill in billing information
• Billing information = retention driver
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Mobile Consumer Lifetime Value with $20 Gift Cards• Modeled higher retention rates for mobile
• CLV with mobile = $323 vs online = $297
• 30 million customers online
• Huge market of additional traditional clients
CLV 2009 2010 2011 2012 2013 2014 Total
Y0 Y1 Y2 Y3 Y4 Y5
Annual Margin per customer $100 $103 $105 $108 $ 110 $113 $ 639
Transaction costs per customer $39 $38 $37 $36 $34 $33 $216
Retention of mobile banking 100% 92% 85% 78% 72% 66%
Expected Contribution per customer $61 $59 $58 $56 $ 55 $53 $343
Minus
Acquisition cost $(20.00) $(20.00)
Mobile banking CLV per customer $323
Transaction cost $39 $39 $39 $39 $39 $39 $236
Retention of online banking 100% 82% 73% 67% 64% 61%
Online banking CLV per customer $61 $52 $48 $46 $46 $45 $297
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Long-term Vision
• Mobile commerce• Go direct – no middle man
•
Capture massive transaction market• Next step in digitalization of banking
• Credit card obsolescence
• Start-up acquisitions – eg. VenMo• Leverage technology partner
Check out with:
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Summary
• One-stop-shop customizable app
• Increase adoption through new functionality
• Promotional activities
• Increase revenue growth and customer retention
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Exhibits
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Exhibit 1: Bank of America Revenue Growth Analysis
Mobile eCommerce Market Share
$mm (2014) 5.0% 10.0% 15.0% 20.0% 25.0%
Loan Growth
2.00 $2,050 $2,470 $2,890 $3,310 $3,730
4.00 $3,943 $4,363 $4,783 $5,203 $5,623
6.00 $6,123 $6,543 $6,963 $7,383 $7,803
8.00 $8,615 $9,035 $9,455 $9,875 $10,295
10.00 $11,443 $11,863 $12,283 $12,703 $13,123