1. Key Bank - Enterprise Architecture Group 1 Mobile financial services “Barriers To Adoption” Sustainable Computing Consortium April 1 st, 2003 Andrew J. Hartridge KeyCorp Enterprise Architect 216-689-3248 andrew_hartridge@keybank.com

2. Key Bank - Enterprise Architecture Group 2 Topics Types of financial services How are financial service organizations positioned to provide these services ? What are the challenges ? Strategies when designing solutions Questions / Discussion

3. Key Bank - Enterprise Architecture Group 3 Overview of Mobile Financial Services Mobile “Online Banking” & Brokerage  Past pilot efforts  Will wireless web become ubiquitous ?  Micro-niche successes  SMS success in Europe C to B Payments  Bill Pay Broad scope of customers High volume Already mainstream in “wired world” Price sensitive Repudiation environment is relatively easy to arbitrate  Point-of-sale payments Removing cash from transaction Opportunity to monetize transactions Foreign success in mobile content and services RFID success in vertical industries

4. Key Bank - Enterprise Architecture Group 4 Overview of Mobile Financial Services (continued) C to C Payments  Broad scope of customers  Generally low dollar size transactions  Price sensitive  Likely to create a high level of repudiation B to B payments / authorizations  Limited scope of customers  High dollar amount transactions  Less price sensitive  Security requirements are high Niche services  Lockbox for mobile funds collections (fees, fines, donations etc)  Enabling mobile identification/authentication

5. Key Bank - Enterprise Architecture Group 5 How are Financial institutions positioned to provide these services ? Highest trust relationship with consumers and corporations  Generally people trust their bank over other trading partners  Existing relationships aid in business integration and performing piloting Highly regulated in areas of privacy and authentication.  GLBA  Patriot 326 Backend systems are already built and integrated  Current payment processing systems  Card association networks are ubiquitous  Equity trading systems are already in place

6. Key Bank - Enterprise Architecture Group 6 Specific challenges Mobile “Online Banking” & brokerage  Business case  Demand for similar experience as the web Bandwidth Device issues  Legal & Regulatory constraints C to C Payments  Current association networks are not efficient at micro-payments  Stored value technologies will require significant hardware investment  Any significant change in consumer behavior will slow adoption  Many competing solutions with no emerging standard  Repudiation claims between customers  North America does not have a single/standard wireless platform or network. B to B payments / authorizations  Security requirements are high

7. Key Bank - Enterprise Architecture Group 7 Specific challenges (continued) C to B payments  m-payment historical data is very thin  Data is very vertical by geography Customer demographics dramatically skews data  Unlike some countries pay-for-content culture is not entrenched in North America  Demand/need for mobile bill payment is limited

8. Key Bank - Enterprise Architecture Group 8 Strategies when Designing systems Do not radically change consumer behavior.  Only a dramatic ‘convenience’ factor will sell a financial solution. Online banking works and has rapid adoption. Why have broad scoped alternate payment solutions failed ?  Polls show security is very important to consumers. Reaction to secure payment systems shows otherwise. Put the business case over competitive leadership Focus on how systems can improve privacy and security over traditional systems. Market consumer benefits carefully if the real benefits are to the FI Build flexibility to address changing regulatory and legal environments

9. Key Bank - Enterprise Architecture Group 9 Questions/Discussion