Charting a path forward through strategy & Execution · 6/2/2020 · Visa Tokens enhance the security & performance of Visa credentials across existing and emerging digital commerce

CHARTING A PATH FORWARD

THROUGH STRATEGY & EXECUTION

June 2, 2020

• John Bratsakis

President / CEO

MD|DC Credit Union Association

MODERATOR:

CHARTING A PATH FORWARD THROUGH STRATEGY & EXECUTION

WELCOME

• Please make sure you are on mute

• To ask a question please feel free to:

• Use the Chat Feature

• Use Raise Hand Feature to ask question at any point during

webinar

• Link to recording and slides will be provided by

Wednesday afternoon.

• Douglas Leighton - VISA

• Head of Community Accounts


MD DC Credit Union AssociationTown Hall

2 June 2020

Doug Leighton

Head of Community Accounts

Visa Inc.

©2020 Visa. All rights reserved. Visa confidential6

This presentation is furnished to you solely in your capacity as a customer of Visa Inc. and/or a participant in the Visa payments system. By accepting this presentation, you acknowledge that the information contained herein (the “Information”) is confidential and subject to the confidentiality restrictions contained in Visa’s operating regulations and/or other confidentiality agreements, which limit your use of the Information. You agree to keep the Information confidential and not to use the Information for any purpose other than in your capacity as a customer of Visa Inc. or as a participant in the Visa payments system. The Information may only be disseminated within your organization on a need-to-know basis to enable your participation in the Visa payments system. Please be advised that the Information may constitute material non public information under U.S. federal securities laws and that purchasing or selling securities of Visa Inc. while being aware of material non public information would constitute a violation of applicable U.S. federal securities laws.

Notice of confidentiality


This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are generally identified by words such as “outlook,” “forecast,” “projected,” “could,” “expects,” “will” and other similar expressions. Examples of such forward-looking statements include, but are not limited to, statements we make about Visa’s business, economic outlooks, population expansion and analyses. All statements other than statements of historical fact could be forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond our control and are difficult to predict. We describe risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, any of these forward-looking statements in our filings with the SEC. Except as required by law, we do not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise.

Studies, survey results, research, recommendations, opportunity assessments, claims, etc. (the ‘Statements’) should be considered directional only. The Statements should not be relied upon for marketing, legal, regulatory or other advice. The Statements should be independently evaluated in light of your specific business needs and any applicable laws and regulations. Visa is not responsible for your use of the Statements, including errors of any kind, or any assumptions or conclusions you might draw from their use.

Forward-looking statements and disclaimer


Online share of total debit spend is increasing, primarily driven by new use cases that shift consumer spending habits

37% 40% 44% 48% 48%

2017 2018 2019 Jan 2020 Feb 2020

CNP PV as a % of Total Debit

PV

CNP PV F2F PV

Source: VisaNet Consumer Debit (includes Interlink/PAVD), AFT data is included. CNP includes ECI / Recurring / MOTO codes

21%19% 19%

25%

6%

1%4%

8%

2018 2019 Jan 2020 Feb 2020

CNP vs CP YoY PV Growth

CNP YoY PV Growth F2F YoY PV Growth

Overall Visa system


COVID-19 has accelerated the shift online

50%43% 45%

55% 60% 59% 62% 59% 60%

Week

of Mar

1

Week

of Mar

8

Week

of Mar

15

Week

of Mar

22

Week

of Mar

29

Week

of Apr

5

Week

of Apr

12

Week

of Apr

19

Week

of Apr

26

CNP PV as a % of Total Debit PV

CNP PV F2F PV

Source: VisaNet Consumer Debit (includes Interlink/PAVD), AFT data is included in overall but not in Retail CNP definition. CNP includes ECI / Recurring / MOTO codes. Everyday Spend includes: Food & Grocery, Discount Stores, Drug Stores & Pharmacies, Wholesale Clubs. Retail includes: Apparel & Accessories, Automotive, Department Stores, Direct Marketing, Electronics, Retail Goods, Retail Services, and Professional Services.

Online vs. Offline

Overall Visa system

April YoY PV Growth Total F2F CNP

Everyday Spend 28% 7% 110%

Restaurants -53% -71% 181%

Retail 2% -40% 62%

1CNP share increased in March and now represents the majority of total payment volume

2Everyday Spend, Restaurants and Retail all observed substantial CNP growth


Exempt issuers’ YoY growth rates outpaced the industry average

34% 37% 41% 46% 46% 47%57%

2017 2018 2019 Jan 2020 Feb

2020

Mar

2020

Apr

2020

CNP PV as a % of Total Debit PV

CNP PV F2F PV

Source: VisaNet Consumer Debit (includes Interlink/PAVD), AFT data is included. CNP includes ECI / Recurring / MOTO codes

20% 19% 21%30%

11%

47%

6%1% 3%

8%

-11%

-29%

2018 2019 Jan 2020 Feb 2020 Mar 2020 Apr 2020

CNP vs F2F YoY PV Growth

CNP YoY PV Growth F2F YoY PV Growth

Exempt issuers only


Prioritize the following:

Highlight debit security features

Develop a Card-on-File strategy

Prioritize instant digital issuance

and push provisioning

Consider incentives to

change consumer behavior

Make operational enhancements to address specific cardholder pain

points


Visa Tokens can provide meaningful improvements

1. Authorization rate lift from decline codes within a sample of 17 merchants. Source: VisaNet, TC05, UC01, Brand: Visa, Excludes Processing Error Declines. Declines calculated as percent of total authorizations

(payment volume). Select Token participating Merchants (PAN and Token) with digital wallet TRs Issuer region US, July-Sept 2018, Potentially addressable by Token. Note: For purposes of these metrics, Super

Regionals” include the top quartile of issuers by Visa PV, Regionals include the second quartile and Community banks include all remaining issuers.

2. Fraud Rate Reduction: Source: CNP & CP Average is for set of Token participating Merchants (by Merchant DBA) (PAN & Token) with digital wallet TRs April-June 2018, Issuer region: US

+3.2%

Authorization rate lift1

+3.2%

Fraud reduction (PV$)2

26%

Comparing authorization rate at top merchants

for CNP token volume vs PAN

Visa Token transactions compared to

PAN-based transactions online

averageaverage


Visa Tokens enhance the security & performance of Visa credentials across existing and emerging digital commerce experiences & form factors

Visa Tokens are designed to optimize the payment ecosystem

01Reduces risk of fraud &

breach by replacing

card numbers with a

token.

Each transaction is

processed with a

unique token +

cryptogram which

increases card

authorization rates

and decrease fraud.

0

2Secure transactions

Domain controls & fail safes secure

transactions across various devices

Enhance the token platform

Additional value-added services like Cloud

Token Framework, VCEH and VCES

enhance security & consumer experience

Dynamic capabilities

Quickly replace stolen credentials, cards

never expire, consumer maintains control

• Jenn Addabbo – CU Ledger

• Founder, Partner


• James Guild – CU Engage

• Managing Partner


Adapting Your Strategic Focus to Meet Changing Member Needs while Optimizing ROI

CU Engage

Jennifer Addabbo

Experience: 16+ years in Business Development and Strategic

Marketing

Specialties: Sales Management, Complex Financial Services Strategy,

Card Payments and Strategy, Digital Banking, Internet Banking + Bill

Pay, Mobile Banking

Past Experience: PSCU, FIS

Location: St. Petersburg, FL

Experience: 24+ years in Leadership, Business Development and

Strategic Consulting

Specialties: Core Data Processing, Innovation Solutions Cards and

Payments + Strategy, ATM, Prepaid and Loyalty Programs

Past Experience: Fiserv, PSCU, Open Solutions/DNA

Location: St. Petersburg, FL

James Guild

04030201

Leaders in the financial

industry were setting

strategies for what looked

to be another steady year of

growth in 2020.

November – December 2019

Kicked off the new year at

GAC, credit union industry

was gearing up for

tradeshow season and news

began to trickle in about

coronavirus in other

countries. Unsure of impact

on the US.

January-February 2020

In what seemed to happen

overnight, the financial

industry had to dust off the

crisis management handbooks

and figure out how to conduct

business amid a pandemic.

Credit unions took it as an

opportunity and stepped up to

the plate.

March – April 2020

As America “opens up”, financial

institutions continue to show their

true colors. Credit unions have shone

throughout the pandemic as a

reliable trusted source for their

members and helping their

communities and employees as they

adjust to job loss and begin to see

possible long-term effects of the

pandemic.

Today

CHANGING PRIORITIES

So

urc

e: D

BR

Re

sea

rch

© D

ec

em

be

r 2

019.

Th

e F

ina

nc

ial B

ran

d

Simplify the customer Journey

Top 5 Trends for 2019

(What really happened…)

52%

50%

Improving data analytics

capabilities and insights43%

54%

Expanding digital payment

capabilities31%

24%

Improving integration of delivery

channels31%

32%

Open banking and use of APIs 30%37%

Actual

Projected

Sources: https://newsroom.accenture.com/news/only-half-of-banks-globally-are-making-significant-advancements-in-digital-transformation-resulting-in-lower-market-valuations-accenture-report-finds.htm

https://www.cujournal.com/opinion/coronavirus-shows-why-credit-unions-need-a-digital-strategy

March 2020

Source: https://www.businesswire.com/news/home/20200402005497/en/

Dig

ita

l Pro

vid

ers

MobilitimFoundry

Orpheus

Morpheus

Corillian

Architect

Banno

Crowded Marketplace

+

* Vendors listed to not represent an exhaustive list

Architect

CUSOs or CU Specialist

Corillian & Mobiliti

Emerging

Incumbent Providers

Banno

+

Dev. Platforms

Common Competitors(All with SDKs)

Vendors listed to not represent an exhaustive list.

Fin Tech’s that may make their mark due to the

changing times

• Easily offer loan refinances

• Retain loans

• Offer digitally delivered to member

• Member digitally signs and completes the process in 90 seconds.

Loan Refinances

• Voice and Message

• Knowledge & Support

• Personal Financial Management

• Chat bots

Conversational Banking

• Move direct deposits

• Set up recurring payments

• Quick APIs

• Helps CU become PFIs

Drive Deposit Growth

• Video enabled branches

• Mobile video banking

• Tool to assist in completing remote transactions

• Interactive and secure

Video Banking

• Small business lending

• Stand up site in 30 days

• Services integrated like underwriting

• Full visibility into the member journey

• Touts exceptional service

Small Business Loans

• Guides prospects to applications

• Provides text reminders to complete loan process

• Connects with loan origination system, online applications and CRM.

Lead Generation

• Automated financial advice

• Establish a financial strategy

• Provides recommendations based on the member’s spending habits

Financial Management

• Donation platform

• Integrates with digital banking platforms

• Allows members to seamlessly donate to their favorite charity

Philanthropy

• Customer service interactions from any channel

• Easily switch from chat to video to co-browse

• Assist new members with the onboarding process

Digital Customer Service

What are our Credit Unions

doing and what do you

need to be considering?

Listening to our Board of Advisors!

• Every Credit Union is experiencing different challenges

• Relevantly Respectful

• 1st and 2nd Quarter Financial Impact

• Maximizing Digital Footprint

• Leveraging Partners for “heavy lifting”

What we heard?

ROI –Income and Expense Strategy

ADJUSTING THE FOCUS.

Listening To

Changing

Member

Needs

Re-align

Strategic

Priorities

Opportunity To

Identify Gaps

In Products and

Service

• Members: 92,000

• Assets: $1.1B

• Online & Mobile: NCR Digital Insight

• Bill Pay: FIS

• Core: Fiserv DNA

• Credit Cards: FIS – Visa Brand

• Debit: Vantiv/worldpay/FIS – Mastercard brand

• PIN Networks: NYCE, STAR

Credit Union Profile - Opportunity

Focus, Ownership,

Execution….. Keeping your Member at

the center of every decision

• Know your Expiration Dates• Notice of Non-Renewal -• Start Process 2 Years out• Options – Renegotiate – Conversion• Early savings

Contract Dates – 2

Years!

• Maximum of 1 Year Auto Renew• Deconversion and LDs• Service Level Agreements• Growth – M&A

New Contract Terms

• Partners with Open APIs• Leverage Digital Banking Integration• Cost of APIs – Per Call vs. Fixed

Integration - APIs

• Member Journeying• Loyalty/Rewards• Incent behavior• PAU – Penetration/Activation/Usage

Leverage Analytics

Streamline Vendors for

Member Experience

Invoice Analysis

• Credit and Debit Card• Fraud, Reporting,

Servicing• PIN Networks• VISA and mastercard

• Largest Expense • Billing Errors• Mid Term/ New Term• Core• Card Payments• Digital Banking

CU Engage Contract Analysis Program (CUE CAP)• Launched in March 2020• One page view of critical contract

dates• Great at a glance for 2021 and 2022

planning• No cost to Credit Unions• Additional deep dive analysis

available

Thank You James Guild

Founder

(727) [email protected]

Jenn AddabboFounder

(813) [email protected]

mailto:[email protected]

• Lynn Heckler – PSCU

• Chief Talent Officer


The Human Aspect of COVID 19 in the WorkplaceLynn Heckler

Chief Talent Officer, PSCU

46 ǀ 6/2/2020 © 2019 PSCU. All rights reserved worldwide. Confidential – do not copy or distribute without permission.

Our Response to this Pandemic will Impact our Employer Brand

for DECADES

47 ǀ 6/2/2020

March – May 2020…What Just Happened?

150%increase in call

volume

75%With 2 weeks,transitioned

of employees to remote

90%Employees now work remotely 3 of 6

Offices open with minimal staff

48 ǀ 6/2/2020

Designing a WFH and RTW Strategy

Considerations:

TheOrganization

The Role

The Team

The Individual

Source: Gallup

49 ǀ 6/2/2020

▪ Data and Information

▪ Employee Considerations

▪ Site Readiness

▪ Technology

▪ Financial

▪ Communications

50 ǀ 6/2/2020 © 2019 PSCU. All rights reserved worldwide. Confidential – do not copy or distribute without permission.

Anyone can lead when the plan is working. The best lead when the plan falls apart.

-Robin Sharma

• John Ainsworth – CU Ledger

• President/CEO


• Mark Sievewright – Founder & CEO

• Sievewright & Associates


Adapting to New Realities in Financial Services

53

Mark [email protected] 2, 2020

The expansion and acceleration

of Digital Transformation with an

increased focus on Digital Trust

Decline in branch visits

and ATM transactions

Increased focus on “touchless”

interactions and payments

Reduced dependency on

the physical workspace -

toward a new WFA philosophy

The Impacts from COVID-19 are advancing a set of New Realities in Financial Services

The emergence of a Carpe Diem moment for America’s Credit Unions

Adapt yourCredit Union’s StrategyNOW toBecome Future-Ready!

• How will you handle 200% in call center and drive thru traffic?• What privacy concerns do you have with remote call center

employees?• How can you ensure that your member is not a fraudster?• How will your members know it’s your credit union calling

them?• Will your members want your staff to touch their driver’s

license?• How will you verify your member’s covered face against a

physical ID?• How do you trust that the ID you’re given hasn’t been tampered

with?• What personal health and safety concerns will your members

and employees have?

Why enhanced Digital ID Verification is a must

• John Bratsakis – President/CEO• Phone: 443-325-0774• Email: [email protected]

• Michelle Byrnie-Parker –SVP/Chief Public Relations Officer• Phone 443-325-0769• Email: [email protected]

• Rory Murray – VP – Advocacy• Phone 443-325-0775• Email: [email protected]

• Andre Lucas – Dir. Compliance• Phone 443-325-0777• Email: [email protected]

Website:

• Credit Union Resource Page:

• https://mddccua.org/index.php/news-cu-community/1681-workplace-guidance-preparing-for-and-responding-to-coronavirus

• League Infosight

• https://mddc.leagueinfosight.com/

• Consumer Resource Page:

• https://www.mddccua.org/index.php/news-cu-community/1713-consumer-guide-to-credit-unions-serving-maryland-and-dc-area

ASSOCIATION RESOURCES





https://mddccua.org/index.php/news-cu-community/1681-workplace-guidance-preparing-for-and-responding-to-coronavirus

https://mddc.leagueinfosight.com/

https://www.mddccua.org/index.php/news-cu-community/1713-consumer-guide-to-credit-unions-serving-maryland-and-dc-area

• Doug Leighton – VISA• Head of Community Accounts

• Email: [email protected]

• Jennifer Addabbo – CU Engage• Founder, Partner


• Phone: 813-362-4622

• James Guild – CU Engage• Managing Partner


• Phone: 727-698-9973

• Lynn Heckler – PSCU• Chief Talent Officer


• Phone: 727-571-7995

• Mark Sievewright – Sievewright & Assoc.• Founder & CEO


• Phone: 617-852-9626

• John Ainsworth – CU Ledger• President/CEO


• Phone: 804-763-9280

SPEAKER CONTACT INFORMATION







Documents

Charting a path forward through strategy & Execution · 6/2/2020 · Visa Tokens enhance the security & performance of Visa credentials across existing and emerging digital commerce