Online Statements, Check Imaging & Check Reorder

April 21, 2004Michal Geller

Director, Product Management

Agenda

• Why Check Imaging, Online Statements and Check Reorder?

• Check Imaging

• Check Reorder

• Online Statements

• Digital Insight Offerings

• Turnkey (Load) Solution or Vendor Options

Please email questions throughout the call. We will collect them and respond to them at the end of the call.

Internet Banking Options: How These Products Fit

Product Meets Consumer Demand

Provides Measurable ROI

Online Statements X X

Check Imaging X X

Check Reorder X X

Funds Transfer X X

Account Aggregation X X

Wireless X

Web/Direct Connect X

Red = Must-Haves

Product Trends

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Online Statements

Check Reorder

PFM

Funds Transfer

Aggregation

Wireless

Third Party Vendors Increase Online Adoption

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OS, CI, CR &FT

End User Penetration RateAcross All DI Internet Banking Clients

Source: Digital Insight. December 2003 data

Product Choice Increases Retention

Source: Digital Insight

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1-2 Products 3+ Products

Percent Increase in Retention of Internet Banking Users

What is Check Imaging?

• Integrated check image viewing from the account history screen in Internet Banking

• Some options allow for in-branch research

Why Check Imaging?

• 16% of end users view checks each month on average

• 68.9% of Internet Banking end-users would be willing to accept an online image in lieu of paper

– Gomez

• The average check copy retrieved from microfilm cost $7 and takes 3 days

– Tower Group

• Check 21 will increase adoption of imaged checks. Presenting them to the end-user leverages the investment.

Check Imaging Benefits

• Improved access to Check Information

• National City Corp saw a 26% increase in customer satisfaction

• Fraud Reduction

• Improved customer service response for:

• Research

• Reconciliation

• Self Service

• Check images can be available as soon as they are imaged rather than waiting for end of month

Source: Check Imaging: Moving to Prime Time and Beyond, Celent, 2003, BTN 2004.

Check Imaging: ROI Calculator

Check Online CostRetrieval Image Savings

Number of Online Customers 15,000 15,000

Average Expense 7.00$ * 0.10$ 6.90$

Average number of images retrieved per month per customer 0.01 0.33

Monthly expense for image retrieval 1,050$ 495$

Total Savings 555$

* Source:Robert Hunt, Tower Group.

Check Imaging Increases Internet Banking Penetration

• FI #1

• California CU

• 52,000 members

• 22% Increase in new IB users/month

• FI #2

• Eastern Bank

• $2B assets

• 27% Increase in new IB users/month

• FI #3

• Eastern Bank

• $250M assets

• 39% Increase in new IB users/month

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Check Imaging Effect on New IB Users

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Check Reorder

• It makes check order easy

• Increase check orders

• No need to remember logins, codes, MICR, RTN, etc.

• Users tend to upgrade to more expensive checks

• Increase revenue per order

• Available for Harland, Deluxe, Liberty and Clarke American

• Users spend between 20-40 minutes on Check Reorder application (Harland)

• Average upsell is between 10-30% vs. offline

Check Reorders Soar Behind Internet BankingAllegacy FCU

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Website Check Reorders

Home Banking CheckReorders

Integration with Home Banking

Put on Main Home Banking Navigation

What are online statements?

• Online storage and access of statements available from within Internet Banking

Why Online Statements?

• Stop sending paper!

• Save $1-$2 per end user

• Monthly marketing opportunities

• Faster availability

• Historical statements

• Web benefits such as email reminders, searches and personalization

• Multiple vendor choices or load solution

Online Statements: ROI CalculatorPaper Online Cost

Expense Description Statement Statement Savings

Stamp 0.37$ -$ 0.37$ Printing 0.50$ -$ 0.50$ Stuffing 0.15$ -$ 0.15$ Envelope 0.15$ -$ 0.15$

Electronic Delivery -$ 0.10$ (0.10)$

Total 1.17$ 0.10$ 1.07$ Number of Online Customers 15,000 15,000

Net Cost 17,550.00$ 1,500.00$ Online Statements Monthly Minimum 500.00$ Total Cost 17,550.00$ 1,500.00$

Cost Savings to the FI for Online Statement Delivery 16,050.00$ Cost Savings Per Customer for Online Statement Delivery 1.14$

Average Online Statement Penetration

Months Since Live Date Online Statement Penetration*

< 6 Months 22.9%

6-12 Months 22.2%

12-18 Months 24.0%

> 18 Months 31.3%

Overall Statement Penetration

29.1%

* Number of users who have accepted the Online Statement Disclosure / Users who have logged in within 180 days. Averaged across all IB clients using EPSIIA or Integrated Statements.

Online Statement Solutions Vary

• Integrated vs. Single Sign On (SSO)

• Service Bureau vs. In-House

• PDF vs. HTML Delivery

• Multiple Marketing Options

• Email Notifications

• Monthly “envelope stuffers”

• Custom marketing messages within statements

• Clickable Check Images

Opt Out of Paper

The true benefit of Online Statements

Opt Out of Paper

Choices and availability of options can be customized

Opt Out of Paper

PDF Statements

Replicates your print statement exactly

HTML Statements

More flexible design and functionality

HTML Statements

Clickable Check Images

View checks directly from within the statement

Multiple Statement Types Supported

Cross-Sell and Upsell

• Use monthly email reminders to promote products

• Perform targeted marketing within eStatement base

Marketing Opportunities

• Use monthly email reminders to promote products• Perform targeted marketing within eStatement base

Strategies to Increase Adoption: eStatements

• Bundle with Internet Banking

• Waive account fees with eStatements/Charge for Paper

• Bundle eStatements with free Bill pay. Eastman CU Case Study

• Online Statements save printing and mailing costs and reduce the impact of the decrease in Bill Pay revenue from members.

• In one month:

• Internet Banking enrollments grew over 600%

• Bill Pay enrollments increased over 1,700% along with a 20% increase in Online Statement sign-ups.

Online Statements Increase Internet Banking Penetration

• FI #1

• CU in the Northwest

• 56,000 Members

• 10% Increase in new IB users/month

• FI #2

• California CU

• 65,000 Members

• 32% Increase in new IB users/month

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Online Statements Effect on New Users

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Online Statements: FI Focus

Total Members

opting out of paper

statements

Average Cost Per Paper Statement

Monthly Cost Savings for

Members who have opted

out

Wescom CU

(as of 6/2003)

16,135 $0.62 $10,003.70

Credit Union #1

1400 $2.00 $2,800.00

Credit Union #2

19,819 $.58 $11,495.02

Source: Wescom Resources Group

Online Statements: Benefits of Internet Banking Integration

• Orange County’s Credit Union

• Provided eStatement solution on their website.• < 10% Online Statement Penetration

• The month after they integrated with Internet Banking

• > 20% Online Statement Penetration – Representing over $2500 of additional cost savings in that month alone.

• Within a year:• 27% Online Statement Penetration

Online Statements: FI Focus

“Over 10% of our members have chosen to eliminate their paper statement in lieu of online statement access.  Our initial savings resulting from decreased printing charges have totaled over $30,000 monthly."

-Kerry Parry

Mountain America Credit Union

Digital Insight Check Imaging

1. Load• FI sends check images to our vendor for storage and retrieval

• Billing and customer support through Digital Insight

2. Preferred• Vendor has contracted with DI to provide superior support for

DI customers

3. Available Vendors (Over 50 Total Vendors)

1. Load

• FI sends print files to our vendor for storage and retrieval

• Billing and customer support through Digital Insight

2. Preferred

• Vendor has contracted with DI to provide superior support for DI customers

3. Available Vendors (Over 25 Total Vendors)

Digital Insight Online Statements

Digital Insight Online Statements

• We can help find the right solution to meet your needs, including showing multiple options.

Summary

• Check Imaging & Online Statements can save you money

• Increased IB Penetration

• Reduced costs

• Self Service

• Check Reorder can make you money

• Increased orders at less cost

• Multiple Options for each

• DI Load options

• Get a referral for a Preferred Partner

• Ask about the availability of your current vendor

Q&A

• We will be posting the slides from this conference on the client site within the next few days

• Preferred Vendors on DI client site:

https://www.diginsite.com/clientsite/prodserv/preferred_vendors.html

Online Statements, Check Imaging & Check Reorder

April 21, 2004Michal Geller

Director, Product Management