MobilePay a Danish fairy tale. Sune Gabelgaard and Kristian Stephansen, Global Fraud Unit, Danske Bank

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1 MobilePay a Danish fairy tale Sune Gabelgaard and Kristian Stephansen, Global Fraud Unit, Danske Bank

2 Danske Bank is present in 16 countries around the world, with strong focus on the Nordics Danske Bank locations Home market Other markets, where we are present London Serves business customers in the British market Russia Serves Nordic customers that do business in Russia New York Serves US institutional investors China Representative office serves Nordic businesses Northern Ireland Serves personal and business customers and large institutional clients Ireland On the Irish market, we concentrate on serving the largest business and institutional clients The Baltics Serves corporate clients and private banking customers also an IT and operations development centre Luxembourg Serves expatriates living outside the Nordics Germany Serves business customers in Germany Poland Serves Nordic customers that do business in Poland India, Bangalore Development centre with more than 800 IT professionals 1

3 MobilePay some numbers merchants trx/day Euro 34,- / payment +3.5 million people are regular users of MobilePay 2

4 Danske Bank chose in October 2012 to develop its own mobile payments service P2P project (SWIPP) Danske Bank was part of a national P2P project (SWIPP) for almost 2 years Main reasons for leaving the Danish industry project in October 2012 Pressure from new entrants require swift responses Intention to implement service in other market areas Confidence that we could make a better solution if we had full control A belief that online product differentiation is important and can have a positive impact on image, customer acquisition etc. 3

5 Initial thoughts It must be just as easy as cash MobilePay must be very simple and accessible to everyone We want to make it easier for people to transfer money to one another 4

6 The key to success is addressing a real customer problem Low entry barriers register on the move Reach can be used by everyone Speed & security realtime transfers and very secure Simplicity few steps to make payment amd same user experience on all platforms 5

7 ... and the result was a simple solution for making P2P payments launched in May 2013 Send, receive and share bills Accessible for everyone 2 min. and you re ready to use it 6

8 Consistency is a keyword. Same payment experience no matter the payment situation MobilePay Online for the webshop MobilePay AppSwitch pay with MobilePay in other apps Terminals with MobilePay for the store MobilePay Point of Sales for large stores and chains MobilePay Business for small shops 7

9 It is all about providing value added services and strong partnerships Loyalty Charity Receipts Partnerships Invoices 8

10 MobilePay will in 2017 be established as an independent company 100% owned by Danske Bank, with a number of distribution partners MobilePay private users Distribution partners MobilePay business customers 9

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12 Fraud Trends Prepaid Phones Metro Fraudster Young and Foolish 11

13 Simple rule based monitoring Human machine learning MP trx R1 R2 R3 R4 R5 R

14 Developments in MobilePay Fraud Losses - Denmark MobilePay Basis Points compared with Payment Cards MobilePay Basis Point Average Dankort Basis Point (Online fraud all DK issuers) Average MC Basis Point (all DK issuers) ,2 Dec-15 1,6 Jan-16 2,2 Feb-16 1,2 Mar-16 0,9 Apr-16 1,3 May-16 0,8 Jun-16 1,5 Jul-16 0,9 Aug-16 0,7 Sep-16 0,7 Oct-16 0,7 Nov-16 1,1 Dec-16 Gross and Net Losses Number of users blocked due to misuse and fraud Net losses Business fraud Insufficient funds P2P fraud Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 jun-16 jul-16 aug-16 sep-16 okt-16 nov-16 dec-16 jan-17 feb-17 mar-17 13

15 MazarBot Goods Not Received 14

16 Sune Gabelgaard and Kristian Stephansen and 15