Technology

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Recommendations for
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Recommendations By
BIG RED KEY CONSULTING
Team 2 Seth Axthelm Jill Cremeans Ryan
Ellis Eric Hedrick Kelly Jones
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Stock is Low!

• No consistent revenue growth
• Low efficiency
• Fee income not fully realized

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Two Options

• Decide to sell Key
• Decide to remain independent

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Selling Key

• Responsible
• Less job loss
• Value for stockholders will increase

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Selling Key What Must Be Done

• Key must stand out from other undervalued banks
• Sell off branches and divisions

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Maintaining Independence

• Entails a massive overhaul of three areas
• Structure
• Expansion
• Technology

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Structure

• Revenue Growth
• More money coming in, less spent
• Spin off less profitable branches
• Evaluate McDonald
• Fee Income
• You have a large customer base of potential
  Capital Markets customers
• Bring in private placement loan personnel
• Must have a greater overall focus on fee income

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Structure(Cont.)

• Spotlight Positives
• Wide range of services
• Excellent credit quality

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Expansion

• Key has close to 1,000 branches throughout 14
  states
• Pacific Northwest, Midwest
• NY and Ohio contain about half the branches
• Alaska, Florida, New Hampshire 3 of branches
• South and Southwest are the largest expanding
  regions with an 80 population growth in the last
  15 years

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Why Not Expand Then?

• Alaska and New Hampshire are growing at a slow
  rate (only 20) over the last 15 years
• Key could spin off these branches and begin to
  expand down south
• Kentucky, Tennessee, Georgia and Carolinas have
  a combined population growth rate of about 50
  over last 15 years
• Bricks n mortar branches need to be
  strategically placed in growing cities such as
  Atlanta, Charlotte and Columbia

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What Expanding Will Do

• Deposit base will grow
• Profit will flourish
• Thus, stock prices will escalate for Key

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Supermarket Banking

• Combines consumers two main pocketbook
  destinations in one location
• They both are intimately associated with home,
  family and future
• It is a new, innovative approach that banks need
  to take to compete
• Increase customer base and give more Key more
  exposure to the public

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Technology

• Expand Services Already Online
• Vs.
• Pure Play

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Expand Services Online

• You already offer many services online, but there
  are still many services not offered
• Recommendations
• Add online trading, insurance, loans, and taxes
  all fully accessible online to apply for and use

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Other Services for the Future

• Interactive meetings with financial advisors via
  online chats, emails, or video conferencing
• Pager or email service that notifies customers of
  deposits and when they are in danger of bouncing
  checks
• Increase speed of transactions being posted to
  online register

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Pure Play

• Benefits
• Offer more attractive rates on savings, checking,
  loans and other interest bearing accounts
• Target a younger customer base
• Opportunity to help expand globally

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Pure Play

• Negatives
• Expensive
• Better off merging or acquiring a internet-only
  bank that is already stable
• Not the best step for Key at the present time

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Innovative Technology

• Merge or partnership with Internet Service
  Provider
• Offer free internet access
• Possibly offer free personal computer with every
  new account

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E-Wallet

• Separate account which a user can deposit digital
  cash and use for online shopping
• Possibly explore companies like Passport.com or
  Flooz.com

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Smart Card

• Download cash onto a credit card with a special
  computer chip
• Offers a replacement for cash
• Used with a personal computer, smart card becomes
  a personal ATM

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Palm-Held Computers

• Offers real-time banking on a wireless network
• Check balances, be notified of deposits, pay
  bills, invest online, and all other services
  banks can offer on the internet

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Banks need to be open-minded about their
partners and creative in their desire to offer
services. Not all proposals will look good in
the cold light of the boardroom but they may
still contain the idea that will conquer the
worlds banking market. -William Forster, IBM