2020 Commerce and Fintech Year in Review Glenn Fodor, CFA Senior Vice President and Head of Data and Analytics November 17, 2020 © 2020 Fiserv, Inc. or its affiliates. Fiserv is a registered trademark. Other products referenced in this material may be trademarks or registered trademarks of their respective companies. Top Themes From 2020 Grocery Travel and Vacations Retail Banking POS Education Holiday Healthcare shopping Entertainment Home Fashion and Dining Beauty Fitness and Exercise Social Media FORTUNE World's Most Admired Companies® 2 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Paradigm Shifts or Passing Fads – Gardening Then Now How to Easily Grow Your Own Defeated Quarantine Gardeners Are Pandemic Garden Throwing in the Trowel Vice, April 24, 2020 The Wall Street Journal, September 16, 2020. FORTUNE World's Most Admired Companies® 3 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Paradigm Shifts or Passing Fads – Cooking and Baking Then Now Forget the Sourdough, Everybody’s Americans Are Starting to Get Baking Banana Bread Sick of Cooking at Home The Wall Street Journal, April 30, 2020 New York Post, August 20, 2020. FORTUNE World's Most Admired Companies® 4 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Paradigm Shifts or Passing Fads – DIY Home Remodeling Then Now Home Remodeling During COVID-19 – Pandemic Leads to Uptick in ‘Expect It to Cost 50% More and Take Home Improvement Projects 50% Longer,’ Says Finance expert Louisville Courier Journal, May 28, 2020 CNBC, September 25, 2020 FORTUNE World's Most Admired Companies® 5 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Paradigm Shifts or Passing Fads – Zoom Happy Hours Then Now My Virtual Social Life Is Exhausting: How to Have a Successful Turns out Zoom Cocktail Hours Can Virtual Happy Hour Burn You Out, Too The New York Times, March 10, 2020 Salon, April 3, 2020 FORTUNE World's Most Admired Companies® 6 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Paradigm Shifts or Passing Fads – Home Workouts Then Now At-Home Fitness May Outlast Tired of Your At-Home Workouts? Coronavirus Pandemic as Digital Maybe It’s Time to Try Running Offerings Keep Customers Engaged Outdoors. Fox Business, November 9, 2020 Washingtonian, July 14, 2020 FORTUNE World's Most Admired Companies® 7 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Evaluation Framework – Paradigm Shifts or Passing Fads Who is adopting the change? Is the new paradigm a sufficient substitute for the original? Is the change scalable (tech or digital driven), or is it a manual work-around? Was the change already underway, and the pandemic accelerated the inevitable? Is the change gimmicky or a stop-gap for something better that’s on the horizon? Does the new way bring about more benefits than simply substituting for the old way? FORTUNE World's Most Admired Companies® 8 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Broad Implications Stem From the Shift to Working From Home Transportation Fashion and beauty Place of residence Coffee and breakfast Building materials Daycare Furniture / Electronics Lunchtime FORTUNE World's Most Admired Companies® 9 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Home – The New Central Focus Home is where Americans feel Decorating and improving outdoor spaces safest amid coronavirus at home, as people are increasingly pandemic, survey finds preferring to socialize and entertain at home Source: General industry information, Navigate360, Fox News, October 9, 2020. FORTUNE World's Most Admired Companies® 10 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Home Improvement – DIY Have you started any 60% new DIY projects in 60% 71% 74% of DIYers are focusing more on their or around your home in the last week? March April May homes than other expenditures (Maintenance, replacement, repair, or remodeling work that you are doing) Improving the Home Office Our DIY customers are reengaging with their home and with The Home “ Depot in Desk or table for Chair Phone “ computer a meaningful way, and they are engaging across the store. Functional Privacy Noise canceling lighting headphones – Edward Decker, EVP of Merchandising at The Home Depot Robust home network (new Computer equipment (ergonomic router, mesh router system) keyboard, printer, external monitor) Source: General industry information, The Farnsworth Group and the Home Improvement Research Institute, The Home Depot. FORTUNE World's Most Admired Companies® 11 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Home Improvement – Staycations More people chose staycations over This trend has led to an uptick in home traditional summer vacation due to the improvement projects to create more COVID-19 restrictions. vacation-like amenities at home. How to create your own How to turn your backyard backyard movie theater into a water park this summer Luxury outdoor amenities: Premium Outdoor living environments: lighting, fireplaces, sophisticated grills Privacy and greenery Screened porches, gazebos and decks and outdoor food prep areas Source: General industry information, Newsday, June 1, 2020, CNN, June 29, 2020. FORTUNE World's Most Admired Companies® 12 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Banks Quickly Rolled Out Robots, AI and Virtual Assistants The pandemic-driven increase in customer service call volumes … 33% 3x increase in call volume to banking increase in average customer service during COVID call wait times …compelled banks to accelerate their digital transformation plans Banks rolled out robots to Banks used AI to support Bank virtual assistants learned manage surge of pandemic- complex underwriting thousands of ways to talk to related loans. processes. customers about the virus. Source: General industry information, McKinsey & Company, Bloomberg, June 8, 2020. FORTUNE World's Most Admired Companies® 13 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Digital Banking Expanded Its Demographic We added over one million new mobile “check deposit users with a surprising 22% of those being baby boomers or seniors “ who have been traditionally harder to engage digitally. – Brian Moynihan, CEO of Bank of America Source: Bank of America. FORTUNE World's Most Admired Companies® 14 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Branch Banking Incorporates Appointments and Consulting F.N.B. began redesigning its branches a few 72% 50 “ years ago to focus more on consultations and increase in appointment quasi-digital “solutions less on transactions. Recent consumer behavior “ volume from February to centers” are scheduled to be changes are accelerating the bank's plan to April for Regions Bank, opened by PNC in 2020 and convert more of its branches to this prototype. including a 350% increase in 2021 – Vincent Delie, new account openings CEO of F.N.B. Corp Source: General industry information, S&P Global, TimeTrade, June 4, 2020, Banking Dive, June 19, 2020, American Banker, September 15, 2020. FORTUNE World's Most Admired Companies® 15 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Social Media Usage Grows 4B+ ~2M people around the world new users joining social now use social media media every day each month ~51% ~53% ~9 of U.S. adults reported of people globally use different platforms that using social media at social media, up from the typical social media 50% just three months user is now a member of higher rates since the ago start of the pandemic Source: Hootsuite, We Are Social, GlobalWebIndex, eMarketer. FORTUNE World's Most Admired Companies® 16 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Expanding Use of Social Platforms 2B+ TikTok downloads in the past two years ~315M downloads in 1Q20, at the height of the pandemic, the most for any app ever in a quarter Top Non-game App Downloads (August 2020) Source: General industry information, eMarketer, Statista. FORTUNE World's Most Admired Companies® 17 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Future of Social Media Social media usage will likely normalize post pandemic. A survey of U.S. adults revealed: ~25% 51% 21% stated they thought their thought of I don’t expect this exact spike in would continue pre- and post- decreasing usage will sustain over a longer to spend more pandemic social media period of time. time on social social usage use after the media after the would be the pandemic – Mark Zuckerberg, pandemic same CEO of Facebook Source: General industry information, eMarketer. FORTUNE World's Most Admired Companies® 18 © 2020 Fiserv, Inc. or its affiliates. 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 Retailer’s Focus on Digital I continue to be excited about the Customer shopping behavior will be Growth in digital is way bigger to us opportunity I see for NIKE in permanently changed in a way that than just the sales or profit on that digital. We know that digital is the is even more digital and puts them one digital transaction because it “ “ “ “ “ “ new normal. The consumer today entirely in control to shop how they deepens our relationship with the is digitally grounded and simply want. Our strategy is to embrace guest, and that pays off in spending will not revert. that reality and lead, not follow. in aggregate. – John Donahoe, – Corie Barry, – Michael J. Fiddelke, CEO of Nike CEO of Best Buy CFO of Target +83% +240% +195% YoY sales growth for Nike’s YoY domestic online revenue YoY comparable digital sales digital channel growth growth +200% 53% 10M growth in demand for Nike’s of total domestic revenue from new digital guests added in commerce app online; vs.