1 Share Price Wachovia Bank example essay topic

Table of Contents 1. Background 1.1 Company History... 11.2 Driving Force... 11.3 Location... 11.4 Quick Summary of: 1.4.

1 Employees... 11.4. 2 Revenues Growth... 21.4.

3 Income Growth... 21.5 Website... 22. Products / Services 2.1 Major Categories of Products / Services... 22.2 Target Marker... 32.3 Important Characteristics of Wachovia...

42.4 Differentiation from Competitors... 42.5 Market Share... 52.6 New & Upcoming Features... 53. Market Analysis 3.1 Industry Characteristics... 63.2 Current State of Technology...

63.3 Competitive Analysis... 7 3.4 Social / Legal/Ethical Issues... 94. Financial Information 4.1 Ownership Structure...

124.2 Income Statement & Balance Sheet Analysis... 124.3 Trend for: 4.3. 1 Share Price... 134.3.

2 Investment Performance... 145. Recommendations 5.1 Current Technology & Improvements 5.1. 1 Strategic Management... 145.1. 2 Products & Service Offerings...

155.1. 3 Customer Relations... 165.1. 4 Human Resources...

175.1. 5 Marketing & Sales... 185.1. 6 Accounting and Finance... 195.1.

7 Distribution of Money... 195.1. 8 Alliances & Partnerships... 201.1 Company History Wachovia was formed in 2001 by the merger of Wachovia Corporation and First Union Corporation. Wachovia National Bank was formed in Winston, North Carolina in 1879.

The name Wachovia came from the Latin name for the German word Wachau. In the mid eighteenth century Moravian settlers gave the name Wachau to a tract of land in North Carolina because it resembled a piece of land along the Danube River called Der Wachau. First Union Corporation was formed in the early Twentieth century funded by a $100,000 stock issue. The company's first headquarters were in a hotel in Charlotte, North Carolina. The company later merged with First National Bank of Ashville to form First Union National Bank of North Carolina. 1.2 Driving Force The current Chief Executive Officer of Wachovia is Ken Thompson.

Thompson has been with the company since 1976 and previously held the CEO position at First Union Corporation. Wachovia is the fourth largest holding company in the U.S. and is the third largest full-service brokerage based on assets. 1.3 Location Wachovia headquarters is located in Charlotte, North Carolina, but the company has operations internationally. The company operates 3,900 financial centers and retail brokerage offices in forty-nine states and around the globe. 1.4.

1 Employees Wachovia has 95,000 employees world wide. Of those ninety-five thousand, there are ten thousand-five hundred registered financial service representatives. 1.4. 2 Revenues Growth In 2003 Wachovia had revenues of 24.4 billion dollars compare to 23.51 billion dollars in 2002. The increase in 2003 was the third consecutive year that Wachovia has seen year-end revenue growth. Currently, Wachovia has experienced fifteen percent revenue growth in the first two quarters of 2004 and an eleven percent decrease in revenues in the third quarter. 1.4. 3 Income Growth Wachovia has seen income growth for nine consecutive quarters dating back to the second quarter of 2002 when compared to prior year income.

Net Income in 2003 was 4.2 billion dollars compared with 3.6 and 1.6 billion dollars in 2002 and 2001.1. 5 Website The Wachovia corporate website is web 2.1 Major Categories of Products / Services Wachovia Corporation is one of the nation's largest providers of financial services to retail, brokerage, and corporate customers. Wachovia's earnings are primarily generated through its four core businesses: General Banking, Capital Management, Wealth Management, and the Corporate and Investment Bank. Through this balanced and diversified mix of businesses, Wachovia is able to provide a broad range of financial products and services, delivered through multiple channels.

For the purpose of this report, our group will focus on General Banking. General Banking provides the following products / services : Checking &Deposit Savings Debit & Credit Cards Online Banking Additional Services IRAs InvestmentProductsCrown Access Banking Premium Savings VISA Check Card Online Bill Pay Residential Mortgage Traditional IRA MutualFundsCrownBanking HighPerformanceMoneyMarket Gold Check Card Wachovia One Stop Real Estate Roth IRA SEP IRA AnnuitiesRealEstateAccessFifty Checking CDs VisaBuxxCard Online Checking Financial Service Free Checking IndividualRetirementCDs Campus Card Home Equity Student Checking Paying Bills with Visa Check Card Direct Deposit Personal Loans Student Loans 2.2 Target Market As a bank, it is hard to identify a target market. Generally a bank is happy to have anyone as a customer so long as their money is green. Obviously, Wachovia would like to have customers use a variety of their services so that they would stand to generate more income. Wachovia identifies those customers who are both transactors, savers / investors, and borrowers as "Sweet Spot Customers". Sweet spot customers represent 21.1% of Wachovia's total customer base and could be considered their target market.

2.3 Important Characteristics of Wachovia fourth largest U.S. bank holding company based on asset so three year return to shareholder's of 86%o third largest U.S. full service brokerage firm based on client assets o over $400 billion in asset so 2,500 branches o 86,670 employees total, 34,487 employees in General Banking 12 million customer households and businesses o 4,400 ATMSo Top quartile stock performance (No. 2) among the top 20 U.S. banks since the beginning of 2001 o Among Business Week's 50 best performing major companies in the U.S. o A standout on the Fortune 500 and Global 500 Ranked No. 21 among the 500 largest U.S. corporations by profits; No. 73 by revenues Ranked No. 49 among the 500 largest corporations in the world by profits; No. 198 by revenues Ranked No. 5 among Fortune 500 Consumer Banks and No. 23 among Global Commercial & Savings Banks 3rd largest in deposits in U.S. 2.4 Differentiation from Competitors Wachovia strives to differentiate from its competitors through superior customer service. Since 2001, Wachovia recognized that the company could only achieve a transformation in service quality if senior management made it a top priority. Key changes that were made include: o committing to consistently measure and monitor customer service quality using the service quality "numbers" just as management uses it financial numbers: to establish goals, measure and reward performance, and make changes to reach established goal so designating an executive-level "Service Quality Champion" whose sole job is to boost service quality measurement so designing monthly high-level service quality meetings that hold leaders responsible for improving service quality performance This commitment to quality customer service is reflected in a recent statement by CFO, Bob Kelly, "Wachovia's vision is to be the best, most trusted and admired financial service company in the nation". Wachovia has begun to use more advanced technology such as SAS to not only improve customer satisfaction but to differentiate themselves from competitors. 2.5 Market Share 2.6 New and Upcoming Features Wachovia is gearing up to implement the federally mandated Check 21 program which impacts all U.S. financial institutions. This program gives financial institutions the option to move checks electronically by allowing them to replace an original check with a substitute check when necessary.

Wachovia announced plans to re-invent personal free checking to better meet consumer needs. Their new plan requires no minimum balance, no monthly service fee, and unlike many bank's free checking accounts, does not require direct deposit. This account will also come with Visa extras debit rewards program which allows customers to earn points by using their check cards. Customers will also have access to free online bill pay.

Wachovia has also paired with Work Brain to integrate a workforce management solution that provides time and attendance management, employee scheduling, entitlements and balances tracking and messaging function. This will replace Wachovia's legacy time tracking systems. 3.1 Industry Characteristics The banking industry is very dependent on technology. It has very strict laws and regulations to abide by and process controls to meet.

While complying with all these a bank must also meet its customer's expectations and surpass its competitors through differentiation. Ways in which banks differentiate themselves from other banks is through technology that makes it processes faster, more accurate and more secure. All of these things lead to greater customer satisfaction and up hold the bank's reputation, as well as meeting as all regulatory compliance issues. 3.2 Current State of Technology Technology is one of the most important areas of the banking industry. Due to the many regulations that banks must adhere to, technology helps make it easier for banks to comply. It also brings better marketing strategies as well as better service and security to their customers.

With the passage of Check 21 banks are now able to use substitute checks, which is a paper reproduction from an electronic image of the original check, instead of the actual original check. This makes processing times for checks shorter and easier. Banks are investing heavily in this area because it adds an extra benefit to its online banking services as well as cuts down on costs. Online banking is the major thing for banks these days and people are beginning to use online bill paying options more. However, people can type in wrong amount, set up automatic payments incorrectly, hit the enter key one too many times, and misplace decimal points. So banks are looking toward technology that will cut down on these types of mistakes, as well as make them money and protect them against fraud.

If a customer is trying to make a large payment, the software would compare that amount to past payments and then might ask the customer for confirmation of that amount. If the customer still wants the payment to go through, then this would raise a red flag and set off some sort of fraud detection. Also, if a customer makes a large deposit into a non-interest barring account, they could be engaged into some sort of dialogue as to how that money could be more profitably invested. One of the things that Bank One has done to differentiate itself from competitors is to team up with MSN Money.

MSN Money offers account aggregation on their website and by partnering with them Bank One will be able to hone in on some of the 15 million monthly U.S. visitors to the site. Account aggregation is where customers can enter in all of their financial information and accounts into one central location. This is to help customers get a better overall look at their finances and net wealth, as well as make it easier for them to manage their finances. MSN helps Bank One tailor online ads based on their customer data. Citibank, a part of Citigroup, has also partnered up with MSN Money. However, Citibank has also differentiated itself from competitors by launching an aggressive campaign to combat online fraud.

They are offering virtual account numbers / controlled payment numbers that link back to a customer's real credit card account, but expire after a single online shopping use. A customer can get these numbers extended to be used several times or only with that merchant. This way the merchant or any would be hackers never have access to the actual account number, only the virtual account number / controlled payment number, which is useless for other purchases. Bank of America and Wachovia are differentiating themselves from the competition with a SAS Broker Surveillance system that enables them to collect and consolidate data from disparate sources a day and profile all account, customer, broker and trading activity. They can use this software to compare transactions with acceptable scenarios and generate alerts when scenario conditions have been breached. Its sales surveillance component flags: excessive trading, asset turn and churn, incorrect calculations of break point discounts, mutual fund switching, short-term trading, market timing, late trading, front-running, parking, and unauthorized trading.

The software can also look for growth or change that might be signs of lifestyle change or attrition and the bank can tailor its offering of service to that customer's needs or changing needs. Bank of America is further differentiating itself by getting EDS to re engineer and manage its voice and data services. EDS and Cisco systems will deploy the banks new IP telephony network that will replace 360 PBX voice systems. The IP technology will make it easier to provide bank employees with access to integrated data from business applications, develop customized XML-based applications, and extend contact center resources to multiple locations. It should also save them a lot of money. 3.4 Social / Legal/Ethical Issues The most important aspects for a bank are security, safety, and trust, which all affect the over all reputation of a bank.

Brand is everything and one of the major things affecting reputations with technology is phishing because it hits at the root of customer confidence. Citigroup has been the largest bank victim to date and the second most attacked company. Phishing cost anywhere from $100,000 to $150,000 per attack and therefore, technology to fight this type of fraud is very important to the industry. Bank of America is battling this by creating a database of account holders who have received e-mails and continually cross checks it with those accounts in an effort to preempt any unauthorized charges or identity theft.

They also made it possible for their call center staff to directly contact Web Security if an attack was suspected. However, a new type of phishing scam called a "layered site" offers links to websites that mimic the bank's site, but overlays the authentic site. So that once the financial data is extracted the fake site fades and the real site emerges. Someone who is not paying close attention may not even see the fade or realize that they have been attacked. Pass Mark Security has come out with technology to offer a personalized image to authenticate company e-mails as well as its website. Customers tend to forget passwords, but they remember images.

Banks are required by law to identify and help stop criminal activity. Money laundering is the act of making illegally acquired money / funds look as if it were earned legally. It is also money legally obtained for illegal purposes. The money is usually laundered through the exchange of cash for large denominations, converting the cash to other monetary instruments, or depositing the cash into established legitimate looking accounts. Experts estimate that between $1 trillion and $2 trillion is laundered through financial companies around the globe annually. To help stop money laundering the Bank Secrecy Act was passed in 1970.

The Bank Secrecy Act was established to: o Deter money laundering and the use of secret foreign asset accounts. o Improve detection and investigation of criminal, tax, and regulatory violations. o Create an investigative "paper trail" for large currency transactions by establishing regulatory reporting standards and requirements. o Impose civil and criminal penalties for noncompliance with its requirements. On October 26, 2001 the USA Patriot Act was passed and adopted in response to the terrorists attacks in the United States and broadened the scope of the Bank Secrecy Act. The Patriot Act broadens the definition of money laundering and adds new record keeping, monitoring, and reporting requirements on financial institutions and their employees. The Patriot Act adds new requirements related to: o Sharing information with regulatory authorities and law enforcement officials about persons and entities engaged in or suspected of terrorist acts, or money laundering that may support terrorist activity. o Requiring the Federal Reserve Board and other federal banking regulators to consider the effectiveness of an institution's anti-money laundering activities before a merger or acquisition can happen. o Enhanced standards for identifying customers at account opening. o Increased due diligence on certain non-US customers and transactions and on private banking customers. Most money laundering occurs through: wires, internet banking, money orders, official checks, and travelers checks. Therefore, the Monetary Instrument Log, the Currency Transaction Report, and the Customer Identification Program were all established.

The Monetary Instrument Log must be filled out if a customer uses cash to purchase official checks, money orders, or travelers checks from $3,000 through $10,000. The Currency Transaction Report must be filled out for all cash transfers totaling more than $10,000 completed by an individual or business during the same business day. The Customer Identifications Program has four steps: 1. Collect the customer's identity information. 2. Verify that information.

3. Record and retain that information. 4. Check the customer's name against government checklists.

The Office of Foreign Asset Control (OFAC) was established to support U.S. foreign policy and national security objectives by administering and enforcing laws that impose economic sanctions on those who threaten the security, economy, and safety of the United States. OFAC issues a list of foreign countries to which sanctions apply as well as blocked persons and countries. So software was developed to screen new accounts and wire transfers. This software compares every customer's name and information with the list and also verifies that countries involved in the transactions are not on the list of sanctioned countries. All of these regulations have produced many anti-money laundering platforms. Wachovia and Bank of America have adopted SAS, which gathers data from transactions a financial services company completes each day and analyses it based on a set of about 130 different scenarios.

The software can take these scenarios and analyze it further: o The software can create profiles, so that if transactions do not fit customsr's normal behavior it will generate an alert. o It can examine the data based upon a certain set of facts or rules. o It can analyze the data by a neutral network that attempts to predict possible money laundering behavior in the future. This software does no focus on one particular part of the business, instead it is across all lines of business and built on scenarios for each business. Then at the end of the day it is all pulled together and you can look at the aggregate. Banks must also know their customers.

Like what line of business they are in, what their normal habits and types of transactions are, where the money in the deposits is coming from, what type of people and countries do they deal with, and where are they from. Banks must report any suspicious activities. Failure to do so can result in monetary penalties and / or jail time for bank employees and the bank itself. It can also damage the reputation of the bank in the eyes of their customers.

4.1 Ownership Structure Wachovia is considered widely held with inside executives only holding six percent of total outstanding shares. Institutional and mutual fund owners account for forty-four percent of outstanding shares. The top inside holder is CEO Ken Thompson, who holds almost two hundred seventy-three thousand shares. Executive Vice president Jean Davis owns about two hundred thousand shares and is the second largest inside holder. The top institutional holder, Barclays Bank, holds over sixty five million shares, which amounts to just over five percent.

4.2 Income Statement and Balance Sheet Analysis Wachovia has seen healthy growth in net income and revenues for the past two years. Net income for 2003 was up eighteen percent over 2002 and revenues increased three percent in 2003. Financial Ratios Net Interest Margin Return on Assets Return on Equity 2003 2002 2003 2002 2003 2002 Wachovia 3.7 3.9 1.1 1.1 13.2 11.8 Bank of America 3.4 3.8 1.5 1.4 22.0 18.7 JP Morgan 2.1 2.1 0.9 0.2 15.4 4.0 Citigroup NA NA 1.5 1.2 19.5 16.2 NA- Information Not Available Net Interest Margin (NIM) is a key ratio on the income statement of a bank. NIM is the difference between the yield on earning assets and the rate paid to obtain those assets.

Wachovia's NIM of 3.7 percent in 2003 and 3.9 percent in 2002 is better than all of its key competitors. A higher NIM means that Wachovia is spending less money than its competitors for each revenue dollar. A bank's non-interest revenue (NIR) is also a key indicator of financial performance. In 2003 Wachovia had NIR of over nine billion dollars compared to just under seven billion dollars in 2002, which is a nineteen percent increase. During 2003 Wachovia had Return on Assets (ROA) of 1.1 percent and Return on Equity (ROE) of 13.2 percent.

Wachovia's ROA is the second lowest compared to all of its key competitors mentioned previously and ROE is the lowest compared to key competitors. These ratios show that Wachovia is not utilizing their earning assets and shareholder equity as efficiently as its competition. Wachovia increased its loans and leases by almost seven percent from 2002 to 2003. The company has kept it reserve for loan losses the same from year to year.

Keeping the same loan loss provision despite an increase in loans is a reflection that Wachovia believes it will be able to collect a higher percentage of its loans. Long term debt only comprises nine percent of Wachovia's total debt and equity during 2003. This is a good percentage that will allow Wachovia to borrow additional money if it is needed. 4.3. 1 Share Price Wachovia bank has seen solid share price growth since going public in 1989. The stock is currently trading at its fifty-two week high of fifty-two dollars and eighty five cents.

Standard and Poor's currently gives the stock its highest, five-star rating, and sets a one year price estimate at fifty eight dollars, which is almost a ten percent appreciation. The chart below shows that the stock has seen total appreciation of almost four hundred percent, which is slightly better than the return of the Standard and Poor's 500 index over the same period of time. 4.3. 2 Investment Performance An investment in the stock of Wachovia over the past ten years has grown at an annual rate of 13.6%. This value is calculated assuming that the shareholder participated in Wachovia's dividend reinvestment program (DRIP). Appendix A shows the value as of the end of 2003 of a one hundred thousand dollar investment in Wachovia's stock ten years ago. 5.1. 1 Strategic Management Right now Wachovia ensures its advantage by partnering with small and mid-size suppliers to better serve customers.

They look for partners that specialize in e Commerce and automated reporting systems. They invest in companies like Data Synapse, Core Brix, Lu meta, and Kestrel Technologies. The following is a list of strategic decisions that we are recommending for Wachovia. o Install Internet terminals at banks to attract the customers "always on the go". o Install RFIDs (Radio Frequency Identification Device) in debit and credit cards so customers can locate nearest branches. RFIDs can also be used to enhance privacy of debit and credit cards and can decrease fraud. o Cross-train all employees in the bank. Bank employees can work as tellers during peak hours, and during slow hours, they can sell CDs, help customers fill out applications, and work as brokers. This allows customers to do business with one person instead of running around to different people for various services. o Expansion to overseas markets: offer services like currency exchange, foreign investment services, and international debt management. o Use the Wall-Mart model in coordinating all 3200 or so banking branches under one central roof.

This will centralize company wide operations and increase speed at which management decisions can be handed out. o Expand branches or regional offices into the mid-west and north-west. Wachovia is focused in the Eastern / SouthEastern region of the U.S. Expanding away from the coastal areas can also decrease fraud and theft since a lot of illegal activities take place around ports and coastal areas. o Increase company offices overseas to be able to compete with companies like Citigroup. o Enhance use of cookies. The company can use "cookies" to see from what websites or portals most of the customers are arriving from. Gathering this data can help Wachovia advertise on portals that will maximize customer entry. o Use third party service providers to analyze web traffic and monitor customer flow in and out of company website. These providers can measure the effectiveness or different emails, advertisements, and other promotional devices. All this will increase e-commerce and online marketing campaigns. o South Trust currently uses VOIP and this has many advantages.

We want to make VOIP a company wide measure. Implementation of VOIP leads to cost reductions in conference calls and long-distance charges, increased bandwidth for movement of large pieces of data, more flexibility of mobile workforces, and enhanced security for disaster-recovery efforts. o For long term growth and customer retention, implement a company-wide corporate responsibility initiative. This would be a company wide mandate that backs up the company's existing platform on ethical standards. The mandate would outline specific strategies Wachovia would implement in the coming years to improve social and ethical responsibility. o Long term growth strategy could also be to increase market-share by increasing horizontal integration (acquire more banks) and streamlining / tweaking vertical integration, to make Wachovia unique from its competitors. Expand Wachovia's market niche. Use innovative technologies to increase and diversify financial services deployment. 5.1.

2 Product and Service Offerings Wachovia offers numerous financial services in four main categories: personal finance, wealth management, small business, corporate and industrial areas. Some of the services offered are in the banking, lending, insurance, brokerage, and investing planning areas. We offer a few suggestions that use technology to improve product and service offerings. o Wachovia offers two services for tracking finances on the Internet: Online Bill Pay and Online Brokerage. These two services are mostly free but the problem is that they are not unique enough.

There is not much incentive for the customer to use these services when similar services with other companies (Citigroup, Bank of America, JP Morgan, etc... ) are available. o Offer online banking in various languages, not just Spanish and English. o Wachovia has joined in on the race to get customers enrolled in their account aggregation system. Being the financial institution to capture aggregation relationships first puts it in the position to look at the competitive holdings and craft the right offer. If you miss out on the opportunity to get your customer to do aggregation at your site, you have given your competition the opportunity to look at your assets with that client and potentially be positioned to move there. 5.1. 3 Customer Relations Right now Wachovia mainly uses the Internet to manage customer relations.

Wachovia uses a management (CRM) data warehouse to manage the company's massive amounts of customer information. In order for Wachovia to move ahead of the competition, more unique strategies (regarding customer relations) need to be implemented on a broader level. In order for Wachovia to move ahead of other large financial services companies, Wachovia needs to implement a relationship centered business model, instead of using a transaction centered model. It has been shown that companies like Dell and Wal-Mart do better than their competition simply by having a better than average customer relationship program. Wachovia should offer services that allow for more person-to-person dealings instead of just identifying a person based on a number or id code. Why is a relationship centered model best?

It will lead to more satisfied customers, greater customer loyalty, higher retention rates, and more opportunities to cross-sell products and services. Increasing the use of wireless technologies will also improve and sustain good customer relations. Although Wachovia already has an online help center and a "contact-us directory", more wireless applications can only improve the company's outlook towards customers. Wachovia could offer a wireless tool or software that will let people keep track of their financial information on their cell phone.

The only way anyone can access this information is through password encryption. Wireless email to alert customers about stock quotes and changes in financial markets will give more options to the individual and group investors. Overall, wireless technologies are a great tool for Wachovia to use because it gives the company new ways to reach customers. The cell-phone or messenger system also has a good chance of attracting the friends and contacts of old members. Wireless technologies will also keep customers engaged in transactions for longer periods of time and this will only improve business. Many companies have used something called "Push Technology" to increase customer support.

This includes measures such as offering daily or weekly newsletters to let customers know what Wachovia is implementing, notifying users of updates, setting up regional call centers instead of relying on a national 1-800 number for technical support, and offering detailed analysis of pre-service and post-service quality of work. Wachovia should look into using this form of technology. 5.1. 4 Human Resources Wachovia has found a new medium to shape up their human resource department. Presently, Wachovia is using People Soft HRMS, now with Workbrain as an option; Wachovia has decided to partner with Workbrain. Workbrain is an integrated workforce management solution designed for large financial institutions. It provides time and attendance management, employee scheduling, entitlements and balances tracking and messaging function.

This system will replace Wachovia's legacy time tracing systems and integrate with existing technology investments such as mainframe terminals and People Soft HRMS. Wachovia has also teamed up with Kenexa Recruiter as its enterprise recruiting solution. Before choosing Kenexa, Wachovia did a thorough evaluation of 12 recruiting vendors and brought five finalists in for demonstration and three for usability exercised. Wachovia has 27,000 plus job opening per year. Kenexa Recruiter implemented in more than 80 organizations, Kenexa Recruiter's web-based solution located the most talented candidates with one-click data access. With Kenexa Recruiter, companies turn their corporate Web site into an interactive career center, while reducing cost and time per hire.

Kenexa Recruiter (R) is available in either a hosted ASP-delivery or can be deployed in-house behind a firewall. Wachovia paired with Docent to introduce My Learning Connection, an online learning management system for its employees. With access to 12 courses and 500 modules, employees can utilize this training for day to day business issues and get instant advice. A portion of the online training comes from E-learning provider Ninth House. Skill Soft Corp. provides an additional suite of courses to complement the Ninth House course ware. 5.1. 5 Marketing and Sales Since the safety and security of their information and money are most important to customers, Wachovia should invest in technology to keep that information safe.

They should offer the virtual account number system that Citibank has been offering. This would offer an extra level of security for their customers and could be used for debt card purchases online as well. Wachovia should also add out-of-band authentication technology to its online banking services. Out-of-band authentication provides a separate pathway from the client network to verify the credentials of online banking or e-commerce customers. Some of these methods include: o Cell phone / telephone : it rings after the user inputs their name and the users voice is authenticated over the phone or they provide a PIN and account access is granted. o Time-synchronous token: an electronic device that generates a 7 to 10 digit code or one time password every 30 to 60 seconds, which the customer types onto the bank screen to gain final access to their account. o Cell phone adapted fingerprint scanners Centralize out-fo-band authentication system (COB AS) which was developed by Strike Force Technologies offers nine different authentication methods which can also be layered for greater security. Its most common method of authentication is to call the customer's cell phone to get them to authenticate a transaction before it can go through.

Then Wachovia should saturate their marketing campaigns with advertisements about these services. In a time when everyone is worried about identity theft, safety, and security of their information, customers would be very happy to have these types of services. 5.1. 6 Accounting and Finance Wachovia uses a highly sophisticated Oracle Financial Services Application implementation used to support enterprise-wide decisions around financial management information. This provides then with access to account, product, and organizational level profitability views. They can track the profitability of the business from the company level down to individual accounts and transactions. They use this source of information throughout the company ensuring consistency and transparency of both internal and external reporting.

Wachovia also uses Mine Share, which integrates seamlessly with the Oracle database and profitability system, to drill into the data and perform ad how analysis. It can extract the data from the Oracle database, transform, summarize, and load it into Mine Share cubes. It also allows the user to drill outside of the cubes into the more granular level data found in the database. Mine Share is integrated into Excel, providing familiar functionality for users and less training is required. 5.1. 7 Distribution of Money Wachovia uses the following to distribute money worldwide: o 3200 financial centers and brokerage office so 4400 ATMso 750 million debit card transactions annually o 300 million ATM transactions annually o 175 million calls serviced annually o 44 million online transactions annually o 300 million online logins annually In the future, with expanding technology, cell phones and PDAs could also be utilized as a method of distribution. 5.1. 8 Alliances and Partnership so Work Wares is an online procurement solution providing customers with the capability to search for goods and services across numerous categories, gain access to competitive pricing and purchase across multiple suppliers from a single Web site.

Work Wares complements and extends Wachovia existing offerings in the treasury management arena by adding deeper supply chain-related capabilities. o Frictionless Commerce manage Wachovia's contracts and key supply base objectives such as supplier diversity. Wachovia requires a software platform to create, manage and track it contract and supplier relationship. Wachovia has streamlined its contract management process plus facilitated additional control surrounding policies, procedure and regulatory requirements. o White Amber manages Wachovia's workforce spending, centralize short-term and high-volume workforce needs and drive down annual investments on temporary and flexible staffing. White Amber help large companies, which increasing rely on contingent and temporary employees from IT to administrative support. o CyberImport manages Wachovia's internet-base tool for all import-related trade payment activities. CyberImport offers importers the ability to manage their Open Account cross border settlement activity on the same platform as their letter of credit and documentary collection. o ADP Wilco manages Wachovia's Gloss system on an ASP basis for the bank's international securities trading business. Appendix A

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