Development of solutions for young clients – innovative approach to education and personalization in a banking app Qorus Banking Innovation Awards 2023- Nominated

Market background Bank Pekao S.A. is one of the largest universal banks in Poland. According to data for Q2 2023, the bank has over 6.1 million retail clients, as a result of which we are ranked second in the Polish market in this respect. Compared to our competitors, we have (Q1 2023): • the highest year-on-year growth rate in the number of Mobile Only clients – +40%, • the highest number of mobile transactions per active user of the mobile app in the market – 47 trx in Q1 2023 per user. These indicators result from our constant drive towards digitization of banking services, implementation of modern tools and enhancement of remote channels in such a way that they best meet the needs of our clients. We develop digital channels as well as fast and convenient customer service processes. We seek to ensure that clients are able to deal with each important matter online. We are also working on reaching new target groups. Since 2020 we have been constantly developing and implementing new products addressed to children and young people – the PeoPay KIDS mobile app for children aged 6-12 and the PeoPay app for teenagers. Since the launch of these modern solutions they have promoted saving and money management awareness among the youngest clients. PeoPay KIDS app – first solutions The innovations offered in the first versions of the application included: • GOALS in the App – the child sets a goal and puts money in a virtual money box in any desired amount at the time of their choice. • Quick view – the child has their finances under control – they can check the account balance and transaction history. • Request for pocket money – the child can send a request for a transfer to the money box or wallet. • Phone top-up – the child may, with the consent of the parent, top up a phone with a pay-as-you-go plan. • PeoPay KIDS Crew – an instructor in the app (a European bison, a fox, or a one złoty coin character) will help out in the child's financial education – they who will give valuable advice to the child. • Child card – the child can learn how to be independent with their own payment card. The parent can choose the image of the card for the child. It can be any of the standard images or a custom one. Parent Dashboard is the parent's command centre in the PeoPay mobile app or Pekao24 electronic banking 1. A parent can set up products for their child at home via the Internet, in Pekao24 online banking or the PeoPay app in the Parent Dashboard tab or in any branch of the bank. The service requires only the child's PESEL number. They can set up a PeoPay KIDS Package (Przekorzystne Account, Mój Skarb savings account, PeoPay KIDS app, PeoPay KIDS Mastercard card linked to the account). The card linked to the account can be set up at any time. 2. FINANCIAL EDUCATION – the child can learn how to save money using the Mój Skarb savings account offering a higher interest rate than that available in a personal account. The child can learn to pay with a card independently and how to use the app. The bank supports the parent and child in the financial education of children. The parent receives educational materials (a guide to the PeoPay KIDS app, a guide for parents, a bank cheat sheet with banking vocabulary, infographics) and materials for children (educational books adapted for children in the 6-9 years and 10-12 years old age brackets). In addition, the bank cooperates with the COGITO group and the bank's clients can use the materials prepared together with that organization, which are available at www.pekao.com.pl/edukids 3. PARENTAL CONTROL – the parent has access to the Parent Dashboard, a special section in Pekao24 online banking and the PeoPay app. This is the parent's command centre, where they decide what functions can be used by their child – they can enable additional functions, e.g. phone top-ups, purchasing game codes, BLIK functions, notifications in the PeoPay KIDS app. The parent decides how the child can use the card, e.g. they can enable cash withdrawals from ATMs or contactless payments, and can set a daily transaction limit – the default limit is PLN 20, with a maximum of PLN 500. 4. SAFETY – the parent manages both the PeoPay KIDS app – they can activate, block, unblock or deactivate it at any time – and the card linked to the child's account – they can block, unblock or close it at any time. 5. POCKET MONEY TO ACCOUNT – a parent can set up and send pocket money to the child's account – weekly or monthly. 6. QUICK TRANSFER TO THE CHILD'S ACCOUNT – the child needs money right away – the parent can make a quick transfer. 7. DISCREET SUPERVISION – the parent has a full access to the child's expenses and transaction history. 8. ACCEPTANCE – actions available to the child with the consent of the parent: • external transfer (other than to the child's accounts) • BLIK transfer to a phone • request for pocket money – topping up the Wallet or selected Money Boxes (transfer to #tag) • phone top up or purchase of a game code • online purchase with a BLIK code PeoPay KIDS app – development At Bank Pekao, since the launch of the PeoPay KIDS app, we have been constantly developing the offer and capabilities of the application to meet the needs of parents and children: • in February 2021, we introduced the Game Codes purchase feature – it allows the child to buy game codes with the Parent's consent. • in June 2021, we enabled Quick Sign In – the child can sign in to the app even faster – with Touch ID or Face ID. • in August 2021, we implemented the Request for pocket money app function – the child can send a request for a transfer to the money box or wallet. • in March 2022, we launched BLIK payments (Polish Payment Standard) – the child can pay easily and quickly for in-store and online purchases with our mobile app with the parent's consent. • in March 2022, we implemented PUSH notifications in the PeoPay KIDS app, • May 2022, PeoPay KIDS app personalization launched – 3 colours of application background (navy blue, red, grey), icons – 3 versions, instructor – a European bison, a fox, a one złoty coin. • December 2022, implementation of 4 skins with game images in the PeoPay KIDS app and cards linked to the Mastercard PeoPay KIDS account with game images. • June 2023, implementation of an educational game in the PeoPay KIDS app. Educational game In June 2023, we implemented an educational game in the PeoPay KIDS app, which introduces children to the world of finance in an engaging and attractive way. The game has been tested with the participation of children and parents. The content has been prepared by experienced experts in the field of financial education of children. We want to interest children in the world of finance and everything that is associated with it and to foster responsible money management. Goals that were important to us when creating the educational game: • Firstly: Familiarization with the functionality of banking products for children that allow them to manage their own money in consultation with their parents. • Secondly: Education and promotion of saving money as an attitude and a way to fulfil dreams and achieve goals. • Thirdly: Creation of a solution that would have an attractive form developed with experts and that would be tested with children and parents. The game is divided into seasons. There will be as many as 10 of them and each one consists of 5 thematic stages. In turn, each stage includes 6 tasks to be completed. They are supported by knowledge stops, where hints can be found. The child completes the game step by step. They gain knowledge about finances by solving quizzes, answering questions and completing interesting tasks. Each season of the game consists of parts with plenty of challenges for the kids. Their elements include: • 5 stages – each season is divided into modules with the following attractions for children: o interesting stories about the main characters in the game: clever Ola and Tolek and their family – grandfather Dzidek, grandmother Leokadia, o knowledge stops allowing children to learn step by step, o educational exercises – quizzes and riddles. • Tournament – after passing all modules, a great tournament of knowledge from the season is launched. • Special missions – learning by doing has invaluable benefits, so in the next stage the child is invited to make decisions and can see their effects. Diamonds, decisions and challenges are to teach the child how to make decisions about using money wisely. The game structure encourages longer engagement. For completing subsequent tasks, the child receives points in the form of stars for: • correct answers to questions, • bonus for the first completion of the game stage without any errors, • real-world tasks that encourage children to put down their phones. A child travelling through the world of finance is not alone in the PeoPay KIDS app. Each season, the child meets a friend, a "creature" that takes different forms. The child can exchange stars collected in the game for clothes and accessories for the creature. The development of the offer addressed to children requires us to enhance our knowledge about the needs of recipients of different ages, e.g. children up to 13 years old need something else than teenagers aged 13 to 17. A thorough analysis of their expectations resulted in the development of the PeoPay app. App personalization At Pekao, we are constantly developing solutions to meet the needs of teenagers. In December 2022, we introduced new features for teenagers in the PeoPay app. The app is meant for teenagers aged 13-17. Its new design is clear, functional and even more personalized. In the application, the teenager has the following options: • personalization – they can use an avatar that they like from the catalogue; • functions that meet their needs – transfer to a phone, BLIK, public transport tickets; • simplified navigation – we show only selected functions that young people can use. In December 2022, we introduced 15 game images that can be used on cards. Since April 2023, we have expanded the catalogue of app personalization options, which mostly include the selection of more backgrounds. There are 22 new different backgrounds with themes in thematic categories such as sports, travel, entertainment, lifestyle, games, with 50 avatars to choose from. This makes the app for your teen even more personal. Why did we decide on such a move? We drew on the experience gained during a similar implementation of the PeoPay KIDS app, where background personalization was very well received and has been eagerly used by the kids. From mid-December 2022 till June 2023, 45,8% of PeoPay KIDS app users used the personalization feature (background or avatar). Most often, children chose game themes modelled on popular games or with attractive visualizations. In our offer for teenagers, we focused on convenient and personalized solutions related to the banking application. In this way, we combine business with pleasure – hobbies with financial education. Thanks to the shared functions, we managed to create an ecosystem of mobile solutions for the whole family. The ability to customize the banking app to your liking makes it possible for everyone to bank the way they like. At the same time, we make sure that the teenager can use features that are really important to them, without adding any "adult" options that they do not need yet. Thanks to this, we create an ecosystem of complementary solutions. Personalization of backgrounds and avatars has increased the range of possibilities for adjusting the appearance of the app to the needs of a teenage user. Customers can also use several app personalization options, including selecting those products that should be visible on the main screen in the form of tiles immediately after logging in to the app. A frequently used feature is the possibility of pressing such a product tile to access further options, including to share an account number or hide the amount of available funds. In the PeoPay app for teenagers we also provide widgets with a quick preview and access to favourite functions. Users of the PeoPay application for teenagers can decide for themselves which widgets they want to have available on the main screen, in what order, and how the main screen of the application should look like. Widgets allow the customer to set a view from 1 to even 5 most recent transactions without the need to enter the full account history, and also enable summarizing expenses and amounts received and analysing expenses on a daily, weekly or monthly basis in the form of financial analysis (PFM). Parents whose children use the app for young clients can use a widget to monitor the balance on their children's accounts or their expenses in a simple statement directly from their PeoPay main screen. Bank Pekao S.A. was also the first in the financial market in Poland to introduce PeoPay "stories". This is where personalized content is presented to users, especially concerning education and app functions.