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©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
The Future of Banking Technology
Chris SkinnerChair, the Financial Services Club
CEO, Balatro
Co-Founder, Shaping Tomorrow
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Banks have many components
Delivery Functions
Personal
Teller
Counselling
Agent/Broker
Dealing
Direct
Self Service
ATM/POS
Telephone/Voice
Home/Corp.
Delivery Functions
Document
Document Processing
Image Processing
Remittance Processing
Mailing
External Functions
Payment Networks
ATM Networks
Credit Authorisation
Settlement
Clearing
Info. Networks
Credit Bureau
Routers, Telerate, etc.
Securities Quotations
Other Data Services
Services
Card Protection
Check Printing
External Business
Relationships
Electronic Card
Interchange
Customer Information Functions
Personal Small Business Corporate
Private Commercial International
Re-insurance
Pensions
Investments
Claim Proc.
Underwrite
Service Functions
Insurance Retail Securities International
Non-life
Life Policy
Actuarial
Collections
Revolving CR
Mortgage
Savings
Chk. Accts
Term Loans Portfolio Mgr.
Personal Lns.
Factoring
Leasing
Trust
Securities
Commodities
Investmt Mgt.
Derivatives
Settlement
Foreign Ex.
Money Mkt.
Market Inst.
Commercial
Trade Finance
Cards
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Business is a-changing
1999Mailing
10,000 people
Twice weekly
Brochures10,000+
Annual update
Meetings40 UK
8 Ireland
6 CEE
Newsletter1,000 people daily
Text only WebsiteNon-interactive
Custom-build
$150,000
$100,000
$100,000
$300,000
$150,000
$800,000
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Business is a-changing
2009Mailing
10,000 people
Twice weekly
Brochures10,000+
Annual update
Meetings40 UK
8 Ireland
6 CEE
Newsletter1,000 people daily
Multimedia WebsiteNon-interactive
Custom-build
$150,000
$149
$10,000
Free
Gone
$160,000
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
“Information about money has become
almost as important as money itself .”
Walter Wriston, CEO/Chair, 1967-1984
“Banking is just bits and bytes.”
John Reed, CEO/Chair, 1984-1998
Banking is a-changing
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
There are no local data centres or servers, just
access to the HSBC network ... five years ago, we
ran 130 data centres because we had acquired 50
companies up to 2003. Today, we have 20 data
centres, and in two years we will have 6 worldwide.
Banking is a really changing
Case Study: http://thefinanser.co.uk/fsclub/2008/12/-hsbc-banking-on-the-network.html
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected] Study: http://thefinanser.co.uk/fsclub/2008/12/-hsbc-banking-on-the-network.html
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Banking is a-changing
1999
Payments
Insurance
Loans
Savings
Investments
Mortgages
>6%
<2%
3% commission
5% fee
>5%
3% margin
Base Rate 4%
3.5% per transaction
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Banking is a-changing
2009
Payments
Insurance
Loans
Savings
Investments
Mortgages
>4.2%
<3.8%
<0.5% commission
<1% fee
>5%
3% margin
Base Rate 4%
<0.5% per transaction
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
eBank Japan
Japan’s largest internet
bank with no branches,
three million customers
and less than 200
employees.
Case Study: http://thefinanser.co.uk/fsclub/2008/07/internet-bankin.html
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
8.7% for lowest risk borrowers
12.8% for highest risk lenders
11.9% for lowest risk borrowers
3.55% for highest risk lenders
APR£5,000
36 months
Base Rate 1%
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
• SmartyPig one of the
first real banking
applications that is truly
social.
• It is like an online piggy bank, where you save money for specific goals.
• First banking application that allows friends and family to contribute to interest bearing goals.
• Public goals allow friends and family to contribute, or keep your account private
SmartyPig
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Where they are now
Launched in April of 2008
• Within 3 months, SmartyPig had customers in all 50 states
• Average goal amount: $8,900
• Average length of goal: 4+ years
• Top goal categories: Travel, Holiday Savings, Electronics, Home
Improvement, Weddings, Homes, Cars
• Two-thirds of all goals are public
• 25% of customers have more than one goal
• 67% of SmartyPig users are under the age of 35, 20% are
between 36- 45, and the remaining 13% are older.
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Q3 2008:
• $14.81 billion worth of payments, 28% year-on-year growth;
• 65.3 million active users, up 19%;
• 214.5 million transactions, up 25%;
• Purchases made outside eBay are now greater than through eBay (71% of
PayPal payments were for eBay purchases at the end of 2004); and
• PayPal provides 28.2% of eBay revenue, up from 24.8% a year before.
Q4 2008:
• $15.99 billion worth of payments, 14% year-on-year growth;
• $623 million in revenue, up 11% year over year; and
• 70 million active users, an increase of 23% year-over-year .
Case Study: http://thefinanser.co.uk/fsclub/2009/01/paypals-tenth-birthday-party.html
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Who needs a bank?
Case Study: http://thefinanser.co.uk/fsclub/2008/08/do-recessions-m.html
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Who needs a bank?
A Red Herring Top 100 European
technology company and Top 200
worldwide.
Completely automated with no
humans involved and only 37 staff
in London, with the rest of the
development team in the Ukraine.
Case Study: http://thefinanser.co.uk/fsclub/2009/02/wonga-another-web-financial-disruption.html
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Banking as a Service (BaaS)
Explanation: http://thefinanser.co.uk/fsclub/2009/02/baas-banking-as-a-service.html
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
• Widget:
– A portable chunk of code that can be installed and executed within any
web page by an end user without requiring additional compilation.
• SaaS:
– an application is licensed for use as a service provided to customers on
demand. On demand licensing and use alleviates the customer's
burden of equipping a device with every application.
Widgets and SaaS
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
BBVA has 4.1 million online
customers performing over 1.3
billion annual online
transactions
They launched Tú cuentas in
Summer 2008 with a totally
customizable interface for the
iPhone, Blackberry and Nokia
phones
BBVA Tú cuentas (You count)
http://thefinanser.co.uk/fsclub/2008/07/bbva-the-first.html
Case Study: http://thefinanser.co.uk/fsclub/2008/07/bbva-the-first.html
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Banking is a-changing
2009
Payments
Insurance
Loans
Savings
Investments
Mortgages
>4.2%
<3.8%
<0.5% commission
<1% fee
>5%
3% margin
Base Rate 4%
<0.5% per transaction
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
These are new trading venues
Explanation: http://thefinanser.co.uk/fsclub/2008/11/one-year-after.html
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
These are new, low cost trading venues
The firm is currently building its
own trading engine - which will be
based in London to reduce latency -
and has engaged a central
counterparty, believed to be EMCF,
for clearing ... believe they will be
able to win market share by
undercutting rivals and keeping
costs to a minimum by operating
out of Budapest.
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Lower Latency
“It takes a 240 millisecond link to go from
London to Tokyo via the US. If you go via
Russia it’s 60 milliseconds faster.”
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
We can move into a new country with credit cards
with an investment of $1-$2 million, mainly on
marketing, because we don’t have to build all that
infrastructure. We can move into a country with
full service banking for under $10 million, which is a
fraction of our competitors. We just open a
building and sell, because everything is delivered
through the network.
Banking is a
really changing
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Personalised search
Personalised NewsLive TVPersonalised Weather
My social networkMy outlook calendar
(including transactions) My finances
My real-time life
My outlook inbox
My Semantic HomePage
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Personalised search
Personalised NewsLive TVPersonalised Weather
My social networkMy outlook calendar
(including transactions) My finances
My real-time life
My outlook inbox
My Semantic HomePage
My Personalised Advertising(not your adverts to me)
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Banking on the Network
BaaS Widgets
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
Further Reading
• Banks ignore social media at their
peril
– http://thefinanser.co.uk/fsclub/2008/12/ba
nks-ignore-so.html
• Social networks don't need banks,
they need friends
– http://thefinanser.co.uk/fsclub/2008/12/so
cial-networks.html
• Social finance is right here, right now
– http://thefinanser.co.uk/fsclub/2008/12/so
cial-finance.html
• Social money – what’s all that about?
– http://thefinanser.co.uk/fsclub/2008/12/so
cial-money-wh.html
• Mobile social money, the final
frontier?
– http://thefinanser.co.uk/fsclub/2008/12/m
obile-social-m.html
• Internet Banking 2010 and Beyond
– http://thefinanser.co.uk/fsclub/2008/04/inte
rnet-bankin.html
• Technology is key for banking in 2009
– http://thefinanser.co.uk/fsclub/2009/01/tec
hnology-predictions-hold-the-solution-to-
the-banking-crisis.html
• The next boom starts in 2014
– http://thefinanser.co.uk/fsclub/2009/01/the-
next-boom-starts-in-2014.html
• The Future of Investing in Europe's
Markets after MiFID ;
• The Future of Finance after SEPA ; and
• The Future of Banking In a Globalised
World
– http://eu.wiley.com/WileyCDA/Section/id-
WILEYEUROPE2_SEARCH_RESULT.html?quer
y=chris%20skinner
©Chris Skinner. All rights reserved. +44 790 586 2270 [email protected]
The Future of
Banking Technology
Chris Skinner
Read my daily blog at
www.thefinanser.com