Digitization of Banking

Ben Robinson, Chief Strategy & Marketing Officer

4 November 2016

@robinsonbenp

Warren Buffett

Financial services as it used to be

Financial services as it is today

An industry in transition

An industry in transition

An industry in transition

The attacking

armies

Targeting discrete parts of the value chain

Fintech 1.0

Ma

rgin

s

Regulatory oversight

Growing ambitions

Fintech 2.0

The disintermediators

Internet platforms

Strategic Choices

We believe banks have to pursue one of 4 strategies 13

E2E, open

platforms

Fully-fledged

aggregators

Traditional

universal

banking

Pro

fita

bili

ty

Scope of activity

Infrastructure

providers

Infrastructure players 14

Hosting

Settlement ReportingPayments

processingProduct servicing

API Layer

Fully-fledged aggregators 15

Ag

gre

ga

tors

API Layer

Digital Channels

Engagement (gamification, PFM, etc.)

Customers

Fintech ProductsNon-Financial

Products Banks

Decision engine, CRM

Open product catalogue

DataI

F

E2E, open platform

Capitalize on

FIs’ primary

assetsTo become

trusted

advisorIn turn boosting

profitability

The opportunity 17

FIs strengths 18

Fintech Firms

Incumbent banks

The opportunity

INNOVATION

APIs &

App Store

The opportunity 20

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Bank Google

Interest Income Fees Data Monetisation

Source: Disruptivefinance

Experience-driven banking

Right products & services

Delivered at the right place and time

Through the right channel

Personalised for individual needs

Experience-driven banking

Bank as

facilitator and

trusted advisor

Real-time location-based offers

Access to best rates on financial

services across market

Access to complementary services

(e.g. legal advice) at preferred rates

Peer advice

Digital vaults & wallets

Partner network

Social Media

Location

Transaction Data

Contextual info (e.g.

saving ambitions)

Help achieving financial goals

Loyalty rewards

Frictionless payments

Vertical E2E IT Infrastructure 23

Digital

Channels

Front End

Own

product

factory

Cloud-

infrastructure

FX Transfer

Payments/Wallets

Unsecured personal lending

SME Lending

AP

I Layer

Fintech products

Social Trading

Mobile money

Automated retail investment

Risk

Getting there

Source: BCG

Ditching the legacy

Ditching the legacy

The journey 25

Ditching the legacy

The journey 26

Efficiently managing the customer lifecycle…

Customer ProductCore Banking

ChannelCRM PFM

Branch Contact Centre Internet Mobile PostEmail

Decision Platform

Amazon

Google

?

Facebook

A bank

(anonymous)

Making innovation possible

No customer feedback; No solution delivered

Products are built around solving customer problems

Earliest testable Earliest usable Earliest loveable

Defects likely to occur

Not loveable first time

Takes too long to solve problem

The internet of hackable things

Everything online Everything hackable

Fast Undetected

Cultural change

required

Opening up existing

platforms

Selling third party

products

Sharing customer

data

Realizing experience-driven banking

Warren Buffett

Thank you