Financial Industry Innovation and the 3rd Platform Innovation pour …2014.innofin.org/public/docs/Proceedings/Smythe.pdf · 2014-10-23 · Public Cloud Global Expenditures $115 billion

Financial Industry Innovation and the 3rd Platform Innovation pour les Services Financiers, Montréal

Innovation for Financial Services, Montréal, October 16, 2014

Robert Smythe

IDC Canada

Innovation and the 3rd Platform

© IDC Visit us at IDC.com and follow us on Twitter: @IDC 2

Source: IDC

What is the 3rd Platform

3

1960-1980 Millions of users

Thousands of apps

1980-2005 100s of Millions of Users

Tens of Thousands of Apps

2005-2020+ Billions of Users

Millions of Apps, Services, Content

Trillions of Things

Industry Solutions

Source: IDC

© IDC Visit us at IDC.com and follow us on Twitter: @IDC

Use the 3rd Platform to Support

Innovation

3rd Platform is a Business Platform Changes how business is done

Delivers new innovation capabilities

Makes new products and services possible

Expands client relationships

Leaders are building creative and innovative solutions


3rd Platform Technology Genesis

3rd Platform – Cloud, Big Data / Analytics. Social & Mobile – 2005+

2nd Platform – PC, LAN / Internet, Client Server – 80s

1st Platform – Mainframe, Terminal – 70s

3rd Platform Components


Becoming the new foundation for enterprise IT. Cloud spending will surge by 25%, reaching over $115 billion

Moving to the point where most adults will have a device and all financial service providers will be using mobile devices as a key

part of their service delivery process

A data avalanche is expanding the size of our digital data volumes towards 6 trillion terabytes. Spending on Big Data will grow by 30%

All software is moving toward including a social component. Social networking will become embedded in cloud platforms and most

enterprise apps and processes

Cloud

Services


Moving to Cloud Services

Public Cloud Global Expenditures

$115 billion in 2017 (25% CAGR)

Dev

Test Dbase

Analytics

Storage

Compute

CRM

HRM Industry

SaaS ITSM

Office Apps

7

58% 13%

29% SaaS - Software as a Service

PaaS - Platform as a Service

IaaS - Infrastructure as a Service

Public Cloud Spending

Allocation 2017

Cloud Platform

Consolidation

Industry Cloud Platforms Exist and

Will Expand Financial institutions have been extensive users of what

is now referred to as cloud services

The challenge is to integrate these services into seamless end to end solutions

A major inhibitor has been 70s era core banking systems


Big Data

and

Analytics


Decision Support

Applications

Analytics &

Discovery

Data Organization

& Management

Top Business Challenges

Insufficient analytic skills

Securing budget

Agreeing on KPIs

Defining business requirements

Justifying business case

Measuring project outcomes

Change management

Big Data & Analytics – More Work

to be Done

10

Top Tech Challenges

Data integration

Data quality

Data security

Data governance

Source: IDC and Computerworld 2013 Business Analytics Survey

Security and Analytics Collide Big Opportunities and Big Peril?

Collect and consume

more sensitive data

Security incidents

increase

Opportunities for secure

managed services

Concerns over security

have risen in 2013

11

Warning Flag: IT Execs Show Less Confidence in Security

63%

48% 50%

29%

Non-IT IT

2012 2013

% IT Security is Very Well Managed

in the Org

n=160

Source: IDC Canada, Top Executive Survey, Sept 2013

Big Data is Not All About Technology


n=111

Source: IDC and Computerworld BI and Analytics Survey Research Group IT Survey 2012

Q: What are the top IT challenges to delivering

a successful business analytics solution?

Q: What are the top business challenges to

delivering a successful BI and analytics

solution in your organization?

Interaction of

Social

Networks

and Business


Social Interaction Management

Maturity

Social is creating a 360o

customer view

Majority of applications will

include a social component

Merging of transaction,

decision and relationship

systems


Q: Indicate the level of agreement that is most applicable to your organization for the following statement:

“We are able to accurately/effectively measure the ROI of our social business applications”

Mobility


Mobility: More Variety, More Choice, More

Headaches, More Mobile Opportunity


0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

2012 2013 2014 2015 2016 2017

Tablets Smartphones Portable PCs Desktops

41% of Canadian Execs cite mobile management as a critical or major challenge

Mobile Ecosystem

Android Mobile Phone Devices 19,000 distinct devices in 2014 vs.12,000 the

previous year

Samsung's market share - 43%

Users on KitKat – 24.5%


Apple Mobile Phone Devices

8 distinct devices

Apple users on iOS 7 – 91%

Be selective – you cannot support everything

Sources: Android & Apple Developer Forums

Froyo 2.2 0.7%

Gingerbread 2.3.3 - 2.3.7

11.4%

Ice Cream Sandwich 4.03 - 4.04

9.6%

Jelly Bean 4.1x

25.1%

Jelly Bean 4.2x

20.7%

Jelly Bean 4.3

8.0%

KitKat 4.4 24.5%

Earlier Versions

1.0% iOS 6 8.0%

iOS 7 91.0%

Mobile Trends

Bring Your Own Device

(BYOD)

One third of application

development targeted

a mobile form factor

in 2013

Payments will be a

driver of mobile

financial solutions


Sources: IDC’s CIO Mobile Survey Fall, 2012

67%

17%

16%

0% 20% 40% 60% 80%

Non-mobile only devices

Mobile only devices

Mobile and non-mobiledevices

Q: What % of new Apps will be for Mobile Devices vs.

Non-Mobile Devices

Digital

Banking

Requires

Innovation


User Needs

Business Imperatives

Technology Enablers

Innovation

Digital Banking Incorporates the 3rd

Platform

©2014 IDC Visit us at IDC.com and follow us on Twitter: @IDC 20

The 3rd Platform creates the

underpinnings for business process,

transformation and, increasingly,

business model transformation:

How they engage with customers

The speed at which they deliver

their products and services

How they innovate

Their resiliency

The reliability of their operations

With such high stakes, the business

is increasingly driving technology

initiatives

Strategic Initiatives for 3rd Platform Technologies

Digital Banking

21 21

5 Year Horizon

Customer

Engagement

Customer

Engagement

Value of

Transformation

Products, offers, and pricing

Customer knowledge

Product/Service Delivery

720 Degree

Customer View

Channel-less Delivery

and Servicing

Contextual

Marketing

Innovation

Prof i tabi l i ty

Engagement

Now

Marketing

Risk

Management

Product ivi ty

Marketing

Data-Driven

Products and

Services

Relationship

Profitability

Singapore

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Digital Banking Innovation Drivers

Know Your Client

• Personalized service via effective yet simple

client ID

• Incorporation of social media

Serve Your Client

• Elegant but simple user interfaces

• Global banking capabilities

• Real time 7/24 straight through processing

Engage Your Client

• Omnichannel capability across all products

• Be part of their digital world

• Services beyond the banking transaction


This will drive

operational efficiency

Become

1 of the “bottom 4”

Banks Move to Digital – Lloyds

Initiatives

Lloyds on the hunt for new digital talent as job cuts

loom

Lloyds to cut thousands of jobs and close more branches

as it embraces a new era in digital banking

Appoints Chief Digital Officer

• Digital centre of excellence,

marketing and customer

development

• Digital innovation culture manager

• Customer experience manager

• Digital solutions designers


Source: www.finextra.com/news/fullstory.aspx?newsitemid=26540

Apple Changes the Payments

Paradigm


Apple Pay and the Payment Structure

Potential Canadian

Apple Pay Universe

Apple Pay announced September 9, 2014

Built on existing payment infrastructure and standards

Convinced 3 card networks and 5 major banks in the U.S. to participate

Apple estimated to receive 15bp of interchange revenue

Places Apple Pay as the prime client interface

Innovative client interfaces and security

Disintermediation of mobile network operators

Initial United States

Apple Pay Universe

Essential Guidance

Digital transformation is running the business better not just deploying technology

Adopt a digital mentality and think like a start-up particularly with incentives

Have a grand vision, but prioritize where to focus

Do not view digital transformation too narrowly (Beyond front ends)

Target to become part of the “bottom 4” mobile icons

Do not underestimate the funding - leaders are spending $ Billions

Enhance core process efficiencies - Address high volume products like cards, loans, and payments

Incorporate the 3rd platform and prepare for the 4th


Documents

Financial Industry Innovation and the 3rd Platform Innovation pour …2014.innofin.org/public/docs/Proceedings/Smythe.pdf · 2014-10-23 · Public Cloud Global Expenditures $115 billion