18 de abril. IBM Client Center, Madrid
Nuevos ecosistemas para nuevos modelos de negocio
PLATAFORMAS EN LA BANCA ABIERTA
Kwafo Ofori-BoatengGlobal LeaderDigital Front Office TransformationIBM Banking & FM Technical Leader Europe
The Post PSD2 Horizon: What Now?
The continuum of Innovation in Retail Banking
Regulation, Customer Expectations and Competitive Landscape have accelerated a deeper approach to banking transformation
• Customer Experience Optimization
• Optimizing Customer Journeys• Operating Model Optimization
• Business Model Transformation
• Operating Model Transformation
• Governance Optimization
• Focused on experience• Customer Focused
Enterprise• Focused on Analytics
• What do we do differently• How do we deliver
differently• Reinventing the
Organization
Digital transformation
• Process Model Optimization • Digitalizing Processes• Cost Optimization
• Focused on efficiency• Enabled by technology• Accelerated by best practices
Digitization
Digital reinvention
This evolution is radically transforming the structure of the industry
Traditional Full Service Bank Non-Traditional Ecosystem
Competing ecosystems
and platforms
Customers
Primary Account Institution
Customers
Financial Transactions
Financial Value-adds
Non-Financial Services
Touch points
Products / Services
Financial Transactions
More relevant to the
customer
Banking Products Customer Products
Operations & Technology Providers
Investors
More disaggregated relationships, activities and
operations
Distribution
Manufacturing
Risk Taking
Distribution
Manufacturing
Risk Taking
Today Future
Primary Account Institution
Banks and/or
Digitalization impact on Banking RoE2005 to 2025F, percent
Current Steady State
Unmitigated Digital Disruption
Source: McKinsey & Co. Forecast
↓35%+Impact on profitability
Economic value is shifting to the customer interface –which accounts for 65% of profit and delivers 20% ROE
0%
20%
40%
60%
80%
100%
Revenues Profits
“DISTRIBUTION”
“MANUFACTURING”
Revenues and Profits by activity2016, $ billions
1,871
2,085
47%
53%
65%
35%
748
404
4.4%
20%
Notes: 1. Estimate based on quantitative data and qualitative SME inputs2. Scale of disruption is the % of current banking revenue that will migrate to new digital business models (either new entrants or incumbents. Global banking revenue ($B) projected in 2020 3. Comprised of mostly unsecured loans except for auto-finance within personal loans
Source: Citi Digital Disruption Mar 2016(Disruption Shift), CB Insights (VC Funding), IBM Voyager Study
RoE
Economic Value
Shifting
Focus of Client Spending
Higher growth spending areas are focused on deploying newer “digital” capabilities including: - Channels- Analytics / Cognitive- Value added services- Ecosystem / platform
enablement
Spending on traditional back-end areas (e.g., payment engines) is large, but slower growth. Spending is focused on:- Structural cost
reduction- Operational efficiencies
Back Office
Product-centricLegacyOfficeLegacy
Systems
FrontOffice
Customer-centric
Digital OfficeOmni-channel journeys,
Experience Orchestration,
Ecosystem Integration,Value added
services
Migrating Functionality
How are we seeing the industry transform in response?
2. Creating simpler, faster, higher quality, more modular core operations at structurally lower cost
Examples:Digital TransformationCognitive, Data & AnalyticsWatson Financial Solutions
3. Delivering secure and scalable industry infrastructure, for secure big data driven workloads
Examples:Cloud Infrastructure TransformationSecurity
3
1. Building and participating in industry networks and digital platform businesses
Examples: Blockchain, Payments and Transaction Services In
sigh
tsFinancial
Managem
ent
Channels
Back Office
Customers
Products
1 2
By building and participating in Industry Networks and Platforms
Private Equity§ Deployed a security-rich
Blockchain, or distributed ledger solution for the private equity market.
§ Provides real-time insight and transparency to all parties.
§ Allows fund to transfer ownership stakes and be managed, serviced and audited throughout the investment lifecycle on a transparent platform
Trade Finance§ Digital Trade Chain (DTC)
consortium§ Solution builds on the current Trade
Information Trade Finance – Open Account for SME.
§ 10+ Additional Banks to join in 2018
§ Expansion outside of Europe in future
Post Trade Processing§ Builds on current Trade Information
Warehouse service, which manages recording keeping and payments for $11 trillion of credit derivatives and is used by 2,500 buyside firms such as mutual funds and pension funds in more than 70 countries.
§ Becomes a key piece of the infrastructure in a very critical market
Hyperledger based platform for developers to create, activate and run Blockchain based processes
Building and operating Financial Services Blockchain industry networks
Partner with clients to establish and own network
Focus
Examples
Industry Networks enabled with Blockchain
Build Operate Own1
By becoming more Efficient and Flexible
§ Global market-leading risk management and regulatory compliance capabilities combined with IBM's deep industry expertise and cognitive capabilities
§ Addresses the substantial operational effort of escalating regulation and risk management requirements.
§ Capabilities include: Regulatory Change Management, Know Your Customer, Anti-Money Laundering, Conduct Surveillance
§ Customer Journey-led digital transformation
§ Extracting banking functionality into a digital agility layer, creation of a “library of services”
§ Ability to launch new digital customer journeys in 14 weeks, reduced change effort by 40%
§ Digital Banking Market Place -1500+ public APIs
§ Application transformation 30% of applications decommissioned
§ Multi-year transformation deployed as an integrated program comprised of 4 work streams that are oriented to enable or improve a number of business capabilities
§ Cost to income ratio improved 10.3 points (55.7 to 45.4%) and lowest customer complaints of the big 4 banks
§ Enabling cognitive interaction to enhance customer experience, improve employee productivity, and reduce costs
Radical middle and back office transformation with up to 40% cost reduction
Digital front office and flexible portfolio to address demand in customer demands
Smarter regulatory compliance through expert trained cognitive solutions
Focus
Examples
Cognitive Operations and Software
Structurally lower costs Customer Centricity Regulatory Compliance2
By driving towards more secure and scalable infrastructures
§ Legacy and cloud hybrid - migration to IaaS & PaaS hybrid model
§ Transfer apps from legacy to cloud-based componentry & cloud native solutions
§ Transformation into composablebusiness models, products, services & capabilities to drive cost reduction and new revenues
§ Nationwide embarked on a radical five-year transformation program to replace its existing systems with a real-time, always-on banking solution built on the IBM zEnterprise mainframe.
§ IBM security tools help Nationwide lock down its mission-critical database environments, manage access rights , detect potential threats in real time and take action to prevent breaches from occurring.
§ 40% cost savings over 10 years§ Enable additional savings through
Dev Ops and Target Operating Model transformation
§ Build new Cloud platform – on and off premise
§ Migrate 1,300 applications § Drive significant standardization
through increased automation and pattern based deployment
Enable banks to transition to, and re-use systems and applications in, the cloud environment
Customer and corporate data and systems security and management
Hybrid computing provides the flexibility to put workloads and data on-prem, private or public cloud
Focus
Examples
Industry Clouds and Infrastructure
3 Industry Clouds Security Hybrid Architecture
What does this all mean?
We believe that marketplaces will become the new normal business model for running a company over the next decade
1
We believe that the individual will generate an increasing volume of unstructured personal digital data, which will require structure, through insights and requests
2
The relationship between the changing needs of the individual and the supply of product and services needs to be supported by a dynamic infrastructure and analyzed using intelligent technologies
3
Components to make it happen
Define what you want to be…. and where you are...
...and then integrate the components that make it happen
Aim for full flexibility, ability to cater for changing needs, new technology components and your strategy...which will change
Think big, start small, deliver fast to production
Accelerators for Post PSD2 Transformation 5 Key Building Blocks
Multiple entry points to the roadmap
18 de abril. IBM Client Center, Madrid
Nuevos ecosistemas para nuevos modelos de negocio
PLATAFORMAS EN LA BANCA ABIERTA
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