The document discusses the evolution of financial services (Financial Services 2.0) driven by innovation, disruption, automation, and rebuilding trust through technologies like blockchain, distributed ledgers, peer-to-peer networks, big data, artificial intelligence, the Internet of Things, and smart contracts. It outlines how these technologies are driving changes in business models, forcing corporations to adapt, and creating implications across the economy, technology, and financial services industry. Specifically, it notes that business models will evolve through distributed ledgers, digital identity, smart contracts, and embracing the "Internet of Value." Corporations will need to adapt through more software/smart contracts, skilled staff, agility, and disrupting disruptors. Implications include transition

1. Financial Services 2.0 : Innovation,
Disruption, Automation & Trust

2. 2Where character is never in question and excellence is always the answer. TM
Agenda
1. WHAT is Financial Services 2.0 ? and
WHY is it happening now ? pg 3, pg 7
2. WHERE are we in the revolution ? pg 9
3. HOW is “IT” driving change ? pg 14
4. HOW will business models evolve ? pg 24
5. HOW will corporations adapt ? pg 31
6. WHAT are the implications ? pg 40
7. WHEN will impact reach the tipping point ? pg 57

3. 3Where character is never in question and excellence is always the answer. TM
WHAT is Financial Services 2.0
and
WHY is it Happening Now ?
1

4. 4Where character is never in question and excellence is always the answer. TM
WHAT is Financial Services 2.0 ?
The evolving, next generation landscape or set of financial infrastructure,
capabilities, partnerships and consumer expectations, that leverages peer-to-peer
(P2P) and advanced data technologies, to add and exchange value, reduce costs,
latencies and risks and enable new markets, products and services for the 21st
Century global marketplace.
» Replacing the outdated model of vertically integrated product segments, via:
– INNOVATION: Inclusion, Connectivity, Collaboration, Commerce, Smart Data
– DISRUPTION: Eliminating Middlemen & Frictions (Cost & Latency), FinTech investment, impact
and Convergence, Industry Redefinition, Destruction of traditional operating models, Restructured
Value Chains, Redefinition of Customer with new powers and expectations
– AUTOMATION: Internet of Value, P2P, Blockchain / DLT, Smart Contracts, IoT, Machine to
Machine Economy, Artificial Intelligence, Machine Learning, Predictive & Prescriptive Analytics
– TRUST: Rebuilding Trust with Protocols not People or Institutions, Eliminate The Middleman, Full
Transparency, Trustless Transactions, Trusted Staff and Partners

5. 5Where character is never in question and excellence is always the answer. TM
“Finance 2.0”
• Internet gave us a powerful way to share and
access information.
• Blockchain now gives us a powerful way to
share and access value.

6. 6Where character is never in question and excellence is always the answer. TM
OPAQUE TRANSLUCENT TRANSPARENT
TRUST & FRICTION DISRUPTION INNOVATION
From Centralized Trust With Middlemen Controlling
Transactions To A Trustless Transaction Economy

7. 7Where character is never in question and excellence is always the answer. TM
WHY is Financial Services 2.0 happening now ?
The 5th Wave of Productivity is driven by technology innovations and accelerated by
demographics, and the loss of trust in Financial and Governmental institutions after
the financial crisis.
» Financial Crisis of Confidence in Financial Institutions (2008)
» Launch of Bitcoin (2009), or Blockchain 1.0 - P2P movement of tokenized value aka
Programmable Money
» Over $19 Billion was Invested in FinTech Companies Globally in 2015 !
» Data Explosion due to Social Media, Mobile, GPS, RFID, E-Commerce, anticipating IoT
» Millennials are less loyal to brands, technically savvy and driven by convenience
» Market Explosion due to Opportunities and Needs of 3rd world unbanked
» Maturing of Big Data Analysis and Artificial Intelligence Tools
» Blockchain 2.0 - Smart Contracts aka Programmable B2B Business Processes
» Vision for Blockchain 3.0 - Programmable Corporations (DAO)

8. 8Where character is never in question and excellence is always the answer. TM
WHY is Financial Services 2.0 happening now ?
Financial Services Investment in Blockchain & Bitcoin Startups and
the Evolution of Social Media

9. 9Where character is never in question and excellence is always the answer. TM
WHERE are we in the Revolution ?
2

10. 10Where character is never in question and excellence is always the answer. TM
WHERE are we in the Financial Services 2.0 Revolution ?
At early stage of Innovation Pattern, that will lead to wave of creative destruction.
» Blockchain aka Distributed Ledger Technology: equivalent to 1995 Internet
» P2P: disruptive, development paridigm for the future
» Big Data: demands driving use case move from Descriptive to Predictive and
Prescriptive Analytics
» AI: moving from research into business strategy and operations
» IoT: Preparing to connect 25+ Billion devices to redefined economy in 5-10 years
» Applications:
– New Advice : ROBO Advisors moving from 1.0 to 2.0, providing multiple
asset classes, rebalancing, and tactical asset allocation for short term risk avoidance.
– New Products : Are Cryptocurrencies a new asset class ?
– New Markets: Extending services to the 2.5 Billion Unbanked ?

11. 11Where character is never in question and excellence is always the answer. TM
Analog Innovation Pattern Meets the Digital Network Effect
SCHUMPETER'S
PRODUCTIVITY
WAVES
OF
CREATIVE
DESTRUCTION
MEETS THE
DIGITAL
INFORMATION
TSUNAMI
Analog Machines
Electro-Mechanical
Machines
Digital Machines

12. 12Where character is never in question and excellence is always the answer. TM
2010s 2020sBLOCKCHAIN
CONNECTED WORLD &
WEB OF VALUE, DRIVEN
BY DIGITAL / CRYPTO
CURRENCY TOKENS,
DISTRIBUTED
APPLICATIONS AND
SMART CONTRACTS ...
IoT
REAL TIME
FULLY
RESPONSIVE
ECOSYSTEM of
PEOPLE,
PROTOCOLS
AND MACHINES
Digital Network Effect Will Accelerate Innovation Impact

13. 13Where character is never in question and excellence is always the answer. TM
Managing Hype Along The Way To Adoption and Impact
Gartner 2016
Hype Cycle

14. 14Where character is never in question and excellence is always the answer. TM
HOW is “IT” Driving Change ?
3

15. 15Where character is never in question and excellence is always the answer. TM
HOW is “IT” Driving Change ?
IT Will Have Many Innovation Roles :
» Educator of Executive Management, Business Leadership & IT Staff
» Enabler via Innovation Lab Processes, Partnerships and “fail fast” Mindset
» Solution Builder of best practice based solutions
» Business Partner internally and with 3rd parties for ecosystem
» Strategic Planner for phased delivery of next generation capabilities
» Service Provider internally and externally

16. 16Where character is never in question and excellence is always the answer. TM
A New Brave World:
Blockchains
vs.
Middlemen
IT as Educator
Coming Soon !

17. 17Where character is never in question and excellence is always the answer. TM
IT as Educator
WHAT Is The Blockchain ?
■ A new form of information technology, a decentralized system of
checks and balances, an infrastructure, an organizing system that
is universal and planetary-scale

18. 18Where character is never in question and excellence is always the answer. TM
IT as Educator
Blockchain Explained
What it enables
What it is
Its impact

19. 19Where character is never in question and excellence is always the answer. TM
IT as Educator
HOW a Blockchain Works
Transaction creation
Transaction verification
Block Creation
Block Validation
Block Added To Chain

20. 20Where character is never in question and excellence is always the answer. TM
1. DISCOVER
Knowledge, Ideas & Best Practices
2. INCUBATE
Partners, Systems & Needs
3. ACCELERATE
Capabilities & Impact
Survey
▪ SURVEY Industry Landscape, SMEs,
Interested Parties, Points of Pain, Possible
Partners & Opportunities (ITERATES)
Educate
▪ EDUCATE IT / Business by Collecting /
Augmenting and Publishing External / Internal
Information Sources for Follow Up Use.
Manage
▪ MANAGE the processes, Data Flows,
Linkages and Status Reporting Requirements
Solidify
▪ SOLIDIFY Clients, Vendors, Proof Of Concept
Candidates and Options For Testbed Ecosystem
Identify
▪ IDENTIFY Specific Proof Of Concept and
Associated Use Cases
Establish
▪ Research, Document, Train and DELIVER
Ecosystem
TO ALLOW IMPLEMENTATION AND TESTING of
Proof Of Concept Use Cases
Extend OR
▪ Define, Plan, Resource and DELIVER
EXTENDED Proof Of Concept Capabilities
Aggregate OR
▪ Define, Plan, Resource and DELIVER
AGGREGATE Solution to Previously Identified
Points Of Pain
Initiate
▪ Define, Plan, Resource and DELIVER NEW
Corporate INITIATIVE
A
B
C
E
G
H
I
Innovation Team Operating Model: Fail Fast
Knowledge Repository &
Roadmap Ecosystem for POCs Major Initiative
D
F
IT-Enabler, Business Partner & Service Provider

21. 21Where character is never in question and excellence is always the answer. TM
Digital Identity Is Critical For Next Generation Solutions
IT as Solution Builder
2005 2020

22. 22Where character is never in question and excellence is always the answer. TM
IT as Strategic Planner
HOW Will Blockchain Be Used In The Future ?

23. 23Where character is never in question and excellence is always the answer. TM
IT as Strategic Planner
Planning For The Next Phase Of Blockchain

24. 24Where character is never in question and excellence is always the answer. TM
HOW will Business Models Evolve ?
4

25. 25Where character is never in question and excellence is always the answer. TM
HOW will Business Models Evolve?
The evolution of Business Models will be accelerated by the elimination of cost and
latency frictions, producing disruptions, new markets, products and services.
These new business models will :
» Adopt Digital Identity for People, Organizations, Devices and Ideas
» Require Distributed Ledger Interoperability for Payments, Consortia driven solutions
to common industry problems, Global Supply Chains and lastly, perhaps, for internal
corporate business processes and data flows.
» Consolidate Reputation Models to utilize Blockchain Technology & Identities
» Adopt Smart Contracts to automate business processes
» Derive Business Value and Competitive Advantage from Big Data & AI
» Deliver efficient, transparent, client centered, regulator certified goods & services

26. 26Where character is never in question and excellence is always the answer. TM
By Connecting People**
(Digital Identity) ...
** Paridigm Shift: Transition from Username / Password to Digital Identity and connecting 21st
Century Identities: People, Organizations, Devices and Ideas

27. 27Where character is never in question and excellence is always the answer. TM
… and Connecting Processes**
(Business Logic)
● Eliminates Friction and
Costs
● Increases Productivity
● Creates and
Destroys Jobs
**
Smart Contracts and Best Practice based Templates to automate the well defined & understood
cases, leaving human talent to focus on exceptions and value creation.

28. 28Where character is never in question and excellence is always the answer. TM
By Embracing The Next Generation Business Model:
The Internet of Value
- DISRUPTING THE DISRUPTORS
- 21ST CENTURY WORK & BUSINESS MODELS
- SMART CONTRACTS
- DISTRIBUTED AUTOMATED ORGANIZATIONS
Closed and Centralized Networks
Open Networks and
Centralized Cloud
Open Networks and
Distributed Cloud

29. 29Where character is never in question and excellence is always the answer. TM
Example: Car Leasing Business TODAYExample: Car Leasing Business: TODAY

30. 30Where character is never in question and excellence is always the answer. TM
Example: Car Leasing Business with BLOCKCHAIN

31. 31Where character is never in question and excellence is always the answer. TM
HOW will Corporations Adapt ?
5

32. 32Where character is never in question and excellence is always the answer. TM
HOW will Corporations Adapt ?
Corporations must meet the challenges of accelerating business competition and
revenue pressures, by smartly identifying, building and integrating next generation
capabilities, emphasising ease of use and reliability with enhanced client security and
privacy.
Expected Corporate Adaptations:
» Blockchain 3.0: Long Term Vision for Automated Corporations, Will DAOs be King ?
» More Software (Smart Contracts), less (but more impactful) People
» More Skilled, Information Savvy Staff, less “Paper Shufflers”
» More Nimble, Loosely Coupled Departments, Just In Time Roles and Budgets
» Must provide Work-LIfe-Balance to get and keep Top Talent
» By Disrupting the Disruptors !
» Build a culture of Consistent Excellence during Constant Change, based on client
needs and innovation … not on risk aversion

33. 33Where character is never in question and excellence is always the answer. TM
Corporations Evolve Toward Blockchain Based
Organizations
All internal and
external
relationships are
managed via
blockchain based
smart contracts

34. 34Where character is never in question and excellence is always the answer. TM
Corporations Evolve Toward
Anti-Fragile, Self Improving Organizations
Handling Stresses
Fragile: Breaks
Robust: Resists
Antifragile: Improves
Antifragile systems
increase in capability,
resilience, or robustness
as a result of stressors,
shocks, volatility, noise,
mistakes, faults, attacks,
or failures.

35. 35Where character is never in question and excellence is always the answer. TM
Future of Finance
Automation at the
Center
Humans at the Center
Humans at the EdgesAutomation at the
Edges
Financial Services Evolves Toward Artificial Intelligence
Solutions

36. 36Where character is never in question and excellence is always the answer. TM
Example: Disrupting Services - Uber vs Blockchain
LaZooz.net

37. 37Where character is never in question and excellence is always the answer. TM
Example: Correspondent Bank Disintermediation

38. 38Where character is never in question and excellence is always the answer. TM
Example: Unbundling of a U.S. Bank
Mortgages Merchant
Services
Financing
and Credit
Payments Payroll
Wealth
Management
Insurance
Investing and
Retirement
Planning

39. 39Where character is never in question and excellence is always the answer. TM
TRUST
INTEGRITY
MATTERS
BECAUSE
REPUTATIONS
TAKE YEARS TO
BUILD BUT CAN
BE DESTROYED
IN MINUTES ...
CULTURE Matters, Even with Trustless Transactions :
The 5Ps - Managing Excellence During Constant Change

40. 40Where character is never in question and excellence is always the answer. TM
WHAT are the Implications ?6

41. 41Where character is never in question and excellence is always the answer. TM
WHAT are the Implications ?
ECONOMY
Move To A Trustless Transaction Economy & Society i.e. Mobile, Frictionless Products and Services
Merging of Tech and Financial Services Companies: Ultimately Banks become “service nodes on the
network”, Markets and Business Models disrupted and redefined e.g. Funding, Lending …
Human Capital Still Key. Wave of Creative Destruction, Education / Demographics will drive Talent
Acquisition / Retention e.g. Work/Life Balance, JIT work force, Corporate Structure Evolution - DAOs ?
TECHNOLOGY
The Internet Of Value: Blockchain, Mobile, Big Data, IoT and AI:
● Transition from Username/Password (“Shared Secret”) Security Model, to new unified,
digital and device identity model
● Cryptocurrencies and Fiat currencies converge to fully enable P2P economy
● Programmable Assets, Trust, Ownership, Money, Identity, Contracts
● Smart Contracts & Applications utilize Blockchain, Big Data, AI etc. to remove latencies, include
billions of IoT devices, automate business processes and move up the Intelligence curve.
→ Shorter Settlement Cycles, → New Products and Services → The Rise of Robo Advice !

42. 42Where character is never in question and excellence is always the answer. TM
Implication: FinTech Growth Endangers Bank /
Customer Relationship … Here come the GAFAs.
FINTECH
Payments
Raising Funds
Digital
Currencies
Advice

43. 43Where character is never in question and excellence is always the answer. TM
Banks are frightened by GAFAs financial power and brand image
Implication: New FinTech Banks Driven By Financial Power
and Brand Image ? (Google, Apple, Facebook, Amazon)

44. 44Where character is never in question and excellence is always the answer. TM
Implication: GAFAs Will NOT Become Banks … But
Banks May Become Slaves of GAFAs ?
• Not profitable enough (negative impact on market cap)
• Too regulated
• “Slow” growth
What banks fear most
are GAFAs owning the
customer relationship
and them becoming
the mere white labels
at the back end of the
process

45. 45Where character is never in question and excellence is always the answer. TM
Implication: Blockchain Backbone For Financial Services
Distributed Ledger Solutions will replace Centralized Systems
Distributed Ledger Based Services will replace Centralized, Legacy Systems

46. 46Where character is never in question and excellence is always the answer. TM
Implication: Blockchain Impact in Post Trade Processing
Streamlined Securities
Settlement
Reducing Latency and Risk
Removal of $20 Billion
in Post Trade Processing
Costs by 2022

47. 47Where character is never in question and excellence is always the answer. TM
Implication: Blockchain Impact Across Entire Trade Cycle

48. 48Where character is never in question and excellence is always the answer. TM
Implication: Rise of Robo Advice in Wealth Management

49. 49Where character is never in question and excellence is always the answer. TM
Implication: Robo Advice Moving From Awareness to
Adoption

50. 50Where character is never in question and excellence is always the answer. TM
Implication: Robo Advice Managing $2 Trillion by 2020
68 %

51. 51Where character is never in question and excellence is always the answer. TM
Implication: Blockchain Will Help Integrate The IoT

52. 52Where character is never in question and excellence is always the answer. TM
Implication: IoT in Financial Services
1. Monitoring & data
transmission
2. Data collection and
management
3. Strategic
analytics
4. Value
Creation
D
A
T
A
M
A
N
A
G
E
M
E
N
T
P
L
A
T
F
O
R
M
Financial
product
development
Risk
management
& pricing of
finance
Identifying
additional
business
needs
Streamlining
contractual
processes

53. 53Where character is never in question and excellence is always the answer. TM
Implication: IoT / Smart Data In Financial Services
Right time and
channel to
connect
Fraud and AML
SME Credit
Budgeting
“Right Time”
Marketing
Smart Learning and Real Time Services
Use Transactional, locational, communications and social media for customer
engagement
Improve AML and Use Pattern recognition software to catch fraud
Use customer behavior to help SMEs manage cash flow
Combine customer behavior patterns with savings goals for planning

54. 54Where character is never in question and excellence is always the answer. TM
Implication: IoT In Asset Financing

55. 55Where character is never in question and excellence is always the answer. TM
Implication: IoT in Insurance, Customized Products

56. 56Where character is never in question and excellence is always the answer. TM
Implication: IoT Economy

57. 57Where character is never in question and excellence is always the answer. TM
WHEN will we reach tipping point ?
7

58. 58Where character is never in question and excellence is always the answer. TM
WHEN will impact reach the tipping point ?
The disruption of the financial sector is underway. FinTech / Financial Services Collaboration
and Convergence are reshaping the value proposition of existing products and services.
Banking and Payments are ripe in the short to mid term, followed by Insurance and Asset
Management.
The “Tipping Point” may be driven by some of these facts, surveys, estimates and needs:
» Over 20% of Financial Service business at risk to Fin Techs
» Up to 28% of Banking and Payments business at risk by 2020
» Up to 22% of Insurance, Asset / Wealth Management business at risk by 2020
» 25% of Financial Services firms do not liaise with FinTech companies at all. They will
underestimate the potential benefits and threats of the convergence.
» Mobile only accounts for 16% of Advertisement Revenue Today, within 5 years,
expectations are that 60% of clients will be using mobile applications (at least once a
month) to access financial services
» Large scale Digital Wallet adoption is critical and requires simplified key management
(FYI: Apple Iphone App store now supports 9 cryptocurrencies … )
» Must solve the Millennial Problem

59. 59Where character is never in question and excellence is always the answer. TM
Tipping Point: Solving The “Millennial Problem” ?

60. 60Where character is never in question and excellence is always the answer. TM
Tipping Point: The FinTech Tsunami ?
Fintech could reduce banks revenues and profits by up to 40% and
60% over the next decade
-60% -40%

61. 61Where character is never in question and excellence is always the answer. TM
Tipping Point: Rise of Inorganic Intelligence
Artificial Intelligence
Distributed Computing

62. 62Where character is never in question and excellence is always the answer. TM
Thank You

63. 63Where character is never in question and excellence is always the answer. TM
BOB BONOMO
President Bob Bonomo, LLC
CEO Blockchain Innovation Group, LLC
Mr. Bonomo is a Digital Currency Council certified Technology, Process and Business Consultant and former Chief Information
Officer at two major Wall Street firms. He currently chairs the Technology and Product Committee of the Wall Street Blockchain
Alliance.
His areas of expertise are the Asset Management component of the Global Financial Services sector, Blockchain / Distributed
Ledger Technologies & the Bitcoin Cryptocurrency Ecosystem.
Bob believes the productivity and disruptive nature of Blockchain’s Distributed Applications (Dapps) will accelerate the
displacement of many centralized systems and services, initially across Wall Street’s Back Office, via consortia, for Settlement time
and cost reductions, followed by the Buy-Side’s Front Office for Product and Service transparency & compliance differentiation, and
then, more generally, across the global corporate landscape of supply chains of goods and services - creating “a 21st Century
Intellectual Assembly Line of Innovation”.
Recent engagements include Business Development, Tech Strategies, Vendor, Risk, Staffing & Funding Analyses and Program
Management / Delivery at Large Financial Institutions, Cryptocurrency Trading Desks and Blockchain Startup Companies.
Via his Blockchain Innovation Group, Mr. Bonomo helps concept stage startup companies evolve to achieve funding, staffing and
operational excellence. He’s formed PayToSkip.com and GuvChain.org startups as disruptive plays in Advertising and Government.
Previously Mr. Bonomo spent over 25 years on Wall Street designing, delivering and managing innovative global systems, processes
and teams.
From Developer to CIO, he was a key transformation agent at Sanford C. Bernstein / Alliance Bernstein and OppenheimerFunds Inc.
In another lifetime, Bob worked at JP Morgan, Moody’s Investors Service and Digital Equipment Corporation. He received a B.S. in
Computer Science from Columbia University School of Engineering & Applied Science in 1981.

64. 64Where character is never in question and excellence is always the answer. TM
CREDITS
My LinkedIn Profile - Bob Bonomo
Centralized, Decentralized and Distributed Systems (Paul Baran, 1964)
Joseph Schumpeter (1883–1950) coined the seemingly paradoxical term “creative destruction,”
My not so random walk down Tech Avenue, Wall Street and Blockchain Boulevard
Gartner Hype Curve 2015 http://www.gartner.com/newsroom/id/3114217
https://www.linkedin.com/pulse/blockchain-powering-internet-value-jarle-holm
https://evry.com/globalassets/insight/bank2020/blockchain-powering-the-internet-of-value---labs-whitepaper.pdf
https://www.cbinsights.com/blog/financial-services-bitcoin-investors/
http://firstpartner.net/news/new-market-map-defines-blockchain-ecosystem
https://www.accenture.com/_acnmedia/PDF-2/Accenture-Wealth-Management-Rise-of-Robo-Advice.pdf
http://www.slideshare.net/kantox/the-next-10-years-in-fintech-57726895
https://www.amazon.com/Business-Blockchain-Practice-Application-Technology/dp/1119300312
http://www.oliverwyman.com/content/dam/oliver-wyman/global/en/2016/feb/BlockChain-In-Capital-Markets.pdf
https://www.pwc.at/publikationen/branchen-und-wirtschaftsstudien/fintech-global-report.pdf
http://santanderinnoventures.com/wp-content/uploads/2015/06/The-Fintech-2-0-Paper.pdf
https://www.pwc.com/jg/en/publications/pwc-project-blue-2.0.pdf