This document discusses the relationship between traditional financial services (finserv) and financial technology (fintech) companies. It argues that finserv companies must adopt technology-driven business models to remain competitive. While fintech startups currently have advantages in areas like user experience and costs, collaborations between fintech and finserv will allow each to leverage the other's strengths for mutual benefit. The document outlines opportunities for systems integrators and service providers like NTT DATA Italia to partner with fintechs and finservs on proof of concepts, use cases, and innovation projects in emerging areas like blockchain and open banking APIs.

1. Information Type:
The information contained in this document is the property of NTT DATA Italia S.p.A.. The information is closely linked to the oral comments
accompanying the same, and may be used only by those attending the presentation. Copying the material contained in this document may be
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Company Name:
Information
Owner:
NTT DATA ITALIA: FINTECH SPACE
MILAN
APRIL, 2016
CONFIDENTIAL
Confidential
NTT Data Italia
Mauro Giorgi

2. 11COPYRIGHT 2015 NTT DATA ITALIA S.P.A.
FINTECH, FINSERV, THE OTHERS: MODEL OF COLLABORATION

3. 22COPYRIGHT 2015 NTT DATA ITALIA S.P.A.
FINTECH DEFINITION: WHAT IS THE DIFFERENCE WITH FINSERV?
Pascal Bouvier writes there is no difference between Finserv (traditional Financial Services,
Lending, Capital Markets, Asset Management, Insurance and Payments) e Fintech.
All these companies must change their Business Model, using and leveraging technologies.
They must think, act, build, organize like Technology companies.
Following this path, Incumbent Finserv will become Incumbent Fintech, with models driven by
technology applications (they’ll become IT intensive companies, like Telco and Utilties). With no
clear distinction with the current startups, now relevant in the new arena, classified as Fintech,
proposing disruption of Incumbent Finserv’s model. No differences between big or small,
system integrator or service provider.
Venture Partner at
Santander Innoventures,
Santander Group's
Global Fintech VC fund
Definition of FINTECH:
…an economic industry composed of companies that use technology to make financial systems
more efficient.

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WHILE FINTECH SHOW ADVANTAGES COMPARED TO FINSERV….
Fintech are essentially new ventures faster than Finserv to
exploit advances in digital technology, with the development
of banking products that are more user-friendly, cost less in
use and are optimized for digital channels.
These new companies can succeed because they are less
burdened by the demands of regulatory compliance to
which banks are subject. Legacy systems do not have
dampers, complex and expensive to maintain. Can focus
on creating single-purpose solutions, which are designed to
offer a better experience within a single product or service.
Are smaller organizations, designed for the purpose of
innovation.

5. 44COPYRIGHT 2015 NTT DATA ITALIA S.P.A.
… THE FUTURE IS BASED ON A NEW MODEL BETWEEN FINTECH AND FINSERV
This "new model" is to collaborate.
Working towards the same goal, Finserv and Fintech are
converging towards a pattern which foresees incubation initiatives
and accelerators, with investment vehicles to exploit, promote and
scale innovation.
This scheme allows you to take full advantage of the two actors:
• the agility of startups compensates Finserv heaviness of
regulation;
• on the other hand in the global crisis the big institutions retain
confidence, historical data, operations (with capacity for risk
and compliance). Things that are not necessarily in DNA of
the new actors.
The strengths and weaknesses of both, Finserv and Fintech,
indicate that they will do better by cooperating rather than
competing.
The new digital businesses must either grow rapidly or die: the
risk of many of them is to concentrate on climbing the billion
dollars (Be the Unicorn). Finserv can offer the critical mass and
immediate scalability for customer’s demand: after all the market
run by more than 300 Finserv is worth trillions of dollars.

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CONVERGENCE BETWEEN FINTECH AND FINSERV
Identification and convergence of Finserv and
Fintech do not exclude other actors.
The maturity of the proposed services with new
technology will not come right away.
The impact on legacy should be managed along
two dimensions: Migration and Integration:
• The Migration will cover services/products as
well as data. Already partly in place in
anticipation of the future opening data as
requested PSD2, that task of creating APIs
and data sharing and information will increase
in the future.
• The Integration of backend systems to new
platforms, to gradually adapt the applications to
processes, it won't be a Big Bang event, but
another process driven by time of business
transformation.

7. 66COPYRIGHT 2015 NTT DATA ITALIA S.P.A.
WHAT IS THE SPACE FOR OTHER ACTORS?
THINK AS
A
FINTECH
2016 2018
ACT AS A
FINTECH
BUILD
YOUR
FINTECH
• Promotion of its own
observation network with the
key players involved, aimed
at the promotion and
development of models and
paradigms that are enabled
by the Blockchain
• Rethinking the role as one
sharing investments and co-
creation of new revenue
sources
• Garrison market opportunities
through constant interaction
with customers
• The player shall endeavor as
a partner able to stimulate the
revival of business processes
in view of BLOCKCHAIN
/Finance API's
• Design and implement new
services in the areas with the
fastest growing expectations
• Build vertical competence centers, increase specialist
knowledge on technologies and related business
models;
• To fuel the ecosystem of startups ranging forming
around the central themes of the Blockchain,
getting in exchange for a contribution of ideas,
expertise, enthusiasm and commitment;
• To integrate issues relating to Blockchain in R&D
programmes;
• To maximize the technological synergies between
contiguous domains such as Blockchain and
Payments, IoT, Big-data, Security, Mobility, etc.
through activation of programs of study in their
own specialized laboratories.
Traditional IT players, like Systems Integrators and Service Providers, have the chance to partner in this model of
cooperation. These players should adopt an approach that we can summarize in three stages:

8. 77COPYRIGHT 2015 NTT DATA ITALIA S.P.A.
NTT DATA ITALIA: ACTIONS IN FINTECH SPACE
• Observation of new
initiatives and companies;
• Attending Fintech Events
(Finovate 2016 London;
Quantech 2016 London)
• Explore collaboration with
startup, Italian and abroad,
specifically in Blockchain
and Financial APIs
• Garrison market
opportunities through
constant interaction with
customers
• Proposing to customers
Use cases for their
Business, acting as a
Fintech and partnering with
them.

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WHICH BUSINESS IN FINTECH AREA FOR NTT DATA ITALIA?
• Currently, Tier 1 customers of NTT DATA Italia (Unicredit, Intesa, Generali) have already established
relationship with Fintechs;
• Banking are exploring with R3 consortium application of Blockchain in Payments and Trade Finance;
• Unicredit has launched an Investment Fund of 200mln euro in UK in order to participate in venture capital of
Fintech;
• PWC is quite active in Italy proposing their experience in Fintech (USA) and their huge database of companies.
Goal is to propose and coinvest with customers in such companies;
• Customers are interested in PoC and Use Cases/Business Models innovating the current business scenario.
They are also interested in partnering with third parties in such initiatives;
• They are also facing the need in short time of resources qualified in new technologies and a revision of their
services and architectures (BiModal Approach by Gartner or Service Creation, as NTT DATA Italia suggests).
The possible Business is:
• Act as a partner with Tier 1 and Tier 2 customers, proposing new and innovative Use Cases, trying to achieve
PoC and then start projects: SHORT TIME, SMALL BUSINESS, INVESTMENT
• Propose (expecially in Finance APIs) to organize and foster the solution of small companies, being the Partner
of Scale and Problem Solver in Integration and Migration: SHORT/MEDIUM TIME, PROJECTS BASED
• Leverage on R&D (do not yet clear how much support from Japan) in order to raise the level of interest and
position: MEDIUM TERM, PROJECT BASED

10. COPYRIGHT 2015 NTT DATA ITALIA S.P.A.
Mauro Giorgi
SVP, Head of Financial Services BU
Mail mauro.giorgi@nttdata.com
Mobile +39 335 5799525