Master Cybersecurity Cosenza - 20151202

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DIGITAL DISRUPTION
FINANCIAL SERVICES RESHAPED…AREN’T THEY?
COSENZA, DICEMBRE 2015

22Copyright © 2015 NTT DATA Italia SpA
SOME EVIDENCE … TO START

CORE BUSINESS IN FINANCIAL SERVICES IS STILL THE SAME…
SINCE MORE THAN 500 YEARS AGO banking industry is traditionally related to 7 KEY ACTIVITIES
Source: The future of Banking, FSA
Distribute
Currency
(To handle currency
lifecycle)
Trading
Support
(To support
international trades)
Investments
(To manage assets
of wealthy clients)
Payments
(To manage
payments)
Securities
(To provide security
of assets)
Deposits
(To buy credit)
Lending
(To sell credit)

… HOWEVER HOW BANKS WILL PROVIDE THEM IS GOING TO CHANGE RADICALLY
7.30 AM Tube ride
Enable easy and fast tube access to go to
your office
NFC payments
9.00 AM
Monitor your investments
network
Improve your investment decisions following
the community support
Social Trading
9.30 AM Purchase coffee
Allow for real-time location of a bar with
promotions for taking a coffe
Location, Coupon,
Loyalty
11.30 AM Investments
Suggest your boss an interesting idea of a
startup in an equity crowdfunding platform
Mobile
investments
1.00 PM Share a lunch with friends
Quick and convenient way to share lunch
costs with three friends
Bill split
3.30 PM
Transfer money to your
son for university
Great exchange rates for international
currency transfers for your son abroad
Currency Transfert
6.00 PM Spending monitoring
Instant monitoring of your son’s spending and
lend money to him
Monitoring,
Lending
6.30 PM Pay a plumber
Pay a plumber for fixing water pipe at home
through portable card reader
SMB acceptance
9:00 PM
Check your expenses and
forecast
Improve financials decision and buying
behaviour through online tools for self-advise
Smart PFM
10:00 PM Find money for a new TV
Ask for lending to you social network to buy a
new TV
Social Lending
10.30 PM Purchase TV online
One click pay that is fast and secure
via mobile for gift purchased online
1-click payment

KEY CUSTOMERS NEEDS ARE EMERGING
Addicted to connectivity
I am always On
I use multiple Devices
I stay in multiple locations
I want immediate and secure access
Addicted to customization
I get better deals
I save money
I want the ultra convenient
I want personalized and customizable offers
Addicted to freedom
I am in control
I am better informed
I want more social engagement
I want more fun
What CUSTOMERS WANT is the ability to ACCESS BANKING SERVICES AT ANY TIME FROM ANY LOCATION USING A
BETTER AND SIMPLER EXPERIENCE than in branches

DIGITAL TRANSFORMATION IS REVEALING A NEW TYPE OF CLIENT …
Self directed customer
•Collects information autonomously via digital
channels
•Expects quality, transparency and facility of
contents
•Rewards companies which are particularly
sensitive and attentive to their exigencies
•Seeks to activate consulting and support
channels on the same digital touch-points
41%
SMARTPHONE PENETRATION
92%
LOCAL INFO QUERIES
84%
ACCESS TO PROMOTIONS
30%
PURCHASES VIA DEVICE
Smartphone usage in Italy

… ALSO DUE TO THE DRIVE AND SUCCESS OF EVOLVED, "DISRUPTIVE" TECHNOLOGIES
Mobile
Social
Big Data
IoT
Cloud
Source: Ericsson, KPMG, Oracle, Gartner, Forrester Research
2012 2020 Growth
2.7 6.1
1.6 3.0
3 45
2,5 25
41 241
Number of users
(billion)
Data volume
(Zettabytes)
Cloud market
(billion US$)
Smartphone
subscriptions
(billion)
2.2x
15x
10x
5.8x
Volume of "smart
connected things"
(billion)
1.8x
Technologies like GPS,
NFC and Mobile scanning
will enable development of
innovative services
55 minutes of mean daily
Social Media usage is
forecast in 2016.
Only 11% of Insurers
utilise predictive models
to:
• identify prospects
• Manage customer
relations in a
personalised manner

COUNTER PROMOTER ATM PHONE BANKING INTERNET BANKING SOCIAL MEDIA
INTERACTION CHANNEL MIX IS CHANGING …
Source: ABI April 2015
NEW MEDIA TRANSFORMS HOW CONSUMERS INTERACT, transact and manage their financial worlds.
5 6 4
7 8
2009
2010
2011
2012
2013
2014
9 7
13
6
11
142009
2010
2011
2012
2013
2014
75
79 80
83 85 84
2009
2010
2011
2012
2013
2014
28
34
40 40
48 50
2009
2010
2011
2012
2013
2014
5
11
17
2012 2013 2014
88 86 86 87 87
84
2009
2010
2011
2012
2013
2014
% of bank customers

... AND CUSTOMERS CAN CHOOSE A SINGLE CHANNEL OR A MULTI-CHANNEL EXPERIENCE
11%
30%
48%
8%
2% 1%
BRANCH LOVERS
41% 48% 10%
PHI-
DIGITAL
Source: ABI April 2015
ONLY
DIGITAL
Solo agenzia o
promotore
ATM
Agenzia + ATM +
WEB o CC
WEB +
ATM
CC
Not
available
% of bank customers

THIS ATTITUDE ALSO HAS IMPACTS FOR INSURANCE CLIENTS …
Source: PwC 2014 (Digital Insurance Survey: 9,281 consumers interviewedi)
26%
of clients would prefer to acquire their
insurance products online (web or mobile)
46%
of clients would prefer a much faster process
at the policy selection phase
67%
of clients want a sensor installed in their car or
home to reduce premiums
50%
of clients are willing to provide additional
information (personal & lifestyle) to the
banking/insurance company in exchange for the best
deal
42%
of clients desire greater transparency
48%
of clients consider ease of access to services and
24/7 availability to be fundamental
36%
of clients would like human support and
assistance during online purchasing (e.g.
chat, video chat …)

… WHO INCREASINGLY ACCESS INSURANCE SERVICES FROM EXTERNAL SOURCES LIKE
SEARCH ENGINES AND OFFER AGGREGATORS ....
43%
of accesses to the company site is from
search engines
71%
of clients perform online searches and
comparisons before buying insurance
products
Source: PwC 2014 (Digital Insurance Survey: 9.281 consumers interviewed); Google Trends
Generali

PRODUCTS & SERVICES COMPLETELY RESHAPED FOR THE BANKING MARKET…
PAYMENTS
eCOUPONING
SUPER WALLET
SOCIAL LENDING
CROWD FUNDING
PERSONAL
FINANCIAL
MANAGEMENT
FINANCE APIS
CRYPTO CURRENCY
PERSON 2 PERSON
CARDLESS &
BIOMETRIC
ON LINE FINANCIAL
ADVISORY
DIGITAL
PORTFOLIO

…AS WELL AS IN INSURANCE MARKET…
DIGITAL SERVICE &
COLLABORATION
PAPERLESS & DEMATERIALIZATION
ANALYTICS
Gather all available information
(structured or not) to predict
customer behavior and adjust
product pricing
Improve customer service with
multichannel and integrated
communication tools. DIGITAL SALES
Enable new touchpoints to
increase lead generation and
brand diffusion (eg social site,
aggregator, partner site..)
MOBILE OPERATION
OMNICHANNEL DIGITAL
PRESENCE
PAYMENTS
TELEMATICS / IOT
Improve sales thanks to lean processes and multimedia
campaigns, smart management of the agent network and
objectives
Overrun physical boundaries of the
agency to enable mobility to agents and
customers
Streamline business process both internal
and external
Innovate the range of
products and services
offered through the
technologies of telematics and
wearable devices.
Oversee the chain of payments decreasing
transaction costs and providing better customer
service
Customer
Agents Company
DIGITAL CRM

…FOLLOWING DISRUPTIVE TECHNOLOGYDegreeofeconomicimpact
(functions,industries,geographies)
1990s 2000s 2010s
Digital Products and
Infrastructure
•Digital products (e.g.
music)
•Infrastructure (internet,
software, …)
Digital distribution &
Efficiency
•Web distribution and e-
commerce (e.g. retail,
electronics,…)
•Operations efficiency
(e.g. e-government) Digital transformation of
business models
•Mobile revolution
•Social media
•Power analytics
•…
Source: IBM, 2014

KEY HIGHLIGHTS FOR THE FUTURE
FI will PROVIDE to
CONSUMERS with
exactly WHAT THEY
WANT, precisely how
and when they need
The biggest threat to FI is
the LOSS OF
CUSTOMER
TRANSACTIONS to other
players in the value chain
REGULATION in the
future banking macro-
system will PLAY A KEY
ROLE
FI will discover NEW
CAPABILITY emerged
already in other sectors
(data management,
engagement models,
marketing …)
TECHNOLOGY
BREAKTHROUGHS will
significantly impact FI “as
we know it” (the demand
and delivery of banking
services will change)

WHAT IS THE FINANCIAL INSTITUTION OF THE FUTURE?

NEW BRANDS VS FINANCIAL BRANDS
New brands that are approaching to financial product/service, enjoy a great competitive advantage
that is not only given by the recognized competences in terms of innovation, but also in terms of
desirability.
Results underline also the bad situation of financial top brands in each country.
Source: ‘Brand Desire Survey’, on 555 brands by different industries. Panel of 22.000 people from 6 different countries.
Desirability of Top Financial Brands (by
country)
#1
#2
#23
Potential ‘Challenger’ Brands
(overall)
out of 555 brands

MONEY FARM: INDIPENDENT ONLINE ADVISORY
total of registered
users
2.000
users that subscribed
premium services
500
AUM avg
€ 70k
Facebook Fans and 8.000
followers on Twitter
8.000
Authorized SIM since 2012 for advisory and
for transactions (orders transmission).
Online advisory & OneClick funcionality for
online investments
3 levels of service (accounts of € 150, € 350, €
600 / year)
Free services: financial info and user profiling
Premium services: Advisory, Portfolio and
Alerting
Results of 6 months (Oct 2012-Mar 2013):
3 mln venture capitals (Principia Sgr and United)
ROI: 10.000 Customers
Target in 4 years: 40.000 Customers

PORTFOLIO MANAGEMENT, ALSO ON SMALL INVESTMENTS
Management fees of Nutmeg, versus
a market average of 1,36%
0,3%
Founded in 2010, its CEO is a
former wealth investment manager
of Barclays. It has raised over
$5mln of venture capital and has
been operative since May 2012.
It allows to invest small amounts
(even only 1.000£) that are
managed by Nutmeg’s specialists.
The investments can be
associated to different customers’
saving targets (to buy home, to
restore a motorbike, etc.)
Percentage fee on assets under
management are required.
Employees within the firm
20
Percentage of UK adults that have declared not to have enough
resources to make investments51%

AMERIPRISE: ADVISORY SELECTION THROUGH THEIR OWN SOCIAL BUSINESS NETWORK
The Client/Prospect can browse the portals and gather information. To
contact a Private Banker, further to searching by name or geographical
nearness, there is the faculty to search by connection to the
LinkedIn network.
The prospect finds the agents connected to
their LinkedIn network and can ask for a
contact.
Promoters publish a
series of contents
provided by Ameriprise
on their LinkedIn profiles
which are made
immediately visible to the
entire LinkedIn network
1
2
70% of Ameriprise promoters have an active profile on Linkedin used for lead generation.
3

MINT: PERSONAL FINANCIAL MANAGEMENT
PFM with free subscription and an
extremely user-friendly interface for:
− Data management by more bank
accounts
− Alerting system
− Budget
− Goals
− Trends
The service is accessible through
website and mobile app
Cross-selling opportunities generated on
the basis of user data
Users has subscribed the free service offered by
mint.com.
Over 10 mln
Source: Javelin Research
Customers that ask for a PFM service offered by their
bank/financial institution.
56%

EKOMINI: FINANCIAL EDUCATION AND SAVING MANAGEMENT FOR Y GEN
Ekomini is based on the combined use of a physic
product and a digital solution, dedicated to children
(6-12 y.o.)
Through a mix of virtual (web game platform) and
reality (saving), the children target is introduced to
the first use of financial instruments.
The goals are the training about four different topics:
• SAVE
• SHARE
• SET GOALS
• INVEST
To the game can be associated financial products
typically managed by other modes that not provide
for a direct children involvement (i.e. savings
account).
22

SMARTYPIG: SAVE FOR A GOAL. AND THANKS TO SOCIAL
Deposits at the end of 2009
Online management of their own
finalized saving project, with the control
of saving funds and progress graphs.
Automatic transfers from their own
accounts and economic contribution by
other users.
Simple and intuitive interface,
integrated with social channels: saving
management becomes funny.
Completely free service that
recognizes the interests on deposits.
$212 mln
Savings reached until today
$3 bln
partnership with BBVA Compass
Since 2010
23

CROWDFUNDING: KICKSTARTER PHENOMENON
People that have funded almost a
prject on Kickstarter
4,8mln
Founded in 2009 in USA, Kickstarter is the
most known crowdfunding platform at a
worldwide level. Among funded projects,
there is also a documentary (Inocente) that
won the Oscar in 2013 in short-doc
category.
Total of funds raised from 2009 to 2013
US$ 796mln
Project funded on online platform
48.000

MOVENBANK: PAYMENTS AND FINANCE MANAGEMENT TOOLS, ALL ON MOBILE
Finovate Europe: best of the show for launch
of mobile-optimized bank2013
A unique tool, based on mobile, to manage their own
expenditure. Moven, created by Brett King in 2010 in US
(Europe launch forecasted for 2014), is available on Android
and iOS and offers::
• Moven contactless sticker (for mobile payments with
MasterCard Paypass)
• Payment receipt directly on smartphone (Spending
Assistant)
• PFM tools for control and analysis (MoneyPulse e
MoneyPath dashboard)
• P2P payments via Facebook, email and mobile, based on
CREDscore system, or rather on the user reputation built
on feedback
• Recharging fund system by external accounts
• Check deposit and bill payments (coming soon)
American Banker: Brett King - Bank Technology
Innovator of the Year 20122012 25

HELLO BANK: THE NEW DIGITAL BANK OF BNP PARIBAS
Manage money simply, make grow savings, understand and optimize personal budget,
access to fundings customized according to accumulation capacity and projects.
HELLO BANK, I RISPARMI AL CENTRO
The new digital bank of BNP Paribas
focuses its baking experience on
PFM and finalized savings features
integrating them on all channels and
on the entire operations of the new
digital bank
The recognition to open a bank account is made
through a bank transfer or webcam
100% paperless

PROGRESSIVE: ONLINE QUOTE OF POLICY TYPE
Fast Quote Aggregator:
Independent of policy type, estimation commences
with input of a single datum (post code) and selection
of the service of interest (car, motorcycle, home, etc.)
Bundle offer:
Faculty to request aggregated
estimates for two policy types (e.g.
car + home)
Responsive site:
Interface which adapts to the device,
highlighting different functions on the basis of
the device utilised (e.g. make a payment and
contact center call).
High propensity for lead generation, through application of typical digital sales tecniques

FRIENDSURANCE: AN EXAMPLE OF SOCIAL INTEGRATION IN INSURANCE MARKET
•This service, only available in Germany for the moment, integrates offer comparison with the concept of peer-to-
peer insurance.
•Initially the network covers – up to an agreed maximum amount – eventual claims against people in the network,
the company applies discounts (up to 50%) on policy premiums and payback in the case of no claims during the
year, generating a conspicuous incentive for fraud prevention/reduction.
•In 2013 in the UK, the Jfloat service was launched, an invitation only service.

AVIVA: SOCIAL GAMIFICATION TO INTEGRATE THE OFFERING
•In 2012 the British insurance company
Aviva developed Aviva Drive, a
smartphone app which delivers up to
20% discount on insurance premiums on
the basis of driving habits (Usage-Based
Insurance).
•The discount can be obtained by tracking
routes with app’s GPS function for 200
miles.
•To make this service more attractive and
stimulate use of the app, Aviva integrated
the simple black box functionalities with a
social concept of gamification.
•The service was also launched in Italy in
2014.
of app users obtained the
maximum discount (20%)
19%
of app users obtained a 10%
discount
50%230,000
downloads in the UK
from 2012 to 2014
41
was the average age
of those completing
the 200 miles
Would you allow your driving to be traced in
exchange for a discount on your insurance?
No
Sì
Depends on the
discount
Source: Deloitte

INSURERS NEED TO ESTABLISH A CONTINUOUS DIGITAL CONTACT WITH THEIR
PROSPECTS/CLIENTS TO BE READY FOR THE NEW INCUMBENT DIGITAL BUSINESS
Wearable Tech for Health Insurance
Intelligent remote home control Tech for Home Insurance
New media, devices and risks to be insured

INSURANCE COMPANIES ARE INCREASINGLY DIGITAL COLLABORATIVE TO OBTAIN MAXIMUM
INTERNAL EFFICIENCY ALSO BY EXPLOITING THE STRENGTHS OF THEIR ANALYTICS …
• Resources collaborate via chat and directly exchange files online
reducing eventual escalations and accelerating case closure,.
• New employees can observe problem resolution live and acquire
knowledge also where not explicitly documented.
• Agents procure real time information, have visibility of sales
performance, can simulate different scenarios at the estimate stage and
input the order directly to an iPad
•Single, complete view of the client (contacts, communications, activity
history …): coherency and standardisation of information between the diverse
business units to deliver added value to the client independent of the silo
based logic.
•Real time dashboard (KPI monitoring of leads, claims and service requests,
sales, …) with an aggregated, global view of business trends also for
executive management

UNICREDIT SUBITO BANCA STORE
Total investment by 2016, (350mln for renovation of
2200 branches)
1,5mld euro
Real estate brokerage brand new company
UniCredit Subito Casa
Products Hi-tech, Casa, Lifestyle, Wellness, Business
Online and at Branch

THE SUPER WALLET & THE MICROECONOMIC ECOSYSTEM

PAYMENTS' SECTOR IN THE LAST 20 YEARS HAS GROWN IN IMPORTANCE UP TO
UNPRECEDENTED LEVELS WITH NEW PLAYERS STEPPING INTO THE MARKET
2000 2010 2020
BANKS AND FINANCIAL
INSTITUTIONS have to CATCH
UP in the present decade WITH
CONVENTIONAL AND
UNCONVENTIONAL PAYMENT
PROVIDERS currently offering
innovative payment servicesto
become the leaders of the next
decade
o TELCO PROVIDERS enter the
payments' market to offer SMS
MONEY TRANSFER, mainly in
Africa where the banking system is
not widespread
o PAYPAL, already present in the
global payments' market,
introduces MOBILE PAYMENTS to
transfer money between users
o SW AND HW VENDORS step into
the market providing peer to peer
and proximity payment solutions
based on NFC TECHNOLOGY
o CARD ISSUERS introduce cloud
based payments leveraging HOST
CARD EMULATOR (HCE)
TECHNOLOGY which is going to
replace in second half of the
decade NFC technology

RETAIL PAYMENTS ARE STRONGLY INTERCONNECTED WITH THE MICRO-ECONOMIC
ECOSYSTEM IN WHICH EVERYDAY MICRO-PAYMENTS ARE EXECUTED
FROM EVERYDAY RETAIL HABITS …
o Everyday expenses are mainly EXECUTED
LOCALLY, leveraging the shop network
developed AT DISTRICT LEVEL
o Everyday expenses are usually mainly MICRO-
PAYMENTS (< 50 €)
o Day to day purchases refer mostly to
NECESSARY CONSUMER GOODS (e.g. food,
medicines, drinks, …) AND OTHER
CONSUMER GOODS AND SERVICES (e.g.
beauticians, barbers, …)
… TO ASSOCIATED PAYMENT ISSUES
o Many retailers still DO NOT OFFER
ELECTRONIC PAYMENT FACILITIES
(credit/debit cards). This is due mainly to costs
incurred in relationship with the average
amount of money spent daily in retail payments
o The MOST WIDELY USED PAYMENT
METHODS are THOSE MOST OFTEN
ACCEPTED in the reference ecosystem, thus
making cash by far the most common payment
method adopted

THE FUTURE OF MOBILE PAYMENTS IS THUS THE "SUPER WALLET", WHICH INTEGRATES
PAYMENT AND VALUE ADDED SERVICES SUPPLIED IN THE REFERENCE ECOSYSTEM
MOBILE
SUPER WALLET
ECOSYSTEM
Sophisticated Banked
Families
Migrant
Workers
Proximity Payments
Online commerce
Utilities
Telco
P2P
PURCHASE AT MERCHANT
VIA CONTACTLESS
BILL PAYMENT
MOBILE
TOP UP
MONEY TRANSFER
TICKET PURCHASE
COUPONING
DISCOUNTS
LOYALTY
Business
PFM
M - BANKING
Financial Advisors
ONLINE ADVISORY Gaming
LOTTERY
MY MICRO SAVINGS
ADVANCED SECUIRTY
CAPABILITY (e.g.:
BIOMETRIC)
Issuers

CURRENTLY IN ITALY MOBILE PAYMENTS APPLICATIONS GUARANTEE EXCLUSIVELY PEER TO
PEER PAYMENTS …
One of the first players is UBI Banca with its UBI PAY
(March2015) that allow users to:
• SEND MONEY TO THEIR CONTACTS,
registered in the mobile phone agenda as easily
as sending a message
• EXECUTE IN STORE PURCHASES through a
simple CONTACTLESS method
• MANAGE ONLINE PURCHASES

… BUT SOME SOLUTIONS PROMOTED IN EUROPE ARE MOVING TOWARDS THIS DIRECTION,
LIKE BANK ZACHODNI WBK WHICH OFFERS WITHIN THE MOBILE BANKING SOLUTION ALSO A
MARKETPLACE
• BZWBK24 allows to shop in Polonia at a
NUMBER OF MERCHANTS, like:
- Shop daily with delivery at home
- Flowers' shipping
- Bus ticket purchase in almost 30 of the
main cities
- Book flights, hotels, cinema's tickets
- Reserve a taxi, pay the parking fare
- Reserve take away food in more than
1500 restaurants
• In the future, the clients' of the bank will be
also able to receive a lease through the
application to cover the purchases

ENHANCED KNOW YOUR CUSTOMER (EKYC)

BANKS WILL FOLLOW THE DATA EVOLUTION TO KNOW AND SERVE
BETTER THEIR PROSPECTS & CLIENTS
ENHANCED
KYC
RISK
MANAGEMENT
Evaluate credit
exposure
CUSTOMER
SEGMENTATION
Segment customers at
granular level for sales
& caring purposes
SENTIMENT
ANALYSIS
Understand what
customers are saying
about the companyCUSTOMER
CHURN ANALYSIS
Identify patterns that
lead to customer
abandonment
Structured
Data
Unstructured
Data
FRAUD
DETECTION
Prevent potential
security attacks or fraud
Internal Data
Third Party Data
AML
…

SOME REFERENCE CASES, HOW BANKS IMPLEMENT "BIG DATA"
THE
NEED
THE
SOURCES
THE
RESULTS
MY ONLINE REPUTATION FRAUD FOCUS & GOVERNANCE
DETECTION OF POSSIBLE RISKS TO ITS
REPUTATION and feedback gathering to increase
positive consensus and customer satisfaction
EXISTING FRAUD INFRASTRUCTURE was NOT
FLEXIBLE ENOUGH to keep up with rapidly changing
compliance regulations and constantly evolving fraud
tactics
Identification and analysis of ONLINE AND SOCIAL
MEDIA COMMENTS about BBVA and its brands
Analysis of TRANSACTION DATA AND ENTERPRISE
DATA SOURCES to determine whether individuals really
are who they say they are
o Consistently respond to and gain insight into customer
needs and feedback
o Measure the success of its outputs and approaches to
engaging stakeholders and customers
o Verify whether positive or negative sentiments have
increased or not
o +40% ability to identify and interrupt potentially
fraudulent transactions
o Prevented thousands of customers from losing funds to
fraud
o Stopped more than $37.7 million in fraud
o 72% reduction in consumer fraud complaints in one
year.

REGULATION ON FINANCE APIS & THIRD PARTY PAYMENT PROVIDERS

BANKING API STANDARDIZATION CONSIDERED BY UK TREASURY
U.K. Treasury Department has defined an agenda that will create
standardized APIs for the industry (Banks).
The move is part of a wider U.K. government agenda aimed at
ensuring that citizens have better access to their consumer
data. The government has previously encouraged banks, energy
companies and utilities, and telcos to provide consumers with
greater accessibility to their personal data in machine-readable
(i.e., API-enabled) formats.
After some empty threats to legislate to ensure consumer rights
to personal data held by businesses, the U.K. Treasury is trying
a different tack: the U.K.’s national treasurer issued a Statement
with financial policies for the year 2015. According to section
1.171, "the government is keen to enable more innovation
around bank data and will launch a call for evidence on how
to deliver standardized application programming interfaces
in the banking industry."

COMPLIANCE FRAMEWORK
FATCA
Reporting su beni e attività
finanziarie posseduti da
cittadini statunitensi
KYC
Serie di procedure di verifica
dell’identità del cliente.
MIFID II
Regolarizzazione del mercato
finanziario europeo. Incentrato
su strumenti e istituzioni
finanziarie
AML
Insieme di strumenti
tecnico/operativi per verificare
che il cliente non sia coinvolto
in attività illegali
263
Rafforzamento della gestione del
rischio tramite sistemi di
controllo interni, informativi e
operazionali
NPL
Procedure di contenimento del
rischio verso clienti insolventi
PAD
Direttiva che aumenta la portata di
controllo dei clienti nella
gestione del proprio conto
bancario
PSD 2
Regolamentazione di sistemi e
modalità di pagamento
incentrata su pagamenti
innovativi
CRS
Scambio annuo internazionale di
informazioni circa i beni che i
contribuenti mantengono
all’estero per evitare le tasse
SEPA
Transazioni di pagamento
regolarizzate attraverso schemi
e procedure standard
BASILEA III
Rafforzamento del sistema
bancario tramite normative sul
capitale, monitoraggio e
trasparenza
T2S
Piattaforma pan-Europea di
regolamento delle transazioni
in titoli per unificare i
regolamenti esistenti
QI
Accordo di collaborazione con
l’IRS, al fine di combattere
l’evasione del fisco sui capitali
di fonte americana

IN THE REGULATORY LANDSCAPE THE PSD2 IS GOING TO SHAPE A NEW CONTEXT WITH
WHICH BANKS WILL HAVE TO DEAL
REFERENCE CONTEXT
o The review of PSD2 regulation, named
"ACCESS TO ACCOUNT" (XS2A) will compel
banks to guarantee to THIRD PARTIES
ACCESS TO THE INFORMATION about their
clients through an OPEN API MODEL
o PLAYERS EXTERNAL TO THE BANK will be
able to build an INTERMEDIATE SERVICE
LAYER BETWEEN THE BANK AND ITS
CLIENTS. This will ENHANCE COMPETITION IN
PAYMENTS AND ACCOUNT INFORMATION
SERVICES SECTOR, shifting the paradigm from
the traditional "4 corner model" to a "third-party
payment provider" one
BANKS' REACTIONS
TPP: Third Party Payment Provider
Fonte: FINEXTRA RESEARCH SURVEY (Maggio 2015, 103 risposte su circa 64 differenti istituzioni finanziarie)
In Europe*:
55%
Of banks states COMPETITION will be enhances
mainly by NEW ENTRANTS, and in particular by
start ups
88%
Of banks admit its CONCERNS AROUND
SECURITY in providing data to third parties
37%
Of banks states they have FULL AWARENESS
OF CHANGES AND IMPACTS brought by the
new regulation

THE NEW LANDSCAPE WILL OFFER NEW BUSINESS OPPORTUNITIES AND MOST BANKS
KNOW IT
Of banks is RE-SHAPING ITS REVENUE
MODEL FOR THE RETAIL SEGMENT55%
Fonte: FINEXTRA RESEARCH SURVEY (Maggio 2015, 103 risposte su circa 64 differenti istituzioni finanziarie); Gartner
Of TOP 50 GLOBAL BANKS will launch in
the years to come their OPEN API
PLATFORM
75%
Of TOP 50 GLOBAL BANKS will launch an
APP STORE FOR THEIR CLIENTS25%
CO-
CREA
TION
Banks will COOPERATE more and more WITH
THIRD PARTIES TO CO-CREATE VALUE for
their clients to increase revenues and
customers' loyalty
… AND WHAT THEY ARE DOINGWHAT BANKS CAN DO …
o Develop an EXTENSIVE SET OF APIS to be
made available to external parties to provide new
value-added services
o Guarantee to TPP for free those services
required by regulatory compliance, while offering
ADDITIONAL SERVICES ON A CHARGEABLE
BASIS
o Evaluate the opportunity to ENTER THE TPP
SEGMENt, thus having access to information on
customers provided by other banks
o Define a PARTNERSHIP WITH TPP to exploit
mutually profitable opportunities

CREDITE AGRICOLE IS ONE OF THE PLAYERS THAT HAVE ALREADY MOVED TOWARDS THE
NEW LANDSCAPE
• Credit Agricole have launched CA STORE as
PART of its ONLINE BANKING SERVICE
• CA Store is an APP STORE where it is
possible to DOWNLOAD BANKING
APPLICATIONS (e.g. budgeting, money
transfer via mobile…) designed and created
by EXTERNAL DEVELOPERS. Developers
have access to a software development kit
that guarantees clients' data are accessed in
a secure way
• The business model is as follows:
- DEVELOPERS are paid according to HOW
MUCH THE APPLICATION IS USED
(CROWD ECONOMY)
- CLIENTS have to pay a SMALL MONTHLY
FEE only in case the application is used

VIRTUAL CURRENCY & THE BLOCKCHAIN PRINCIPLE

BITCOINS INTRODUCTION IN THE FINANCIAL MARKETS HAVE BROUGHT TOGETHER THE
DEVELOPMENT OF A MAJOR INNNOVATION: THE BLOCKCHAIN
Fonte: http://insidebitcoins.com/news/bitcoin-venture-capital-funding-pace-1-billion-2015/30665
o In 2009, Bitcoins have been introduced into the
market and still BY END OF 2015 it is
expected that MORE THAN 1$ BILLION IN
VENTURE CAPITAL FUNDING
o BITCOINS were started in the sphere of
CRYPTO-CURRENCIES, and is a currency
whose transactions are prooved in the
absence of a central counterparty, thanks to
the BLOCKCHAIN
o The BLOCKCHAIN has three main
characteristics that make its currency SELF-
CONSISTENT:
• Transparency and anonymity
• Decentralization
• Cryptography
REFERENCE CONTEXT OPPORTUNITIES
PERMISSIONED BLOCKCHAINS allow to
IMPROVE HUMAN INTENSIVE AND TIME
CONSUMING PROCESSES, thanks to
"CONSENSUS" that makes transactions self-
consistent and avoid explicit validation.
In the financial sector, blockchain application
would alllow to SPEED UP PROCESSES
THAT NEED POST-EXECUTION
VALIDATION OR CROSS-CHECK of
information betweek counterparties or with
authorities (e.g. regulatory reporting, KYC,
AML, Trading finance, …)

FINANCIAL SERVICES COMPANIES, LIKE SWISS UBS, ARE INVESTIGATING OPPORTUNITIES
ARISING FROM THE APPLICATION OF THE BLOCKCHAIN TO FINANCIAL PROCESSES
UBS launched in AUGUST 2015 a CHALLENGE for financial
technology entrepreneurs and startups, which covers various
INNOVATIVE FINTECH AREAS, including blockchain
technology
Within the program, UBS has started working on a
PROTOTYPE VIRTUAL CURRENCY ("UTILITY
SETTLEMENT COIN") to be used by banks and financial
institutions FOR POST-TRADE SETTLEMENTS between
financial institutions.
Settlement through USC will be performed on a private
financial platform developed based on permissioned
blockchain technology
INCREASE
SETTLEMENT
EXECUTION
SPEED
REDUCE RISK
INCREASE
EFFICIENCY
REDUCE
OPERATIONAL
COSTS

HOW FINANCIAL SERVICES CAN MAKE IOT TECHNOLOGY PAY OFF

WHY IS IOT RELEVANT FOR FINANCIAL SECTOR?
Banking
• Improved commercial loan risk management
• Using IoT data to assess creditworthiness
• Monitoring students and their debt
• Banks as platforms for micropayments
• Logical banking
• Retail banks finance replacement of failing
appliances
• Potential for employer services/payroll
• Intelligent homes revolutionize mobile payments
• Thing-based consumer finance
• Sensors will revolutionize recordkeeping
• IoT-sensitive lease pricing
• International trade financing in struments
• IoT-facilitated account security
• IoT-driven energy project finance
• “Googlization” of retail banks
Investment and wealth management
• Change in the investment management
business model
• Data acquisition in the age of perfect information
• Predicting the harvest
• Portfolios informed by real-time IoT data
• IoT unearths new investment opportunities
• IoT undermines derivatives in corporate bond
market
• Entrepreneurs’ telematics as a metric for startup
valuation
• Increased returns and reduced risks from POL
analysis
• Linking health monitors to wealth management
• Riskology—the new investment science
• Using data to profile customers and conduct
intelligent upsell
• Using IoT ecosystem data to tailor investment
recommendations
Insurance
• Insuring individuals in high-risk areas
• Using sensor data to provide smart cargo
insurance
• Unbiased vehicle insurance management
• Health insurance premiums adjusted for lifestyle
choices
• Insuring assets in risk-prone areas
• More accurate pricing of product liability
insurance
• Cyber-insurance companies use IoT to
determine premiums
• Natural hazard detection to spread risk and
reduce claims
Capital markets
• Leveraging IoT for crowd-investing
• Development of crowd-sourced capital pools
• Making virtual currencies physical
• New commodity datastreams
Commercial real estate (CRE)
• A new “smart construction” era begins
• Real-time bidding markets for CRE
• Real-time information allows occupancy
optimization
• Improved risk management in CRE construction
and lending

Mauro Giorgi
SVP, Head of Financial Services BU
Mail mauro.giorgi@nttdata.com

Master Cybersecurity Cosenza - 20151202

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