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Tomorrow’s transactions	today
Forced	marriage,	romance	still	to	be	discovered
FinTech and Banks
May	2016
Shikko Nijland
2 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
3 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
Tomorrow’s transactions	today
May	2016
Shikko Nijland
@startupfestEU,	crazy	dude	from	Innopay	
claims:	FinTechs need	bank’...
5 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
6 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
7 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
8 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
9 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
10 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
11 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
12 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reser...
13 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reser...
14 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
15 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reser...
16 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reser...
17 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reser...
18 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
19 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
20 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reser...
21 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
22 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
23 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
24 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reser...
25 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reser...
26 Banks	and FinTech – Forced marriage,	 romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reser...
27 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
28 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
29 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
30 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
31 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
32 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
33 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
34 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
35 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
36 Banks	and FinTech – Forced marriage,	romance	still to be discovered?	Innopay.	May	2016.	©	Innopay	BV.	All	rights	reserv...
Tomorrow’s transactions	today
We	look	forward	to	it
Contact	us Shikko Nijland
Managing	 Partner
Shikko.@innopay.com
+31	6	...
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Keynote speaker Innopay presentation at MeetFinTech Day on May 26th - Payments

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Innopay presentation at MeetFinTech Day on May 26th. Represented Payments

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Keynote speaker Innopay presentation at MeetFinTech Day on May 26th - Payments

  1. 1. Tomorrow’s transactions today Forced marriage, romance still to be discovered FinTech and Banks May 2016 Shikko Nijland
  2. 2. 2 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. • Innopay: Innovation experts in di • >30 consultants • HQ: Amsterdam, new office in Frankfurt • Three Practices: Payments, Digital Identity, e-Business • Services: Strategy, Co-creation, Transformation • Member of EBA, EPCA and ECP • Founding member of HollandFinTech
  3. 3. 3 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. FinTech and Banks: forced marriage? @startupfestEU, crazy dude from Innopay claims: FinTechs need bank’s collaboration, otherwise they will not survive :D :D :D
  4. 4. Tomorrow’s transactions today May 2016 Shikko Nijland @startupfestEU, crazy dude from Innopay claims: FinTechs need bank’s collaboration, otherwise they will not survive :D :D :D
  5. 5. 5 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Banks and FinTech: a forced marriage of convenience? Services/FinTechspace Infrastructure SEPA Processing: ACH, Visanet, Banknet Settlement: Real Time Gross Settlement Instruments: SCT, SDD, Cards e.g. Browser e.g. Webshop Payer account Beneficiary account Online banking Routing service Online Payment Provider (PSP) Information Funds Source: Innopay analysis, Euro Banking Association (EBA) CUSTOMER MERCHANT CREDITOR BANKDEBTOR BANK 1 1 2 Regulated financial institutions more optimised for regulatory compliance, security and resilience, adding trust, reach and scalability Less exposed to the onerous requirements and compliance obligations, adding excellent services having fit with customer needs, intuitive UI and seamless UX = Bank & FinTech chemistry TRADITIONAL FOUR CORNER PAYMENTS MODEL BANKS VS FINTECH CAPABILITIES INSTANT PAYMENTS 2 Source: Innopay analysis
  6. 6. 6 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Putting payments in a broader context: three key change drivers in financial services 1. CUSTOMER BEHAVIOUR 2. FINTECH & COMPETITION New players capturing market share driven by technological innovation Seamless payments anytime, anywhere, any device 3. EUROPEAN REGULATION Regulatory reforms disrupting traditional value chain (PSD2, IFR, GDPR, AML4, eIDAS) Source: Innopay analysis
  7. 7. 7 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. DevicesContext Customer Journeys Orientation Selection Transaction Delivery Customer care CommerceBanking Onboarding Usage Customer careSelectionOrientation OnlinePOS On-the-go Customers expect digital services anytime, anywhere on any device.. Source: Innopay analysis
  8. 8. 8 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. .. and wish to integrate payments seamlessly in their day-to-day life Instant availability of information and funds Mobile initiation Simple and easy Omni-channel, one experience Reconciliation and benchmarking Integrating various payment methods Safe & secure, robust and no fraud Access always and everywhere Source: Innopay analysis
  9. 9. 9 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Putting payments in a broader context: three key change drivers in financial services 1. CUSTOMER BEHAVIOUR 2. FINTECH & COMPETITION New players capturing market share driven by technological innovation Seamless payments anytime, anywhere, any device 3. EUROPEAN REGULATION Regulatory reforms disrupting traditional value chain (PSD2, IFR, GDPR, AML4, eIDAS) Source: Innopay analysis
  10. 10. 10 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Technological development are driving change in several sectors • Mobile wallets • Digital currency Payments • Automated investments • Robo advice Wealth Mgmt & savings • P2P lending • Crowd-funding Lending & capital raising • Use of sensors • New risk pools Insurance Changing ecosystems (APIs, open source) Enhanced data handling methods (big data analysis, machine learning) Portal aggregation Distributed and decentralized ledgers (Blockchain) New methods for security (Identification, authentication, token and credential mgmt) Move towards the cloud Sector transcending trends Source: Innopay analysis, DNB (2015)
  11. 11. 11 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. …but not all technologies are as relevant: impact vs priority High Medium Low Impact on Industry Priority in the next 3 years HighMediumLow Instant payments Online payments Digital wallets Contactless cards NFC Bank2corporate connectivity Cyber security HCE E-invoicing Biometrics in authentication E-Identity TokenizationCloud Payment services mPOS Distributed ledgers P2P mobile money transfers API-ification Machine learning Virtual accounts Supply Chain Finance Will become mainstream fast “High impact” drivers are (potential) game changers Big data Source: Innopay analysis, Accenture (Nov 2015)
  12. 12. 12 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Front Office (distribution) Back Office (manufacturing) Market (processing) infrastructure Investing / Wealth mgt Personal savings Payments Lending Capital raising Incumbent’s universal banking model: offer full range of financial products and services ‘end-to-end’ Customer types Service category CONSUMER BUSINESS
  13. 13. 13 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. … is under attack of specialised FinTechs: competition on isolated products and services Customer types Front Office (distribution) Back Office (manufacturing) Market (processing) infrastructure Investing / Wealth mgt Personal savings Payments Lending Capital raising Independent UX layer, digital front-end API-driven middle- and back office Electrification of market infrastructures Independent, digital front end, middle and back office Service category CONSUMER BUSINESS
  14. 14. 14 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Death by a thousand cut for banks? Let’s explore FinTech-Bank relationship Source: CBinsights
  15. 15. 15 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Traditionally, banks were the dominant financial services provider… ADDRESSABLE MARKET1: FINANCIAL SERVICES Traditional bank services Traditional banks2 1 Addressable market: potential consumer and professional clients for incumbent banks 2 Traditional bank: established player in the market BANK Source: Innopay analysis
  16. 16. 16 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. …but now many FinTechs emerge seeking to disintermediate banks or take heads on competition ADDRESSABLE MARKET1: FINANCIAL SERVICES MODEL FINTECH MODEL DESCRIPTION EXAMPLE DISINTER- MEDIATION Compete and/or cooperate with traditional players. Depend on relation with incumbent to offer service DIRECT COMPETITION Compete with incumbents, offer similar service as incumbents, often start via market ‘long tail’ (which is typically un- /underaddressed) Traditional bank services Traditional banks2 DISINTER- MEDIATION DIRECT COMPETITION BANK 1 2 1 Addressable market: potential consumer and professional clients for incumbent banks 2 Traditional bank: established player in the market 1 2 Source: Innopay analysis
  17. 17. 17 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. … however, not all FinTechs aim to ‘disrupt’ banks, as collaboration could be more beneficial in particular situations ADDRESSABLE MARKET1: FINANCIAL SERVICES MODEL FINTECH MODEL DESCRIPTION EXAMPLE DISINTER- MEDIATION Compete and/or cooperate with traditional players. Depend on relation with incumbent to offer service DIRECT COMPETITION Compete with incumbents, offer similar service as incumbents, often start via market ‘long tail’ (which is typically un- /underaddressed) SUPPLIER TO Support incumbents (and other service providers) in competing through lower operational costs and/or new product/service capabilities COMPLEMENTS New players with new applications which represent value to customers (but that do not impact traditional players yet). Potential areas for product expansion & revenue growth. Traditional bank services Adjacent financial services Traditional banks2 COMPLEMENTS SUPPLIER TO BANK 3 4 1 2 3 4 DISINTER- MEDIATION DIRECT COMPETITION 1 2 1 Addressable market: potential consumer and professional clients for incumbent banks 2 Traditional bank: established player in the market Source: Innopay analysis
  18. 18. 18 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. FinTech investments are increasing each year, most activity in payments 0 2 4 6 8 10 12 14 2008 2009 2010 2011 2012 2013 2014 United States Europe Asia-Pacific Other 9% 7% 14% 13% 14% 12% 9% 9% 11% 9% 9% 10% 13% 16% 10% 9% 12% 14% 17% 18% 22% 24% 18% 21% 53% 50% 43% 45% 47% 44% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2008 2009 2010 2011 2012 2013 Capital markets Personal finance mgmt Data analytics Banking and corporate finance Payments $ billion GLOBAL FINTECH INVESTMENTS GLOBAL FINTECH DEALS BY CATEGORY Source: McKinsey&Company
  19. 19. 19 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. … but only few FinTech start-ups are able to become scale-ups Source: Statistic Brain, Jan 2016 PERCENTAGE OF START-UPS OPERATING ACROSS INDUSTRIES Across industries, 50% of the start-ups failed to remain in operation after 4 years PERCENTAGE FAILED TO SURVIVE AFTER 4 YEARS PER SECTOR 42% of the start-ups within Finance, Insurance and Real Estate sector failed to survive after 4 years 0% 10% 20% 30% 40% 50% 60% 70% 80% 1 2 3 4 5 6 7 8 9 10 Year Percent survived 42% 44% 44% 45% 46% 49% 51% 53% 53% 55% 63% Finance, Insurance and Real Estate Education and Health Agriculture Services Wholesale Mining Manufacturing Construction Retail Transportation, Communication and Utilities Information Percent Failed to Operate After 4 years 50%
  20. 20. 20 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. The main reasons FinTechs fail is overall lack of reach, trust and scalability FINTECHSBANKS We have Reach, Trust and Scalability! We have Agility, UI and UX! Source: Innopay analysis
  21. 21. 21 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Putting payments in a broader context: three key change drivers in financial services 1. CUSTOMER BEHAVIOUR 2. FINTECH & COMPETITION New players capturing market share driven by technological innovation Seamless payments anytime, anywhere, any device 3. EUROPEAN REGULATION Regulatory reforms disrupting traditional value chain (PSD2, IFR, GDPR, AML4, eIDAS) Source: Innopay analysis
  22. 22. 22 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Five upcoming ‘regulations’: we’ll focus on PSD2 and its impact on payments Source: Innopay analysis
  23. 23. 23 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved.
  24. 24. 24 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. New model emerging under PSD2 providing third party access to account (XS2A), thereby disrupting existing value chains Payer account Beneficiary account TRADITIONAL FOUR CORNER MODEL DEBTOR BANK CREDITOR BANK Information Funds CUSTOMER MERCHANT SCT, SDD, Cards ACH, Visanet, Banknet Real Time Gross Settlement Instruments Processing Settlement SEPA e.g. Browser Online banking e.g. Webshop Routing service Online pymnt provider Services Infrastructure Payer account Beneficiary account EMERGING XS2A MODEL UNDER PSD2 AS-PSP CREDITOR BANK Information Funds CONSUMER MERCHANT SCT, SDD, Cards ACH, Visanet, Banknet Real Time Gross Settlement Instruments Processing Settlement SEPA e.g. Browser Standardised interface (‘API’)1 Routing service Online pymnt provider Services Infrastructure Payment Initiation Services (PIS) Account Information Services (AIS) e.g. Webshop • CHALLENGES CUSTOMER RELATION • ADDS TO COMPETITION IN ACQUIRING BUSINESS • REDISTRIBUTION OF MSC • CHALLENGES CUSTOMER RELATION • MONETISE ACCESS TO DATA 1 There seems to be industry consensus that Application Programming Interfaces (APIs) provide for a cost effective, easy and secure means of enabling XS2A. Final decision subject to EBA Regulatory Technical Standards Source: Innopay analysis
  25. 25. 25 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Two new regulated roles that will shake up the existing payment landscape: payment initiation service provider (PISP) 1. PAYMENT INTIATION SERVICE PROVIDERS Customer initiates payment (SCT, SEPA Credit Transfer) directly via PISP (and not via AS-PSP). PISP forwards instruction to AS- PSP and communicates result to customer and merchant CUSTOMER MERCHANT AS-PSP 3 2 1 PISP Payment scheme EXAMPLE SERVICES PROVIDING SIMILAR FUNCTIONALITY Source: Innopay analysis 1 There seems to be industry consensus that Application Programming Interfaces (APIs) provide for a cost effective, easy and secure means of enabling XS2A. Final decision subject to EBA RTS Existing flow Future flow (API) API
  26. 26. 26 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Two new regulated roles that will shake up the existing payment landscape: account information service provider (AISP) 2. ACCOUNT INFORMATION SERVICE PROVIDERS The AISP presents aggregated view on transactions and balances from multiple accounts held at multiple banks AS-PSP AS-PSP AS-PSP 1 Displayed countries are indicative AISP CUSTOMER EXAMPLE SERVICES PROVIDING SIMILAR FUNCTIONALITY 2 Source: Innopay analysis 1 There seems to be industry consensus that Application Programming Interfaces (APIs) provide for a cost effective, easy and secure means of enabling XS2A. Final decision subject to EBA RTS Existing flow Future flow (API) API API API
  27. 27. 27 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Today’s interaction with one’s bank accounts is limited to exclusive, bank- owned channels… Bank account Internet banking and mobile app Customers Bank domain PRE PSD2 XS2A ERA Source: Innopay analysis
  28. 28. 28 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. … PSD2 XS2A will provide customers more digital options to interact with their bank accounts through TPPs… Bank account Internet banking and mobile app Customers Customers TPP1 Bank domain Bank domain PRE PSD2 XS2A ERA (POST-) PSD2 XS2A ERA Payment accountBank account Internet banking and mobile app XS2A (‘API’)2 1 Includes both PISP and AISP 2 There seems to be industry consensus that Application Programming Interfaces (APIs) provide for a cost effective, easy and secure means of enabling XS2A. Final decision subject to EBA RTS Source: Innopay analysis
  29. 29. 29 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. … potentially causing fragmentation in services as many TPPs will seek to monetise account access… Bank account Internet banking and mobile app Customers Customers TPP Bank domain Bank domain PRE PSD2 XS2A ERA (POST-) PSD2 XS2A ERA Payment account Entrance of TPPs (incumbents, FinTech, bigtech) Bank account Internet banking and mobile app XS2A (‘API’) Source: Innopay analysis
  30. 30. 30 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. …with not only financial players entering the market: service providers come from different backgrounds Data/credit reference Third party Identity Invoicing Remittance & FX Banks ERPs Lending & Finance Merchants Payment Platform Peer2Peer Online Banking & e-payments Deferred payments E-Wallets Collecting PSPs SEPA e-mandates Cash Management Multi-banking Online Banking & Cards NON-EXHAUSTIVE Source: Innopay analysis
  31. 31. 31 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Opportunity for banks and FinTechs to collaborate beyond regulatory PSD2 push: leveraging the value of Open APIs Source: Innopay analysis, Euro Banking Association ON Optional Payment APIs Optional non-payment APIs ‘Regulated PIS/AIS’ PSD2 XS2A Example APIs PSD2 XS2A • SCT initiation • Transaction details & balance • Confirmation availability of funds Additional PIS • Payment guarantee • ‘Real-time’ payment • Refund/refuse services • Conditional payments • Dispute resolving services Additional AIS • Intraday bank statement • Payment Status Report • E-Mandate management DIGITAL IDENTITY • Authentication • Online contracting • Age verification • Attribute provisioning
  32. 32. 32 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. Some banks are already experimenting with Open APIs and FinTechs EXAMPLES
  33. 33. 33 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. 1. CUSTOMER BEHAVIOUR 2. FinTech & COMPETITION New players capturing market share driven by technological innovation Seamless payments anytime, anywhere, any device 3. EUROPEAN REGULATION Regulatory reforms disrupting traditional value chain (PSD2, IFR, GDPR, AML4, eIDAS) What is the ultimate relationship status for FinTechs and banks?
  34. 34. 34 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. 1. Banks are increasingly acting like FinTechs and have deep pockets BANKS ORGANISE FOR CONSTANT CHANGE • From cost/margin oriented structure to customer focused culture • Banks have the (financial) resources to make the transition • Implementation of agile operating model to speed-up decision making and time-to-market for new services • Development of Open API offering/community • Set-up of innovation centers including hackathons, incubators • Banks in position to decide on engagement with FinTechs (ignore, collaborate, compete, acquire) Picture from Money20/20 presentation Ralf Hamers (ING) Source: Innopay analysis
  35. 35. 35 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. 2. Single life of FinTechs can be difficult, despite agility & technology advantages CHALLENGES OF FINTECHS • FinTech seek world dominance • Costs of ‘surviving’ and scaling-up is always higher than expected • Incumbents have massive scale advantages • Customers and their loyalty is difficult to obtain • Fragmentation of services increases competition Source: Innopay analysis
  36. 36. 36 Banks and FinTech – Forced marriage, romance still to be discovered? Innopay. May 2016. © Innopay BV. All rights reserved. 3. Benefits of Bank - FinTech marriage may outweigh the pro’s of staying single AS WITH MOST MARRIAGES IT COMES WITH CHALLENGES... Preserving acquired company’s agility, culture and innovation, while marrying it to the controls and assets of the bank BANK – FINTECH MARRIAGE ‘Fintegration’ unlocks for both FinTechs and banks optimal usage of respective assets Source: Innopay analysis
  37. 37. Tomorrow’s transactions today We look forward to it Contact us Shikko Nijland Managing Partner Shikko.@innopay.com +31 6 537 414 65

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