Opportunities and challenges in Digital Banking pub

Opportunities and challenges in
Digital Banking
31-Aug-17
www.SALconnect.com 1

Agenda
31-Aug-17
• Introduction
• Digital – Fintech
• Opportunities
• Challenges
• Future view
• The next threat
• Summary

Presenter
31-Aug-17
Yair (Oren) Jacob Porat – Entrepreneur , Consultant
Born in Israel:
35 years experience in:
Entrepreneur , Consultant ,Business development, Risk management , Cyber Security , Business solutions .
20Years experience in emerging markets – Mongolia , Africa
Initiatives :Vasco Data security ,Kaspersky Labs, Microsoft Nav, BDO
Founder of :
PLBTechnologies , ISC Mongolia ,Amar-Incon, NaviWorld Mongolia ,BDO Mongolia, BDO Advisory, SAL LLC

Digital banking ?
FinTech?
31-Aug-17
Focus on Emerging Markets

Digital banking ?
31-Aug-17
• Various definitions
• It is Online banking ?
• ATM ?
• POS ?
• Mobile banking ?
• Digital advertisements ?

Digital banking ?
31-Aug-17
Leveraging of technology to deliver banking products.
True Digital banking need to go far beyond online or mobile banking platform.
Going digital implies embracing the latest technologies at all functional levels in the banks.
The online or mobile platform is only the front end of the banking service delivery platform.
Other functions like :
- risk management,
- treasury,
- product development,
- marketing,
- Customer relationship,
- sales teams …………. at the middle and back end.
All of these functions also have to digitize in order for the bank to be truly considered a
digital bank.

Digital banking ?
31-Aug-17
• the start point of a digital bank is to be IP-enabled at its core. No legacy. No
spaghetti. No barriers to its beating heart, except those that avoid fraud and
cyberattacks.

Fintech ?
Definition
31-Aug-17
After reviewing more than 200 scientific papers citing the term "fintech",
the most comprehensive scientific study on the definition of fintech
concludes that
"fintech is a new financial industry that applies technology to improve
financial activities”.
FinTech is the new applications, processes, products or business models in
the financial services industry, composed of one or more complementary
financial services and provided as an end-to-end process via the Internet

The Digital banking opportunities
31-Aug-17
Focus on the emerging markets
• The emerging markets are home to 85% of the global population and
nearly 90% of people under 30 reside within the emerging markets.
• Given the demographics, these markets are currently finding themselves at
a ‘sweet spot’ where population trends favor the growth of online
transactions.

31-Aug-17
Focus on the emerging markets
• Emerging markets could boost their economies by $3.7tn over the next
decade if they embrace the full potential of digital finance, according to a
report published by McKinsey.
• It found that nearly 80 per cent of adults in emerging economies had
mobile phones in 2014, but only 55 per cent had a financial account.With
mobile phone ownership projected to reach more than 90 per cent of
adults in emerging markets by 2020, McKinsey said: “For most people in
these countries, the story begins in the palm of their hand, with a mobile
phone.”

31-Aug-17

31-Aug-17
• It’s been more than 25 years since Bill Gates dismissed retail banks as “dinosaurs,” but the
statement may be as true today as it was then.
• Banking for SMEs has been astonishingly unaffected by the rise of the Internet.
• The marketing, underwriting, and servicing of SME loans have largely taken a backseat.
• Other sectors of retail lending have not fared much better

The Digital banking/Financial Challenges
31-Aug-17
Digital Disruption – AThreat and an Opportunity for Banks

31-Aug-17

The Digital banking challenges
31-Aug-17
“Banks can win by delivering a digital experience that goes
beyond account balances and payments to a broad set of tools
that truly helps customers manage the financial aspects of their
business.”
– Dean Jenkins

31-Aug-17
3 Major challenges are :
1. Put your customer first :
• Modernize the user experience to deliver financial products in a way that is
consistent with other digital tools they use on a daily basis from the device of their
choosing.
• Personalize the user experience by aligning it to the intersection between the
profile of the business and the persona of the user, allowing individual users to add in
their own preferences to enrich their experience further .
• Use a differentiated shopping experience to attract new customers and
expand relationships with existing customers that allows customers to self-enroll in
new financial products and request bank assistance when necessary .
• Secure and Protect the financial assets and transactions of your business
customers by understanding user behaviors and identifying security anomalies
that can head off financial fraud before it happens.

31-Aug-17
2. BroadenYour Financial Product Suite – more information beside
account balance
• Offer a comprehensive view of a business’s financial position provide
tools that allow businesses to understand their financial position in the future .
• Deepen product reach into business processes that go beyond typical
banking functions such as bill pay….
• Provide Analytics and Insights that help business understand how they are
doing from a financial perspective and provide advice on how to improve future
financial results

31-Aug-17
2. Increase Speed and Agility – Banks now need a digital platform that
facilitates the speed and agility required to remain digitally competitive
• Establish a configurable Digital Banking platform that can be both tailored
and extended to bring new capabilities to market quickly…..
• Embrace the cloud delivery model l that increases the speed and frequency in
which new digital products can be deployed and offered to business customers
• Change to an on-going investment model for bank digital channels with an
agile roadmap that can be adjusted as market demand changes

31-Aug-17
• As you go digital you more expose
• Adopt Security , Anti Fraud , In All channels
• Manage risk , Cyber attacks & Cyber fraud
• E-Channels Cyber protection
• WPF- Web payment fraud detection
• real time detection & Response ,Agile approach
•

31-Aug-17

31-Aug-17
• Share success & difficulties
• Share with other technology providers
• Create Agile environment .
• Drive innovation:
• Bank must leverage new technologies - Adoption
• Use Multilevel / Multi sense/ multi platform authentication solutions
• different challenge to different customers & services
• Banks are financial service providers !
• Banks are not R&D companies or startups .
• Choose the best experienced partner.
• NO NEEDTO REINVENTTHE WEEL AGAIN – JUST USE IT – IT IS HIGH
TECHNOLOGY CHALENGE

31-Aug-17
• KISS – approach
• Think future and be ready………………………

31-Aug-17
Fintech is opportunity – not aThreat !
• Fintech currently focusing on small fraction of the financial
services
• Lending , e-Commerce , ….
• Unlike fintech startups, banks have had decades to build
extensive infrastructures, develop solutions for compliance
and regulatory requirements and - most importantly - earn
consumer trust.

SOME FUTURE VIEWS
31-Aug-17
Next year is likely to be a game-changing year for the banking and
finance sector. (in EU first )
As the General Data Protection Regulation (GDPR) and Revised
Payment Service Directive (PSD2) are implemented across the
European Union,
the exclusive control of banks and other financial institutions on
financial data of their customers is about to end.

SOME FUTURE VIEWS
31-Aug-17

SOME FUTURE VIEWS
31-Aug-17
PSD2 and GDPR will transform the banking and finance industry
and result in a new wave of partnerships between banks and
ecosystem enterprises to create a win-win situation for everyone

The next threat on the bank business model
31-Aug-17
Not the FinTech
The real threat for the banks are the technologies giant
- Google , Amazon,Apple ,Facebook
- They start providing financial services ……WhatsApp ….
- They have different business model –THEY KNOW HOWTO GENERATE
FROM INFORMATION MONEY

31-Aug-17
- New challenges from regulatory , new technologies …
- With the PDS2 the banks will need to open the API to 3rd parties and compete with
new services…
- Fees model is problem compare to the FinTech model , BUT.. HR is bigger threat !
- The core banking systems based on old models .
- Employees not exposed to new technologies .
- WhatTodo ?
- Train employees for the new wave.
- Start to look inside ….your HR.
- Manage talents inside you enterprise .
- Create Agile environment . ( Service , Development ….)
- Cooperate with FinTech companies.
- Cooperate with other banks ….
- MANAGEYour DATA

31-Aug-17

Summary
31-Aug-17
The Emerging markets chakanges :
- The local market is limited ( banks , branches , number of users,
International Players).
- Going beyond limitations : Agility , Startup ecosystem , Talents
management of local employees & enroll foreign community.
- Adopt agile environment.
- Train .. Train , manage talents
- Flexible Regulatory approach needed.

31-Aug-17
Thank you
Contact Details:
Mail:YJporat@SALconnect.com
Cell: +976-99113747
We provide : Advisory , Anti Fraud , Cyber , Digital banking solutions
Representing: BottomLineTechnologies , Integrity ,Vasco

31-Aug-17
Sources
P&C Israel
BottomLineTechnologies
HBR
ChinaDaily
ReadWrite
Morpho
Mckinsy
PWC

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