Banking Reloaded

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Learn about
* why traditional banks are under pressure
* the complexity of IT landscape of financial institutions
* the attackers of the financial industry
* the role of technology
* an outlook

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Banking Reloaded

  1. 1. Banking Reloaded http://www.FrankSchwab.de by Frank Schwab
  2. 2. “A computer in every home.” Bill Gates as a teenager
  3. 3. "There is no reason anyone would want a computer in their home.“ Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977
  4. 4. Sir Winston Leonard Spencer-Churchill It is difficult to make predictions, especially about the future
  5. 5. “We need banking, no banks” (1999)
  6. 6. Number of US Banks Source: FDIC 1990 20112000 16,000 8;000
  7. 7. Number of German Banks Source: Deutsche Bundesbank 1990 20112000 0 2,000 4,500
  8. 8. Why?
  9. 9. Regulation SolvV SOXAML Basel II Basel III Basel I MiFID II Dodd Frank FATCA MiFID I SEPA
  10. 10. Security Product Pricing Decision Contract Account Customer Contact Recovery Transaction Output Archiving Booking Position Identity Retail Loan Internet CRM Product Pricing Decision Contract Collaterals Account Customer Recovery Transaction Output Archiving Booking Position Identity Retail Loan Branch CRM Product Pricing Decision Contract Collaterals Account Client Recovery Transaction Output Archiving Booking Position Identity Corporate Loan Branch CRM Security Product Pricing Decision Contract Account Client Contact Recovery Transaction Output Archiving Booking Position Identity Corporate Loan Internet CRM Security Product Pricing Decision Contract Account Customer Dealer Recovery Transaction Output Archiving Booking Position Identity Consumer Loan Extranet CRM Product Pricing Decision Contract Collaterals Account Contact Recovery Transaction Output Archiving Booking Position Identity Customer Retail Mortgage Branch Products are implemented redundantly and inconsistently across product lines and channels Example: Credit systems landscape
  11. 11. IBM Mainframe Sun Server Intel blade Tandem Thin clients Fat clients AIX Server Server FarmAny technology of each and every decade
  12. 12. Complex
  13. 13. Complicated
  14. 14. Unproductive
  15. 15. Inflexible
  16. 16. Cost inefficient
  17. 17. Need to transform
  18. 18. (Q1/2013) Some current research on CORE
  19. 19. Current CBS transformations often introduce old technology
  20. 20. Banks keep the status quo
  21. 21. Traditional Banks
  22. 22. “The future is always here - it’s just not evenly distributed yet.” - William Gibson, Fiction Novelist
  23. 23. 17 Million Customers in Kenya 40,000 Safaricom Agents New: Deposits and Loans
  24. 24. 2000 2003 2007
  25. 25. Design + Functionality + User centric = Life style
  26. 26. 2011 20162012 2013 2014 2015 662 Mn > 4 Bn Source: Cisco, 2012 Number of internet capable mobile devices
  27. 27. 72% Watching TV Playing Video Games Listen to music Reading newspapers Reading books Internet Smartphones are used always and everywhere Source: Market Simplified
  28. 28. Digital Natives
  29. 29. Price Coverage Benefits Bandwidth Convenience
  30. 30. If I had asked people what they wanted, they would have said faster horses. Resistance To Change Falls For Benefits
  31. 31. Market share affluent bank customers Branch 1990 2020 Mobile ? 2005 Internet
  32. 32. Attacker
  33. 33. Trust Loans Transformation Investments Payments Customer
  34. 34. Trust Loans Transformation Investments Payments Customer
  35. 35. Trust Loans Transformation Investments Payments Customer
  36. 36. Trust Loans Transformation Investments Payments Customer
  37. 37. Trust Loans Transformation Investments Payments Customer
  38. 38. Trust Loans Transformation Investments Payments Customer
  39. 39. Square >2 Million User >6 Bn USD
  40. 40. Wants to co-create products Expects better user experience Inform themselves online Trusts in advice of peers in online forums Uses social media to communicate Buys online The New Customer
  41. 41. Customer experience
  42. 42. Where are the banks?
  43. 43. Non-banks and attackers make the speed
  44. 44. Customer Payments Brokerage Loans Deposits
  45. 45. Banks need to speed up
  46. 46. What can we think of?
  47. 47. Car dealership Location-based services
  48. 48. Own home Top Desire
  49. 49. R I P
  50. 50. Banks need to be close to customer dreams
  51. 51. Context Banking Next You are looking for your own home? We can help to make your dream come true.
  52. 52. Scan
  53. 53. 18 € 53 € 5 € 12 € 17 € 23 €
  54. 54. New Paradigms Towards Banking IT
  55. 55. IT Intensity
  56. 56. IT costs per user per year in USD 200 Tier 1/2 Bank Google 3.4 Facebook 3.8 eBay 7.4
  57. 57. Source: eBay, April 2013 1 GB Commodity RAM = 19 USD 128 MB Mainframe RAM = 249 USD Factor 100
  58. 58. Cost comparison - 75 % Cost reduction potential
  59. 59. Google
  60. 60. The OPEN Compute Project
  61. 61. Infrastructure High variety Industrialized & Low Cost New Paradigms in Banking IT
  62. 62. Apple
  63. 63. BIAN service descriptions Standardisation
  64. 64. Application Applikation centric Infrastructure High variety Industrialized & Low Cost New Paradigms in Banking IT Apps & Standard
  65. 65. Relational data bases Horizontal scalability { } { } { } A new approach towards data bases will make the difference
  66. 66. Processes Fix coded Flexible New Paradigms in Banking IT Infrastructure High variety Industrialized & Low Cost Application Applikation centric Apps & Standard
  67. 67. Elektronic fileBusiness standardisation Detailed key performance indicators Fully automated decision Automated assignment of documents to business processes Industrialisation: Think and work in processes Example: Loan factory
  68. 68. Processes Fix coded Flexible Products Functional User oriented Infrastructure High variety Industrialized & Low Cost New Paradigms in Banking IT Application Applikation centric Apps & Standard
  69. 69. Experience based front end development http://www.moven.com
  70. 70. Products User oriented Processes Flexible Infrastructure Industrialised & Low Cost Applications Apps & Standards New paradigms in Banking IT
  71. 71. Outlook
  72. 72. “The future is always here - it’s just not evenly distributed yet.” - William Gibson, Fiction Novelist
  73. 73. # Web APIs 2000 2005 2013 >10.000 0 programmable web
  74. 74. Bank API
  75. 75. Store Platform Open SAP Oracle IBM ... Modules/Apps
  76. 76. overrated underestimated Gartner Hype Cycle
  77. 77. Success = 1% inspiration + 99% perspiration
  78. 78. Do you want to learn more? Frank@FrankSchwab.de http://www.FrankSchwab.de

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