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FinTech, from 'Nice to Know' to 'Need to Know'

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September 2015 Total Solutions and Innopay presented the results of a survey among corporates on their views towards Fintech. 70% of the corporates are following the B2B FinTech market, but have not engaged yet. The two main reasons not to engage are 1) lack of sufficient knowledge about, and insight into the impact of using FinTech solutions, and 2) concerns about the continuity of FinTech company.
Innovative companies have already embrased FinTech. The comming years the early majority will onboard.

Published in: Technology

FinTech, from 'Nice to Know' to 'Need to Know'

  1. 1. Results of the survey held among corporates about their view towards FinTech FinTech: from ‘Nice to Know’ to ‘Need to Know’ Robi Dattatreya, Douwe Lycklama en Pieter Nijs 16 September 2015
  2. 2. 2 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © In 1998 ABN AMRO launched its innovative online FX and MM dealing platform… …10 years later, online FX and MM dealing has become mainstream
  3. 3. 3 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Payer Bank Bank Payee Traditionally, banks are the place to go for initiating and receiving payments SWIFT, correspondent banking, etc.
  4. 4. 4 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © PSD2: The EC wants more innovation and competition in the banking sector Payer SCT, SDD Cards, Cheques ACH Visanet, Banknet Real Time Gross Settlement Bank Bank Payee SWIFT, correspondent banking, etc.
  5. 5. 5 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © FinTech: Innovation ‘on top of’ banking Payer SCT, SDD Cards, Cheques ACH Visanet, Banknet Real Time Gross Settlement Bank Bank Payee SWIFT, correspondent banking, etc.
  6. 6. 6 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Financial Institution (FI)-services FinTech: Positioning in four different ways New services (non-FI) 4: ‘Diversification’ 2: ‘Direct competition’ Traditional FI’s 1: ‘Disintermediation’ 3: ‘Supplier’ Source: Innopay analysis
  7. 7. 7 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Financial Institution (FI)-services FinTech: Positioning in four different ways New services (non-FI) Source: Innopay analysis Traditional FI’s
  8. 8. 8 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Most corporates follow the FinTech market Not at all We follow the market passively We follow the market actively We talk to various parties We work with a FinTech-party
  9. 9. 9 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Major concern is supervision and continuity We want to maintain our relation of trust with our bank We doubt the adequacy of supervision We are uncertain about the continuity of FinTech-parties We are uncertain about consequences to internal processes We are uncertain about the added value to our corporate
  10. 10. 10 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Survey concern 1: regulatory supervision Many FinTech-companies are supervised
  11. 11. 11 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Survey concern 2: continuity | FinTech has moved towards Early Majority Acceptance Innovators 2.5% Early Adopters 13,5% Early Majority 34% Late Majority 34% Laggards 16% Your Company?
  12. 12. 12 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Financial Institution (FI)-services Four Examples of FinTech service offerings New services (non-FI) 1: ‘Disintermediatie’ Source: Innopay analysis 4: ‘Diversification’Traditional FI’s
  13. 13. 13 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Pro Quidity competes with banks to optimise the working capital in your supply chain From Amsterdam <10 employees Established 2014 Pro Quidity offers ‘reverse factoring’ to SMEs: it finances your outgoing payments to SME suppliers, on the basis of your creditworthiness Positioning 2: ‘Direct competition’
  14. 14. 14 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Your supplier Your corporate Reverse factoring is financing your payments, on the basis of your creditworthiness Factor 1. Delivery 2. Approval of invoice 3. Paym ent of invoice* 4. Payment to factor *On the basis of your creditworthiness, not that of your SME supplier
  15. 15. 15 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Reverse factoring ensures a healthy supply chain – and direct benefits to you • SME suppliers often lack the creditworthiness for traditional factoring • Pro Quidity offers such suppliers a helping hand • Reverse factoring: financing your outgoing payments • Ensure healthy suppliers with your own creditworthiness • Ensure longer payment terms (to the factor) • And ensure early payment discounts – as the factor already pays!
  16. 16. 16 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Cashfac offers Virtual Bank Account- technology to corporates and banks From London ±80 employees Established 1992 Cashfac offers Virtual Bank Account-technology that enables clients to centralise their cash- and transaction management Positioning 1: ‘Disintermediation’
  17. 17. 17 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Virtual Bank Accounts enables you to allocate funds without separating them physically Entity A Entity B Entity C Payables Suppliers Salaries Taxes ReceivablesCustomer1 Customer2 Customer3 Payables Suppliers Salaries Taxes Receivables Customer1 Customer2 Customer3 Payables Suppliers Salaries Taxes Receivables Customer1 Customer2 Customer3 EUR EUR = Current account = Mirror Account = Virtual Account Legend ‘Real’ world Virtual world
  18. 18. 18 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © • Centralise multi-entity transactions – and POBO/COBO subsidiaries• Centralise multi-entity transactions – and POBO/COBO subsidiaries Virtual Bank Accounts enable you to centralise at different levels • Self-service your bank accounts • Minimalise the number of Current Accounts • Connect multi-bank accounts • Reconciliate ‘straight-through’ • Centralise multi-entity cash
  19. 19. 19 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © You could use Virtual Bank Accounts to POBO/COBO subsidiaries Entity A Entity B Entity C Payables Suppliers Salaries Taxes ReceivablesCustomer1 Customer2 Customer3 Payables Suppliers Salaries Taxes Receivables Customer1 Customer2 Customer3 Payables Suppliers Salaries Taxes Receivables Customer1 Customer2 Customer3 EUR EUR ‘Real’ world Virtual world Payment On Behalf Of Entity B = Current account = Mirror Account = Virtual Account Legend
  20. 20. 20 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Earthport offers banks a hub for faster cross- border payments From London ±150 employees Established 1997 Earthport offers a cross-border payments hub that enables clients of banks to pay to other countries both faster and cheaper Positioning 3: ‘Supplier’
  21. 21. 21 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Banks can take a shortcut on the existing infrastructure Bank VS Bank NL SWIFT, correspondent banking, etc.
  22. 22. 22 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © While cross-border payments are rerouted via banks today, with costs at every bank… Payer VS Payee NL $ $
  23. 23. 23 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © Earthport functions as a central hub that can connect a bank to other banks – directly Payer VS Payee NL $ $ $
  24. 24. 24 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © ‘Distributed ledger’-technology such as Ripple can do the same… and more in the future Bank VS Bank NL SWIFT, correspondent banking, etc.
  25. 25. 25 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 © FinTech = Need to Know!! Get in the driver’s seat! Robi Dattatreya, Total Solutions, www.ts.eu Douwe Lycklama en Pieter Nijs, Innopay, www.innopay.com 16 September 2015

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