A Look at Turkey FinTech Landscape and Ecosystem presentation in "Understanding FinTech in Islamic Finance Workshop" on February 20 21 2018 at Marmara Taksim Hotel, Istanbul

1. FinTech ?
TechFin ?
Understanding FinTech in Islamic Finance
February 20-21 2018 at Marmara Taksim Hotel, Istanbul
A Look at Turkey FinTech
Landscape and Ecosystem
Onur B. Çağlar
● Serial
Entrepreneur
● C Level
Professional
● Academician
● Consultant
+90533 6330011
@obcag00
obcaglar.com

2. FinTech ?
TechFin ?
Onur B. Çağlar
● Serial Entrepreneur
● C Level
Professional
● Academician
● Consultant
+90 533 6330011
@obcag00
obcaglar.com
FinTech entrepreneur is more something
like that in Turkey!
Understanding FinTech in Islamic Finance
February 20-21 2018 at Marmara Taksim Hotel, Istanbul

3. About me

4. My professional history
START
1998
- University graduation
- 3rd year in career
3 years before having my bachelor degree, I
already started my professional career.
I started from field, hardware and customer
support departments.
2006
- Professional career break
- Military obligation completion
- Entrepreneurship / 1st Startup
My main milestone was at Cukurova Group
(YKB, Superonline, Mapco, Turkcell/Shubuo).
For military obligation I left the Turkcell, I
completed with honour degree.
After military, I founded my first startup Pozitim
as edge mobile and internet technology
company. I traveled Europe, Asia and Africa for
selling technology platform and services,

5. TODAY
My professional history
2013
- Finance sector career
- 2 more startup
After dead-end disputes and vicious circle with
my initial partners, I left my startup by selling my
shares.
Then, my other main industry venture started,
finance sector is strong milestone in my life.
I worked in Bank, Payment and E-Money
companies as C level. Beside I participated in 2
startup (1st was Digital agency, 2nd one was
FinTech)
2015
- Academic career
- Consultancy
- 1 more startup
- 2nd startup has failed
Another main milestone in my life is an
academy. I started my unfinished academy
career by giving lectures and continue for PhD.
We closed agency because of partners’
disagreement.
We founded another FinTech, try to find
investor, tender and big customer agreements.
Moreover, I am advisor in several sector.
Planning 2
more vertical
startup

6. FinTech
Philosophy

7. The history of money
Method Interface / Technology
Scratch Barter
9000-6000 BC: Animal Animal farm and agriculture
1000 BC: Precious metal and coin Bronze age
500 BC: Modern coin Iron Age, Mining science
800 AD: Paper currency (China) Printed
1950s: Credit cards Digital technology
1980s-90s: Online banking Internet
1990-2010: e-Money Mobile, Cloud, Cryptology, IoT, etc.
2010-Today: Cryptocurrency Blockchain
Tomorrow:? ?

8. Information
Distribution ofTransfer of
Cash
Smart
Assets
20181990 2025e 2050e 2075e
Instantiation of
Smart
Resources
Smart
Entities
2090e
Simple networks Smart networks
Applications
Transfer of Value, Confirmation of Identity, Registration of
Preference (Voting)
Smart
Contracts
Economics Governance
More complexity through the digital pipes

9. A day in the life of

10. Those who are uncomfortable!

11. They get squeezed out of the sand pool!

12. Challengers!

13. FinTech global
market

14. Recent growth
Source: CB Insights | 2017
2012 - 3Q17
● total investment:
$54.6 billion
● #Fintech
invested: 4.559

15. 2017 FinTech funding summary
ICOs were too hot and started to replace other investment methods. Source: FintechStartupsCo - TEB Private Banking | January 2018

16. Financing and payment are still the top topics (whole 2017)
Note: Global Fintech Ecosystem Report Source: FintechStartupsCo - TEB Private Banking | 2018

17. 2017 Monthly FinTech equity funding (money raised)
Note: ETH, BTC, LTC values in ICOs are converted to $ via monthly average rates. Source: FintechStartupsCo - TEB Private Banking | January 2018

18. 2017 FinTech investments (monthly)
Source: FintechStartupsCo - TEB Private Banking | January 2018

19. FinTech investments in 2017
Bank and Financial
Institution Investments
Invested fund: $12.3B
#Investment: 152
Source: FintechStartupsCo - TEB Private Banking | November 2017

20. Banks main Fintech investments in 2017
Source: FintechStartupsCo - TEB Private Banking | November 2017

21. Hottest topic FinTech investments (December 2017)
Note: Only equity funding rounds are included. PFM: Personal Finance Management. Source: FintechStartupsCo - TEB Private Banking | December 2017

22. ICO became new funding source for entrepreneurs
Note: ICOs are almost unheard of in 2016, now reached $ 2 billion Source: FintechStartupsCo - TEB Private Banking | 2018

23. Unicorn - Global FinTechs
Financing, Insurance, Payment, CryptoCurrency and Blockchain investments are too hot. Source: CB Insights | 2017
25 FinTech was
Unicorn with
valuation of $1
billion, totaling
$75.7 billion
Note: Recently, IPO of
"Zhong An Insurance"
from Asia was worth
$10 billion.
“Ant Financial” plans
equity fundraising at
potential $100 billion
valuation

24. Turkey market

25. The evolution of the Turkey market
01
90’s Telecom &
Internet Market
02
2008-VAS
3rdParty and
BTK
03 04 05 06
07 08 09
Bitcoin
prohibition &
punishment
Let us watch
the world first!
CryptoCurrency
legislation
opinion
00’s e-commerce
regular/irregular
2009-
MOBILSIAD
Association
2008’11- Etid &
Eticad & Eder
2014 - 6563 E-
commerce Law
10 11 12
6493 meetings
@TBB
2013 - 6493
Payment
Licenses
2015-
ÖDED
Association

26. Early investments in 2017 increased by 102%
Note:Convertible note & debt figures not included. Just disclosed "Equity Investments" included. Source: Startups.watch | January 2018

27. Early investments in 2017 increased by 102%
Note: In 2017, investments of iyzico, Evtiko and Ototrink were the most influential investments. Source: Startups.watch | January 2018
Angel
& VC
Growth
Equity &
Private
Equity

28. Investors' most invested areas in 2017 (Early stage)
Source: Startups.watch | January 2018
FinTech SaaS Real
estate
Bio-
technolo
gy
Market-
place
IoT Retail-
tech
Auto-
tech
Image
process
Travel

29. Turkey
FinTech
Ecosystem

30. 62.2 M
Market potential customer pools
15.5 M 29 M12 M 41.5 M
Domestic
Money
Transfer
Digital
Payment
Customers
International
Money
Transfer /year
130 M
Credit Card
Holder7 M
8.5M
Expatriate
Smartphone
Owner
15-40 ages
Internet &
TV Owner
1.6 MTradesmen /
Craftsmen
Debit Card
Holder

31. Why
FinTech/TechFin
innovation?

32. Why innovate?
Banks & FinTech
innovation
Why?
Take responsibility
Next step?
For a sustainable
future!

33. Non-banking digital players
& Technology innovation
Why innovate?
Banking &
FinTech
Natural resources
& Environmental demolition
Disruptive Trends
Social environment
& Society

34. Why innovate?
„"Banking is important, not banks!"
- Bill Gates
"Banks are a kind of extinction?"
- Ralf Hammers, ING Group CEO
Emergence of non-traditional competitors
Non-banking digital players & Technology innovation

35. Innovation development
Speed
10 terabit / second
Measuring time
Nanosecond (one in a
billion) and femtosecond
(a billionth of a billion in
a million), the 2nd
communication time of a
trillion bits (terabit)
Industry
1.0
Industry
2.0
Industry
3.0
Industry
4.0
4th Industrial Revolution
Water /
Steam
Electricity Computer
Automation
Internet of
Things
(IoT)
Digitization of the manufacturing sector (Smart Factories)
Mechanical
Production
Mass production
Electronics in
production
Cyber-Physical
Systems
Connect
physical and
virtual worlds
Non-banking digital players & Technology innovation

36. Where will be the innovation?
SME Tools
(PaaS, SaaS)
Consumer
BankingPayment
&Transfers
Banking
Infrastructure
Security
Retail
Investments
Lending &
Financing
Research&
Data

37. What are investors
looking for?

38. Gartner's hype cycle for the future of money

39. в
в
вв
2018 FinTech trends
Encryption, OTP,
biometric authentication
combination, security at
every stage
Security–Data
в
в
в
в
в
Digital solutions and ad
revenues shrink, budgets
tighten, and life-cycles shrink
Agile - Digital
Digital coverage
Digital coverage extends
to corporate and non-
SME banking areas
Omni-channel
Both physical and digital
services will be delivered
to unbanked customers
Open Banking
Will become more
apparent with the Unified
Payments Interface and
APIs
Auto-personalization
User will get personal service
based on past interaction,
preferences from all devices
Operationally embedded
AI, quickly identify
workflows and improve
process efficiencies
Intelligent workflow
To reduce fraud, speed up
the implementation of the
contract and increase
transparency
Blockchain
To offer better bids, new
regression models powered by
machine learning will be applied. It
will be supported by insights into
customer behavior, expectations
and responses.
Machine Learning
Banks started to use
ChatBots to support
customer interactions and
speed up service
New generation Chatbot

40. FinTech and beyond
AssetsImmediate
cash transfer
Applications
(Money, Payments,
Remittance)
Financial
instruments
(Unified ledger, Mortgages,
Loans, Stocks, Bonds)
(Titling: house, auto)
Payments
Financial
Services
Logistics & Supply
Chain Energy, IoT
Healthcare
Government
Humanitarian
Non-profit
Industry adoption
Time
Complexity
(Goods transfer,
Assurance,Provenance,
Commercial trade)
Identity
(Driver’s License,
Passport, Visa)
Contracts
Registries
(Marriage licenses,
Birth/death registries)
Public
Documents
(BoL, Forfeiting,
Insurance, Inventory)
Cash Smart Assets Smart Contracts

41. Blockchain will
also change the
finance sector

42. THE TEAM

43. Transformation in Finance sector with Blockchain
With decentralized and distributed model; we will not see the central banks and system banks doing business as a global
silo / warehouse, value and money security and transfer, clearing-house that handles money deposits, deposits and
deposits as multi-currency loans.
While Blockchain, which records, approves, and controls validation on all digitized, secure / encrypted, immutable,
intervention and tamper proof chain will perform the same function, the financial services will create functions such as
higher accuracy and information sharing in the ecosystem.
Blockchain and FinTechs will take following areas from banking world
✓ Money transfer
✓ Payment
✓ Securitization
✓ Insurance
✓ Brokerage, guarantee and security in trade
✓ Mintage
✓ Account and bookkeeping
Accenture: 32% of bank revenues are at risk with new digital business models (FinTech)

44. How banks can fill winds of FinTechs into own sail?
Of course with Open Banking Ecosystem
Application programming interfaces (APIs) are key to the Open Banking Revolution

45. Time to develop an Open Banking Strategy
The future of banking will involve the combination
of in-house and 3rd party digital products, providing
personalized solutions available on demand.
Management of the customer relationship will be
won by firms with the best products, data analytics
and experience platform.

46. Let’s fill the winds of FinTechs into your sail?

48. What I need to
do?

49. THE TEAM

50. THE TEAM

51. Right team
What is success? How you can achieve?
The product or service that you will
start to develop from idea, that is
innovation should offer any value to
the customer?
What is in it for me?
Value proposition
Business model
Unique / genuine
Timing
Target segment, value proposition,
access channels, relationships,
revenue stream (right brain); Key
resources, events / activities,
business partners and cost stream
(left brain)
At the right time, it is necessary to
determine the launch time of the
business by following the correct
conjunctures, correct consumer
trends.
It is not possible to achieve success
by doing the same things. Even
government is asking the same
question when they would decide to
support your project!
Right people (hair, feet, technical, finance and operations)
should be team, put the right guy in right job

52. Useful and valuable ideas
People fall in love with their ideas, they live in "moments of
life" they value too much!
Don’t forget! first wheel can not make money, man who finds
other three and makes them functional wins the money!

53. Now illusion time

54. Ihaveadvised6start-ups,Iamstilladvisorof2ofthemandpartnerinanother2.
Ifollowaverystrictselectionprocesstogetinvolved.
Onur Baran Caglar, MBA
● Lecturer at Istanbul Aydin
University,
● PhD Candidate at Istanbul
Kultur University
● Advisor in Telecom, Internet
and Finance verticals
Stay humble, live minimalist!