Global Banking Innovations

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This is an update to other presentations and consolidates most of the case studies on the website thefinanser.com. This presentation is embedded in this blog entry: http://bit.ly/NEYx0, as well as being used in part for a webinar on 1st June 2009 which can be heard / watched here: http://bit.ly/1qf2NF

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Global Banking Innovations

  1. 1. Chris Skinner www.thefinanser.com
  2. 2. the future of global banking
  3. 3. SEPA €50m http://www.amazon.co.uk/Future-Banking-Globalised-Skinner- Chronicles/dp/047051034X/ref=sr_1_1?ie=UTF8&s=books&qid=1214062513&sr=8-1
  4. 4. MiFID <50 http://www.amazon.co.uk/Future-Investing-Europes-Markets- after/dp/0470510382/ref=pd_sim_b_6
  5. 5. http://thefinanser.co.uk/fsclub/2009/02/the-new-eu-regulator-and-liquidity-risk.html
  6. 6. http://thefinanser.co.uk/fsclub/2009/03/robobank-no-human-hands-needed.html
  7. 7. http://thefinanser.co.uk/fsclub/2009/03/jibun-bank-the-mobile-only-bank.html
  8. 8. “Asia has around 600,000 villages and maybe 600 to 700 million unbanked people there. If you want to get to that mass, technology is the only thing that works. “Today, in a bank like ICICI Bank, you have less than 15% of transactions taking place within a branch. Five years back, 95% of the transactions took place within a branch. So you have an idea of what happens when the technology touches the unusual. “If I look at cost per transaction, it is about a tenth of a western bank. That is entirely because we could leapfrog a generation of technology.” K V Kamath, CEO, October 2006
  9. 9. http://thefinanser.co.uk/fsclub/2009/04/africas-mobile-revolution.html
  10. 10. http://thefinanser.co.uk/fsclub/2009/04/creating-a-bank-that-rocks.html
  11. 11. http://thefinanser.co.uk/fsclub/2008/07/bbva-the- first.html
  12. 12. http://thefinanser.co.uk/fsclub/2009/06/a-spanish-first-social-banking.html
  13. 13. “We can move into a new country with credit cards with an investment of $1-$2 million, mainly on marketing, because we don’t have to build all that infrastructure. We can move into a country with full service banking for under $10 million, which is a fraction of our competitors. We just open a building and sell, because everything is delivered through the network.” Ken Harvey, CTSO http://thefinanser.co.uk/fsclub/2008/12/-hsbc-banking-on-the-network.html
  14. 14. the future
  15. 15. ©Chris Skinner +44 790 586 2270 chris.skinner@fsclub.co.uk
  16. 16. the critical point
  17. 17. The times, they are changing 1959 1969 1979 2009 1989 1999
  18. 18. $800,000 1999 Meetings Mailing 40 UK 10,000 people 8 Ireland Twice weekly 6 CEE $300,000 $150,000 Brochures Newsletter 10,000+ 1,000 people daily Annual update Text only Website $100,000 Non-interactive $150,000 Custom-build $100,000 33
  19. 19. $160,000 2009 Meetings Mailing 40 UK 10,000 people 8 Ireland Twice weekly 6 CEE Free $150,000 Brochures Newsletter 10,000+ 1,000 people daily Annual update Multimedia Website Non-interactive Gone $149 Custom-build $10,000 34
  20. 20. 1975
  21. 21. 2000
  22. 22. 2010
  23. 23. European Order Book Volumes Value of Equity trading, March 2009 Exchange / MTF Order Book Trades Order Book Turnover (EUR m) 1 London Stock Exchange 17,279,867 123,650.0 2 Euronext 15,365,479 116,839.0 3 Deutsche Borse 8,118,311 95,835.8 4 Spanish Exchange (BME) 2,832,093 60,682.8 5 Chi-X Europe 10,554,888 57,168.5 6 Borsa Italiana 6,227,802 45,937.2 7 SWX Europe 2,875,388 45,495.4 8 NASDAQ OMX Nordic 4,802,676 43,150.6 9 Turquoise 3,309,508 22,567.8 10 Oslo Bors 1,240,279 11,397.7 11 BATS Europe 1,760,985 8,277.7 12 SIX Swiss Exchange 462,090 2,802.3 13 Wiener Borse 440,927 2,781.6 14 Warsaw Stock Exchange 1,200,689 2,545.6 15 Athens Exchange 669,246 2,228.3 Figures sourced from FESE
  24. 24. In a Best Price Routing world Potential Market Share Changes Under Best Price Routing 20% 18% Potential market share change% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% M TFs Eurone xt LSE Deutsche Borse -4% -6% -8% Nov-08 Dec-08 Jan-09 Feb-09 Under best price routing, research shows that there would be a significant shift in liquidity and market share to the new MTFs, while the incumbent exchanges would lose market share. Source: Equiduct Orange LFA
  25. 25. Do Don’t Build customer confidence Anger the customer Cut costs Cut for the sake of cutting Focus upon operational efficiency Ignore new business models Reduce branch overheads / branches Stop innovating Invest in mobility services
  26. 26. Further Reading Blog Index (from April 2009) http://thefinanser.co.uk/fsclub/the-week/ A Directory of Social Finance http://thefinanser.co.uk/fsclub/2009/04/a-directory-of-social-finance.html The Future of Banking: in a Globalised World http://www.amazon.co.uk/Future-Banking-Globalised-Skinner- Chronicles/dp/047051034X/ref=pd_bxgy_b_img_b The Financial Services Club Library (members only)
  27. 27. www.thefinanser.com

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