Banking as a Service (download)

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For a while, I've had a vision of banking as a web service based upon widgets of functionality. This is becoming vital if banks are to fit into the semantic web. All of this is explained in my blog entry: http://thefinanser.co.uk/fsclub/2009/02/baas-banking-as-a-service-presentation.html.

Throughout the presentation there are links to the relevant entries here that explains it all too. Feel free to send me any comments or thoughts.

And, for lots more on this, have a look at my directory of social finance http://thefinanser.co.uk/fsclub/2009/04/a-directory-of-social-finance.html.

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  • HSBC: Banking on the NetworkHSBC are pretty transparent these days about their strategies, as can be seen from their investor relations webcasts and presentation downloads. Also, as mentioned last week, I had a visit to a firm using video technologies who sent me a webcast of Ken Harvey, Chief Technology and Services Officer (CTSO) discussing the bank as a network in a presentation earlier this month.Here is a summary of what he said, for those who don’t have half an hour to spare to watch the video:We spend $6 billion a year on technology, and recently embarked on a multi-billion dollar, multi-year project to become an IP Bank.
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  • http://www.finextra.com/fullpr.asp?id=24817-- Travel 21% Average Goal: $4,411-- Holiday Spending money 12 Average Goal: $903-- Electronics 10% Average Goal: $2,470-- Home Improvement 6% Average Goal: $12,912-- Saving to Save: 5% Average Goal: $9,761-- Weddings 5% Average Goal: $7,850-- House down payment/addition 4% Average Goal: $22,228-- Emergency Fund 3% Average Goal: $6,632-- Babies 3% Average Goal: $5,084-- Home Furnishings 2% Average Goal: $3,543-- Car or Car Expenses 2% Average Goal: $6,778-- College: 1% Average Goal: $9,667-- Misc. 26% Average Goal: $10,710-- Car Expenses 2% Average Goal: $6,778-- College: 1% Average Goal: $9,667-- Misc. 26% Average Goal:ses 2% Average Goal: $6,778-- College: 1% Average Goal: $9,667-- Misc. 26% Average Goal: $10,710<number>
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  • HSBC: Banking on the NetworkHSBC are pretty transparent these days about their strategies, as can be seen from their investor relations webcasts and presentation downloads. Also, as mentioned last week, I had a visit to a firm using video technologies who sent me a webcast of Ken Harvey, Chief Technology and Services Officer (CTSO) discussing the bank as a network in a presentation earlier this month.Here is a summary of what he said, for those who don’t have half an hour to spare to watch the video:We spend $6 billion a year on technology, and recently embarked on a multi-billion dollar, multi-year project to become an IP Bank.
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  • Banking as a Service (download)

    1. The Future of Banking Technology Chris Skinner Chair, the Financial Services Club CEO, Balatro Co-Founder, Shaping Tomorrow ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    2. Banks have many components Delivery Functions External Functions Document Delivery Functions Direct Payment Networks Document Processing Personal Self Service Image Processing Teller ATM/POS ATM Networks Counselling Telephone/Voice Remittance Processing Credit Authorisation Agent/Broker Home/Corp. Mailing Settlement Dealing Clearing Info. Networks Customer Information Functions Credit Bureau Small Business Corporate Routers, Telerate, etc. Personal Securities Quotations Private Commercial International Other Data Services Service Functions Insurance International Retail Securities Services Underwrite Collections Portfolio Mgr. Term Loans Securities Foreign Ex. Card Protection Revolving CR Chk. Accts Money Mkt. Claim Proc. Personal Lns. Commodities Check Printing External Business Market Inst. Investmt Mgt. Life Policy Savings Factoring Pensions Relationships Electronic Card Leasing Commercial Cards Investments Non-life Derivatives Interchange Actuarial Mortgage Settlement Trade Finance Re-insurance Trust ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    3. ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    4. Business is a-changing $800,000 Meetings Mailing 40 UK 1999 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 $150,000 Non-interactive $100,000 Custom-build $100,000 4 ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    5. Business is a-changing $160,000 Meetings Mailing 40 UK 2009 10,000 people 8 Ireland Twice weekly 6 CEE Free $150,000 Brochures Newsletter 10,000+ 1,000 people daily Annual update Multimedia Website Gone Non-interactive $149 Custom-build $10,000 5 ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    6. Banking is a-changing “Information about money has become almost as important as money itself .” Walter Wriston, CEO/Chair, 1967-1984 “Banking is just bits and bytes.” John Reed, CEO/Chair, 1984-1998 ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    7. Banking is a really changing There are no local data centres or servers, just access to the HSBC network ... five years ago, we ran 130 data centres because we had acquired 50 companies up to 2003. Today, we have 20 data centres, and in two years we will have 6 worldwide. Case Study: http://thefinanser.co.uk/fsclub/2008/12/-hsbc-banking-on-the-network.html ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    8. Case Study: http://thefinanser.co.uk/fsclub/2008/12/-hsbc-banking-on-the-network.html ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    9. Banking is a-changing Base Rate 4% Loans Mortgages >5% >6% 1999 Payments Savings 3.5% per transaction <2% Investments Insurance 3% commission 3% margin 5% fee 9 ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    10. Banking is a-changing Base Rate 4% Loans Mortgages >5% >4.2% 2009 Payments Savings <0.5% per transaction <3.8% Investments Insurance <0.5% commission 3% margin <1% fee 10 ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    11. eBank Japan Japan’s largest internet bank with no branches, three million customers and less than 200 employees. Case Study: http://thefinanser.co.uk/fsclub/2008/07/internet-bankin.html ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    12. Base Rate 1% APR £5,000 36 months 11.9% for lowest risk 8.7% for lowest risk borrowers borrowers 3.55% for highest risk 12.8% for highest risk lenders lenders ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    13. SmartyPig • SmartyPig one of the first real banking applications that is truly social. • It is like an online piggy bank, where you save money for specific goals. • First banking application that allows friends and family to contribute to interest bearing goals. • Public goals allow friends and family to contribute, or keep your account private ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    14. Where they are now Launched in April of 2008 • Within 3 months, SmartyPig had customers in all 50 states • Average goal amount: $8,900 • Average length of goal: 4+ years • Top goal categories: Travel, Holiday Savings, Electronics, Home Improvement, Weddings, Homes, Cars • Two-thirds of all goals are public • 25% of customers have more than one goal • 67% of SmartyPig users are under the age of 35, 20% are between 36- 45, and the remaining 13% are older. ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    15. Q3 2008: • $14.81 billion worth of payments, 28% year-on-year growth; • 65.3 million active users, up 19%; • 214.5 million transactions, up 25%; • Purchases made outside eBay are now greater than through eBay (71% of PayPal payments were for eBay purchases at the end of 2004); and • PayPal provides 28.2% of eBay revenue, up from 24.8% a year before. Q4 2008: • $15.99 billion worth of payments, 14% year-on-year growth; • $623 million in revenue, up 11% year over year; and • 70 million active users, an increase of 23% year-over-year . Case Study: http://thefinanser.co.uk/fsclub/2009/01/paypals-tenth-birthday-party.html ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    16. Who needs a bank? ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    17. Who needs a bank? Case Study: http://thefinanser.co.uk/fsclub/2008/08/do-recessions-m.html ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    18. Who needs a bank? A Red Herring Top 100 European technology company and Top 200 worldwide. Completely automated with no humans involved and only 37 staff in London, with the rest of the development team in the Ukraine. Case Study: http://thefinanser.co.uk/fsclub/2009/02/wonga-another-web-financial-disruption.html ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    19. Banking as a Service (BaaS) Explanation: http://thefinanser.co.uk/fsclub/2009/02/baas-banking-as-a-service.html ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    20. Widgets and SaaS • Widget: – A portable chunk of code that can be installed and executed within any web page by an end user without requiring additional compilation. • SaaS: – an application is licensed for use as a service provided to customers on demand. On demand licensing and use alleviates the customer's burden of equipping a device with every application. ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    21. BBVA Tú cuentas (You count) BBVA has 4.1 million online customers performing over 1.3 billion annual online transactions They launched Tú http://thefinanser.co.uk/fsclub/2008 cuentas in Summer 2008 with a totally /07/bbva-the-first.html customizable interface for the iPhone, Blackberry and Nokia phones Case Study: http://thefinanser.co.uk/fsclub/2008/07/bbva-the-first.html ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    22. Banking is a-changing Base Rate 4% Loans Mortgages >5% >4.2% 2009 Payments Savings <0.5% per transaction <3.8% Investments Insurance <0.5% commission 3% margin <1% fee 22 Skinner. All rights reserved. ©Chris +44 790 586 2270 chris.skinner@fsclub.co.uk
    23. These are trading venues ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    24. These are new trading venues Explanation: http://thefinanser.co.uk/fsclub/2008/11/one-year-after.html ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    25. These are new, low cost trading venues The firm is currently building its own trading engine - which will be based in London to reduce latency - and has engaged a central counterparty, believed to be EMCF, for clearing ... believe they will be able to win market share by undercutting rivals and keeping costs to a minimum by operating out of Budapest. ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    26. Big difference ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    27. eXay ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    28. Lower Latency “It takes a 240 millisecond link to go from London to Tokyo via the US. If you go via Russia it’s 60 milliseconds faster.” ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    29. Banking is a really changing 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. ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    30. My Semantic HomePage Personalised search My outlook calendar My finances My social network (including transactions) Personalised News My real-time life Personalised Weather Live TV My outlook inbox ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    31. My Semantic HomePage Personalised search My outlook calendar My finances My social network (including transactions) Personalised News My real-time life Personalised Weather Live TV My outlook inbox My Personalised Advertising ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk (not your adverts to me)
    32. Banking on the Network BaaS Widgets ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    33. Further Reading • Banks ignore social media at their • Internet Banking 2010 and Beyond peril – http://thefinanser.co.uk/fsclub/2008/04/inte rnet-bankin.html – http://thefinanser.co.uk/fsclub/2008/12/ba nks-ignore-so.html • Technology is key for banking in 2009 • Social networks don't need banks, – http://thefinanser.co.uk/fsclub/2009/01/tec hnology-predictions-hold-the-solution-to- they need friends the-banking-crisis.html – http://thefinanser.co.uk/fsclub/2008/12/so • The next boom starts in 2014 cial-networks.html – http://thefinanser.co.uk/fsclub/2009/01/the- • Social finance is right here, right now next-boom-starts-in-2014.html – http://thefinanser.co.uk/fsclub/2008/12/so • The Future of Investing in Europe's cial-finance.html Markets after MiFID ; • Social money – what’s all that about? • The Future of Finance after SEPA ; and – http://thefinanser.co.uk/fsclub/2008/12/so cial-money-wh.html • The Future of Banking In a Globalised • Mobile social money, the final World frontier? – http://eu.wiley.com/WileyCDA/Section/id- – http://thefinanser.co.uk/fsclub/2008/12/m WILEYEUROPE2_SEARCH_RESULT.html?quer obile-social-m.html y=chris%20skinner ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk
    34. The Future of Banking Technology Chris Skinner Read my daily blog at www.thefinanser.com ©Chris Skinner. All rights reserved. +44 790 586 2270 chris.skinner@fsclub.co.uk

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