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Digitalisation of
the bank account
JOHAN NORD, CCO TRUSTLY
The Fintech scene
The Swedish Fintech scene
STOCKHOLM - EUROPE’S SECOND LARGEST FINTECH CITY
0
200
400
600
800
1000
1200
UK Sweden Netherlands Germany Rest of Europe
Total FinTech investment volume 2004-2014
USD millions
*An overview of the FinTech sector in the greater Stockholm Region by the Stockholm School of Economics (SSE) 3
The Swedish Fintech scene
TOP THREE 2014 INVESTMENTS IN STOCKHOLM FINTECH COMPANIES
2014 Activity*
The year 2014 was a landmark year for
investments in Stockholm-based FinTech
companies.
In total 15 FinTech deals attracted $266
million in investments. Moreover, FinTech
investment in Stockholm represented 32
percent of total investments in Sweden.
$125 Mln
$55.5 Mln
$28.8 Mln
*An overview of the FinTech sector in the greater Stockholm Region by the Stockholm School of Economics (SSE) 4
Trustly
Trustly is a payment solution.
BANK PAYMENTS AND TRANSFERS
The merchant makes Trustly available in their checkout next to
other payment methods like Card, Klarna and PayPal.
The end-user can then pay directly from their
bank account using Trustly
6
7
Five main business areas
TRUSTLY IS A B2B COMPANY
e-Commerce Selected customers:
Travel Selected customers:
Selected customers:Marketplaces
Gaming Selected customers:
Financial services Selected customers:
8
Consumers are adopting mobile commerce
CONSTITUTES 1/3 OF ALL TRANSACTIONS
94%
78%
65%
4%
17%
29%
2% 5% 6%
1/1/13 1/1/14 1/1/15
Desktop Mobile Tablet
The bank account
10
The hub of peoples financial life
ALL OTHER PAYMENT METHODS DEPENDS ON THE BANK ACCOUNT TO WORK
Invoice
e-wallet
Debit card
Credit cardBitcoin
The bank account
11
Strong authentication
TWO FACTORS
’Something you have’
’Something you know’
’Something you are’
93% of European citizens have a bank account
HUGE UNDERLYING CUSTOMER BASE
93%
7%
Banked
Unbanked
http://ec.europa.eu/finance/finservices-retail/docs/inclusion/sec_2011_907_en.pdf
13
14
Online payments in Europe
The importance of catering to the European consumer’s preference to pay with their bank account
e-Commerce mix, Western Europe
*Datamonitor (market size, payment preference Germany) , Worldpay (payment preference other)
**Includes invoice, micropayments, e-wallets, cash on delivery
64%
48%
45%
32%
31%
27%
24%
13%
8%
6%
5%
Netherlands
Finland
Poland
Germany
Austria
Sweden
Belgium
Norway
Spain
Denmark
Italy
Bank payments Card Other**
USD 236 billion
market (2014)
15
A good product leads to high user adoption.
The importance of catering to the European consumer’s preference to pay with their bank account
iDeal transaction growth, Netherlands 2005-2014
Source: iDeal
0
50,000,000
100,000,000
150,000,000
200,000,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
31.3
23.3
10.4
8.5
8.1
5.8
3.9
0.9
8.2
United Kingdom
Germany
Nordics
France
Netherlands
Italy
Spain
Russia
Rest of Europe
Source: Postnord – Ecommerce in Europe 2015l
Cross border e-commerce in Europe
Where European e-commerce consumers buy products from when they buy from abroad within Europe (millions of people)
(millions of people)
Final remarks
18
Why Trustly?
• There is a market: 93% of all Europeans have a bank
account
• There is an underlying consumer preference in Europe
• Digital authentication methods – paying online using your
bank account is increasingly user friendly
Trustly expanding into markets
YESTERDAY 8, TODAY 29
• Officially announcing expansion into
21 new markets
• Live in all 28 EU markets plus
Norway
• Press release distributed this
morning
19
Thank you!

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Digitalisation of the Bank account

  • 1. Digitalisation of the bank account JOHAN NORD, CCO TRUSTLY
  • 3. The Swedish Fintech scene STOCKHOLM - EUROPE’S SECOND LARGEST FINTECH CITY 0 200 400 600 800 1000 1200 UK Sweden Netherlands Germany Rest of Europe Total FinTech investment volume 2004-2014 USD millions *An overview of the FinTech sector in the greater Stockholm Region by the Stockholm School of Economics (SSE) 3
  • 4. The Swedish Fintech scene TOP THREE 2014 INVESTMENTS IN STOCKHOLM FINTECH COMPANIES 2014 Activity* The year 2014 was a landmark year for investments in Stockholm-based FinTech companies. In total 15 FinTech deals attracted $266 million in investments. Moreover, FinTech investment in Stockholm represented 32 percent of total investments in Sweden. $125 Mln $55.5 Mln $28.8 Mln *An overview of the FinTech sector in the greater Stockholm Region by the Stockholm School of Economics (SSE) 4
  • 6. Trustly is a payment solution. BANK PAYMENTS AND TRANSFERS The merchant makes Trustly available in their checkout next to other payment methods like Card, Klarna and PayPal. The end-user can then pay directly from their bank account using Trustly 6
  • 7. 7 Five main business areas TRUSTLY IS A B2B COMPANY e-Commerce Selected customers: Travel Selected customers: Selected customers:Marketplaces Gaming Selected customers: Financial services Selected customers:
  • 8. 8 Consumers are adopting mobile commerce CONSTITUTES 1/3 OF ALL TRANSACTIONS 94% 78% 65% 4% 17% 29% 2% 5% 6% 1/1/13 1/1/14 1/1/15 Desktop Mobile Tablet
  • 10. 10 The hub of peoples financial life ALL OTHER PAYMENT METHODS DEPENDS ON THE BANK ACCOUNT TO WORK Invoice e-wallet Debit card Credit cardBitcoin The bank account
  • 11. 11 Strong authentication TWO FACTORS ’Something you have’ ’Something you know’
  • 13. 93% of European citizens have a bank account HUGE UNDERLYING CUSTOMER BASE 93% 7% Banked Unbanked http://ec.europa.eu/finance/finservices-retail/docs/inclusion/sec_2011_907_en.pdf 13
  • 14. 14 Online payments in Europe The importance of catering to the European consumer’s preference to pay with their bank account e-Commerce mix, Western Europe *Datamonitor (market size, payment preference Germany) , Worldpay (payment preference other) **Includes invoice, micropayments, e-wallets, cash on delivery 64% 48% 45% 32% 31% 27% 24% 13% 8% 6% 5% Netherlands Finland Poland Germany Austria Sweden Belgium Norway Spain Denmark Italy Bank payments Card Other** USD 236 billion market (2014)
  • 15. 15 A good product leads to high user adoption. The importance of catering to the European consumer’s preference to pay with their bank account iDeal transaction growth, Netherlands 2005-2014 Source: iDeal 0 50,000,000 100,000,000 150,000,000 200,000,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
  • 16. 31.3 23.3 10.4 8.5 8.1 5.8 3.9 0.9 8.2 United Kingdom Germany Nordics France Netherlands Italy Spain Russia Rest of Europe Source: Postnord – Ecommerce in Europe 2015l Cross border e-commerce in Europe Where European e-commerce consumers buy products from when they buy from abroad within Europe (millions of people) (millions of people)
  • 18. 18 Why Trustly? • There is a market: 93% of all Europeans have a bank account • There is an underlying consumer preference in Europe • Digital authentication methods – paying online using your bank account is increasingly user friendly
  • 19. Trustly expanding into markets YESTERDAY 8, TODAY 29 • Officially announcing expansion into 21 new markets • Live in all 28 EU markets plus Norway • Press release distributed this morning 19

Editor's Notes

  1. Slide: Introduction   Good morning! Thank you for the opportunity to be here today to tell you about Trustly and the exciting development concerning digitisation of bank accounts. My name is Johan Nord and I have worked in various roles in banking and finance for the past 10 years.   Most recently as a Director of Societé Generales investment bank with a focus on financial institutions.   Since this past summer, I have worked as the CCO of Trustly and a member of its management group.
  2. Slide: FinTech scene (1/2)   Trustly is a part of the Swedish FinTech scene, which is exciting from both a European and a global perspective.   Sweden is a small country that has received a proportionally large share of the investments in the sector in recent years.
  3. Slide: FinTech scene (2/2)   In Sweden, Stockholm accounted for more than 30% of the FinTech investments in 2014 and Trustly received the third largest investment after Klarna and iZettle.   Trustly thereby gained new part-owners in the form of Bridgepoint Development Capital, a very well-reputed European venture capital company.   We are very please with their confidence in us and their active involvement in the company.
  4. Slide: What is Trustly?   What is Trustly? 
  5. Trustly provides a payment solution based on bank payments for commercial activities online. The linchpin in Trustly’s product range is based on being able to carry out inbound and outbound payments on behalf of consumers and retailers, based on their balance in their Internet bank. The company is a licensed payment institute and is under the supervision of the Swedish Financial Supervisory Authority. To briefly explain how it works, an online retailer integrates Trustly on its site and the consumer can use his or her bank account to buy goods and services. Trustly’s products have several areas of application that generate added value for both consumers and retailers.
  6. Slide: Verticals   The company works in five customer segments. They are:   E-commerce - consumers buy products and pay directly from their bank account. We take care of return payments in an automatic process, reducing an otherwise large administrative burden for the retailer   Travel industry - this is a segment that generally handles large value orders, which makes it practical for the consumers to pay directly from their bank account A number of financial companies use Trustly’s products. Among other services, we provide fast inbound payments to PayPal’s e-wallet. Skrill and SAS Travel cash offer their customers payments with the same top-up solution. In marketplaces, we collaborate with Blocket and Tripwell to name a few. Trustly accepts the payment from the buyer and forwards it to the seller. This can be compared with what is known as an escrow product. The product generates trust in the transaction between people who do not know each other. and in Gaming, where gaming companies offer their customers the possibility of making both deposits and withdrawals from their gaming account online.
  7. Slide - Units   E-commerce is constantly developing, especially in terms of the kinds of units used to make purchases.   Just a few years ago, almost all e-commerce took place on desktops.   Smartphones and tablets have taken a growing share of the market.   At Trustly, we see a clear trend where the mobile phone will continue to gain ground, at the same time that our solution is adapted to the mobile, desktop and tablet.
  8. Slide: The bank account - how it is digitised   Trustly’s vision is to make bank payments simpler and easier and we are benefited by the technical shift now taking place at the banks to improve userfriendliness and the user experience for consumers.   The bank account has long been the hub of the financial life of consumers, with the vast majority receiving their salary there and many keeping savings there.   When Internet banking arrived in the 1990s, the bank account did not keep up as a practical alternative for online payments.   This created an opening for the alternatives that were more consumer friendly at the time, like PayPal, invoices, and cards.   This was due in part to the secure, but complicated, methods that customers were forced to use to log in and use their bank account.   At the same time, the banks did not have a solution suitable to the needs of retailers to be able to manage records and reporting.  
  9. Slide: Development of authentication methods   But things are happening at the banks   The European Banking Authority (EBA) has developed regulations for secure online payments.   ‘Two factor authentication’ is being talked about. The anatomy of a secure authentication is:   ‘Something you have’ - a mobile phone or security token ‘Something you know’ - a code or an identity number   A lot of hardware used to be needed to reach the Internet bank.   Thanks to digital signing, now supported by the Swedish banks, authentication is not only secure, but also much more practical.   Nearly 90% of all of Trustly’s mobile payments in Sweden are authenticated and verified by Mobile Bank ID.   More than 60% use Mobile Bank ID for their payments on the desktop.   Mobile Bank ID has truly digitised the bank account for real in Sweden, but this change is also beginning to take place in other countries.
  10. Slide: Continued development of authentication methods   You could even say that exciting things are beginning to happen within the banks.   The banks are adopting technology for voice and face recognition, for fingerprints and so on to make it easier, and still secure, for the consumer to authenticate themselves.   i.e. “Something you are”   Simplicity is crucial for the bank account to remain relevant to consumers and will thereby further increase Trustly’s relevance in the payment service ecosystem.
  11. Slide: The bank account in Europe   Europe - In Europe, it is hard to live a normal life without access to one’s bank account. Nearly 95% of the residents have access to a bank account, which makes it the dominant source of money in the consumers’ lives.  
  12. Slide: Online bank payments are a relevant payment method in Europe   From a European perspective, bank payments are one of the most important payment methods for e-commerce. A few countries stand out, such as the Netherlands, Finland and Poland.   The reason that consumers in these countries prefer bank payments is a combination of historic behaviour and the fact that there is an adequate service for bank payments.   It is worth noting that many countries had no practical solutions to make online bank payments, which is clearly visible in the lower part of this graph.
  13. Slide: National alternatives   There are a number of national bank payment initiatives that are created by the local banks. Swish is one example that everyone knows, iDeal in the Netherlands and EPS in Austria are two others.   These solutions are popular in their respective domestic markets and have achieved high degrees of use among consumers.   These national solutions constitute a positive impulse in that they drive the digitisation of the bank account and educate the consumers.
  14. Slide: Cross-border trade   But there have been limitations in the national initiatives   To-date, they have not reached beyond their country’s borders and consumer purchasing behaviour is rapidly changing. A large and growing part of online retailing is now taking place across the borders in Europe.   About one out of two consumers in the largest e-commerce economies have bought goods from abroad. The largest exporters of e-commerce in Europe are the UK and Germany and the Nordics are in a respectable third place.       With more cross-border business, payment solutions are needed that work throughout the entire European market.
  15. Slide: Our reason for existing   Many of the enabling components for the bank account to make a strong comeback as a payment alternative are now in place.   1. There is a large market; 95% of all Europeans have a bank account. 2. There is an underlying consumer preference in large parts of Europe. 3. New digital authentication methods make the bank account easy to use in connection with e-commerce.   What has been missing so far are players who offer bank payments for e-commerce throughout Europe.
  16.   Slide: Trustly’s expansion   Yesterday, Trustly was in 8 European countries.   I am proud to officially announce that, as of today, Trustly is now in 29 European countries.   As you can understand, fantastic teamwork has been the foundation for this strong expansion and I want to take this opportunity to thank everyone at the company for their incredible work to reach this shared milestone.   Trustly’s vision is to enable bank payments in Europe and we are now finally European for real.   In connection with this, the company has made progress on the journey we began seven years ago, and our work to offer even simpler and easier bank payments continues.
  17. Conclusion   Thank you for the opportunity to talk here today.   Representatives from Trustly will stay on during the afternoon to partake of the exciting developments in FinTech