This report summarizes how Innovative technologies are disrupting the financial industry and how organizations can leverage them to their advantage. It is a must read for senior executives in banks and other financial service providers (FSPs).

1. Fintech 4.0
Innovative technologies that are disrupting the financial industry and how
organizations can leverage them to their advantage

2. Fintech
4.0
Blockchain
Cryptocurrency
Artificial
Intelligence
Robo-Advisory
VR/ARDigital Banking
Digital Lending
Crowdfunding
Regtech
FOREWORD
Fintech is shaping the future of financial services, and
traditional banks and financial organizations need to
adapt quickly to the changed environment in order
to survive. Various startups have disrupted the market
and have upped the ante not only in terms of
technological advancement, but also business
models and more importantly, customer experience.
It is estimated that 59% of customers in North
America, 61% in Western Europe and 59% in the Asia-
Pacific are using Fintech products. While some banks
have made progress in adoption of new Fintech
services, many bankers have not yet realized the
magnitude of change the financial services industry is
undergoing and underestimate the impact Fintech
4.0 is having on customers, who are the ultimate
disruptors. Financial organizations must develop a
Fintech 4.0 strategy to ensure their continued survival
amidst stiff competition.
80% customers feel Fintech companies
provide faster services than banks

3. BLOCKCHAIN
At a very high level, the blockchain is a decentralized ledger, or list, of all transactions across a
peer-to-peer network. This is the technology underlying Bitcoin and other cryptocurrencies.
of incumbents are concerned they are
losing revenue to fintech innovators
of financial firms expect they will be
using blockchain as part of a system/
process by 2020
88%
77%
Impact of blockchain on financial industry
$20
Billion
is the estimated amount banks can save
per year in infrastructure costs through
blockchain technology
Blockchain Use Cases
✓ Payments infrastructure
✓ Funds transfer infrastructure
✓ Digital identity management
✓ Smart insurance
✓ Cryptocurrency
Source: PwC Global Fintech Report 2017, Business Insider,
Innovify analysis
Nasdaq has obtained a patent for a data transfer and logging system,
with a blockchain used to track trades and clearing positions

4. CRYPTOCURRENCIES
Cryptocurrencies are a type of digital currency that use cryptography to secure transactions, control
addition of new units and verify asset transfer. Most cryptocurrencies today use blockchain
technology.
is the total market capitalization of
cryptocurrency
is the share of Bitcoin (BTC) in the total
market capitalization, making it the
largest by a huge margin
$198
Billion
61%
Impact of cryptocurrencies
Ethereum
(ETH) is the 2nd largest cryptocurrency by
market cap after BTC
Use cases of
cryptocurrency
✓ Initial coin offerings (ICOs)
✓ Funds trading cryptocurrencies
✓ Alternate investment
opportunities in the face of
declining returns from gold and
real estate
Source: Forbes, coinmarketcap.com, Innovify analysis
CME Group, the world’s largest derivatives marketplace, has
announced the launch of Bitcoin futures, pending regulatory approval

5. ARTIFICIAL INTELLIGENCE (AI)
Capital One Alexa skills allows customers to check balance, track
spending and even pay bills through voice commands. This is in
addition to Eno, it’s personal text based intelligent assistant.
29%
33%
37%
45%
49%
0% 20% 40% 60%
Credit approval processes
Trading
Investment/ portfolio…
Financial analysis/research
Risk assessment
Areas where financial executives
anticipate introduction of AI
Source: Euromoney Institutional Investor, Innovify analysis
Established financial service providers (FSPs) are adopting AI in order to enhance customer experience,
reduce costs and prevent disruption of their business by startups.
Projected investment in
fintech AI for 2017
$1.5
Billion
Use cases of AI
✓ Wealth management
✓ Automated customer support
✓ Insurance and claims
management
✓ Fraud detection
✓ Virtual financial assistance

6. ROBO-ADVISORY
Robo-advisory is an application of AI that uses algorithms to automate the entire investing process
including setting financial goals, portfolio re-balancing and monitoring thus reducing cost and
making wealth advisory services accessible for small investors.
$2.2
Trillion
Assets under management of
robo-advisors by 2022, growing
at a CAGR of 68%
$83
Billion
Assets under management of
Vanguard robo-advisor platform
at end of first half of 2017
Impact of Robo-advisory
Charles Schwab offers low-cost financial advisory with
zero account fees and commissions. Bank of America
and others are building their own robo-advisors.
Use cases of robo-advisory
✓ Asset allocation
✓ Placement and execution of
orders
✓ Investment recommendations
and review
✓ Budgeting and cash flow
management

7. VIRTUAL AND
AUGMENTED REALITY
Fidelity Labs developed StockCity, an investment app
for Oculus Rift, in 2016 and is currently working on the
use of VR to assist customer service agents
Use cases for VR in
Fintech
✓ Data visualization
✓ Immersive learning
✓ Virtual banking
✓ VR/AR payments
VR and AR are at infancy stage in fintech, however companies are already investing in these
technologies looking at the potential for user engagement and adoption in the future.
Impact of VR
$75
Billion
Projected sales for VR in the year
2021
and interactions will replace
traditional branches as banks
seek to cut costs
Virtual
branches
of millennials are not invested in
the stock market, banks intend
to engage them via VR
80%

8. DIGITAL BANKING
47%
51%
62%
0%
10%
20%
30%
40%
50%
60%
70%
2014 2015 2016
Percentage of Americans using
primarily digital banking
Bank of America, JP Morgan and Citigroup have shut 389 branches from Q3 2015 to Q3 2016 in an
effort to focus more on self-served digital channels: online, mobile and ATM.
has teamed up with technology firm MX to launch “My Personal
Bank” app to make banking and money management easier for
its customers
Cost saving using digital cheque
compared to traditional cheque96%
Impact of digital banking
Use cases for digital
banking
✓ Account opening
✓ Balance check and credit
card payments
✓ Portfolio monitoring
✓ Bill payment
✓ Person-to-person money
transfer

9. A number of digital lending platforms including peer-to-peer lending have cropped up to cater to
different borrowing needs. Alternate lending is helping drive financial inclusion, especially in emerging
markets.
DIGITAL LENDING
55%
69%
72%
72%
81%
0% 20% 40% 60% 80% 100%
Repayment flexibility
Competitive rates
Fast decision making
Convenience of online platform
Easy/ quick application process
Top drivers of borrowing via alternate lending
for retail borrowers
Source: YouGov 2016, Innovify analysis
JP Morgan Chase has partnered with OnDeck to launch Chase Business
Quick Capital, which is a digital product for small business lending
Use cases for digital
lending
✓ Online loans from banks
✓ Working capital loans for small
businesses
✓ Small loans for salaried
professionals
✓ Online mortgage
✓ Mobile based credit
decisioning

10. WEB BASED CROWDFUNDING
FRAMEWORKS
GE subsidiary FirstBuild, Pfizer and Heineken are among the companies
which have launched crowdfunding campaigns on platforms like Indiegogo
In 2016, equity crowdfunding surpassed VC funding for the first time.
Use Cases for
Crowdfunding
✓ Equity crowdfunding
✓ P2P lending
✓ Charity crowdfunding
✓ Reward based crowdfunding
$93
Billion
Projected global investment
through crowdfunding by 2025
as per a World Bank report
Impact of crowdfunding
134,114
Projects successfully funded on
Kickstarter as of 6th Nov 2017

11. REGTECH
Nomura may earn up to $134,000 per client for premium
research packages with high quality audit trails and
subscription management following MiFID 2
Regulatory technology or ‘regtech’ refers to solutions that address regulatory challenges and
compliance requirements through innovative technology.
Use Cases for
Regtech
✓ Regulatory change
updating
✓ Data analysis for
evaluation
✓ Compliance and
reporting
✓ Company
examination
$321
Billion
Fines paid by banks since
the global financial crisis
(as of Mar 2017)
Impact of regulation
MiFID 2
Markets in Financial
Instruments Directive 2,
scheduled to come into
force on 3rd January 2018
for the European Union
(EU)
Specific Use Cases
for MiFID 2
✓ Regulatory reporting:
pre-defined set of 12
standardized reports
✓ Ad-hoc client
reporting: execution
information based on
client request
✓ Ongoing monitoring of
execution venues

12. IMPACT
Financial service providers
(FSPs) need to redesign their
processes and systems to cope
with evolving customer
expectations, heightened
competition, changing
macroeconomic conditions,
increasing cost pressures and
stringent regulatory
environment.
Industry 4.0 technologies are disrupting the financial services industry at a
rapid pace, leading to innovators acquiring market share at the expense of
‘laggards’.
Innovify works with financial
organizations to transform them
as per the needs of today’s fast
changing times. With our
expertise in a wide range of
technologies and our presence
across the globe, we are the
partners of choice for fintech
innovation.
Revenue
Generation
User
Acquisition
Cost
optimization
BENEFITS OF
FINTECH
INNOVATION
Risk mitigation
Customer
retention
Regulatory
compliance

13. INNOVIFY
To embark on your Fintech 4.0
journey, get in touch with us at
rohit@innovify.com
We create value for users at every stage in the product lifecycle; delivering
better performance, cleaner design, usable functionality, and a superior
experience.
We have built Fintech products that transact over $ 100
million annually.
Innovation
Design
Agile
Development
Growth
Hacking Consulting
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