Présentation banques et Fintech, sont-ils concurrents ou partenaires ?

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Banks & FinTech
From competition to partnership
Sylvain FAGNENT
SFAGNENT@OCTO.COM
@FagnentSylvain
https://fr.linkedin.com/pub/sylvain-fagnent/8/838/881
Stephen PERIN
SPERIN@OCTO.COM
@sperin
https://www.linkedin.com/profile/view?id=5912760

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FinTech : contraction of " Finance " and "
Technology".
Company offering financial services based
on technology.
FinTech a quick Definition …
“
”

3. 3
…but even more ?!
FinTech are recreating a new world
supporting, displacing and disintermediating
the old world finance with technology.
Fintech is a new market.
It is 21st century finance.

4. 5
FinTech – an economic boom that is accelerating
248
1042
2013
2014
Source : Venture Scanner
Number of FinTechs
x4
#FinTech
2008 2013 2014
…
3 Bs
928 M
Global investment in FinTech
$
15 Bs
x3
x5

5. 6
Where are the FinTechs

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Massive financial operations in the French FinTech sector

7. 11
Prêt rémunéré >18
Investissement 6
Leasing 2 Sécurité 2
Prêt equity >10 Crowdfunding >14 Paiement 18
Outils pour l’entreprise >10
Néo banque 2
7Finance perso. Investissement instit. >4
4Transfert de fonds Autre 9 27/10
>106

8. 13
60 min in FinTech
Src : Route 66 venture

9. 14
FinTech leverage existing business models by de-intermediating fi services and
capturing most of the client value
Today Tomorrow ?
The disintermediation of financial services by new entrants may leave the
traditional banking model only with the burden and cost of core banking
infrastructure and capital charges

10. 15
How to surpass the
confrontation ?
Beyond the frontal impact
“
”

11. 17
FinTech & banking are getting closer and closer

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Innovation by being closed to the innovators and get inspired, open
innovation
Partnership
Specific high-end services
Acquisition
Subsidiary
Integration
Investments
Capital Risk
Funding
User Experience
White label
Robot advisor
Robot advisor
Incubator
Early stage seeds

13. 20
BBVA has created a deep connections with innovators
Real time payment SME loans, scoring 2.0
Partnership
Acquisition
Big DataBank 2.0
Investments
Design

14. 21
AXA: Digital Transformation
Born in 2015, AXA Strategic Ventures has a budget of 200 M€.
AXA Seed Factory, created in 2013 with 10 M€, move to an FinTechs &
InsureTechs accelerator
AXA Labs in San Francisco is
a center of excellence in
customer experience and
innovation. AXA anticipate
the new digital trends
through direct interaction
with Silicon Valley’s top
talent

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Major American corporate investment banks have been investing in
FinTech since 2009
• Citigroup (15 FinTech)
• Goldman Sachs (11 )
• Morgan Stanley (8)
• JPMorgan (4)
• BankOfAmerica (4)
• Wells Fargo (3)
American CIBanks FinTech Investments
• Square (mobile payments)
• Obopay (mobile payments)
• BIlls.com (Business-payments)
• Revolution Money (Online
transaction)
Payment technology
• Context Relevant,
• Kensho Technologies,
• Dataminr
• Antuit
• Ayasdi
Data analytics
Personal Finance & P2P Lending
• Betterment (Robo Advisor)
• Motif (Personal Finance)
• Prosper Marketplace (P2P Lending)
• Lufax (P2P Lending)
Source: CBInsights

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Yes, but ... are their DNA
really compatible? Does
the transplant work ?
A fundamental question
“
”

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Bank and Fintech DNA
Product centric
Complexity / Opacity
Long cycles / Rationalization
Data silos
Strict regulatory
Generalist
XXth. century technologies
Bank DNA
Customer centric
Simplicity / Transparency
Short cycles / Innovation
Data driven
Little or no regulated
Specialist
XXIth. century technologies
FinTech DNA

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A pain: Legacy
Source : http://www.rbs.com/content/dam/rbs/Documents/News/2014/11/RBS_Building_IT_Resilience.pdf

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Simple
“Reinventing online banking with modern web
and mobile experiences, no surprise fees, and
great customer service”
“WHY”
“We started Simple because retail banks
have forgotten who their customers are”
“We love design and technology”

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Simple – composit bank

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Simple – flow processor
Source:https://www.simple.com/blog/my-apology-to-you

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Simple – flow processor
We rebuilt our infrastructure from
scratch
[…] massive project to replace our partner
processor with one we’ve built.
So why did we do it?
[…] The first reason was to improve our
ability to innovate […]
The second reason, ironically enough, was
to improve system stability.

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Standard Treasury

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Standard Treasury

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“We are building an API banking platform,
becoming our own bank”
Standard Treasury vision
“We have been unimpressed with
existing bank infrastructures”
Source : http://blog.zactownsend.com/standard-treasury-as-a-startup-bank
“We want to be the Amazon Web Services
of banking”

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Silicon Valley Bank (SVB) has acquired the assets and team of
Standard Treasury
“Last year we decided that the best way to bring the Standard Treasury
vision to fruition was to build our own bank. That's a big dream. Earlier
this year, primarily because of concerns around regulatory and
geographic risks, we were unable to raise a Series A funding round
against that goal. ”
“We decided the next best
thing was to closely align
ourselves with one bank ”
We are looking forward to
transforming (our) products for
the SVB context and launching
some versions of them.

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Conclusion
The reconciliation will
require effort on the part
of banks
“
”

28. 35
Spontaneous mutation
Source : http://www.craveonline.com/images/stories/2011/2011/October/Comedy%20Channel/dr-manhattan.jpg

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Banks with the FinTech
DNA
Mutation
“
”

30. 37
mBank have completed it in a few quarters to go fully mobile
1999
2012
2013
• 4,4 million customers
• Decision to move to a full
mobile bank
• Design Driven
• No silos: teams consisting of
IT, business, UX worked
together (from design to
launching the product)
70% of customers to
use the new digital
bank services

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Fidor

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Innovation Digitale sur 3 axes :
1- Externalisation
infrastructure IT sur le
Cloud d’Amazon
2- Meilleure expérience
utilisateur
(« personnalisation des situations »)
3- Ecosystème Applicatifs
(M-Banking, Mobile Paiement,
Application pour les acheteurs
immobiliers, etc.)
« Mobile payments app has had more than a -
million downloads and had handled more than
$9 billion in transactions. »
Ralph Norris, CEO CBA

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Disrupted disruptors

34. 46
The threats on the future of FinTechs
Overestimating
new world of
data science
Underestimating
Regulations
Disrupted
disruptors
Short term < 2 years
Legacy
Technologies
& IS
Regulations ,
restriction,
interdiction
Chinese
competitors
Long term > 10 years
Disruptions
by the
BlockChains
Can’t reach
critical mass
 Blockchain : Blockchains are transaction histories
that use multiple parties for verification. The
blockchain is a decentralized and networked.
 China : China is doing amazing things with Tencent
and Alibaba: MYbank (Alibaba) and Webank
(Tencent).
 Ripple & regulation : U.S. Treasury slaps virtual
currency startup Ripple with $700K fine: “Virtual
currency exchangers must bring products to
market that comply with our anti-money
laundering laws,” said FinCEN Director JC Shasky
Calvery.
5 years < Mid term < 10 years
?

35. 51
Source:http://www.keepcalm-o-matic.co.uk/p/keep-calm-and-thank-you-for-your-attention/

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https://www.youtube.com/watch?v=FNQSM4ipZog
https://www.youtube.com/watch?v=J6bukvHFh3E

37. 53

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Many players attack all banking business

39. 60
Bitcoins FinTech Map

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Digital Banking & FinTech : the White Paper
http://www.octo.com/en/publications/14-digital-banking-fintech-is-cannibalizing-banks

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