Quarterly published Digest of most relevant digital innovations in bank and insurance. This quarter: focus on Ecosystems - Beyond Banking and Insurance

1. DIGITAL INNOVATION DIGEST
Q4 - 2018
#11

2. CUSTOMER
EXPERIENCE
SUMMARY
This quarterly-produced document is an illustrated condensed of few but most relevant and inspirational trends or innovations in Finance / Banking
/ Insurances.
It was created for internal knowledge sharing purposes and to promote the digital culture among consultants and business managers.
[Payment] Biometric contactless payment card Italy
ECOSYSTEMS [Ecosystems] Beyond Banking & Insurance Belgium / Worldwide
[Payment] “Turn off” certain spending United Kingdom
CUSTOMER
CENTRICITY

3. 01Ecosystems: ground wave is coming

4. Ecosystems: ground Wave is coming
In Short
It a recurring topic in the digital innovation digest: bank and insurances are
breaking the silos and start to build ecosystems and added value services with
external partners.
It’s already fairly common for Bank and insurers to collaborate together and to
propose “hybrid” offer when it’s about merging Life insurance products and
financial guidance services like estate planning and asset management, but since
few months, ecosystems are emerging and fast growing in two promising
domains: Payments and Mobility services.
ECOSYSTEM
A system involving the interactions between
a community of living organisms in a particular
area and its nonliving environment
An economic system involving the interactions
between a community of companies in their
core business and non-core business
environment.
The main interest (and the primary danger for incumbents) of these
ecosystems focused on Mobility and Payments: They are easily
accessible to new entrants and / or to actors coming from outside the
banking and insurance sectors.

5. Ecosystems: ground Wave is coming
Pop Up by Belfius: a marketplace of service
inside the banking app like:
“Votre plein sans carte” : filling up the gas
tank without card or cash.
1. Select a gas station (Lukoil) directly
within the Belfius app.
Example
Pop Up by Belfius
More services will be added in 2019 and an API for developers is
already available.2. On the spot, select the pump number (still in the app)
3. Fill in the tank
4. Once it’s done, details of the purchase are displayed directly in the app (and
the payment is automatically initiated)

6. Ecosystems: ground Wave is coming
In KBC app you can already:
• Pay you parking (park meter) directly from the app.
• Consult your “Titre Services” balance and transaction history
• Buy ticket ride from De Lijn or SNCB/NMBS.
Example
Pay your parking with KBC
Example
ING +Deals
ING clients can already go to Total station for gas, buy online with Coolblue or
book a flight with Brussels Airlines or an hotel with Booking directly from their
banking app.
50 K ticket sold (Q4.2018)
70 K parking session paid (S2.2018)

7. Ecosystems: ground Wave is coming
Lydia is a French mobile payment solution (could be compared with Payconiq or Paypal by
example). Lydia is available for P2P and commercial payments.
Banque Casino, is a full licensed bank owned by Groupe Casino (Retail) and CIC-Credit
Mutuel.
Lydia’s users can request a personal loans from 100 to 1.000 € (max 90 days) directly in
Lydia’s mobile app.
No additional KYC process requested, clients authentication is provided by Lydia and if the
loan is granted, funds are immediately credited on Lydia payment account.
Example
Instant consumer loans with Lydia & Banque Casino
Lydia brings his customer database, the interface and the instantaneity,
Banque Casino endorse scoring, supports credit risk and funds management.
In this scheme, Lydia is paid by Banque Casino (retro commission)

8. Ecosystems: ground Wave is coming
Insurance is also on the move
Even if insurers can’t rely on mobile app consulted daily, they are also developing ecosystems and added value services beyond their traditional
range of core business services.

9. Ecosystems: ground Wave is coming
Vitality is one of the most successful health coaching program. Created by the South African group Discovery Limited, the program is available in
several countries (Belgium, France, UK, USA, China…) where he could be subscribed directly (B2C) or via Health Insurance Policy (B2B2C).
Vitality health coaching is providing training programs, health monitoring services (thru connected watch) and rewards or discounted price at
commercial partners (Amazon, fitness centers, Sport Shop, Spa etc.).
December 2018
Example
Vitality Health coaching program

10. Ecosystems: ground Wave is coming
Analysis
Boosted by PSD II and open data trends, the “Beyond Banking” (or Beyond Insurance) concepts will have significant impacts on financial
industries.
Ecosystems and added value services are powerful opportunities to foster loyalty, attract new customers and reduce price sensitivity. They are
also drivers to develop new business models and sources of revenues.
But they induces a sharing of customers data and a partial loose of control on customer experience for less digital-efficient services providers.
More than providing good products or to master “pipes” , the key to lead an ecosystem is to own the gateway. And to own and hold the
gateway it is mandatory to succeed to provide constantly good customer experience.
With their mobile app used daily, Bankers are in first position to keep control on customer’s relationship. Especially when it’s about payment
services, a domain where they have strong history and relevant security standards. Competition with GAFA’s and newcomers will be tough but
incumbents are learning fast and they have financial means to react strong.
For Insurers the picture is gloomier. Often easier to underwrite, insurance contract are also easy to forget (When nothing bad happen).
Without daily interaction it’s hard to maintain customer engagement and to stay in their top of mind.

11. Ecosystems: ground Wave is coming
Customer Loyalty
(Churn prevention, customer
engagement and support,
then brand advocacy)
Customer Acquisition
(Unbanked & uninsured
customers, millennials, tech-
savvy and trendsetters )
Reduced price sensitivity
(When added value services
are integrated in a global
[Premium] package).
Convenience
“Consumers buy with their
foot”: When you make things
easier for people they will be
ready to give you their money
(and their data)
Revenue generation
(cross-selling and upselling,
revenue per customer growth)
Data Acquisition
(consumers insights, next best
action, predictive marketing)
First Wave effect Second Wave effect Third Wave effect
Ecosystem
Epicenter
Brand
Awareness
Raise
interest
Touchpoints

12. 02Biometric Contactless payment card

13. Biometric Contactless payment card
In Short
Intesa Sanpaolo, the number one banking group in italy, releases the first
biometric contact less Mastercard in Europe.
Consumers may simply tap their card to any POS terminal to pay and authorize
the transaction with their fingerprint. In addition, the card works without a
battery as it’s powered by the terminal which means that there is no limit on the
number of transactions.
The card works with existing card terminal infrastructure, so merchants can easily
maximize the shopping experience delivered to their customers without the need
to upgrade their current hardware or software. For issuers, the technology helps
detect and prevent fraud, increase approval rates, reduce operational costs and
foster customer loyalty.
Intesa Sanpaolo’s solution includes secure on-the-spot fingerprint enrollment at
selected locations and in the future customers could even enroll for the service at
home. To ensure the right to privacy, biometric data is stored on the card itself,
not the bank’s servers. Protection is further enhanced by the fact that personal
data is encrypted and never leaves the card.
Built-in fingerprint sensor eliminates the need for PIN or
signature
Unique battery-less card is powered via existing PoS
terminals so no need to be recharged
Retro compatibility with existing PoS terminals network is
guaranteed.
In branch, on PoS or at home fingerprint enrollment.
Multilayers security.

14. Biometric Contactless payment card
Analysis
• Great care given to customer adoption factors:
• Fingerprint enrollment at home, in branch or in PoS
• Full retro compatibility with existing systems
• Technical constrains (battery) eliminated
• Beyond the hype: what the real added value for customers ?
• The true added value relies in contactless.
Fingerprint is more a gadget.
• At a time when NFC smartphone and mobile payment systems
are everyday more frequent, such high tech card may appear
already outdated.
• Illustrative of this is the Swedish case: Contactless card
penetration is one of the lowest of Europe while the country is
considered to be the most cashless society in the world.
Swedes have switched directly from traditional cards to mobile
payment applications like Swish (which is used by more than
one inhabitant in two)
Since 2018, more than half of card payments in Europe
(Top 15 countries) are contactless.
Over a two year horizon, all point-of-sale payment
terminals should be contactless compatible in Europe.
Contactless payments leader is Poland with more than
80% of penetration for contactless.
To the other end of the spectrum: Nordic countries, which
is surprising as those countries are almost cash-less.
Source: National Banks and Local Card Associations, Datamonitor,
Euromonitor, and First Annapolis Consulting estimates.

15. 03“turn off’ spending with
certain types of retailers

16. “turn off’ certain spending
In Short
In December 2018, Barclays becomes first UK high street bank to enable
customers to stop transactions at chosen retailers to give vulnerable
customers greater control over their money.
A simple button within the Barclays mobile banking app now allows the
customer to choose which types of retailers they are able to spend with,
meaning any attempted payments that fall within the ‘turned off’
category will be automatically declined.
If it is very easy to “turn off” certain spending, it is also easy to turn
them “on” again. But according to the Money and Mental Health Policy
Institute any sticking point in the buying process may be helpful for
person who are trying to resist to purchase (or gambling) addiction.
If Barclays on the first high street bank to propose such feature,
Neo Banks like Monzo and Starling are doing it since several
month now.

17. KEY NUMBERS
About Initio
> 750 consultants, 95% employees
More than 120 Digital Consultants
52 % women / 48% men
Turnover 2017: >95m €
Large team in Digital Strategy & Digital Marketing
International and multi-industry experience
Business/Process analysts & Project managers with Digital
experience
* Ranked in the Top greatest places to work for
Initio is the international brand of the Square group*, an
international consulting firm in strategy, organizational and
operational consulting.

18. Luxembourg
153-155 rue du Kiem - Entrée D
8030, Strassen
Luxembourg
+352 277 239
luxembourg@initio.eu
Brussels
Boulevard Brand Whitlock, 60
Brussels, 1200
Belgium
+32 (0)2 669 77 44
brussels@initio.eu