This is the presentation, Claro's co-founder, Aldo de Jong, presented at the Money2020 conference in April 2016. The full report can be downloaded at alwaysinbeta.org

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Rethinking banking for an “Always in Beta” world
INSIGHTS & IMPLICATIONS | April, 2016

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Always in Beta: An open innovation initiative

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A powerful collaboration
+

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A global study that brings together six different local contexts
ISTANBUL
LONDON
CAPE TOWN
DUBLIN
MEXICO CITY
SINGAPORE
3 user centred stories:
•Transition to financial independence
•Entrepreneurs
•Pioneer users
71 user interviews
28 expert interviews
13 immersion activities

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Digital is finally shaking up banking

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Digital has finally shaken up banking
35% of full-service banking revenues at risk
$16bn spent by US banks on digital transformation in 2015
3X growth in FinTech ventures investment in the last year
1/3 millennials believe they won’t need a bank at all within 5 years
Accenture, Digital Disruption in Banking;
IDC Financial Insights;
Accenture, Future of FinTech and Banking
Viacom, The Millennial Disruption Index

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The Digital Revolution
• Cost
• Distance
• Time
• Barriers to entry
• Competition
• Information
• Access
• Transparency
• Debundling
Digital decimated the barriers to entry and increased competition

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Competitors
are everywhere
The financial services industry is being overhauled
Every part of the model
is being disrupted
WEALTH &
ASSET
MANAGEMENT
CAPITAL MARKETS &
INVESTMENT
INSURANCE &
RISK MANAGEMENT
PAYMENTS
RETAIL BANKING &
CONSUMER
FINANCE
BUSINESS &
CORPORATE
BANKING
New ecosystems are
forming

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Changed expectations
Digital didn’t just put users online; it fundamentally changed their behaviors,
expectations and values
Changed behaviours Changed values

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The Digital Revolution has shaped a
new generation that is disinterested
in banks
There is a growing gap between you and your future customer
The traditional banking model is
disrupted. Competitors are
everywhere.

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Always in Beta answered four fundamental questions to build a new model
What does the changing financial services landscape look like?
How can you create new
value propositions for
Digital Natives?
How can you build a
relationship with
Digital Natives?
Who are Digital Natives
and how can you
meet their needs?

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Debundling
Layering
Fragmentation
Banking ecosystem transformation

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Summary: the banking ecosystem has taken a new shape
DEBUNDLING, LAYERING AND FRAGMENTATION
Core technology
Platforms
Applications

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Banks have traditionally provided the entire range of financial services functions in-
house, and bundled together
DEBUNDLING, LAYERING AND FRAGMENTATION
Lending
Insurance
Financial Learning
Payments
Money Management
Credit
Saving
Trading
Investing
Core technology
Applications

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Lower barriers to entry led applications to debundle
DEBUNDLING, LAYERING AND FRAGMENTATION
Core technology
Applications

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The emergence of platforms enables the next generation of applications
DEBUNDLING, LAYERING AND FRAGMENTATION
Platforms
Core technology
Applications

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New players with singular value propositions fragment the ecosystem further
DEBUNDLING, LAYERING AND FRAGMENTATION
Platforms
Core technology
Applications

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The core-technology is also fragmenting as specialized players provide specific core
enabling technologies
DEBUNDLING, LAYERING AND FRAGMENTATION
Platforms
Core technology
Applications

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In summary, banking is transforming into layers of core technology, enabling
platforms, and applications
DEBUNDLING, LAYERING AND FRAGMENTATION
Platforms
Core technology
Applications

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The emerging FinTech landscape tool
DEBUNDLING, LAYERING AND FRAGMENTATION
Platforms

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The emerging FinTech landscape tool
DEBUNDLING, LAYERING AND FRAGMENTATION
Applications

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The emerging FinTech landscape tool maps out 60+ value propositions across 9
functional areas and enabling platforms
DEBUNDLING, LAYERING AND FRAGMENTATION
Investing
Trading
Saving
Credit
Lending
Insurance
Money Management
Financial Learning
Payments
Enabling platforms

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Who is this next generation of customers?
A global generation whose mindset and behaviours are being
shaped by networked digital technologies on an ongoing basis.

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A
C
B
Old model| Linear life path
?
?
?
?
?
?
?
New model | My life is in
constant flux. So I choose to
keep my options open.
Your customers’ life-style is shifting

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How can you build a relationship with the digital consumer?
TRUST
ENGAGEMENT
PLANNING
FINANCIAL
MANAGEMENT
COMMUNICATION
1. How can we build trust with them?
2. How can we engage them?
3. How can we help them plan?
4. How can we help manage their money?
5. How can we communicate in a way they understand?

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Belief in the authority and stability
of institutions as the primary driver
of trust (top-down, one-way)
Trust is created and maintained
through shared experience and
interest
(bi-directional)
Authoritative Shared
1. How can we build trust with them?

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Engagement has been based on
loyalty – one-time conversion that
gets people on board for life
Engagement is gained through
continuous relevance in daily life
Loyalty Relevance
2. How can we engage them?

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Long-term planning on a linear life
path gives people security and
stability
Customers develop their skills and
networks so they are prepared to
navigate through their fragmented
life path
Planning Preparation
3. How can we help them plan?

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Customers delegate management to
the bank, which is best positioned
to take care of everything so you
don’t have to
Enable customers to
make and implement decisions
themselves
Delegation Enablement
4. How can we help manage their money?

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In the age of information, provide
many options.
Communication needs to have
meaning for Digital Natives – in
their language, from their mindset
Information Meaning
5. How can we communicate in a way they understand?

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This relationship consists of five fundamental elements
SharedAuthoritativeTRUST
RelevanceLoyaltyENGAGEMENT
PreparationPlanningPLANNING
EnablementDelegation
FINANCIAL
MANAGEMENT
MeaningInformationCOMMUNICATION

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Always in Beta Toolkit - engage and create offers for Digital Natives
2. DESIGN PRINCIPLES
3. REFRAME SCENARIO TOOL
1. EMERGING FINTECH LANDSCAPE
4. FINANCIAL MODES MODEL

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Aldo de Jong| Partner
aldo.dejong@claropartners.com
+34 647 857 922
Thank you.
Download the full report at
alwaysinbeta.org