Larc2014 - Payments Innovation looking forward to the future

1 SWIFT Latin American Regional Conference (LARC) - 2014 28-28 May 2014

Andres

Fontao

Next Bank

Global

Ricardo

Hissao Leo Vernazza

CIP-Camara

Interbancaria de

Pagamentos

Brazil

Paganza

Uruguay

Payment Industry Innovation: Future Perspectives

Innovation Special Interest Session

#LARC2014

@swiftcommunity

Daniel Rojas

Rocket

Colombia

May, 2014

Payments Innovation Ricardo Hissao

Payments Timeline

Pre 9000

BC 1960s

Barter

1970s 1980s 1990s 2000s 2010z

RTGS

Switching

Services

Automated

payments ATM

Credit Card Online

payments

POS PC

Pre-Paid

card system

Online

auctions

Online

banking Cross border

payment

message Magnetic

Stripes

Barcodes

What is innovation?

“In many cases innovation in retail

payments represent only incremental

improvements to existing and established

payments service”

How to Innovate?

Analyzing

Planning

Listen to your

clients

Collaborate across IT

and Business

Welcome

diruptive

technologies

Start Small

Think Big

Examples:

Barriers to Innovation

Inadequate attention

with Security and Fraud Limited

interoperability

Central Bank

Central Banks have very

measured view about the

anticipate impact of innovation in

their countries

Barriers to Innovation

IT systems and culture are the biggest barriers to innovation

Ranking of barriers to innovation, by size of bankWhere 1 is the highest barrier nad 6 is the lowets barrier

Large Banks Medium banks Small Banks1 IT Systems IT Systems IT Systems

2 Culture Culture Regulation

3 Organisation silos Organisation silos Financial

4 Regulation Regulation Culture

5 Management priorities Management priorities Management priorities

6 Financial Financial Organisation silos

Efma-Infosys Innovation Survey 2013

Note: Size of Bank is based on rankings from The Banker magazine: Large is 1-50, Medium 51-300 and Small is > 300

Payment phobia more common than fear of spiders

26% of people are ‘paynuphobes’, which is defined as

people who avoid using contactless payment cards and

mobile phone banking because of fears around security

68% of people experience some sort of phobia

25% of people are scared of spiders; 34% are scared of

heights; 14% are scared of enclosed spaces

(claustrophobia); 5% are scared of clowns; 3% are scared

of bridges; nearly 1% are scared of buttons

Source: The Payments Council - UK

36% of people would avoid using a

contactless payment card and 42% would

avoid using mobile phone banking

Security Enhancement

Biometric ATM

Voice

Checking

Eye retina

scan

What is coming …

Cash and coins: Anonymous

form of payment will be one of

the reasons why hard cash

continues to survive

Digital Jewelry: Pieces of

security jewelry to payment

authentication

NFC placed

inside wearable

smart technology

NFC chip

under skin

Problem: Payments Regulation Today

The increasing number of policy and

regulatory stakeholders focusing on

payments can create uncertainty

Constant changes in the financial

market, witch requires monitoring

extremely dedicated

The rate and pace of change

compromising the effectiveness of

existing legislation

Smart Prism Framework Innovation Inside of Payments Regulatory Process

Thanks !

App para el pago de gastos mensuales.

PROBLEMA

PROBLEMA

- App #1 categoría Finanzas del App Store

- Ganador BBVA Open Talent 2013

- Premio Nacional de Innovación 2013

- 2da startup más disruptive en LATAM (NextBank Innotribe Bogotá)

- Mención especial del BID-Fomin 7 tecnologías para inclusión financiera 2012

- Elegida entre las 20 apps más innovadoras del mundo, app Circus, Barcelona, 2014

RECONOCIMIENTOS

- Comisiones

- Reducción de costos

- + Transacciones (+ información)

- Servicio innovador

- Sin costo de TI

BENEFICIOS PARA EL BANCO

- Mobile-first

- Especialización

- Tecnología

- Marketing digital

KNOW HOW DE PAGANZA

- 10 facturas por usuario por mes

- México:

- 60% de los celulares que se venden son smartphones

- 20 millones de smartphones

OPORTUNIDAD

leo@mail.paganza.com

Optimal financial

Decisions

53%

Piensan que no hay diferencia entre las ofertas de bancos

1 de 3

Están dispuestos a irse a otro banco en 90 días

Prefieren ir al dentista que oír al Banquero

Problem.

People handle their money

poorly. They make bad financial decisions and

choose the wrong financial products.

Solution. )

v USERS

A free and anonymous platform

to make correct financial

decisions.

_ BANKS

Connecting the right

Clients with the correct

products.

70% IN ACQUISITION COST.

>

%

& 4 FINANCIAL TOOLS

# 1. HOW TO ACHIEVE A FINANCIAL

GOAL-

$ 2. FIND THE BEST FINANCIAL

PRODUCT-

! 3. HAVE AND MAINTAIN A BUDGET-

" 4. DIAGNOSIS OF PERSONAL

FINANCE-

Thinking different to solve

an obvious problem %

• Financial Mindset + alternative view of the problem.

• Big difference between USA and Latam (Not only cut and paste).

• Long process of reinvention and iteration of the tools and approach of

rocket.

• Learning of the acceleration process of an entrepreneurial ecosystem.

• Not being afraid to make mistakes, learn and keep doing

+

+

=

+

+

Rocket Users Experience. ¥

Business Model. '

SELL OF LEADS

Finance.

1. Follow Up Lead: Leads are paid as

long as the loan is not in default.

2. Delivered: Leads are paid when the

financial product is Delivered.

3. Long: Leads are paid when the user

fills the complete questionnaire

4. Basic: Leads are paid when the user

fills the sort questionnaire

Retail.

• Delivered: Leads are paid with

effective sell of the goods.

• Sample: Leads are paid when the

users begin a trial.

• Basic: Leads are paid when the users

general data is acquired.

WHITE LABEL

• Sale of simple variation of the tools

of Rocket, adapted to the web page

of banks .

• Only for strategic allies.

ACCESS TO DATA

• Access to our data set of users and

financial product information.

• Standardized reports of information

to entities.

More than

big Enough. h

Usd$ 5,8 Billion a year.

The market opportunity

150M Banked users

4M New credits (monthly)

$150 Acquisition cost of the banks

per each client

Currently

6-12 months

12-24 months

Long Term Opportunity. †

The creation of value to our users using the Rocket

tools allows us to gather "Big and Smart Data"

essential for the solution of making optimal financial

decisions for Latin-Americans.

Users Data. Financial Products

Data.

Business

Intelligence. The best tool for

financial decisions.

_ ) o + * = ( ) x

Our Team. x

Daniel Rojas

CEO Daniel worked for 7 years in the integrated financial

regulator, developing standards for financial

inclusion, consumer rights and financial risks. mx.linkedin.com/pub/daniel-rojas/2b/816/a60/en

Felipe Gaviria

CFO / CCO Felipe has a Master degree in economics. He has

worked for the financial regulator and has occupied

management positions in the securities market self-

regulator. co.linkedin.com/pub/felipe-gaviria/25/aab/bb9

Sergio Orjuela

Senior Analyst of Mathematical models Studied economics and he is specializing in

statistics. co.linkedin.com/pub/sergio-orjuela-ruiz/53/356/287

Juan Martitegui

Growth Hacker Expert in Internet Marketing, Social Media, Digital

Media y Productivity. ar.linkedin.com/in/juanmartitegui

Hugo Marín

CDO / UX (Product director) Bachelor in Philosophy and arts, Hugo has 8 years

of experience in design and interface usabilty. co.linkedin.com/in/marinhugo/

Javier Moreno

Director of Mathematical models Mathematician, worked for the integrated financial

regulator and for the public retirement pension

fund. es.linkedin.com/pub/javier-moreno/5a/890/185

Objetivo Fintech. %

• Mirar que es lo que los clientes quieren que su banco le ofrezca. No lo que les

imponemos que usen.

• El manejo de la data mas critico que el fondeo.

• Mirar como hacer para que lo usen bien y recurrentemente.

• Eliminar ineficiencias que los usuarios deben pagar.

• Buscar ventajas competitivas, de los bancos dándole competitividad a los

clientes.

• Ser un “Middleman” responsable. El producto adecuado, en el momento

correcto.

• Tener fácil y rápida adaptabilidad a las nuevas tendencias y tecnologías.

Retos. %

• No todos los retos son regulatorios y tampoco son el escudo, ( miren google-

uber)

• Entender que es más fácil innovar por fuera del Banco.

• Es importante para los bancos ver que esta pasando con los Startups.

• Entender que somos Startups

• La mayor competencia de los bancos no son los otros bancos, son lo

disruptivos del Fintech.

• Las alianzas se construyen no se compran.

THE ROI OF FINTECH IS THAT YOU'RE

STILL IN BUSINESS IN 5/10 YEARS

Daniel Rojas CEO

daniel@rocket.la

www.rocket.la

52 SWIFT Latin American Regional Conference (LARC) - 2014 28-28 May 2014

Andres

Fontao

Next Bank

Global

Ricardo

Hissao Leo Vernazza

CIP-Camara

Interbancaria de

Pagamentos

Brazil

Paganza

Uruguay

Payment Industry Innovation: Future Perspectives

Innovation Special Interest Session

#LARC2014

@swiftcommunity

Daniel Rojas

Rocket

Colombia