The Fintech Revolution and the Future of Banking

The Fintech Revolution

www.nikolasbadminton.com

Sisyphus & skipping rocks

Banking vs. Fintech

Software is eating the world…

2007

2008

“Mobile is eating the world.”

Benedict Evans, Andreessen Horowitz

More people on earth have access to cell phones than toilets.

Out of the world's estimated 7 billion people, 6 billion have access to mobile phones.

Source: United Nations, 2015

1/3 have smartphones

Source: http://www.slideshare.net/a16z/mobile-is-eating-the-world-40841467

2 to 3x more smartphones than PCs by 2020

Personal Taken everywhere Frictionless access Sensors, cameras Location Payment Social platform Much easier to use

10x the opportunity

Mobile leverageIncreased sophistication is as important as scale

X =

Millennials • 53% see no difference between banks. • 71% would rather go to the dentist than listen

to what their bank is saying. • 1 in 3 are open to switching banks in the next

90 days. • 33% believe they won’t need a bank at all.

Source: http://www.millennialdisruptionindex.com/ and http://time.com/40909/why-millennials-would-choose-a-root-canal-over-listening-to-a-banker/

Innovation is accelerating

Digital Wallet Solutions

“More than a third of early adopters more or less say that they “rarely” use it anymore. And the percentage of those users who say they use it every time they can, has fallen by 50 percent since launch.”

PYMNTS.com

http://www.pymnts.com/news/mobile-payments/2016/apple-pay-adoption-usage-2016/

Alternative Card Networks

“I think many of the big incumbents right now will die. They have not kept up to date and they are technologically bankrupt.”

Tom Blomfield CEO Monzo

P2P Foreign Exchange Marketplaces

P2P Insurance & Social Good

?

Gamification in Banking

Cryptocurrencies

“It was the best of times, it was the worst of times…”

Charles Dickens A Tale of Two Cities

Anonymity & security Financial Inclusion

Reduced cost Flexibility

Anonymity & security Crime

Money laundering Terrorist funding

“The nation’s largest bank has been testing the program in recent months to move U.S. dollars for about 2,200 clients between the two financial centers using a version of the “blockchain” technology that underpins bitcoin.”

Daniel Pinto, J.P. Morgan

http://www.wsj.com/articles/one-place-j-p-morgan-is-boosting-spending-fintech-1456172040

X

Moving money across borders using path-finding algorithms

Source: http://fortune.com/2016/07/10/wall-street-blockchain-technology-banking/

http://www.wsj.com/articles/one-place-j-p-morgan-is-boosting-spending-fintech-1456172040

“This could disrupt monetary policy.”

Christine LaGarde IMF Managing Director

Source: https://www.youtube.com/watch?v=AsetntXCPRQ

TheNew Power

$446bn

$608bn

$541bn$373bn

$255bn

$2.2 Trillion

Source:www.millennialdisruptionindex.com/wp-content/uploads/2014/02/MDI_Final.pdf

“73% of Millennials would be more excited about a new offering from Google, Apple, Amazon, PayPal, or Square than from their own nationwide bank.”

Millennial Disruption Index

https://www.bloomberg.com/gadfly/articles/2016-06-28/drink-up-quick-alibaba-the-pboc-wants-your-punch-bowl

Yu'e Bao

CAD$152bn

“It's now moving directly into banking, after starting online micro-lender MYbank last year…Its issuance of 30 billion yuan of loans as of January has been enough to attract the attention of regulators. That growth may now be reeled back.”

Bloomberg

https://www.bloomberg.com/gadfly/articles/2016-06-28/drink-up-quick-alibaba-the-pboc-wants-your-punch-bowl

2017 to 2025

1Banking and Fintech partnerships will keep innovation pushing forward both inside and outside of traditional banks.

2Internal tech incubators will innovate without the restrictions of policy and normal business-as-usual activities.

3Employees and customers will be involved in regular design charrettes for new banking solutions.

4 Consolidation of fintech companies into ‘Super-Fintechs’, lead by tech giants.

5 Developers will become a more valuable human asset than Traders and Brokers.

But, what about the

future future?

Disruption + progress is inevitable.

The Fintech Revolution

www.nikolasbadminton.com