GFT Group 25-Apr-16 1 Technology moving faster than the Banks Philippe Guenet April 2016
GFT Group 25-Apr-16 1
Technology
moving faster
than the Banks
Philippe Guenet
April 2016
GFT Group 25-Apr-16 2
Philippe Guenet
ESC Marseille Provence - Promo 1995
Back then :
ESC claim to fame
Started work in Internet / eCommerce
Self-made into Technology
Architect / CTO in Consultancy (Vodafone / New International / M&S / O2 / Ladbrokes / etc)
Now:
GFT – Specialised Financial Services Consultancy
Executive Delivery Manager
Working with tier 1 investment banks
Introduction
GFT Group 25-Apr-16 3
What technology means to Banking?
GFT Group 25-Apr-16 4
The journey of money
Retail Banking Commercial & Corporate Banking
Wealth and Private Banking Investment Banking
€10
€1.000.000
Wholesale markets
Corporate
Finance
Market
access
Risk &
Compliance
Funds
Brokerage
servicesBuy-side
GFT Group 25-Apr-16 5
What technology means to Banking?
GFT Group 25-Apr-16 6
@genda
• What is “tech disruption”?
• How are Banks coping?
• Trends & solutions
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Current Technology trends
Source: dilbert.com
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What digitalisation means?
User Experience
Customer
Experience
INTERNET
MOBILE
CROSS-CHANNEL
SOCIAL
INTEGRATION
SELF-SERVICE
ALWAYS ON 24/7
WEB
IoT
AUTOMATION
PERFORMANCE
STANDARDS
EXCEPTION
MANAGEMENT
OPEN
TECHNOLOGY
COST REDUCTIONS
OperationsInnovation
Disruption
NEW MODELS
NEW CUSTOMERS
FEEDBACK
NEW
PARTNERSHIPS
ECOSYSTEM
NEW
TECHNOLOGIES
GLOBAL
GFT Group 25-Apr-16 9
Fintech = Financial Services Technology Start-ups
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What are Fintechs about?
Source: FintechInfo.com – Fintech Mind Map
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Source: FintechInfo.com – Fintech Mind Map
What are Fintechs about?
Payments
Insights
Blockchain
Security
eFunds
Crowd lending
Utilities
Infrastructure
Crowd funding
Personal banking
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The revolution of Bitcoin
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Blockchain, biggest disruption to come
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Changing world of Banking
“Banking is
necessary,
Banks are
not.” Bill Gates
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Future challengers?
(ApplePay)
(PayPal)(Amazon Web Services)
GFT Group 25-Apr-16 16
So, if technology is so
critical, what are banks
doing about it?
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Banks pre 2008
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And then…
What happened in
2008?
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2008
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2008
Sub Prime collapse
Global Financial Crisis
Systemic risk, rapid contagion
Collapse of Lehman Brothers
Banks too big to fail
State intervention
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2008 – Lessons learnt
Systemic weakness (OTC)
Limited aggregated risk management of
counterparty trades
Highly manual reporting
Growth from M&A resulted in
substantial IT legacy
Insulation between banking and
investment arms necessary
GFT Group 25-Apr-16 22
And then…
But it is what happened
since 2008 that
matters more…
GFT Group 25-Apr-16 23
Investment banks : “between the rock and the hard place”
The world of Investment Banks has
changed for ever
Recapitalisation
Regulatory Compliance
Collaterisation of trades
Transformation of OTC markets – more
vanilla / lower margins
Ring fencing Retail vs Investment banks
Low interest rates removing volatility from
money markets
More Flow-Business
Punitive fines for failing Controls
“New Normal of Banking”
Meet Regulatory Compliance
Cut Costs + Refocus Business
GFT Group 25-Apr-16 24
Digitalisation : also “between the rock and the hard place”
Technology has changed how customers
engage
Digital 24/7 self service vs face-to-face
Digital payments
New entrants on profitable Business
Banks are slow to disengage from Legacy
Joined-up cross-channel experience
Cut and reposition high street presence
Fight increasing Fraud and Financial-Crime
(KYC, AML)
“New Normal of Banking”
The future is Digital but how quickly can one
transform the present?
GFT Group 25-Apr-16 25
Trends and Solutions
for a rapidly changing
world of Banking?
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Turn Technology from a Constraint to an Advantage
Untangle the spaghetti of IT legacy
Reduce duplication of systems
Modernise technologies
Golden source of Data
Real-time
Straight-through processing – reduce exceptions
Mutualise non-differentiated capabilities (Utilities)
Leverage Ecosystems of Fintechs rather than
compete
Embrace Open Standards
Do it fast!!
“New Normal of IT”
Simplify Architecture, master Data, use open
standards, reduce costs, accelerate change
GFT Group 25-Apr-16 27
New Management Techniques
Lean management techniques
have brought transformation to
Automotive and manufacturing.
IT is going through its industrial
revolution. Same needs, same
solutions: Lean IT.
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Inflection point
Banks are challenged but intrinsically resilient
Investment Banking needs to rapidly readjust by mastering the constraints of IT
All forms of Banking need to digitalise by embracing innovation and new ways to engage with customers using Technology
The Ecosystem is a threat as well as an opportunity
There will be casualties. Mastering Technology will play a key role in successfully building the future of Banking
GFT Group 25-Apr-16 29
Thank you
Philippe Guenet
@WeAreLeanIT