TREND SPOTTING IN ISSUING SERVICES AND SOLUTIONS 5 th November 2015, Nets Day Sweden Sakari Olli, Head of issuing customer deliveries and solutions
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TREND SPOTTING IN ISSUING SERVICES AND SOLUTIONS
5th November 2015, Nets Day Sweden
Sakari Olli, Head of issuing customer deliveries and solutions
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To remain competitive – banks need to address
some key market forces
Future
payments
ALTERNATIVE
PAYMENTS
NEW
CONSUMERS
CLOUD/APIs MOBILE
PAYMENTS
RACE FOR
POSITIONING ANALYTICS
INTERNET OF
THINGS
REGULATION TOKENISATION
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New digital customers have
different expectations
NEW
CONSUMERS
MILLENNIALS
1980-2000
DIGITAL NATIVES
POST 2000
Exponential increase of payment
methods
Physical Online Mobile
2003 2009
2000
2007
2003
2005
1950 1960 1980 2020 1970 1990 2000
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26
76
54
23
37
5
19
26
28
11
13
34
5 4 12
5
4 4 12
0 %
50 %
100 %
SWEDEN DENMARK NORWAY FINLAND
CARDS
INVOICE
DIRECT VIA BANK
PAYPAL OR SIMILAR
OTHER
Source: Nets Research Q2 2014
Preferred payment
methods when
paying for online
purchases
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Crypto-currencies are growing, but the
underlying blockchain platform is more relevant
2.4
00
23
.00
0 6
6.0
00
10
0.0
00
jan. 13 jan. 14 jul. 14 Dec. 2014
BITCOIN MERCHANT GROWTH
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from the selected Nets colours New aggressive players in payments
domain
*) Source: Fast Company in 2013, 2014, 2015 **) Source: The Reputation Institute annual reports in 2012, 2013, 2014
Paypal, Amazon and Google dominate e-commerce
Western Union, MoneyGram, Xoom (PayPal), Vodafone, Orange dominate
global remittance
Top 50 Innovators’ list does not show a single bank*
Top 50 reputed companies’ list does not show a single bank**
Player managing max. number of payment accounts is not a bank
>70% of PE investments in European payments are going to non-bankers
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Mobile is catching up the digital
volumes
Mobile transactions growing:
90% every year
1,000 new users / day
Manual transactions decreased by
19%
Source: Annual report of Nordea Bank 2014
In 2014, the amount of mobile logons
was 263 millions, quickly catching up
the mature Netbank logons (352
millions)
Transactions
Branches vs mobile
millions/quarter
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Mobile payments will make up to 60%
of total transaction volume in 2020
SOURCE: Bain & Nets
4
5
6
7
8
9
10
TR
AN
SA
CT
ION
S,
BIL
LIO
N
MOBILE
TRADITIONAL TRX.
AT LEAST 3.7BN TRANSACTIONS OUT OF
PROJECTED 9.3BN TRANSACTIONS
IN 2020 WILL BE MOBILE
-Vipps
-MobilePay
-mCash
-MeaWallet
- iZettle
-Klarna
-Payex
Mobile
-Pivo
-Elisa Payments
-DNA Payments
- iZettle
-Klarna
-MobilePay
-Swish
-WyWallet
- ICA Contactless
-Klarna
- iZettle
-SeQR
-MasterPass
online wallet
-PayAir
-PayPal NFC
trials
-MobilePay
-Swipp/Paii
- iZettle
-Klarna
-Beeptify
-MeeWallet
-EMT wallet
- ”E-stonia”
- Id
-Voting
-Etc.
Lots of mobile initiatives on the market
Disruptors will continue
to transform the
payment landscape
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colours Opportunity or Threat?
TOKENISATION
SUPPORT FOR NEW
CHANNELS
NEW
ROLES
REDUCES
FRAUD
DATA
SECURITY
ADDRESS
MERCHANT PAINS
BOOST
E-COMMERCE
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New regulations are driving innovations
– Compliance view is not enough
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9 24
48 61
82
159
2007 2008 2009 2010 2011 2012 2013
3 4
8
2012 2013 2014
APIs as the key drivers of innovations
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colours Rise of Open APIs in payments
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Open APIs in financial services and
individual customer experience
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Using data to ….
move from payments to advice
Analytics report Each payment transaction leaves
a footprint
Trends/ predictive analytics, anti-fraud, segment-spend trend, advisory …
are some examples that the market is ready to pay
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Using data to ….
offer value-added services for issuers
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Internet of Things Emergence of a new payment segment
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Top-down view
Consolidation to six key trends
• Agile technologies, partnerships and alliances allow banks/non-bank
attackers to lower cost base and more flexible (e.g. time to market)
• Standardisation and lower market entry barriers
• Transaction margin compression
• Battle to secure liquidity
• Digitisation of commerce and alternative payments (e.g. mobile)
• Increased role of digital ecosystems
• Influence of advanced analytics
• Digital attackers, some with business models beyond payments
• Banks moving fast to defend position
• Consumers expect fast, convenient, safe and personalised solutions
• Merchants explore new ways of commerce
• Combination of infrastructure services with data and other services
creates new revenue potential
• Continuous upgrade of security features (e.g. tokenisation)
Growing
regulatory
intervention
New technological
innovations
Increased
competition
Changing
customer
expectations
Growing role of
secure
infrastructures
New cost
paradigm
A
B
C
D
F
G
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Impact and relevance to
our Nets Business Units…
Merchant
Services
Card
Services
Payments
Services
Domestic
card
scheme
Services
Clearing
Services
eSecurity
Services
Digitis. &
Inform.
Services
Growing
regulatory
intervention
New technological
innovations
Increased
competition
Changing
customer
expectations
Growing role of
infrastructures
New cost
paradigm
Highly relevant Partially relevant
A
B
C
D
E
F
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colours So what is Nets doing?
TOKENISATION
MULTI-CHANNEL
E-COMMERCE
PLATFORMS
BUSINESS
ANALYTICS
OPEN APIs FOR
ISSUING SERVICES
MOBILE WALLETS
Major investments to support our customers success
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Sakari Olli Card Services +358 50 363 66 38 [email protected]
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