CODE-0 The information contained in this document belongs to Value Partners S.p.A and to the recipient of the document. The information is strictly linked to the oral comments which were made at its presentation, and may only be used by attendees of that presentation. Unauthorized copying, disclosure or distribution of the material in this document is strictly forbidden and may be unlawful. Virtual Currencies And Financial Services Industry Disintermediation 14-15 May, 2014 Future Payments & Digital Banking Conference & Awards
22
Embed
Virtual Currencies And Financial Services Industry ... · 5,000,000 6,000,000 7,000,000 ... •Money lending system between peers, ... “a type of unregulated, digital money, ...
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
CODE-0
The information contained in this document belongs to Value Partners S.p.A and to the recipient of the
document. The information is strictly linked to the oral comments which were made at its presentation, and
may only be used by attendees of that presentation. Unauthorized copying, disclosure or distribution of the
material in this document is strictly forbidden and may be unlawful.
Virtual Currencies And Financial Services Industry Disintermediation
14-15 May, 2014
Future Payments & Digital
Banking Conference & Awards
CODE-1
1
Value Partners: Multinational strategy consultancy
• An international player
Global reach: 10 offices in 8 countries with a global staffing
operating model
• A strong team of professionals
20 partners, >200 professionals, 23 nationalities
• An excellent track record
Constant growth over the last 20 years
• A large and loyal customer base
Over 350 client served in the past three years,
60% of which have been with us for over 8 years
• Leading worldwide Financial Services and TMT (Telecom,
Media, Technology) practices including the former “Spectrum
Strategy Consultants” in London
History in a snapshot
Founded in 1993 by 16 partners and senior consultants from McKinsey & Co. In February 2007, Value Partners acquired Spectrum Strategy
Consultants to further enhance its leadership in the TMT sector. In 2012 Value Partners successfully sold its fully owned IT Consulting
subsidiary, Value Team, to NTT Data (valuation at ~10x EBITDA multiple)
CODE-2
2
Contents
•Emerging business models based on P2P
•Virtual currencies the history so far
•Challenges and future scenarios
For the conditions of use of this document please refer to the front page
CODE-3
3
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
2013 2014 2015 2016 2017 2018
Mobile BB Connections(3G & 4G)
Fixed BB Connections
% of wired broadbandconnections sold as partof bundle
Broadband connectivity is set to further expand as a result of Fixed-Mobile Convergence (FMC) growth
Fixed-mobile broadband connections, global 13-18f (000’s)
Connected device sales, global 13-18f (m)
13-18 CAGR
0
500
1,000
1,500
2,000
2,500
1,185
1,432
+13% 2,044 2,161
1,882
1,669
USA/ Canada
Africa
Americas
Asia Pacific
Europe: Eastern
Europe: Western
Middle East
Source: Ovum, WCIS, Value Partners analysis
CODE-4
4
This is enabling new business models (e.g. crowd-funding, P2P lending, virtual currencies) within the three core areas of banking potentially disrupting the traditional ecosystem
P2P lending
• Money lending system between
peers, without involvement of
financial intermediaries – whole
model is based online through
social media/ exchange platforms
Virtual currency payments
• Payments system using digital
currencies over a P2P network,
usually without the need for a
trusted third party or identification of
the payer and the payee
• Transactions are traceable by all
peers in the system and fully
encrypted
Crowd-funding
• Collection of funds amongst users
registered on an online platform without
involvement of banks
• Funds deposited are invested in
different assets – initial investment
typically low (<£500)
NOT EXHAUSTIVE
CODE-5
5
P2P lending registered significant growth over recent years and expected to keep pace in future
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
(GBP 000s) Money lent on Zopa
Source: Zopa, thefinanser, Value Partners analysis
Cumulative money lent on Zopa, 2006-14 (£, 000s) ILLUSTRATIVE
• P2P ‘social’ lending service launched in
the UK in 2005 and now operating
internationally (e.g. Japan, Italy, USA)
• Model entirely based online (no bank
involvement) – service leverages social
media and user’s word of mouth to
expand user base
• In the UK, Zopa lent almost £500m of
savings to UK borrowers since its
launch, lending ~£200m in the last 12
months
• Average lender returns range from 7-
11% with reported <0.2% defaults
06-14 CAGR
32%
CODE-6
6
Similarly, crowd-funding is expected to grow exponentially especially within the property market
• Centralised hub designed for online investors with the aim of simplifying the crowd-funding
market by hosting different investment opportunities on one platform
• Platform to be launched in upcoming months - reported hundreds of websites/ businesses
listed on platform
• Company specialising in crowd-investing, crowd-lending and crowd-funding
• Initial investment required can be as low as £10 – platform also provides training sessions
to users and possibility to exchange information over main social networking websites
• Over £1.2m invested amongst 6,500 registered investors
• Online platform enabling registered users to self-select different property investment
opportunities and buying shares, with investment from just £500
• As of Feb. 2014, business already raised £170k (in less than 11 days) among initial 109
investors
• Defined as ‘members club’ specialising in crowd-funding, website specialises in property
investments in the UK, also providing investment education and advise to users
• Initial investment required is low and protected from interest rate fluctuations
• Based on company’s targets, reached £1m target fund during first 2 years of operations
NOT EXHAUSTIVE
Source: Company’s websites, crowdsourcing.org, thefinanser, Value Partners analysis
CODE-7
7
Contents
•Emerging business models based on P2P
•Virtual currencies the history so far
•Challenges and future scenarios
For the conditions of use of this document please refer to the front page
CODE-8
8
To understand “virtual currencies” it is key to set a baseline definition
“a type of unregulated, digital money, which is issued and usually controlled by
its developers, and used and accepted among the members of a specific virtual
community“
European Central Bank 2012
"a medium of exchange that operates like a currency in some environments, but
does not have all the attributes of real currency“
US Department of Treasury, 2013
CODE-9
9
Virtual currencies have been long in existence evolving out of loyalty schemes…
Source: Value Partners analysis
1981-’83
Loyalty Schemes
Multi-merchant Schemes
Virtual Currencies
1994-’97 1998
Beenz.com
2003 2009
Bitcoin
2004
World of
Warcraft Gold
.com bubble
2010-ytd
Op
en
ne
ss
Of
Sc
he
me
C
lose
O
pe
n
ILLUSTRATIVE
CODE-10
10
Type 3
Type 2
Type 1
The ECB defines 3 types of virtual currencies based on their interaction with the real economy…
Source: ECB, Value Partners analysis
Virtual Currency Description Examples Real Economy
• No interaction with real economy
• V.C. is only used for buying virtual
goods and services
• V.C. is purchased using real
money at a fixed rate, but cannot
be converted back
• V.C. can be used to buy both
virtual and real goods and
services
Description
Virtual Currency Real Economy
Examples
• Users can buy and sell V.C. using
the real money at a given
exchange rate
• The V.C. is similar to real currency
in terms of interaction with the real
economy
Virtual Currency Real Economy
Description Examples
CODE-11
11
…whereas authorities in different countries are responding in various ways
Nature of the
virtual currency
• A commodity for DNK (formally rejected as a “currency”), FIN, LVA, GBR
• A financial instrument by DEU, SWE
• Scriptural money by LUX
• Not specified for other countries
Taxation
• Reviewed on single case basis by SVN
• Taxable if considered as an electronic service in DNK
• Subject to capital gains tax in FIN, SWE
• Subject to VAT if used in DEU (for purchases of goods and services), NLD
Authorisation to
operate BitCoin
• Required in AUT, DEU, LUX, GBR (on a case by cases basis on discretion of the Bitcoin operator)
• Restricted in RUS (as a for anonymous electronic transfer + businesses involved with Bitcoin are
considered associated with money laundering and terrorism financing)
• Not required in other countries
Competent
authority
• Central bank in: CYP, GRC, BEL, SVK, HRV, DNK, EST, FRA, HUN, LTU, NLD, PRT, DEU, GBR, RUS