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Digital transformation
Frank Schwab, January 2017
German banking industry
Year 2000
2002 2015
ING*DiBa benefits from 1st digital wave
Customers
1.8 millions
8.5 millionsProfits
-4 millions EUR
1,115 millions EUREmployees
914
3.749
FrankSchwabSpeaks.com Source: annual reports ING*DiBa
ING*DiBa – 10x business volume
2002 2015
Deposits in billion EUR
19.2
121.1
Loans in billion EUR
4.6
98.0
2002 2015FrankSchwabSpeaks.com Source: annual reports ING*DiBa
PayPal 2x Deutsche BankMarket cap, Nov 2016 [in billion EUR]
17
Deutsche Bank
44
PayPal
Deutsche Bank PayPal
Customers 25,000,000 169,000,000
APIs 0 > 25
Employees 100,000 8,000
1st Welle
But
No
Business model
2017
IBM Mainframe
Sun Server
Intel blade
Thin clients
Fat clients
AIX Server Server Farm
Investmentneeds
No interest rate business
Profits
RolandBergerFinTech Study,March2016
Alipay
2015
289millionsmobileuser/month
8.5millionsmerchants
52 ordersperuserperyear
24,000employees
> 400 FinTechs
Crowd
1 million EUR in 9 minutes and 23 seconds
Fidor: Facebook Like Interest Rate
Peer to peer
Crypto
642 currencies
703 exchanges
10 %-8
Blockchain
Blockchain
time
Public register
Transaction blocks
Smart ContractsPublic register Transaction block with
conditions
Condition
Example
Shares: dividend payment
Smart Contracts – Example car finance
AI^
Amelia, Source: IPSoft
IT Service Desk Agent
SEB Bank
3 weeks
700 employees
4,000 calls
Roboadvisory
Over rated
Gartner Hype Cycle
Over rated
Under rated
Gartner Hype Cycle
Mobile
Proceses
100% STP
< 60 seconds
Cloud
API
Plattform
All just hype?
36
BPO; 396 Insurance; 1.515
FinHCIT; 2.087
FinMgmtSol; 4.173
IB / Wealth; 4.702
Banking/Lending; 9.296
Payments/Ecommerce; 13.543
36 billions USD in FinTech investments in 2016
[in million USD]
1.525 transactions
337
432
293
186
14110531
FrankSchwabSpeaks.com Source: Financial Technology Partners
D.A.CH FinTech scene overtook the UK - with over $1,3B investments (VC + venture debt) in 2015
2.50%
13.9%
150%
Bank
ing%
9.40%20% 0,7% 5.5%2%
Lend
ing%
358% 1% 0.5%
10% 20% 14.20% 5% 230%
49.8% 0.5%
Insurance%
1% 3.5% 7%
Investmen
t%
5.5% 10% 0.27% 2% 4%
0.6% 1.6%Blockchain%/%Other%
*%Source:%%TechFluence%
Paym
ent%
150%
Chart shows funding in € mn. Estimates based on disclosed deals only- no liability for errors.
Customer
paymentsSecurities
Loans
Deposits
PayPal further develops its business step by step
2000 2006 2010 2015
Online payments
P2P
Account
CardsLoans
POSCash
FrankSchwabSpeaks.com Source: annual reports PayPal
IT defines retail banking of the future
= new KPIs
IT costs per user per year in USD200
Tier 1/2 Bank eBay
7,4
3,8
3,4
FinTech
10
FrankSchwabSpeaks.com Source: annual reports
Customer acquisition costs in EUR50 - 200
Traditional banks FinTech
5 - 25
What do German banks
do?
CommerzbankStartup-Garage
Comdirect
Venture Capital
CommerzVentures
Main Incubator
Commerzbank
UniCredit / HVB
45 millions EUR invested in 2016
DZ Bank / German union banks: Hackathon, March 2016
Source: https://twitter.com/dzbank/status/705424223838146560/photo/1?ref_src=twsrc%5Etfw
Quo vadis?
2030
Loans
Assets
Payments
Banking Services
R I P
New banking products build on new technologies
Crowd P2P Crypto
Cloud API
^
AI MobileBlockchain Plattform
FrankSchwabSpeaks.com
Diffusion of innovation
Longer than we think
Fasterthan we
think
time
diffusion
Banking disruptedNew
Traditional
Ban
king
Ser
vice
NewTechnologyLegacy
Niche
Financial infrastructure provider
ErSuccessfuldisruptors
FrankSchwabSpeaks.com
German retail banking 2030
2015 2030
Saving banksPrivate banks Union banks FinTechs Non Banks
FrankSchwabSpeaks.com
