Aftershocks and Opportunities –The Future of Financial Services

July 30th, 2020

Sponsor

• Slides for Rohit Talwar, Cliff Moyce, and James Lee

Our Panel

Brett King - Industry Futurist and Entrepreneur, USA

Miranda Mantey - Strategy and Foresight Analyst,

ATB Financial Innovation Lab, Canada

Dr. Stefano L. Tresca — Founder of PurpleHat,

Angel Syndicate for Impact Investing & Financial Inclusion, UK

Elaine Mannix - Global Insurance Sector Leader, UiPath, Ireland

Cliff Moyce - Industry Expert on the Future of Banking,

Insurance, and Private Equity, UK

James H. Lee - Founder, StratFI Investment Advisory, USA

Rohit Talwar - CEO, Fast Future, UK (Moderator)

What’s the New Time Horizon of Our Strategy?

How Viable is Our Version of ‘Invisible’?

Facing The Next Twelve Months

The Pull of the Past vs. The Shock of the New?

Evolution of the

Pandemic

Poorly

Contained

Global

Eradication

Inclusive

Abundance The VIP

Economy

Economic

Recovery

Deep and Prolonged Downturn

Vibrant Economic Rebound

The Long

Goodbye

Safe but

Hungry

Preparing for Multiple Scenarios 2022-2023?

Key Forces Shaping the Future

Preparedness

as a

New Mantra

Learning –

The

Critical

Enabler

Embedding Sustainability – Guided by SDGs?

Role in Learning, Wellbeing, Mental Health?

Nanotechnology /

Atomically Precise

Manufacturing

New Computing

Architectures

Hyperconnected

Internet of People and

Things

Immersivity &

Mixed

Reality Living

Robotics /

Drones /

Autonomy

Brain

Uploading

Cryptocurrencies

& Blockchain

Technology

Healthcare

Transformation

Digital and

Synthetic

Biology

Human

Augmentation

Vertical

FarmingPrecision

Farming

DNA Data Storage

Wireless

Energy

Artificial Intelligence /

Conscious

Technology

Alternative

Energy Sources

Genetic

Medicine

Smart

Dust

Space

Technology

Supersonic

Flight

Hyperloop

Transport

Nuclear

Fusion

3D / 4D

Printing

Shapeshifting

Matter

Food Chain

Transformation

Exponential Science and TechnologyGlobal Innovation Chains – Small Footprint Production

Addressing Digital Dominance?

Bank of America $312 Billion

Boeing$201 Billion

Volkswagen$83 Billion

Walt Disney$168 Billion

21st Century Fox$83 Billion

Hilton Worldwide

$23 Bn.

$1,000,000,000,000

Ford40 Billion

Hershey$20 Bn

Kroger$24 Billion

Tiffany& Co.

Harley-Davidson

Western Union

Foot Locker

XeroxNewsCorp.

QuestDiagnostics

Dr PepperSnapple

Gap

Under Armour

H&RBlock

RalphLauren

E*Trade$16 Billion

Goodyear

Whirlpool

Hasbro

General Mills

$27 Bn

eBay$33 Billion

The Rise of Closed

Ecosystems,

Subscription

Models, and The

New Financial

Services Titans

Acceleration of AI’s Seven Stages – From RPA to Artificial General Intelligence to Singularity

Deep Tokenisation, Everything Becomes Money /

Aggregation and Translation of Loyalty Rewards

Rethinking Our Relationship with Money and

Financial Services

APP World - Choose An Interface Not A Bank

Localisation – My Purchase As My Investment?

User Designed and Customisable Products With

Contracts on Demand E.g. Lexical Labs

Halo InsuranceCoverage for Every Aspect of Our Lives in One Constantly Evolving Policy

Addressing the Great

Dislocation

Financial

Inclusion

What do Those

on the Margins

Want / Need?

Guaranteed

Basic Incomes

and Services

Conclusion - Prepare for Multiple Scenarios

Health, Environment, Scarcity vs Abundance, Humans vs Tech, Trade, Politics /

Economic, Competition vs Collaboration, Business Models, Social Responsibility

Can digital financial services help

raise people out of poverty in

developing countries?

CLIFF MOYCE

JULY 2020

➢ 22 of the worlds 25 poorest countries are in

Africa

➢ 422 million people on less than $1.90 per day

➢ 10 poorest countries in the world are all in

Sub-Saharan Africa (SSA)

➢ 350 million unbanked adults in SSA

➢ weak financial services industry

The problem

Financial services – a partial solution?

➢ “Countries with more developed financial systems achieve higher

economic growth and faster reductions in poverty and income

inequality.” (World Bank, April 29, 2020)

➢ They mean ‘banking the unbanked’

Step 1: what actually works - Microcredit

➢ Social enterprises

➢ Small loans to impoverished

borrowers with no collateral

➢ Grameen Bank in Bangladesh:

• repayment rates of 95%+

• 70% of borrowers escape

extreme poverty within 4 years

(Latifee, 2000)

• 95% of customers are women

➢ But less successful in other

cultures, eg parts of SSA

Step 2 - Microfinance

Traditional banks doing

microcredit ffor profit.

Also ‘banking the unbanked’

model.

Some criticisms (eyes right…) but

some successes.

Step 3 - Financial Inclusion

➢ World Bank saw success of microcredit

and microfinance and started a global,

top-down programme Involving large banks, credit card companies, NGOs,

governments, financial regulators,

philanthropic foundations, educators to

use or own the model.

➢ Still trying to bank the unbanked.

➢ But they didn’t predict…

Digital financial services aka ‘Mobile Money’

➢ Technology to the rescue!

➢ Not predicted. A product of ICT not financial services industry

➢ Uses smartphones to receive, store and transfer electronic money; buy

products & services; make payments; take out loans; and, buy insurance.

➢ No bank account, debit card or credit card required. A pay as you go phone

is all you need.

➢ “M-Pesa (Safaricom and Vodafone) lifted 194,000 households, or 2% of Kenyan

households, out of poverty.” (Suri & Jack, 2016).

➢ But far fewer than 20% of adults have a smartphone in the poorest countries in

SSA

Conclusions

1. Microcredit run by social enterprises works – but in some cultures

better than others

2. Microfinance by banks can also help, with the right approach

3. ‘Mobile-Money’ has worked better than anything else in Africa.

The World Bank was wrong. We don’t need to ‘bank the

unbanked’. Focus on Mobile Money instead?

4. Or should we? Mobile Money doesn’t lend money. That was

most important in Indian sub-continent to encourage commerce.

5. Is focus on phones wrong? We are not as globalised as we think.

Cultures vary.

Finally…

References

Gibson, A. (2016). FSD Kenya: Ten years of a market systems approach in the Kenyan finance market. Last retrieved 30/07/2020

from https://fsdkenya.org/publication/fsd-kenya-ten-years-of-a-market-systems-approach-in-the-kenyan-finance-market/

GPFI (Global Partnership for Financial Inclusion) (2010). G20 Principles for Innovative Financial Inclusion. Last retrieved 30/07/2020

from https://www.gpfi.org/publications/g20-principles-innovative-financial-inclusion-executive-brief

GPFI (Global Partnership for Financial Inclusion) (2016). High level principles for digital financial inclusion. Last retrieved

30/07/2020 from http://www.gpfi.org/news/new-g20-high-level-principles-digital-financial-inclusion

GPFI (Global Partnership for Financial Inclusion) (2017). Baden-Baden G20 Communiqué Commits to Advance Financial

Inclusion. Last retrieved on 30/07/2020 from http://www.gpfi.org/news/baden-baden-g20-communiqu-commits-advance-

financial-inclusion.

Jack, W. and Suri (2016). T. The long-run poverty and gender impacts of mobile money. Last retrieved on 30/07/2020 from

https://science.sciencemag.org/content/354/6317/1288

Latifee, H.I. (2000). Microcredit and poverty reduction; Experiences of Grameen operation in Asia. BRAC Center for

Development Management (BCDM), Rajendrapur, Bangladesh.

Mader, P. (2016). Card Crusaders, Cash Infidels and the Holy Grails of Digital Financial Inclusion. BEHEMOTH A Journal on

Civilisation 2016 Volume 9 Issue No. 2

Pazarbasioglu, C. and Mora, A.G. (2020). Expanding digital financial services can help developing economies cope with crisis

now and boost growth later. Last retrieved 30/07/2020 from https://blogs.worldbank.org/voices/expanding-digital-financial-

services-can-help-developing-economies-cope-crisis-now-and-boost-growth-later

References

Silver, L. & Johnson, C. (2018). Majorities in sub-Saharan Africa own mobile phones, but smartphone adoption is modest. Last retrieved on 30/07/2020 from https://www.pewresearch.org/global/2018/10/09/majorities-in-sub-saharan-africa-own-mobile-phones-but-smartphone-adoption-is-modest/

Stebbins, S. (2020). These are among the 25 poorest countries in the world. USA Today. Last retrieved 30/07/2020 from https://eu.usatoday.com/story/money/2019/07/07/afghanistan-madagascar-malawi-poorest-countries-in-the-world/39636131/

United Nations (2020). About the Sustainable Development Goals. Last retrieved on30/07/20202 from https://www.un.org/sustainabledevelopment/sustainable-development-goals/

United Nations (2018). Financing for Development: Progress and Prospects 2018 – Report of the Inter-Agency Task Force on Financing for Development. New York: United Nations. Last retrieved on 30/07/2020 from https://www.un.org/development/desa/publications/financing-for-development-progress-and-prospects-2018.html

World Bank (2018). Financial Inclusion: Financial inclusion is a key enabler to reducing poverty and boosting prosperity. Last retrieved 30/07/2020 from https://www.worldbank.org/en/topic/financialinclusion/overview

Wyche, S., Simiyu, N., and Othieno, M. (2016). Mobile phones as amplifiers of social inequality among rural Kenyan women. ACM Transactions on Computer-Human Interaction. 23 (3): 14. doi:10.1145/2911982.

Yunus, M. A (2012). A history of microfinance. TEDxVienna. Last retrieved 30/07/2020 from https://www.youtube.com/watch?v=6UCuWxWiMaQ

AFTERSHOCKS AND OPPORTUNITIES

THE FUTURE OF ASSET MANAGEMENT

JULY 30, 2020

James H. Lee, CFA, CMT, CFP®

Founder, StratFI

TOP 10 ASSET FLOWS GOING TO 3 ETF PROVIDERS

TOP ETFS’ CORRELATION MATRIX

(Stocks, Bonds, Gold, Small Caps, and Junk -- Everything Moves Together)

Source: Morningstar

ROBO-ADVISOR PORTFOLIO PERFORMANCE THRU Q1 2020

1-Yr Trailing

Returns (%)

3-Yr Trailing

Average Returns (%)

Betterment -8.8 0.7

Schwab -10.2 -0.3

TD Ameritrade -6.8 2.0

Vanguard -6.4 2.03

Wealthfront -9.4 1.2

• Average for taxable accounts, normalized returns (net of fees)

• Source: The Robo Report

LET’S DO SOMETHING DIFFERENT

From inception November 30, 2015 through June 30, 2020. Actual performance, net of fees. Dividends and gains reinvested. Past performance is no guarantee of future

results. Please refer to the Disclosures for additional information. For professional use only. Data source: Morningstar

StratFI Decaffeinated

Market Timing

StratFI Caffeinated

Market Timing

IS CRYPTO WINTER IS OVER?

Ytd. performance thru 7/30/2020

Source: Cryptorank.io

DECENTRALIZED FINANCE IS A WHOLE NEW ECOSYSTEM…

▪Store of Value

▪Global Payments (Bank Wires vs. Crypto Transfers)

▪Currency Exchange (Uniswap)

▪Lending and Borrowing (BlockFi, Compound)

▪Futures Contracts (Synthetix)

▪Venture Funding (ICO)

▪Micropayments

▪Smart Contracts (Ethereum, Cardano, Tezos, EOS)

DISCLOSURES

Important InformationFor Professional Use Only. Not for Distribution to the Public.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

Strategic Foresight Investments LLC (“StratFI”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where StratFI and its representatives are properly licensed or exempt from licensure.

Risk DisclosureNo investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment.

All investments include a risk of loss that clients should be prepared to bear. The principal risks of StratFI strategies are disclosed in the publicly available Form ADV Part 2A.

Market timing may be used in an effort to manage risk and enhance returns. It does not, however, guarantee a profit or protect against loss.

Performance DisclosurePast performance shown is not indicative of future results, which could differ substantially.

Presentation and Q&A with

Rohit Talwar

Wednesday August 12th, 2020

18.00-19.30 UK

19.00-20.30 CET

13.00-14.30 ET

www.fastfuture.com/events

Fast Future Keynote Theatre: Navigating Deep Disruption

Presentation and Q&A with

Jenny Kleeman

Thursday August 20th, 2020

18.00-19.30 UK

19.00-20.30 CET

13.00-14.30 ET

www.fastfuture.com/events

Fast Future Keynote Theatre: Sex Robots & Vegan Meat