Digital Banking 2030
FELABANNovember 7, 2016
Guillermo Kopp
Worldwide Financial Services Industry Director
Digital is driving massive demand for transformation in financial services
2
MANAGING THE REALITIES OF RISK,
REGULATION, LEGACY SYSTEMS, AND
COST PRESSURES
DELIVERING INNOVATIVE CUSTOMER
AND EMPLOYEE EXPERIENCES WITH
SPEED AND AGILITYIT budgetsare currently required to keep the
lights on (Source: Celent)
(Source: Capgemini)
50%of Gen Y
>15%customers
>
(Source: The New Yorker,
May 16, 2016)
FINANCIAL
COMPANIES
ACCOUNTING FOR
US CORPORATE PROFITS
LIKELY TO LEAVE THEIR
BANK IN THE NEXT
SIX MONTHS
Top reasons:
Ease of use and service
Paid in bank fines since 2009
(Source: Morgan Stanley)
$280B
~70% of
17%30%
Before
2009 By 2015
80% of bank customers prioritize online
and mobile functionality
(Source: Wall Street Journal
June 3, 2016)
80% of customers would
switch to a insurer that provided
personalized service
(Source: Accenture)
Driving Digital Transformation in Financial Services
Threats perceived by
financial institutions
TECH
COMPANIES
STARTUPS
TELCOS
RETAILERS
BANKINGLOANS & CREDIT
INSURANCE
INVESTING AND
RETIREMENT
WEALTH
MANAGEMENT
Source: EFMA-Infosys Feb 2015 Digital Banking Report
BLOCKCHAIN
“There are hundreds of
startups with lots of
brains and money
working on various
alternatives to traditional
banking.“Jaime Dimon, CEO, JP Morgan Chase
2/3 of
customers
globallyAre using FinTech
product or services.
Bankers underestimate
the impact of FinTech
firms on their customers.
Traditional banking customers seek
more personal or
tailored solutions…and are happy to consider
alternatives to traditional banks.
(Source: Gartner)
44%of banks report that
improving user
experience is their
top priority2
Consumer expectations are being shaped by customer experience leaders outside of banking
1. 2016 Capgemini world banking report, April 2016
2. Derek Corcoran, Digital Business Banking Trends in 2016, Avoka, March 31, 2016
Digital transformation is essential to sustaining a competitive advantage
5
ENGAGE YOUR
CUSTOMERS
with compelling
experiences across
all channels
EMPOWER YOUR
EMPLOYEES
to drive customer
intimacy and be
digitally astute
OPTIMIZE YOUR
OPERATIONS
for efficiency,
compliance and
risk management
TRANSFORM
YOUR PRODUCTS
to unlock new
revenue opportunities
and achieve growth
Bu
sin
ess
Ag
ilit
y
Cost Take Out
Risk Compute
Core Systems
Storage & Back-up
Dev/TestCloud Platform
Production Cloud Infrastructure
Productivity Applications
>80% of new apps
in the next 5 years will be
distributed/deployed on
clouds
from infrastructure to application platforms
The strategic focus in the cloudwill shift
34% of CIOs say technology
as a service (cloud) will
have the most profound
effect on the CIO role in
the futureBusiness IT
Mobility
Digital Marketing
Big Data/ Machine Learning
Internet of Things/Devices
Blockchain as a Service
Market Data/Analytics
Blockchain is a secure, shared, distributed ledger
Secure
Distributed
Ledger
Standby Letter of Credit (SBLC) - Current State Overview
Microoft
Treasury
Agrees to Buy
Requests SBLC
Provides SBLC
Terms
Accept Terms and
Provide Issuing Bank
Details
Validates and Approves
Issuing Bank
Submits ApplicationSends SBLC
Sends SBLC
Reviews SBLC
for Treasury
Processing
Tracks security to expiration date so
long as customer maintains
payment schedule. If customer
defaults, pursues claim with
Advising Bank.
Initial
Contract
Negotiation
Initial Contract Negotiation
Inform Advising
Bank in case of
Customer default
Amendment Negotiation
Amendment
Negotiation Forwards
Amendments
Resends SBLC
Reviews SBLC
Again for
Treasury
Processing
SBLC New Process Flow - Distributed Ledger
1. Applicant agrees to transact with Beneficiary via SBLC
5. SBLC activated with expiration date; transaction complete
2. Applicant submits SBLC request to the ledger
3. Applicant bank issues SBLC
4. Beneficiary bank reviews and advises SBLC
Blockchain-enabled Digital Transformation - Benefits
Improves process speed, efficiency and effectiveness
Shifts operating model from transactional to relationship driven
Enhances multi-party transparency
Lowers adoption barriers
Together, with a growing number of partners, we have developed an open ecosystem in a secure environment supported by Azure.
Azure
More partners every day!