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Willem Schellekens, Co-founder of the ING Innovation StudioJohan Löfmark, Partner Digital at Tata Consultancy ServicesDagens Industri FinTech Event; Stockholm, Sweden; 29 September 2016

Mastering Open Banking in the Emerging Experience Economy

#DIFinTech

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Nordics have been a pioneer in digitalizing financial services

Cost per financial

transaction world leading

Emerging towards a cashless society

Adoption, penetration

and interactions

through mobile

services highest in

world

First in world with broad adoption of

online banking

Over 99% of banking

interactions in digital channels

Digitalized customer behaviors

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Business Change CentricDigitalizing the BusinessLead KPI: Business Growth

But, we have just started our digitalization journey

Customer CentricDigitalizing the ExperienceLead KPI: Net Promoter Scores

Transaction CentricDigitalizing business processesLead KPI: Cost per transaction

DEGREE OF DISRUPTION

PAST

• Online banking• Digital Payments• Credit Cards• ATM’s• n.

• Omnichannel• Mobile channel• Personalization• Realtime• Rightselling• Digital Advice (&PFM)• n.

• Dissemination of digital in the Enterprise, Culture and Innovation• New Business and Revenue Models• New digital Products and Services• Externalization of Services• Ecosystem Collaboration• 100% STP in Realtime

BANKS FINTECHTHE GAP & THEME OF TODAYS CONFERENCE

FUTUREDigital 1.0

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Digital is once again identified as core to Financial Services industry

62

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Source: TCS Analyst Team. Please note that titles most likely has no linkage to strategy or likehood to generate results. Some similar titles have been included. Data not inteded for business decisions.

Number of people with title ”Chief Digital Officer” (CDO) in Swedish Financial Services (incl. insurance) Industry

#

t.20162015

HIGH LEVEL INDICATIVE ANALYSIS

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Most Nordic Banks embarked on (second) aggressive digitalization journey

ILLUSTRATIVE ”DIGITAL” TCS ENGAGMENTS IN NORDIC BANKING SECTOR; 2016

Front End transformation

program100% Mobile

BankRobotics Process

Automation

Next Wave (Mobile)

PaymentsDigital Floor &

Digital Lab

APIfication Architecture(including PSD2

preparation)

GDPR &

Customer 360 Big Data

100% E2E STP Chatbot Banking

Digital Workplace

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In theory incumbents are in the inner track of tomorrow

Banks Valuable Assets:Customer relationshipsCustomer dataBalance sheet strengthLegislation know-howTalents....what more?

FinTech Challenges:Regulation, Privacy, SecurityNo operational backboneScalingUntested in periods of high interest rates, increased risk and reduced investment

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But: always the great firms that fail with introduction of new technologies

Incremental Business ChangeChange Logarithmic

Progression of TechnologyChange Exponentially

Digital Business Transformation

t. Prof Clayton M. Christensen

Enterprise 2.0

CrowdsourcingSharing economy

Industrial Internet, Internet of Things, Machine2Machine

Telematics & Self Driving Cars

Automation of knowledge work

3D printers (&scanners)

Smart/Connected Home

Wearables

Cryptocurrencies

Artificial IntelligenceRobotics & Drones

Pervasive Analytics

API’s

Co-Creation

Platform ThinkingVideo Analysis n.

The person behind the disruptive innovations and technologies theory

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It’s a new marketplace; driven by dematerialization of the bank

We have always (proudly) provided Customer with a complete and fully integrated value proposition

...but we are rearly able to provide solutions to the needs of everything for everyone

API-fication

Ecosystem Maturity•Digital exponentionally reducing cost of integration•Realtime self assembling & organizing of People, Process & Systems•Legislation accelerating (PSD2)

Dematerialization Key Drivers:

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Dematerialization will create bank banking platforms

BANKING

Own products & services

Other products & services

Startups

External Marketplaces

Other Financial Services Firms

The worlds largest accommodation provider owns no real estate

The worlds largest taxi company owns no vehicles

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This digitalization ambition includes exploring Fintech

Acquisitions

Own Venture Capital funds

•SBAB acquiring Booli.se•Nordnet acquiring ShareVille•etc...

Buy minority stakes

•SEB investing in Tink•Nordea investing in Wrapp•etc...

•Collector Ventures•Nordnet Ventures•etc...

Incumbent going FinTech

•Handelsbanken Finans -> Ecster•DNB -> Vipps•etc...

Collaborate•Ålandsbanken & Dreams•Swedbank & Sprinklebit•etc...

Now feel the heat 1 degree at a time as FinTech started to target the profitable segments in marketplace

Source: McKinsey Panorama; FinTech Database - Global

Illustrative Responses by established actors

Startup Accelerators

• Nordea Startup Accelerator•STING Fintech (SEB a partner)•etc...

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...but we to often tend to have an inside-out apporach

Great Track record of FinTech in

Sweden etc.

Illustrative Global FinTech Actors

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The needed outside-in perspective; customer at the epicenter

Great Track record of FinTech in

Sweden etc.

Illustrative Global FinTech Actors

Thank You

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