Presentation of Arthur D.

Little Capabilities on
Financial Services
Focus on Banking & Omnichannel Digitalization
September, 2016
Agenda

 Introduction to Arthur D. Little – Financial Services Practice

 Digitalization in Financial Services

 New Opportunities in Financial Services

2
 An introduction to Arthur D. Little

Arthur D. Little: At the forefront of innovation – the world's first

Management Consultancy

Innovating business – since 1886

Today we are the only premier global management consulting firm with a 125
year track record. Founded as a technology consultancy, throughout our history
we have contributed to numerous ground breaking innovations.

Linking strategy, and transformation

We are acknowledged as a thought leader in linking strategy and innovation. We
consistently develop next generation solutions that transform your business to a
new normal.

Working uniquely, different

Our people and their side-by-sideTM approach integrate cross-sector knowledge
and next level thinking seamlessly into your business.
How we work is innovative, what we deliver is positive change.

3
 References

Arthur D. Little combines worldwide reach and local presence

Zurich Amsterdam
Vienna Beijing
Tokyo Beirut
Stockholm Bogota
Singapore Boston
Shanghai Brussels
Seoul Buenos Aires
Sao Paulo Cambridge
San Francisco Dubai
Rome Frankfurt
Riyadh Gothenburg
Prague Hong Kong
Portugal Houston
Paris Istanbul
Oslo Kuala Lumpur
New Jersey London
New Delhi Madrid
Munich Milan

Source: Arthur D. Little

4
 The New Era of Innovation and Creativity

The confluence of global trends is creating unprecedented challenges and

opportunities
Global trends

Scarcity and stability of

Rise of emerging economies
resources

Urbanization and
Social & demographic shifts
integrated mobility

New health & wellbeing The New Era of

Digital revolution
demands
Innovation for
Business! Fast changing business
Hyper-competition
ecosystems

New customer power Disruptive technological

and sophistication advances

Business trends

5
 Our Motto

Arthur D. Little has a particular profile for linking strategy, innovation and
transformation
1. Anticipate! 2. Innovate! 3.Transform!

UNDERSTAND
future trends, changes in BUILD SHAPE
ecosystems and cross- innovation capabilities, ecosystems and your
industry dynamics along creative solutions & business company
value chains models continuously

 DNA for technology
assessment
 Joint expert teams from
different ecosystems
 Broad industry network
 Over 100 years experience in
innovation as a service
 Large track record in
technology-to-business
projects
 Unique access to startup
companies
 Disruption as a service

Source: Arthur D. Little

6
 Our Values

The Arthur D. Little value system is geared to delivering tangible results

Innovation
Client first & thought
Delivering value for leadership
the client is priority Value Indepen-
number one We live and breathe
driven innovation dence
We deliver
quantifiable top-line Integrity Our only vested Practical &
interest is in our
Quality and/or bottom-line & ethics clients’ success implemen-
impact
We go the extra mile
table
We live according to
to always exceed Team the highest Personal Recommendations
clients’ expectations standards of
work professional conduct
growth grounded in
reality
We work closely The skills, intelligence
together with and creativity of
each other and the people are our
with our clients key assets

Source: Arthur D. Little Values

7
 Our Offering

Our banking experience focuses on six areas that face most of the major
challenges for banks in the coming years
“Innovating Business”
1 2 3 4 5 6
Design
Growth Omnichannel Customer Operational
innovating Digitalization
strategies development management efficiency
businesses
Increase the Differentiated Operational
Develop innovative Dynamic commercial Digital transformation
performance of the customer management improvement in key of banking
business models activities & loyalty
market models elements

 Commercial  Innovation in  Building  Client segmentation  Building Agile  Integration of online

strategy and products – e.g. loans, Omnichannel capabilities & mobile channels
 Customer cycle
integrated business accounts, insurance strategies and management  Lean banking  e-transaction & e-
models capabilities sale
 Distribution models  Capabilities in  Review and improve
 Development of digital / traditional  Align commercial loyalty & retention SLA – perceived and  Digital-able
offered quality products
Joint Ventures and channels offering to  Differential value
alliances in new segment/channel proposition per  Organizational  Streamlining of
 Develop segment redesign – shared processes
business areas organizational  Redesign customer centers,
 Client oriented optimization  Digitalization of
 Increased capabilities for interface to segment organizations (Data banking partners
penetration – innovation & channels mining, structure,  IT development –
integration and  Workspace 2.0
Upselling & cross  Prioritize initiatives  Organization of etc. )
selling strategies – architecture  Cloud (NFD/SDN)
based on upstream customer interfaces  Predictive modeling data processing
e.g. life cycle innovation activity solutions
management

Growth & innovation Management improvement Operational transformation

Source: Arthur D. Little

8
 Our Referencies

In the Financial Services Industry, Arthur D. Little serves key players

across the entire value chain Selected Examples

Asset/ Wealth
Retail Banking/ Financial Services Cards/ Payments/
Insurance Management/
Corporate Banking and Leasing Stock Exchanges
Private Equity

Financial Services

Source: Arthur D. Little

9
Agenda

 Introduction to Arthur D. Little – Financial Services Practice

 Digitalization in Financial Services

 New Opportunities in Financial Services

10
 Digitalization in Financial Services

External and internal disruptions are incrementing the digitalization

impact in financial companies increasing the pressure for digitalization
Disruptions around digitalization
 Clients are eager to break to the status-quo of banks and sole providers of Financial Services
As Clients require - 33% of millennials believe they will not need a bank in the future and 73% prefer a provider
their Financial that is a digital start-ups
Services Company
to be Digital …  Not only restricted to millennials, over 80% of the population in either digital native or
transformed in Europe¹

… Financial Services  According to our Digital Transformation study, one quarter of Financial Services Companies
Companies are are already digitally adapted or centric
rapidly transforming  Companies are heavily investing in Digitalization and transforming their business and
digitally … operations to become digital

… with an added  Over one hundred annual fintech operations² – some of them as part of Bank Integrations
threat of Fintech  All bank business lines are threated by Fintech initiatives – starting from payments and ending
solutions … with equity Finance
… plus regulatory
pressure to become  New regulation: PSD21 requires banks to provide TPPs2 with access to customer data,
open and balance check and payment initiation services through TPP
transparent
Source: Arthur D. Little Note: (1) EU-28 in 2015, (2) > 1M$

11
 Digitalization in Financial Services

All bank business lines are threatened by Fintech initiatives, starting from
transactional operations and extending to core financial operations _
Financial sector – Non exhaustive
+

Threat of non-banking competitors _

Transactional solutions Financial Solutions
Intern. Working
P2P Retail Personal Equity Retail Transaction
Payments online PFM Insurance Capital
transfers banking /SME loans Finance Investment banking Finance
transfers
Mobile P2P Lending Crowd- Portfolio Supplier
payments & funding investment management
Wallets
10%
Fintech servicers

Personal /SME
loans

Online
payments Trading
Invoicing
10%
Short-term
credit

Mobile POS
systems

17% >2% 1.1% 0.3%

Source: Datafox, Statista, Adyen, Crunchbase, Forbes, company’s corporate web, Arthur D. Little analysis
% % of penetration in annual transaction value of Fintech providers for the solution or service in the UK (2016)
12
 Digitalization in Financial Services

Considering the revolution on Financial Services and the desired change

by customers, Banks have a great position to lead this transformation
“Mobile First” for Banking
Accelerate & innovate
Branch Telephone Desktop Mobile
UK example
2010 41 % 7% 46 % 7 % 1.238
Considering current footprint in
Financial Services and dominating
position in the region, there is an
2015 20 % 4 % 34 % 43 % 2.101
opportunity to accelerate & innovate
73% of Millennials
prefer Financial
service offering to reach the established
2020 8 % 16 % 73 % 3.201 Services from Digital objectives
Start-ups but only
about 1% of USA
consumer banking
New Banking revolution revenue has been Expand footprint
disrupted by fintech
Investments in FinTech ($B) 73% of this investment focusing players
on the personal and SMEs – Beyond the current offering, there are
+60% strong focus on branchless additional areas where banks could
banks & Loans expand in the value chain and/or offer
19,0 integrated services (e.g. Financial
1,8 Marketplace)

2010 2015
Source: Arthur D. Little, Viacom, The Financial Brand Notes: (1) Based on the Convergence of Banking & Telecoms Arthur D. Little ViewPoint

13
 Digitalization in Financial Services

PSD21 requires banks to provide TPPs2 with access to customer data, balance
check and payment initiation services through TPP
Options for Retail Banking under an Open Ecosystem
Current Future?
Comply with TPPs and
Aggregators of banking and
Customers assure that own services are
insurance providing better

Variety of models and change required

excellent
services
Leverage services as a TPP
and be the front office for
not our clients but others Leverage Internal APIs
TPP capabilities to offer to third
Develop new services parties (i.e. AWS)
beyond required banking to
improve experience
Bank front Third parties get access to
API (i.e. other Become a marketplace for
services existing customer data and
banks, Fintechs) best services and products
Internet/Mobile with open Back Offices distribution via the app store

Source: Arthur D. Little, ABN AMRO Innovation Centre

Note: (1) PSD 2 is the European regulation called Directive on Payment Services that will become effective in 2018
(2) Clients have to opt in and authorize a Licensed Third Parties (e.g. TPP) 14
 Digitalization in Financial Services

The basis for our approach is Arthur D. Little’s “Digital Transformation”

Framework
Arthur D. Little’s Digital Transformation Framework
Business
Model Customer Pull
(“Digital First Individual”)
Market Products
Approach & Services
Customer
Experience

Digital Capability Technology Push

Digitalized Value Chain/ Processes
Layer
Data: Integration & Analytics

Partnerships & Innovation Management

Management
Layer
Leadership & Management capabilities

Source: Arthur D. Little

15
 Digitalization in Financial Services

However, it is essential to link digital strategies to business objectives -

Digital plans should have a tangible impact on …
… increasing revenues... … improving productivity … … developing digital
capabilities…
Transfer operations from traditional
New digital products & services or Developing a digital marketing
to digital channels – close and refocus
new business models (Fintech) strategy, i.e, SEO, SEM, re-targeting
brick-and-mortar networks

Digitalization of intermediaries Improving IT agility, i.e. time to

Acquisition of new customers
(agents, brokers, …) and operations’ market, to address digital
through digital channels
providers (maintenance crews) transformation

Increasing ‘share of customer’ New data management to generate

Digitalization of salesforce operation,
through cross-selling (digital competitive insights with real time
i.e. salesforce mobility
information and channels) capabilities

Improving customer loyalty and Digitalization of end-to-end processes New management capabilities for
service, through digital interaction to i.e. claims management with Straight digital transformation and new digital
reduce churn Through Processing culture

… or creating new value

Acquisition of companies in the Digital World to absorb knowledge and sell them for a profit

Partnership and innovation management for innovative approaches

Source: Arthur D. Little analysis

16
 Digitalization in Financial Services

As such, the impact of digitalization must create economic value for the
Bank Project example

Four-year impact assessment of the digital initiatives – Example in Financial Services

Values on base 100 with respect to initial margin

125%
8-14%
100%
90% 25-29%
10%
Transferring
Margin erosion due Increased revenue customers &
to increased due to new intermediaries to
transparency and products & services digital, improved
competition - Thus, and improved CEx FO-BO operations1
lower prices and cross-selling

Current Online increased “As is” gross Growth in revenues, Cost reduction Final margin
gross margin transparency in margin customers contribution with
contribution the market contribution digitalization
strategy
Type of impact

Source: Arthur D. Little experience Notes: 1) Others, such as reduced IT cost due to Agile Transformation are not considered

17
 Digitalization in Financial Services

Based on accepted information, Banks need to follow a digital dashboard

Project example

Example of Digital Dashboard – Objectives, Areas of Development and KPIs

evelop new digital products and
 New positioning of current products on digital ecosystem  % de revenues from new products & services or new
D services – financial or non  Launch new digital products/services (e.g. value data, e-store) digital related business models
financial related
 Offering of new products to current customers using digital  Number of sales of digital clients over total digital
ncentivize cross sell to digital
I clients
interactions – mobile or banking site clients2
 Development of digital tools to improve cross sell3  CSI4 digital vs non digital clients

 Acquire clients with digital means – Digital sales force or

G enerate new digital clients web  Number of new digital clients acquired
 Digital tools (only mobile bank) for specific profiles

mage: Positioning of the Bank as  Digital solutions to increase the awareness of the bank digital  Level of recognition as a digital bank
I a digital leader
offering – products, tools, services, channels, etc.  “engagement” level in social networks
 Digital Marketing – SEO, SEM, RTB¹  Web visits, rankings or Apps usage

 Migration of operations to digital channels with new or  % of operations performed in digital channels and
ransfer Front Office operations
T to digital channels
improved functionalities penetration of digital clients
 Promote digital self-service (gamification)  Operational savings through digital interac.

 Automatic operations in Back Office and regulation
chieve cost reduction in Back
A Office and development
 Introduce digital signature and improve document mgmt.
 Improve IT developments with reduced Time to Market
 % of transactions and operations automatized
 Operational savings in Middle and Back Office
 Reduced cost of IT development & Compliance

 Improved services and customers experience in digital  NPS of clients in digital ecosystems
oyalty of Digital Client
L Retention and loyalty
channels  Customer Effort Score Digital vs Traditional
 New value added services to digital clients  Customer Churn Digital vs Traditional

Source: Arthur D. Little Notes (1): Real Time Bidding (2) Clients that mostly interact through digital channels (3) Predictive models or smart data for personalized
offering (4) Cross Sale index
18
Agenda

 Introduction to Arthur D. Little – Financial Services Practice

 Digitalization in Financial Services

 New Opportunities in Financial Services

19
 New Opportunities in Financial Services

To achieve these results, Digital transformation requires change mainly

across six different levers
Digitalization implementation investment & requirements
Category Areas of investment Examples
Adapted  Defining common direction responsible for achieving overall digital business goals  Trainings
organization  Developing or acquiring required digital capabilities, i.e. agile methodologies, cloud..  Hiring new employees
Innovation  Disruptive innovation radar based on digital services or solutions to improve operations, improve  New ventures or seed capital
ventures engagement with digital clients or new business model  Tech radar
 Acquisition, partnership and integration with Start-ups (Fintech)
Improved channels –  Processes simplification and improved CEx  Smart Mobile Banking
Sales and service  Consistent solution though all channels – omnichannel for branches, call center, PC & mobile  Tablets in mobile
 Increasing traffic from potential/new customers through digital services initiatives consultation
 Omnichannel capabilities
Improved Data &  Personalized offering based on real-time market trends and user behavior  Social & Web Analytics
Analytics  Transformation of clients into experts: provide information he/she can act upon individually and  User & Usage Analytics
independently  Analysis of user behavior
 Integration and refinement of unstructured data from various sources – data lakes (e.g. portfolios, watchlists)
IT integration &  Integration of banking-applications and systems (application/process/abstraction layers)  Integrated layers APIs
Operations  Improving IT project development – Agile, integration suppliers, etc.  Financial Cloud
 IT infrastructure and processes migration into the Financial Cloud  Agile
 Reducing / linking data silos and redundant systems  Virtual data base

Digital Product &  Developing capabilities for designing a suitable product offering, i.e. products tailored to real client  Flexible product
Services needs development tools - test&
 Product technification, i.e. use of technology for measuring risks and optimizes prices , or offering learn capabilities
new digital services
Source: Arthur D. Little

20
 Adapted organization

Financial institutions lag behind on digital organization, and must adapt and
create the roles to tackle digitalization efficiently
Stronger need for a digital organization Two key alternatives in digital organizations
Who designs? Who implements?
Companies remain unprepared to ride the digital wave
but this adaption is critical because: Top 32%
management 73%
 Digital strategy and common steering schemes
 Quickly decision making Chief Digital 5%
18%

Officer
 Relation between IT area with the core business
36%
+16% Specific BUs 9%
(usually clients,
5,5
Global TI)
14%
5,0 Financial 13%
Nobody
4,5 -15% Best option

4,0 -1% -3% 

 Agility, easier decision-making and clearer
responsibilities and KPIs
Chief Digital
3,5 -10% officer (CDO)
 Particularities are no taken into account and
x
authority issues
3,0
 Closer implementation, authority easier to
2,5  build and particularities identified Decentralized
Information Customer Organization Product Operations Digital
Technology management Portfolio and Logistics  No clear responsibilities and slower adoption
x Functions
of methodologies
& services
Source: Arthur D. Little

21
 Adapted organization

Financial institutions lag behind on digital organization, and must adapt and
create the roles to tackle digitalization efficiently
New roles in digital organization The role of IT in a digital organization

1
 Ownership of data quality and data availability  Agile development of projects and micro-
Chief Data Officer across the organization Agile approach segmentation of deliveries in order to reduce
 Responsible taking care of data lakes time to market and quickly adaptation

2  Specializing IT resources on digital projects in

Dedicated
 Omnichannel specialist order to increase efficiency and to build a team
organization
Customer  Focus on customer-satisfaction issues, sizing of IT
Experience and set priorities for key areas to improve
3
Flexible  A pool of resources between the digital and
arrangement non-digital projects should be set up as buffer of
IT demand

 Digital radar of the company that manages

and innovates global digital platforms 4
Digital innovator Specialization of
 Creation of a pool of heavily specialized
 Run interactive digital media, content and providers providers is advisable
CRM

Source: Arthur D. Little

22
 Innovation ventures

Rather than going against Fintech, Financial Services companies have

started to acquire/integrate Fintech companies in their product portfolio
Collaborative environment in Digital Transformation with Fintech

 Banks area seeking to

build ecosystems:
complex network of Personal
interconnected system finance
that can be leveraged mgmt.
into a competitive
advantage quickly Data
 Forming a coalition of analysis
firms that you trust and
then looking to build a Capital
model that can scale markets
 +65% of banks want to
partner with Fintech Banking and
with ~50% of them corp.
seeking collaboration) finance

Payments
Source: Arthur D. Little, Match-maker ventures, CAP Gemini Retail Bank Report

23
 Innovation ventures

From internalization of initiatives to venturing, banks are taking diverse

approaches to cooperate with digital innovators
Cooperation and other mechanism for Digital Start-ups

Disruption as a External joint venture drives

1 Service (Daas) disruptive startups
DaaS Venturing
External Equity investments to assess and
Strategic Partnership
2 Venturing
access new growth opportunities
(Venturing)
NewCo Strategic Partnership with focus in additional
Type of Business

3 Partnership revenues for business unit

Accelerator Foundation of independent unit
NewCo
4 Approach
with strong relationship to
corporate
Incubator Short term boost of start ups in
5 Accelerator early phases (90 days to 4
months)
Support of and cooperation with
Hub / Lab 6 Incubator
startups in early stages
Internal M&A Internal innovation unit with
(Captive) 7 Hub / Lab
organizational decoupling
Internal R&D
Acquisition of developed
8 M&A
companies with existing business
Integrate
Ideation Prototyping Building Scaling
or Sell
Idea Idea
Start-
up
Start- Start- Sustainable Com- Com-
Phase 9 Internal R&D Internal product roadmap
Idea
Idea Start- up up Model pany pany
Idea up

Source: Arthur D. Little

24
 Improved channels – Sales and service

From internalization of initiatives to venturing, banks are taking diverse

approaches to cooperate with digital innovators
Digitalization is a threat to the status quo of traditional branches

 Branches in Spain are falling. Branches are expensive and  Digital channels –and mobile in particular- is having an increased
operationally inefficient. Networks in Spain have fallen to impact on operations. In the UK, digital accounts for most
early 1980’s levels (Santander has announced it will close transactions as of 2015
425 in 2016). Banco de España expects a further reduction
of 6k branches. Branch Telephone Desktop Mobile
46,167
44,532 43,267 2010 41 % 7% 46 % 7 % 1.238
40,202
38,237
33,786 32,073
31,356
20.000- 2015 20 % 4% 34 % 43 % 2.101
25.000

2020 8% 16 % 73 % 3.201

2008 2009 2010 2011 2012 2013 2014 3Q2015 2020e  Digital-only, branchless banks are on the rise, changing clients
expectations:
According to a study among European youngsters,
70% would rather go to the dentist than visit a
branch

Source: The Financial Brand, Cap Gemini, British Banking Association, ClickFox, Ernst & Young, Banco de España, Arthur D. Little
25
 Improved channels – Sales and service

In order to adapt to the digital wave, branches must focus on what they
do best –personal assistance to complex problems
Banks must transform their channel strategy to adapt to the digital wave

 Brick and mortar branches must transform their reason of  Omnichannel and new technologies are
being the key for success. According to a study,
most clients as of 2015 are already
 According to a 2014 survey, clients in the US still give a strong
multichannel: ATM only
relevance to physical branches, but from the ‘problem solving’ CC only
and information dimensions, not from a transactional or daily 5,00%
operations point of view Digital only 5,00%
10,00%

Online Branch
Overall
importance 15,00%
Branch only
61,00%
ATM Multichannel

Client history Information

 Best practices for the majority clients which operate through

different channels are:
− Have a consistent and seamless experience
− Adapt the experience to the channel
Problem
solving
Transactional − Use new technologies (i.e. one step-onboarding, natural
language processors, blockchain)
Source: The Financial Brand, Cap Gemini, British Banking Association, ClickFox, Ernst & Young, Banco de España, Arthur D. Little
26
 Improved Data & Analytics
Innovation in banking has a strong digital component and runs around
better customer knowledge, and acting on customer data and preferences
The usage of customer knowledge for commercial purposes
More information than ever
 Banks today have access to more
information about their clients than
ever through:
− Better management of bank-
generated info (i.e. master data
management, big data
management, data lakes, better
CRM tools, integrated channels,
predictive modelling)
− Digitally generated information
(i.e. geolocalization of devices,
internet of things)
− User generated content
(i.e.social network radars)
Source: Gallup, Accenture, Arthur D. Little
New
uses Improve commercial efficiency Micro-segment commercial offers
 Improvement in targeting efforts  The ‘Offers as you live’ concept is
encouraging sales and customer satisfaction arising, enabled by connected
devices and mobility:
 According to a survey on opinions on bank’s
received offers, most of them are, at best, − Geolocalized offerings (i.e. in-
irrelevant, at worst, intrusive store financing, toll payments)
− Mobility smartcards
− Surge pricing (i.e. insurance
66 % based on behavior)
53 % 46 %
41 %
28 %
17 %
− Flexible, micro-personalized
products (i.e. digital products)
General offer Intrusive offer Has product with
primary bank
 In a recent experience, a Latin American bank had a 40% improvement in number of
products per client derived from the use of predictive models
Fully engaged customer Non fully engaged customer
27
 Improved Data & Analytics

Platforms are a requirement to create an Ecosystem in Banking

Share service with Development of new

1 third parties from their standards: e.g. OAuth
internal services portolio APIs to give third parties
access to customer and
transaction data
Retail Banking is Platforms can
unbundling and Leverage external help banks to
creating innovation internally to communicate,
opportunities 2 provide better services, work and
for a products and experience New regulation: PSD21
to their customers integrate with
marketplace requires banks to provide
others
Bank TPPs2 with access to
customer data, balance
check and payment
Monetize the services initiation services through
they provide opening to
3 third parties for scalable TPP
services
Source: Arthur D. Little
Note: (1) PSD 2 is the European regulation called Directive on Payment Services that will become effective in 2018
(2) Clients have to opt in and authorize a Licensed Third Parties (e.g. TPP) 28
 Digital products and services

Digitalization – Emergence of IoT, mobilization and digital platforms – has

enabled a range of new B2B and B2C product and service opportunities
Examples- not exhaustive
Enabler
Target Platforms IoT1 Digital channels

Integrated Trading Platforms

SME platforms SME channels

B2B
P2P lending
Banking as a Service platforms

Wealth Management
P2P lending
Telematics P2P payments
Loyalty systems Smart Cities
B2C
Geolocalized offers

Fintech Platforms Mobile payments

Urban mobility ecosystem
Source: Arthur D. Little
Note: (1) Acronym of Internet of Things Developed in next slides
29
 Digital products and services

The rise of digital platforms facilitates supplier integration, improved

customer experience and operational excellence for asset management
Development of platforms for new business opportunities Example

Customer
Access to a

Intimacy
 Development of platforms is disruptive Client or Investor diversity of
 Platforms target different challenges - Clients
Integration of counterparties in
disaggregated value chains or multi- Newer generations
Newer generations with
offering for vanilla products. Examples: with less trust of FA
less trust of FA and seeking Wealth management Platform
and seeking advise 1

Operational
- UBS Neo - unified full-service

Excellence
advise somewhere else
somewhere else1
customer portals with full trade New entrants with Multichannel management based on interactive
lifecycle multiasset capabilities lower commissioning platform with multi-asset investment providing
fees customized data based advice, multi-source
- Origin Markets – corporate bonds research and comparative monitoring
Capabilities
Capabilities toto develop
private placement more tailored
develop
offerings
more tailored offerings

Proprietary Funds

Equities or Bonds
 Summarizing, platforms development including
including algorithm
algorithm

Life insurance

& other funds

represent both an opportunity – new based portfolios

Investments

P2P lending
based portfolios

Alternative
leadership

products
business capabilities, improved

Product
customer interactions – and a

…
challenge (e.g. disintermediation) to
Financial Services Companies

Source: Arthur D. Little Notes. (1) FA is Financial Advisors (2) 59% of Gen D seek advice from internet, social site or friends with only 40% doing it from
FA according to Accenture
30
 Digital products and services

Banks should consider a stronger push in Payments taking into

consideration new technologies and payment ecosystems
M-Payments are growing The increasing use of NFC P2P payment is the future

 Mobile payment has taken off on a global  NFC is the most common technology which accounts  P2P payments are catching up. As of
scale, representing 7% of global electronic with 100-500 initiatives globally. Market 2015, almost half of customers in the
transactions. The following figures are forecasts anticipate an 81% NFC US have used the option, and as many
2,800
expected to continue growing at a fast pace, penetration worldwide by 2019. as 27% are using it once a month
81%
exceeding 800 billion USD by 2017:.
Penetration (%) 72%
58%
NFC enabled smartphone
shipments(mill) 46% 1.760
823 Daily
Share of in-store payments
34% 1,120 Not aware
Weekly
M-Payment market (bn) 23% 720
5%
14 %
465 10 %
305
605 1,73%
Monthly
0,80% 2014 2015 2016 2017E 2018E 2019E 12 %
In 2014,there were 21 million NFC-enabled POS
426 terminals in operation worlwide. The ongoing POS
terminal trend is accelerating. By 2019 acceptance
0,31% will increase to 75 million. 40 %
285
75
65 19 % Never
55 At least once
188 43
32
21
0,09% 13
0,04%

2013 2014 2015 2016E 2017E 2013 2014 2015 2016E 2017E 2018E 2019E
Source: Arthur D. Little research, Gallup
31
 Digital products and services

New innovate players in the Banking space- Number26, Finleap o Bank4U

– have obtained Banking licenses and are leveraging strong platforms

Saving Company Builder with a focus on

synergies
 Empowering entrepreneurs to create
successful companies
Investing Insurance
 Interconnected and flexible ecosystem
 Providing seed funding, access to
investor network, and best practice
processes
 Funding round: $24M by HitFox Group
Payment Lending
Overview
 Companies Launched: 9
 Country: Germany
 Founded: 2014
Clearing/Settling Shared Services  Founders: Jan Beckers, Hendrik
Krawinkel, Ramin Niroumand
 Active in more than 10 countries

Source; Arthur D. Little

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 Digital products and services

The FS position in Smart Cities in unclear - ADL has considerable

experience designing and implementing Smart-cities1
Steering and strategy

Globalization
Global trends

Aging population 5 Ecologically

Processes and use

Communication
sustainable

Needs and prioritization

4

Security

Results and benefits

Urbanization
Administrations Economically
Environment and 3 Application and services sustainable
climate challenges
Citizens and 2 Digital platforms Socially
Demanding stakeholders

visitors sustainable
1 IT-infrastructure
Businesses
Democratically
Enabling technology sustainable
Academia Internet of Things Virtual/aug.reality Big Data & Algor.

Int. payments Cloud services Sharing Platform

Public Admin &
services Smartphones Social media Connectivity

Source: Arthur D. Little Notes: Vienna, Dubai or Stockholm

33
 References

Relevant experiences in Banks & Asset Management – Omnichannel

platform and digitalization
• Digitalization of a leading retail bank in the Americas, including digital channel management to become a reference in digital banking and thereby
acquire new customers, digitize existing customers and increase efficiency
• Development of a customer management and omnichannel strategy to focus on a client based strategy for a leading bank supporting the
organization in the implementation of their omnichannel strategy
• Reinforcement of the customer experience and quality management model for the leading Spanish Bank delivering a dynamic scorecard
elaboration varying reporting levels
• Digitalization strategy and implementation for a leading European Asset Management company leading to increased retention, improved digital
leads and enriched sales funnel
• Management Audit of the strategy and objectives of the Spanish Asset Management Company, which was presented to the Spanish national bank
authority
• Development of Business Intelligence capabilities and development of predictive analytics for a major leading bank
• Developing an omnichannel strategy for an international banking holding group
• Digitalization benchmark in the banking industry
• Assessment of the agility and working model of the innovation management and digital prototyping unit of a large European banking group,
delivering a roadmap for the transformation identifying concrete actions to overcome main issues
• Quality review and development of a quality management dashboard for a leading financial institution in Spain
• Redefinition of the online positioning of a financial services company
• Development of the business plan for an e-wallet and new digital channels for a leading global retail bank
• Definition of the vision for Cloud Infrastructure and communications for a leading global retail bank
• Model for developing plans for branch management of a Spanish bank
• Program to improve omnichannel “Customer Experience” for a Spanish bank, with a focus interactive channels
• Support in defining the viability plan of a new urban mobility tool for online and mobile channels for a leading Spanish bank

Source: Arthur D. Little

34
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