Deutsche Bank Markets Research Industry Date 8 September 2013 Retail Bank Strategy Global Financial Services Jason Napier, CFA David Lock Research Analyst Research Analyst (+44) 20 754-74433 (+44) 20 754-11521
[email protected] [email protected] F.I.T.T. for investors The Future of Banking Acceleration of change leads a big increase in bank IT spend With the press full of reports on innovation in money matters - think progress by Square, volumes in mobile payments at M-PESA, doubled revenue at Monetise, new bank launches like Metro, big data, digital wallets, mobile banking, crowdfunding, P2P lending - we think most investors see mostly downside risk from change. We look at each topic and conclude that a big increase in bank IT spend is coming which isn't captured in market expectations. But we also think this spend will deliver an ability to process higher volumes at lower unit costs, reduce branch costs and generate new revenue streams. We do not expect material bank disintermediation by tech. ________________________________________________________________________________________________________________ Deutsche Bank AG/London Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 054/04/2013. Deutsche