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APSI Day 1/2015 on “FinTech” Financial institutions, Technologies & Start-ups

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Introduction What is the main idea behind FinTech?

2.05 Traditional industries, before the internet, made consumption expensive, time consuming and sometimes inaccessible.

• The main idea behind the FinTech revolution is that the Internet helps to create innovation and value…

0.35 0.45 0.55 f.ex. The book industry with Amazon, the music industry with iTunes, the TV industry with Netflix

• … and since the financial crisis it started in the financial industry in all first movers financial centers like Silicon Valley/ New York,

2.94 London, Tel Aviv…

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Introduction What is FinTech?

2.05 FinTech is the innovation function of financial services in the digital age. It has less to do with ICT technology, more to do with business model reinvention and customer centric design. FinTech can be categorised as follows:

0.35 • Traditional FinTech, “facilitators” with larger incumbent 0.45 0.55 technology firms, supporting the financial services sector (evolution side; which could be split between traditional & innovative evolution of features)

• Emergent FinTech, “disruptors” with small innovative firms, disintermediating incumbent financial services with new 2.94 technologies (revolution side)

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Introduction The rise of a FinTech Revolution

2.05 The crisis of 2008 defined a new area for the financial industry. Considering main inefficiency of the banking and investment system, the digital industry opened up enormous areas of opportunities: • FinTech companies, including startups, software provides, ICT companies, consultants and more traditional financial services companies are disrupting the financial industry in B to C but some also in B to B • New innovative Startups are taking more and more advantage of a positive 0.35 0.45 0.55 ecosystem and imagine how to disrupt financial services traditional banks provide. • Talented people were attracted by FinTech entrepreneurs who often ask: “Would you prefer to work in a highly hierarchical company or for a dynamic FinTech start-up?” Traditional financial intuitions have start to react but have to deal with 2 main issues: 1) They noticed the FinTech too late and 2) They are often too big to change 2.94

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Introduction Relationship between Financial Institutions and FinTech companies

2.05 Banks can’t stop FinTech anymore and build slowly relations with FinTech companies, some with a big successes but many with a lot of failures.

Relations between banks and FinTech companies are based on 2 different scenarios: 1. Banks invest directly in FinTech start-up companies

0.35 0.45 2. Banks use lobbying to slower the FinTech revolution, having time to start 0.55 acquiring successful FinTech companies by adopting similar business models through the creation of subsidiaries and new tech-brands.

Global investment in FinTech has increased in the last 5 years from $930 m in 2008 to $2.97 b in 2013. It is expected In the coming years to take a bigger chunk of the overall VC investment.

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FinTech segmentation Worldwide segmentation of companies by Venture Scanner

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FinTech segmentation Adding Bitcoin on the top

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14:05 Interview Digital Letzebuerg: WG on “FinTech”

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Nicolas Mackel

0.35 0.45 CEO Luxembourg for Finance 0.55 Chairman of the “FinTech” WG

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14:25 Presentation FinTech Luxembourg / Silicon Luxembourg

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Charles-Louis Machuron

0.35 0.45 Founder Silicon Luxembourg 0.55

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Conclusion FinTech companies cannibalisation traditional Financial Institutions

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“It’s better to own the

0.35 0.45 0.55 disruption than to be eaten by it” Chris Skinner

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2.05 Jean DIEDERICH Partner EU-A & Digital Asia

CHINA Nantes UK T +352 26 37 74 1 Impasse Augustin Fresnel Shanghai 44816 Saint-Herblain cedex, BP 80363 London F +352 26 37 74 982 #807 Evergo Tower 10 Fleet Place M +352 661 322 351 1325 Central Huaihai Rd, London EC4M 7RB [email protected] 200031 Shanghai Paris 159 avenue Charles de Gaulle Manchester HONG KONG 92521 Neuilly-sur-Seine cedex 3000 Manchester Kurt Salmon is a global management Hong Kong Business Park, Aviator Way 99 Queen’s Road Manchester M22 5TG consulting firm dedicated to building the 66/F The Center, Central GERMANY market leaders of tomorrow. Düsseldorf Königsallee 11 North America JAPAN 40212 Düsseldorf Tokyo UNITED STATES 0.35 More than just partnering with our clients, Ark Mori Building 31F 0.45 Atlanta 0.55 we ally with them, integrating ourselves 1-12-32 Akasaka, Minato-ku, LUXEMBOURG 1355 Peachtree Street, N.E. seamlessly into their organisations in order 107-6031 Tokyo Leudelange Atlanta, GA 30309 41 Zone d’activité Am Bann to develop innovative, customised solutions L-3372 Leudelange Europe and Africa for their 21st-century business issues. Minneapolis BELGIUM 120 S. 6th Street MAGHREB Succeeding in today’s increasingly complex, Brussels Minneapolis, MN 55402 Square Stéphanie Casablanca consumer-driven environment is an enormous Avenue Louise 65 157, Boulevard d’Anfa N° 72 challenge. But companies need to look beyond 1050 Brussels 7ème Etage de l’immeuble New York Racine D’Anfa, 20 000 Casablanca 650 Fifth Avenue today; they need to position themselves for New York, NY 10019 continued success in the even more uncertain FRANCE Lyon SWITZERLAND future. That’s where Kurt Salmon comes in. Immeuble “Le Front de Parc” Geneva San Francisco 109 boulevard de Stalingrad, 105 rue de Lyon 345 California Street We call it delivering “success for what’s next.” BP 11259 69608 Villeurbanne 1203 Geneva San Francisco, CA 94104 The results are transformative. 2.94 www.kurtsalmon.com