Fintech Top executives and investors sound off on the trends and technologies that will transform financial services in the next 3–5 years. 1 We asked 20 leaders in financial services a single question: What technology or business model innovation will have the greatest impact on ? financial services in the next 3 to 5 years?? ? 2 Who did we talk to? “ ”3 Areas Of Expertise Payments Venture Capital Insurance Banking Asset Management 4 Henry Agusti Bart Brouwer Jan Hammer Patricia Kemp Kathy Nalywajko Digital Platforms Executive Senior Corporate Strategist General Partner Co-Founder & General Partner Senior Vice President & Investment Counselor Jim Breyer Keith Crawford Karim Hirji Will Kohler Anju Patwardhan Founder & CEO Global Head of Mergers Senior Vice President, Partner Managing Director, CreditEase & Acquisitions International & Ventures Fintech VC Fund 5 Steve Pretre Tim Rozar Ruben Salazar Genovez John Stecher Harrie Vollaard Venture Partner Chief of Staff to the CEO SVP, Head of Products, Group Managing Director, Head of Rabo Fintech Innovation & Solutions Barclays Investment Bank Ventures Dan Rosen Bipin Sahni Harshul Sanghi Serge Taborin Rafal Walkiewicz Partner EVP, Head of Innovation R&D Managing Partner Group Innovation Director CEO, Willis Towers Watson Securities 6 Key Findings AI is the biggest Blockchain is Customer acquisition Platform business trend to watch. noticeably absent. costs are too high. models are a focus. 7 of 20 respondents cited Surprisingly, blockchain was Respondents believe new Platform businesses will artificial intelligence as only mentioned once as the business models and radically shift how financial having the greatest impact biggest trend to watch in partnerships that lower services are distributed. in the next 3–5 years. financial services. customer acquisition costs will have the greatest impact. 7 Themes That Stood Out 8 The CB Insights machine intelligence platform synthesizes, analyzes, and visualizes millions of documents to deliver fact-based insights. It enables smart companies to predict trends, see competitors’ strategies, explore new markets, and reveal opportunities to capitalize on change. CLICK HERE TO TRY CB INSIGHTS cbinsights.com9 TRUSTED BY THE WORLD’S LEADING COMPANIES “Leveraging CB Insights...helped us cast a wide net and remain on the cutting edge of startup discovery.” Laura Gaviria Halaby, Global Head of Fintech Acceleration 10 Here’s what they said... “ ”11 Henry Agusti Digital Platforms Executive RECENT ACCOMPLISHMENTS Responsible for Bank of America’s mobile and online banking platforms currently being used by over 25 million and 35 million customers, respectively. “Everywhere you look customers are getting more comfortable with electronic payments over cash or checks.” 12 “Everywhere you look customers are getting more comfortable with electronic payments over cash or checks. Whether it’s the increased adoption of person-to-person payments via Zelle and other platforms, or the adoption of digital wallets like Apple Pay for digital commerce and point of sale, the dramatic changes in behavior are evident. Even the under-banked are adopting more paycheck disbursements Henry Agusti with prepaid cards. It’s driving digital innovation from a variety of Digital Platforms Executive industry players to create increasingly intuitive and convenient payment tools. It’s also driven the major shift towards financial centers being places where customers seek advice and guidance instead of processing routine transactions.” 13 Jim Breyer Founder & CEO @jimihendrixlive RECENT ACCOMPLISHMENTS Lead/co-lead investor/board member of over 40 highly successful technology companies, including Facebook, Walmart, Dell, Marvel Entertainment, Etsy, and Legendary Entertainment. “Today I remain confident that Currently an investor and serves on the Board of blockchain, and Circle, will radically Blackstone (BX) and 21st Century Fox (FOXA). change financial services for the better.” Previously ranked No. 1 on Forbes’ Midas List of Tech's Top Investors. 14 “Blockchain. In 2013, I led Circle’s Series A round. I invested because I believed then, as I believe now, that blockchain technology will be a transformative force. We built the company around the following question: what if money could move across borders, between currencies, and among friends without friction? Jim Breyer We knew that moving, sharing, trading, and investing money had to Founder & CEO be easier and realized that blockchain technology could provide novel and effective answers. Today I remain confident that blockchain, and Circle, will radically change financial services for the better.” 15 Bart Brouwer Senior Corp Strategist RECENT ACCOMPLISHMENTS Responsible for supporting the executive board in setting the strategic vision of the bank with regard to activities beyond traditional banking. “The main challenge for banks is to Focus areas are platform business models, trends, innovation, fintech, new competition, and emerging stay relevant for their customers business areas. in…digital ecosystems” 16 “Platform business models will radically change the way banks provide financial services to their customers. In the near future, customers will be served via digital ‘ecosystems’ where people network, shop, bank and do many other things in one place. Go-to-platforms — like WeChat — provide the personal and relevant experience customers expect, open to third-party providers of financial and other relevant offerings. The main challenge for banks is to stay relevant for their customers Bart Brouwer Senior Corp Strategist in these digital ecosystems. Are they able to create and grow a go-to platform on their own, or will they end up on successful platforms of others? At ING, we want to be where our customers are: on digital platforms. We are developing our own go-to platform, but we will be part of platforms of others as well.” 17 Keith Crawford Global Head of Mergers & Acquisitions RECENT ACCOMPLISHMENTS Responsible for leading the evaluation and execution of strategic transactions and investment opportunities. “We are on the verge of redefining Led the negotiation and execution of the $485 million acquisition of GE Asset Management with over $100 value creation across the foundations billion in assets under management. of finance with the advent of digital Works with State Street’s businesses to invest in new technologies which recently included NextCaptial and money and assets.” PensionBee, among other early / mid-stage investments. 18 “The financial services industry is moving from Digitization to Digitalization. In other words, from process optimization and efficiencies to new business models and value creation. Digitization involves creating better user experience and flexibility along with enhancing processing and scalability of capabilities. Whereas Digitalization is about redefining the user experience by creating new business models along with user experience. This shift will result in new investment vehicles and forms of liquidity, in addition to new types of capital such as digital currencies. The growing need Keith Crawford for advanced analytics and real-time data transparency will also require access Global Head of Mergers & Acquisitions to new markets such as peer-to-peer and crowd-driven solutions. We are on the verge of redefining value creation across the foundations of finance with the advent of digital money and assets. With this will come innovative and transformational technologies that will enable us to realize these efficiencies, such as artificial intelligence (AI), machine learning, distributed ledger, and enhanced cloud capabilities.” 19 Jan Hammer General Partner RECENT ACCOMPLISHMENTS Adyen went public on June 12th, in Europe’s largest VC-backed fintech exit ever. Index Ventures backed the company in 2011 and is its largest shareholder. “The evolution of financial services over the coming decade will be driven by new Recent exits: OANDA, Adyen beautifully designed products with new Recent deals: Capitolis, Alan revenue models, offering more for less, Recent financings: Robinhood, backed by Index since its Seed and ultimately for free, to the end user.” round, raised $363 million, valuing the company at $5.6 billion 20 “Traditional financial services have been characterized by large customer acquisition costs, high fees, and poor user experience. The evolution of financial services over the coming decade will be driven by new beautifully designed products with new revenue models, offering more for less, and ultimately for free, to the end user. Jan Hammer General Partner The push towards free will dramatically improve transparency in the market and ultimately open up existing and previously inaccessible financial products to a much wider pool of customers.” 21 Karim Hirji Senior Vice President, International & Ventures RECENT ACCOMPLISHMENTS Recent investments include Algolux and Humatics. “Technology alone will not have the Intact Ventures has made nine investments and deployed greatest impact on financial services in the $120 million in capital, including investments in Metromile, Turo, and Snapsheet, and partnered to develop medium-term, rather, we need to start by a tailored insurance program for Uber across Canada. looking at the changing needs of the customer to understand what will have the greatest business model impact.” 22 “Technology alone will not have the greatest impact on financial services in the medium-term, rather, we need to start by looking at the changing needs of the customer