Bekkozha Muslimov presented on fintech trends and investments at the Cass Business School conference. He discussed how loss of trust in banks, rising expectations of consumers, the influence of millennials, new technologies, and regulation have created conditions for change and disruption in the financial services industry. Muslimov also reviewed key fintech verticals such as lending, payments, and blockchain that have seen significant investment and growth, and how both startups and traditional banks are responding to these trends through partnerships, acquisitions, and launching their own innovations.

1. Fintech Overview and Trends
2 April 2016
‘Bekkozha Muslimov, Investment Director at Blue Wire Capital
Fintech Conference at Cass Business School – “Investment Landscape in Fintech”

2. About Blue Wire Capital
Focus:
Portfolio:
Team:
Fintech investments:
About myself:
• Extensive experience in M&A advisory and corporate
M&A for FTSE100 company;
• MBA from London Business School

3. Conference Attendance: Leading Indicator

4. Status Quo
Innovation in Financial
Services:
 ATM in 1960s
 Online banking in 1990s
 Securitizations
 CDOs
 Credit Default Swaps
 OTC Derivatives

5. Perfect Storm
Five conditions for Change:
 Loss of trust
 Expectations of better
 The rise of millennials
 New distribution channels shaped by
technologies
 Regulation conducive to innovation

6. Loss of Trust
Sources: filings by regulators and other government authorities, data from banks, and estimates of US litigation costs by analysts at KBW

7. Expectations of Better
Sources: Temkin Group Q3 2013, Consumer Benchmark Survey

8. The Rise of Millennials
84% say they are influenced by user
generated content
60% say financial products are not
targeted at them
33% say they would not need a bank
in five years
Sources: Accenture

9. New Distribution Channels

10. Regulation
• Systemic failure in banking sector in 2008
• Increased governmental regulation: Dodd-Frank, Volcker, EMIR, Basel III
• Focus on separation of retail and investment banking businesses
• In UK regulation is conducive to innovation:
• PRA (former FSA) launched and dropped some of requirements for new banking entrants
and introduced “fast-track” licensing regime
• FCA set up Project Innovate
• The number of registered e-money providers has more than doubled in the last two years from
38 to 79
• A new Payment Systems regulator
• Government set up “New Bank Start-Up Unit”

11. Death by a thousand cuts
Worry less about these competitors
Worry about these emerging peers
Unbundling of a bank

12. Technology
Power of Disruptive Technology: Marketplace Lending as an example:
Source: Clay Cristensen Disruptive Innovation Framework

13. Bank Response
Source: The Pulse of Fintech, KMPG and CB Insights
 Acquire
o Investments into start-ups
o BBVA acquired Helsinki-based
Holvi
 Partner
o Citigroup partner with Lending
club
 Co-Opt
o Barclays set-up incubator run
by Techstars
 Compete
o Charles Schwab set-up own
algo trading to compete with
Wealthfront
Bank Investments into VC-backed fintech start-ups

14. Global Fintech Financing
Source: The Pulse of Fintech, KMPG and CB Insights
Key Verticals:
1. Lending
2. Payments/Billing
3. Personal finance and asset
management
4. Money transfer/remittance
5. Blockchain/bitcoin
6. Capital markets
7. Crowdfunding
8. Insurance

15. Global Largest Fintech Deals
Source: The Pulse of Fintech, KMPG and CB Insights
$7.7B $4.5B$1.5BTotal

16. 14 of Fintech Unicorns in Payments and Lending
Source: The Pulse of Fintech, KMPG and CB Insights

17. 10 Largest European Fintech Rounds
Source: The Pulse of Fintech, KMPG and CB Insights
Top Cities
London - 50 Deals/$744M
Hamburg - 5 Deals/$110M
Berlin – 10 Deals/$79M