The banking industry is changing, new comers are changing the game, and banks have to re-invent themselves to stay in the game. What are the key issues? What could be the future?

1. Tomorrow’s
banking
transforma1on,
supported
by
CH&Cie
Patrick
BUCQUET
-­‐
Chief
Inspira7on
Officer
–
Head
of
the
CH&Cie
FinLab
pbucquet@chappuishalder
-­‐
@pbucquet
-­‐
+1
347
419
7709
December
2014

2. The Banking industry is going through major changes, and banks are more and
more challenged by new entrants
2
Finance is a
“more-business”
on large audience
…
Next Gen
Banking
Banking is an
experience and
not a service
Regulation is no
longer a barrier
for new entrants
UX
is
key
to
provide
a
service
focusing
on
one
use,
providing
a
powerful
UX
Authori7es
favor
financial
inclusion,
suppor7ng
new
entrants
in
the
industry
The
actual
barrier
is
now
the
audience,
the
success
is
to
be
able
to
manage
a
large
volume
of
users
to
make
banking
a
sustainable
business
800 million users
(e-commerce)
8,5 million users,
40% of Kenyan
adults
1% of Whole Foods
transactions after 1
month (US)

3. Disruption in Banking is lead by new comers, which are taking full advantage of
technology enablers arriving to maturity
§ Differentiate web and
mobile, leverage on
smartphone capabilities
§ Integrate innovative services
(NFC payment, PFM
management, etc.)
1
Next Gen
banking
services
Basic Digital
Banking
2
3
Improved
Digital
Banking
§ Standard offering:
copy-paste branch
services on digital,
either web and mobile
§ Value proposition is matching a clear user’s
expectation or solving a user’s problem
§ New entrants benefits from a low or unclear
regulation
§ They propose a new business model, challenging the
traditional commission-based banking business
model
Breaking points:
• Digital standards transforming the User
Experience (lead by other industries)
• New technology capabilities (mobile, social
media, NFC, etc.) arriving to mass deployment
• New business models possible using the large
amount of data
Traditional
banking
services
3

4. User eXperience
New entrants attack all the part of the banking value chain, having in common to
propose a new way to serve users, focusing on an the User eXperience
4
UX is not limited to User Interface (UI). It is the way to
engage, serve and connect user.
§ Authentication
§ Aggregation
§ Coaching, advice (including P2P)
User Engagement
§ Payment
§ Investment
Products & Services
Market Place
(connecting users
and needs)
§ P2P Lending, Crowdfunding
§ FX
Illustra1ons

5. The Next Gen Bank will rely on an outstanding UX, with 8 main pillars to
achieve success
5
UX
Community & Social
§ Banking part of the online social
environment: access to P2P expertize,
sharing with peers, etc.
§ P2P services
Always on & Real-Time
§ Omni-channel, multi-device
§ 24/7 access whatever the channel
§ Real-time updates, alerts
§ Users can provide feedbacks and ideas to
improve the offer
Co-construction
Empowerment & Coaching
§ Tools to take decision
§ Nudge approach
§ Coaching, advice, access to expertize
Reward
§ Loyalty programs
§ Users want to be recognized for their
loyalty
Simple, Design, Useful
§ Match specific user’s needs
§ Simple use, no complexity
§ Useful information
Personal
§ No more “one size fits all”
§ Strong level of personalisation (UI, offers,
savings & budget management, etc.)
§ Personalized advice
§ Fair-cost pricing, transparency on fees
and business models
§ Clear communication (on overdraft,
scoring, etc.)
Transparency
Fun & Emotion
§ Banking part of the day-to-day life, less
boring, more fun

6. The Next Gen Banking business models will rely on user’s data instead of
commissions on transactions
6
§ In Europe, the EU is pushing down the interchange
rate (0,2 – 0,3%)
§ Customers are more and more requesting
transparency on prices
§ Banks are no longer seen as the only financial
service providers
§ Digital companies have developed a media-like
business model, valuing their audience with a deep
profiling of their users
There is a strong pressure on
commissions
Other industries have lead the path to
new business models
§ Lead generation
§ Profiling / Scoring
§ X-sell / up-sell
New business models are based on data

7. When it comes to user’s data management, Banks are far away from the best-in-
class
7
1.3B
798M
600M
800M
Worldwide
users
152,5M
60M
83M
Number of
customers
Number of
customers
799M
500M
435M
X 2X 5
230M

8. As a data-specialist, Alibaba is now one of the biggest financial service
providers in the world
300 million users of Alipay
(online payment) – 80 million
transactions par day
190 million users of Alipay
Wallet
Yu’e Bao is the biggest funds
(125 million customers, $90 Mds
AUM)
Zhao Cai Bao finances SME,
based on a P2P model
Chinese banking
regulator allowed
Alibaba to launch
MYBank, a privately
owned bank
8

9. In the long run, banks are coping with a critical choice about their future
with 4 main options to be considered
9
UX specialist
Golden Factory
GeneralistNiche
4
1
3
2
1. Provide banking Back-Office for
all products & services (including
banking regulatory constraints).
Ex.: Bancorp providing back-
office services to Simple (US)
2. Provide underlying infrastructure
to provide one specific service.
Ex.: on payment, Ripple, Braintree
or Chase Paymentech
3. Focus on one service (niche
positioning) and develop an
outstanding UX. Ex.: Paypal,
Apple Pay, Stripe, Venmo
4. Focus on UX and leverage on
user’s data to create value and
propose all financial services
(broker-like model). Ex.: Alibaba,
Walmart, Mint
4 options to be considered for
banks about their future
Today’s
Banks

10. If they decide to compete on UX, banks would have to completely change
their business model
10
• Banks will manage and
protect Identity
• Banks will take care of all the
user’s data, controlling
access by third parties
§ Banks will be part of user’s
community, organising
exchanges
§ Banking will be a market place
connecting people to their
needs, and not only limited to
finance
§ Banking will be a commodity,
and as proven by Apple Pay, the
service will not depend on the
underlying product (same UX)
§ “Open Architecture” will be a
standard, allowing each service
provider to connect to any bank
§ Banks will become a trusted
finance amplifier, part of the day-
to-day life, with finance only a
part of it
§ Banks will be able to advise
users in their different moment of
life … A Life
Coach
… Bank-
Agnostic
… The
trusted
data
manager
… A social
enabler
The
Next Gen
Bank
will be…

11. In the short term, banks can still catch up with the market, focusing on UX
and integrating underlying existing banking products
11
PART OF THE INNOVATION IS NOT TO RE-INVENT THE PRODUCTS
BUT TO PROVIDE A CONSISTENT UX
Credits
PFM
UX
Savings
Investments
Credits
PFM
Payments
Contacts

12. Banks need to change, innovation is a key component of the transformation, but
requires a very specific approach
12
Innovation comes first from one identified pain point
• The starting point must be one issue to be solved, from the user’s point of view
• The service will address one specific market segment, based first on use
Innovation is inspired by observation
• Innovation starts with the acknowledgement of how users use the service or would
use it
• Co-construction is a key part of the process to get users’ feedbacks to fine tune and
validate the concept, but based on a concrete service
• Innovation is about conviction, and does not come with focus group
Communication about innovative offers is the same as the
traditional ones
• Innovation cannot be promoted, it has to be demoed
Right Wrong
Innovation can be managed like a standard project
• Small team, short Time-to-Market, Outsourcing are the pillars of a new approach to
manage projects
• Intrapreneurship mindset needs to be promoted internally
LESSONS LEARNED FROM LATEST SUCCESSES
Innovation is deeply changing the UX, and is not limited to
the User Interface
• There is not always a need to re-invent the products and services, but to provide a
useful and consistent UX

13. CH&Cie is supporting banks with pragmatic innovation capabilities to deliver the
NEXT GEN BANKING
§ CH&Cie has set-up an international
market watch to follow the latest
trends and identify the new
opportunities
§ CH&Cie is able to test on the field the
latest innovations to be sure it is a
good practice to get inspiration from
§ CH&Cie is in contact with key players
leading the path to innovation, start-
ups, though leaders, industry most
advanced players
With an international
footprint, CH&Cie
identifies new trends to
generate new ideas
With hands-on
consultants, CH&Cie
scopes and organizes the
project to develop the
concept
CH&Cie partnered with
eYeka to turn an idea into a
concept with a
crowdsourcing approach
§ Based on the first idea selected by
CH&Cie, eYeka is launching a contest
to a community of worldwide
contributors to challenge the idea
and turn it into a concept to be
developped
§ In 3 weeks, a pool of concepts is
collected and filtered from a business
point of view by CH&Cie, then shared
with the bank
§ CH&Cie’s consultants have all
operational and concrete experiences
§ CH&Cie can gather all the required
expertises, from IT to regulatory
compliance
§ CH&Cie has developed a pragmatic to
scope a project in 4 workshops and
to deliver a concrete action plan
1 2 3
Ideas based on
expertize /
convictions
Concept back-tested
and adjusted through
collaborative
innovation
Action plans to
quickly deliver a first
concept (MVP)
13

14. CH&Cie has developped a new way to manage project, to quickly deliver
innovative offers
14
CRAZY PATCHWORK
OF IN-HOUSE AND
OUTSOURCED
CAPABILITIES
GET INTO ACTION QUICKLY, TO
DELIVER A PROOF OF CONCEPT,
AND NOT SLIDES
ONE CONCEPT &
A CORE TEAM
PROJECT QUICKLY
LAUNCHED WITH
REASONNABLE LOSSES
ACCEPTATION
CONCRETE
ACTIONS
EXISTING
CAPABILITIES
=
+ +
NEXT GEN PROJECT by CH&Cie
the successful project is not the one which anticipates the future 18-24
month ahead, but the one who builds it NOW

15. Throughout
solu+on
development,
CH&Cie
support
the
ini+a+ve
by
playing
the
product
owner
role
in
Agile
implementa+on.
§ Support
the
user
experience
design
§ Scope
and
design
solu7ons
and
features
§ Act
as
the
product
owner
in
agile
development.
§ Coordinate
the
development
processes
between
all
stakeholders
User
Experience
Design
Our value proposition: catalyst innovation with a strong business sense
From
concept
to
implementa+on,
CLO
func+on
played
many
roles
throughout
the
ini+a+ve
including
Project
Management
and
Competence
Integrator
§ Define
the
overall
digital
strategy
and
offerings
§ Setup
and
build
up
the
digital
organiza7on
structure
§ Monitor
budget
&
forecast
status
§ Source
and
management
external
vendors
§ Plan
and
track
progress
Chief
Launch
Office
(CLO)
Map
and
create
business
/
organiza+onal
processes
(front
to
back
end)
with
a
user-­‐centric
approach
towards
digital.
Modeling,
op+mizing
and
reengineering
§ Document
customer
journey
§ Model
and
analysis
processes
§ Op7mize
and
improve
processes
§ Leverage
new
technologies
to
reengineer
processes
Business
Process
Management
Provide
market
insights
to
generate
ideas,
animate
brainstorming
sessions,
challenge
the
offer
design
and
improve
the
offer
along
the
project
§ Latest
trends
§ Market
watch
§ Best
prac7ces
§ New
project
approach
§ Concrete
return
of
experiences
(on
field
tests)
§ Contacts
with
thought
leaders
Chief
Inspira+on
Officer
(CIO)
15

16. Use Case #1: CH&Cie and eYeka are supporting DBS to develop
the next gen mobile banking in Asia
Mobile banking is a must-have in Asian countries, DBS wants to increase its footprint leveraging on mobile
capabilities and penetration rate.
CH&Cie is currently advising and supporting DBS in the launching of a
full mobile banking solution for India, China and Indonesia (countries
where DBS presence is limited).
CH&Cie quickly scope a first concept to be quickly developed
based on agile methodology with an efficient on-boarding of the different
stakeholders.
eYeka’s community back-tested and fined tune the concept to finalize
the offer design. About 50 people from eYeka’s community contributed
to the project.
5-6 CH&Cie persons coordinate around 50 DBS persons and around
100 IT experts.
The launch of the 1st live components of the application should occurs
12 months after the genesis of project.
16

17. Use Case #2: CH&Cie’s proposition to AXA Bank in France leads to a
disruptive and unique offer
A disruptive value proposition…
§ “mobile first” bank account with PFM tools and new services
§ Focus mainly on day-to-day customer expectations
§ Bringing concrete value to the user, with tools helping to take decision
… with a fair cost strategy
§ All the core services included
§ No frills offer
§ Ancillary products / services in option
Our business venture: SOON, one of the first banks in the world natively designed for smartphone
CH&Cie advised and supported AXA Bank to launch Soon in France
From the opportunity study to the launch, CH&Cie has been deeply involved
in the project, our moto "foster ideas, bring solutions" has never been so true
17

18. Introduc1on
to
CH&Cie
December
2014

19. Chappuis Halder & Cie is a Financial Services consulting firm, delivering
strategic projects across the globe
19
Chappuis Halder & Cie is a consulting company specialising in Financial Services. We have
expanded geographically from our origins in Geneva, now serving clients in all of the major financial centres
across the globe. Our main focus is on 4 business areas: Insurance, Retail & Private Banking, Corporate &
Investment Banking & Commodity Trading.
CH&Cie expertise is anchored in the deep sector and functional knowledge of our consultants; all of us
have a financial services background, and know the sector inside out. Because we do nothing else, and we
operate across the globe, we are able to bring a rich seam of best practice ideas and benchmarking data to
our clients.
§ New York
§ Montreal
§ Geneva
§ Paris
§ London
§ Luxembourg
§ Hong Kong
§ Singapore

20. CH&Cie FinLab is based in New York City, to GET direct connections to trend
setters and to GET hands-on experience with innovations
20
Support
innova+ve
start-­‐ups
to
improve
their
business
models,
look
for
investors,
select
best-­‐of-­‐breed
service
providers
to
propose
one-­‐stop
shopping
offer
to
our
clients
§ Brainstorm
with
selected
start-­‐ups
to
beber
understand
market
trends,
Promo7on
of
selected
start-­‐ups
to
our
clients,
Connect
start-­‐ups
with
investors
Build
new
plat-­‐form
to
be
proposed
to
our
clients,
build
on
one
project
to
develop
a
mul+-­‐client
plat-­‐form
GET
involved
into
innova+on
Build
direct
contacts
with
innovators,
to
iden+fy
and
understand
new
trends,
with
start-­‐ups,
investors,
regulators,
incubators
§ New
York
§ London
§ Singapore
§ Tel-­‐Aviv
GET
connected
to
the
heart
of
innova+on
Keep
track
of
the
various
developments
in
the
sector:
new
ini+a+ves,
new
ideas,
main
trends,
etc.
Assess
the
success
of
the
different
new
ini+a+ves
/
technology
with
on-­‐field
tests,
thanks
to
our
interna+onal
footprint
GET
concrete
feedbacks
on
innova+on
Produce
content
/
studies
/
overview
/
panorama
to
fuel
bank’s
innova+on
processes
Select
ini+a+ves,
Iden+fy
poten+al
benefits
for
banks,
define
the
possible
partnership
in
bank’s
context
Realize
benchmark
studying
best
prac+ces
and
new
way
to
manage
projects
GET
ideas
for
our
clients

21. CH&Cie FinLab is supporting the hands-on expertize of CH&Cie’s
consultants
21
Latest
CH&Cie
Digital
Club
was
in
Paris
with
Holvi
CH&Cie
is
a
regular
speaker
at
major
events
CH&Cie
frequently
issues
reports
on
hot
topics
CH&Cie
recently
invested
into
innova+ve
projects
CH&Cie
Digital
Club
gathers
thought
leaders
Demo at Finovate London 2014 – click here
Presentation at the EFMA Banking in innovation in
Barcelona, 2014 – click here
Radio show – Breaking Bank – March 2014 – click here
innovation that works
monipulse

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22