Reinventure Fund MD Danny Gilligan's presentation at the September 2015 FINSIA Forum, #nextgentech

1. Danny Gilligan @dannygilligan
Simon Cant @simoncant
Rohen Sood @rohensood13
Reinventure @reinventurefund
www.reinventure.com.au
Challenging existing
financial services business models
and growing global businesses
September 2015

2. Changing nature of the workplace
• Drivers of disruption in Financial Services
• Implications for Financial Services organisations
• The critical role of incentives, processes and
horizons
• Changing nature of firm structures
• Implications for roles, skills and attributes

3. The unbundling of Financial Services
Ubiquitous
Data
Technology
Driven Networks
Artificial
Intelligence
Savings &
spending e.g.
Wealth
management e.g.
P2P lending e.g.
Crowdfunding e.g.
Payment
platforms e.g.
Risk priced
insurance e.g.
Source: Reinventure
Risk based
lending e.g.
Cryptocurrencies e.g.

4. That unbundling erodes core advantages financial
services have relied upon
- Centralised, direct relationships
with customers, being replaced by
peer enabled technology networks
- Proprietary data advantage being
eroded by increasing pools of
accessible, liquid and mobile data
- Business intelligence and
processes rely heavily on human
resources replaced by algorithms
Relationships
Information
Intelligence
- Trust embedded in brand and
broadcast message replaced with
trust embedded in digital
experience and peer rating
Trust
NETWORKS
DATA
AI
EXPERIENCE
TRADITIONAL ADVANTAGE FINTECH ADVANTAGE
As digital experience penetrates financial services offerings
further, this risk accelerates

5. Characteristics Sustaining Disruptive
1 Capital preference Yield
capital/debt
Venture capital
2 Technology
heritage
Legacy Greenfield
3 Revenue impact Additive Potentially
cannibalise
4 Ongoing cash flow Fast payback Reinvest
profits
5 Staff risk appetite Low risk
returns
High risk/ high
returns
6 Business case Predictable Unpredictable
7 Planning model Waterfall Lean startup
8 Value proposition Better,
higher price
Good enough,
cheap
9 Customers Premium Non/low-end
10 Upfront capex High Low
Incumbent
horizon
Venture horizon
Years
Return
0 1 2 3 4 5 6 7
Sustaining
PFM tools
e.g. Moven
Disruptive
P2P lending
Application to financial services
Source: Reinventure
DifficultyforincumbenttoaddressIncentives, process and horizons are critical
factors in inhibiting incumbents’ competitiveness

6. The generic disruptive patterns will have implications
for changing the nature of firm structure
Source: Reinventure
Where we are
now
Vertical
Integration
Outsource
Non-Core
Services
Traditional banking infrastructure – all services in-
house, all platforms custom built
INSIDE OUT: Out-sourcing of “non-core” functions to
major service providers
Where we are
heading
Modularisation
of Services
Unbundling
Services
OUTSIDE IN: Buying in modular services to create a
new “stack” model of operating
VERTICALISATION: Given a modular, variably
costed operating stack, niche verticals become
profitable and simple to serve
Lattice Effect
ECOSYSTEM: Shift away from direct, control
structures (employee or supplier) to ecosystem
model of development (eg API’s, hackathon, bounty
programmes)
Where have
we been CS-90

7. Financial Services workers of the future will require:
AI
Creativity
APIs
Collaboration
Data literacy a critical
skill in future world
Modular approaches
to product and
service design
universally required
Process roles
replaced by AI will
see creative skills
enduring in value
Ability to collaborate
internally and
externally vital to
speed and
effectiveness
MORE
Control orientation
Move to contextual
services
Near-term risk
myopia
Solve customers
problem
Control orientation is
often false economics
Increasing need to
balance near term
risks of action with
long term risks of
inaction
Banking fades to
background of natural
experience in vertical
Developing industry
vertical expertise
important
+TECH APPLICATION+
+SKILL DEVELOPMENT+
Source: Reinventure
+INDUSTRY EXPERTISE+
LESS
-RESISTANT ATTITUDES-

8. Universal tips for individuals in the new world
1. Understanding of lean/agile operating
- Key to working at speed in new world
2. Consideration of personal brand
- Hedge risk of corporate brand erosion/displacement by
developing personal brand
3. Nature of employment
- An openness to working in more flexible structures
across multiple organisations
Source: Reinventure

9. Danny Gilligan @dannygilligan
Simon Cant @simoncant
Rohen Sood @rohensood13
Reinventure @reinventurefund
www.reinventure.com.au
THANKS