Apidays New York 2024 - Scaling API-first by Ian Reasor and Radu Cotescu, Adobe
The Finance, The Digital & The Society - Smart Cities Summit 2018 - Algiers
1. THE FINANCE, THE
DIGITAL & THE
SOCIETY
Boris JOSEPH
CEO NATIXIS ALGERIA
28/06/2018
ALGIERS'S SMART CITY
2. 2
75% of today's
S&P 500 companies may
be replaced by 2027
47% of US Jobs
at risk due to
computerisation
Change is the only constant
Sources : Roland Berger, Frey & Osborn - 2013
3. Will 1990’s predictions will come true?
3
Internet banking and declining use of cash and cheques render the standard banking
model obsolete.
The value of branch networks will collapse and banks will be unable to compete with
new players enjoying far lower operating costs.
1990 - The disintermediation of banks
1990 / 2007 - The contrary happened
Use of computer ability to develop sophisticated products, high frequency trading, High
profits, …
Since 2007 - The prediction shows signs of coming true…somehow
Regulation Technology Generation
4. 4
Fintech 1.0 – The first wave mostly hit
payment transactions
Start-ups were targeting only 6% of banking revenues
Sources : MacKinsey
CIB Business was largely
spared by this first wave
Start-ups were targeting retail-banking which account for
52 percent of total industry revenues
5. 5
Fintech 1.0 – Where are they heading ?
Fintech are looking for any opportunities with high return and avoid capital intensive
areas offering poor returns
Sources : Panorama
Banks offer basic and low
cost sticky services
allowing them to earn
attractive margins in
other areas, including
investment management,
credit-card fees, or
foreign-exchange
transactions
59 percent of the banks
earnings flow come from
pure fee products, such
as advice, payments,
origination or sales
6. 6
Fintech 1.0 – Paymium Case study
Trading platform for Bitcoin
Sources : Atlantico
Gonzague Grandval : “
Paymium meets two
needs : how to buy and
sell Bitcoins ? And how to
accept payment in Bitcoin
and convert it immediately
in Euro ? “
Pierre Noizat : “ We intend to increase our
trade volume by five by end of 2016. In
addition, the interest of Blockchain
technology, on which Bitcoin grows, is now
widely recognized by the banking sector.
This paves the way to new applications in
the field of digital trust and payments “
Bitcoin
7. 7
Fintech 1.0 – Tagattitude Case study
Financial services via any mobile – bank’s friendly
Yves Eonnet : “In 2005 I co-founded TagPay to develop contactless mobile payment
technology. TagPay is now a complete digital core banking system, centered around
the mobile phone. With TagPay, banks become universal hubs of digital financial
services. TagPay powers financial services in over 25 countries.”
Payment
2005 : creation - 20 people – work mainly
in emerging countries (Africa) – address
the excluded of banking system (M-
payment, transfert, invoice, …)
To shop, the client enters the trader’s
number on his mobile and places the
two mobile face to face. The client
receives a call from the platform which
is listened (the audio code) by the
trader’s phone (NSDT tech). If both
devices have the same information, the
payment is done.
8. 8
Fintech 1.0 – Prêt d’Union Case study
Multi Lending platform between private and corporates
Crowd Lending
sector and believing to fully understands it,
he realizes few months later that his credit
rate is in fact 14%, and that he has submitted
revolving credit. Moreover, looking at his
financial statements, he notes that the
savings he had placed in the bank was paid
less than 3% per year, without any proportion
with the credit rate that was then subscribed.
Younited CREDIT project was born
No LIMIT ! Make it SIMPLE ! INNOVATE or
die ! FASTER is better ! Act as an
ENTREPRENEUR !
September 2008:
Charles Egly makes an
appointment in his bank
to take out a consumer
loan of € 6,000 in order
to pay his taxes. While
working for 7 years in
the banking
9. 9
Fintech 1.0 – Lendosphere Case study
A platform only dedicated to sustainable development projects
Laure Verhaeghe : For me, creating
Lendosphère was obvious. Indeed,
sustainable development and
crowdfunding carry values of
transparency. I am convinced that to
raise awareness, concerns about our
health and money are both crucial
Amaury Blais : Engineer, he
worked for 5 years as an analyst
in various institutions in the
banking sector (Natixis, BNP
Paribas,...). He then joined the
collaborative economy and web.
Crowd Lending
2014 : Creation - 2 people
- Rate : 3,3% to 10 %
- 1 to 5 years
- Project size : 10K€ to
250k€
- Mainstream : energy (wind,
solar)
- Investment between 50 to
10k€
- Projet providers : EDF
énergies nouvelles,
Valorem, Innovent, Abo
wind
10. 10
Fintech 1.0 – Eos Venture Case study
A small among the majors
Stéphane LUBIARZ :
“We chose to launch this new type of business in Europe with one goal in mind: To help our
economy grow. Europe has many talented SMEs looking to develop, but they often
encounter difficulties financing their growth. At the same time, we are witnessing a real
evolution in investment habits, where private individuals now look to invest directly in a
company using online crowdfunding portals. Some may see this as a disruption in the
finance world. We see it as the future: A fully collaborative financing market for everyone”
Crowd Equity
2012 : Creation - 11
people – with its ACPR
agreement, it allows :
1 - fund raising above 1
M€ to SME
2 – Secondary market
3 – European market
access
4 – open source with
other platform
11. 11
Fintech 1.0 – FinexKap Case study
A very efficient trade receivable platform
Treasury
2012
Creation
4 people
Cédric Teissier (ex-
Debevoise&Plimpton) and
Arthur de Catheu (ex-Ardian) -
The idea is to connect together
institutional investors and
companies through an electronic
platform.
12. 12
Fintech 1.0 – Alphametry Case study
A market place connecting Fund Managers with best world experts
- Economic and regulatory changes challenge Equity
research
- Alphametry creates connections in the professional
investment community
- It makes equity research easier to use, open up new
sources of expertise for asset managers, and generate
more business possibilities for research contributors
- The web-based marketplace covers 35000 stocks,
ETFs and futures traded on 45 equity exchanges
worldwide
Advisory
13. 13
Fintech 2.0 – The second wave, grow
quickly or die
A spirit of cooperation between fintechs and incumbents is developing
1 Defined in terms of the extent to which competitive dynamics are likely to change in that segment
2 Based on Oliver Wyman analysis of major European markets; split varies considerably on a country-by-country basis
14. 14
Fintech – In CIB, Cooperation is currently the main
trend
Sources : Panorama Fintech
1 ex: treasury services to corporate-banking clients
The trend toward B2B is most pronounced in CIB which accounts for 15
percent of all fintech activity across markets
15. 15
Fintech – Positionning on the CIB value chain
Key value
proposition of
new
entrants
§ Time to market (e.g. within days)
§ Highly responsive to client demands
(e.g. within minutes)
§ Services based on latest technology
§ Disintermediating middleman
§ Fees down between 50% to 90%
Limits of
existing
new entrant
offering
§ Startup, not institutional yet,
capital limitation, many will not
survive
§ Niche positioning i.e. client
accesses by segments, breadth
of product offering
§ Regulatory constraints to be
anticipated
16. 16
Industries – Focused on B2C mass markets
Customer needs
understanding
GAFA - Energy provider - Telecom - Media giants – Distribution
Large and loyal
customer base
§ Large customer base
§ Large geographical footprints
§ High frequency transaction
(data analytics)
Financial power
Strong regulatory
advantage
§ Pre-existing competence in financial
services
§ Long and short term resources access
§ low capital and liquidity
requirement
€
17. 17
First wave GAFA MMFElectronic wallet 500 Micro
credit
Licaitong -
700
Industries – Already on the move
Baifa - 65
18. In the course of history, Markets withstanded and
adapted to major crisis and structural changes
18
?
Elaborate Mortgage-related securities
designed to reduce risk encouraged
investors to pile into American
housing market, which then crashed.
Subprime
2008
Debts of European countries reach an
unbearable burden. Greek default
shows CDS unprotective role. PIGS
fall erase risk free concept.
EU Crisis
2011
Shares in telecoms and internet
boomed amid euphoria over the
wonders of the web. Eventually
investors spotted the lack of profits.
19. 2009 – Implementation of post crisis reforms in the
area of financial regulation
19
Shield the financial sector (FS) from all
subsequent crises, whatever their
origin
Correct critical weaknesses in the
regulation approach (the “light touch”
philosophy)
End the « too big to fail » approach
Need to take account of other financial
sectors: Insurance companies, Asset
managers, Shadow Banking
A more intensive and intrusive
supervision with a specific policy
framework for the G-SIFI’s
Effective cross-border bank
resolution plans
Domestic structural separation plans
(France/Germany/UK)
These actors’ potential threats to FS
stability have to be reduced
Deficiencies The Answers
Basel III: the core regulatory
response (CRD IV in Europe):
strengthen capital and liquidity
regulation
I
2
3
4
21. 21
Corporate banking value chain
3 Model Archetypes
END-TO-END PROVIDER BANK-LED MODULAR OFFERING PARTNER-LED MODULAR OFFERING
Sources Oliver Wyman
22. 22
Bank led modular offering - FIDOR Germany
FIDOR is German, a mobile only neo-bank
Fidor has built its own core platform
and has created a series of APIs to
generate an open architecture
modular bank offering
It has experienced strong early-
stage popularity linked to the
strength of its “community
offering”, strong marketing and
involvement in social media
The loyal, although small customer
base has permitted expansion,
leveraging the open architecture
modular bank set-up to offer
multiple different financial services
offerings, including
– Crowdfinancing
– Social Trading (Inc. Commo)
– Savings bonds
Sources Oliver Wyman
25. CREATION OF A MODERN
AND ROBUST ARCHITECTURE
l
IMPLEMENTATION OF
SECURITY MEASURES IN THE
APPLICATION
l
SUCCESSFUL PEN TESTS
ACHIEVED
QUANTITATIVE AND
QUALITATIVE MARKET
SURVEY THROUGHOUT THE
PROJECT
l
CO DESIGN WITH THE
CLIENTS
l
PERMANENT TESTING TO
IMPROVE THE USER
EXPERIENCE
AN INNOVATIVE SOLUTION WITH MULTIPLE
REQUIREMENTS
Co-construction
with the client
Security, our
priority
1.2
ALGERIAN CENTRAL BANK
AGREEMENTS OBTAINED FOR
ALL FEATURES, INCLUDING
ONLINE ONBOARDING
l
CLIENT DATA PROTECTION
Be full
compliante
25
26. % OF INTERNET ACCESS BETWEEN 2007 AND 2015
1.3
0
10
20
30
40
50
60
70
80
90
Algérie Maroc Tunisie France
% of internet access between 2007 and 2015
0
10
20
30
40
50
60
Algérie Maroc Tunisie
% of 3G between 2007 and 2015% OF 3G BETWEEN 2007 AND 2015
Marketevolution
Market
opportunities
The market survey reveals that:
Mostly, customers need to move in their branch to make
a transfer, to withdraw money. It reveals also that
“Security and physical access to a bank” branch are the
main expectations of the users.
• The customers have are eager for digital services
(eg online administrative documents)
• Encouragement of the supervisory authorities for
"innovative" solutions
Why did we launched a mobile bank?
26
27. A MOBILE BANK BUILT ON THE BASIS OF CUSTOMER
NEEDS
The response: Banxy a mobile Bank as
a new banking experience for users
Accessible from a smartphone which will
allow the user to open an account
without moving, order transfers and
manage CIB card and checkbook. This
bank will make you move as little as
possible in a bank branch while providing
a customer support center.
Expectations expressed …
l "Why do you say it's hard to get to your
bank? "
Réponses:
„ "I don’t have time, Schedules are not
suitable »
„ Parking issues : "It's hard to find
parking"
„ Proximity: "Far from my place of work
/ home"
1.5
27
28. BANXY, A MOBILE BANK THAT’S
STILL EVOLVING
ACCESSIBILITY
ADVICING
Permanent user
support
Call Center
6/7
08h30 à 20h30
Immediate support of
user’s requests
Real time operations
Simplicity of the
user experience
without having to
move to a branch
An available bank on
smartphone
7/7 et 24/24
Natixis Algeria
branches remain
at the disposal of
Banxy users
PRATICALY
Custumized support
delivered to the user
Expertise on banking
offers
BANXY ... OUR VALUE PROPOSITION FOR OUR USERS
28