HOW OPEN APIS WILL CHANGE THE FUTURE OF BANKING

1. Picture by Kuster & Wildhaber Photography, ﬂickr HOW OPEN APIS WILL CHANGE THE FUTURE OF BANKING January 2016 Hamburg /Germany

2. 1. Data 2. APIs 3. What is the connection to banking? 4. Impact on banks and banking IT

3. Data is the new oil

4. Only connected / smart data has a true value - Context - Relevance The true smartness of data is the aggregation of different sources: - Overall view - No value when only taking a silo in consideration Data is not an end itself

6. What are APIs? An API is for a computer what an internet browser is for humans ﬁgo API HTML code Subscription check based on bank account transactions (https://www.aboalarm.de/vertragscheck) + = > 3.000 ﬁnancial sources

7. Best practice of “API companies”

8. Google maintains over 100 different APIs which enable third party developers to create new services. These new services have a big impact on Googles success story. Google Nearly every Google service can be accessed from third parties via an API

9. Salesforce would not have been as successful as they are without their force.com platform. force.com is home to a massive number number of third party services which can be used by every Salesforce user. Salesforce Vertical and horizontal services on top of Salesforce API

10. Twilio & Stripe Hidden champions: communication and payment are crucial infrastructure With Twilio and Stripe any developer can implement payment or communication services into their own service - without the usual complexity.   All of us have used at least one service which depends on Twilio or Stripe (Uber, Coca Cola, Kickstarter, Twitter, …).

11. Scaling across IT and developer communities Facebook, Apple, PayPal, UBER - or in short: all digital successful offerings.

13. › Existing assets from banks are losing value › Size › Branches › Tradition › Traditional networks › Customer relationship › Regional proximity and ties › Powerful IT systems

14. New requirements are developing but only third parties fulﬁl them › Speed › Innovation › Flexibility › New skills › Flexible and strong IT › Daily relevance and context of ﬁnancial data

15. Consequence: The ﬁnancial world is currently being disrupted Quelle: www.millennialdisruptionindex.com/

16. The new ﬁnancial landscape Startups and incumbents from other industries are entering the space Bank BBank A Customers Products

17. Important: None of the new players is trying to replace a bank completely

18. Focus on speciﬁc use cases Result for the banks: „Death by a thousands cuts” Quelle: Tom Loverro, RRE Ventures, Slideshare

19. Rebundling follows unbundling The “FinTech supermarket” “Eventually, Number26 wants to be a FinTech hub that offers users the best ﬁnancial products through integrations with other players, such as TransferWise.” Source: http://dailyﬁntech.com/

20. What would be a suitable answer from banks? To beat the new entrants at their own game.

21. How could the future of banking look like? • A true ﬁnancial home for the customer - also in the digital world • Connected and smart • Full of context and relevance • Role model and competitors are digital ecosystems and new entrants • PSD2 and XS2A is the catalyst for this mindset The required transition New role models and regulation are opportunities Banks today • Isolation of own systems • Believe into the loyal customer ➡ Totally unrelated to today’s reality

22. Flexibility Aggregation Speed New use-cases Implementation of third parties New ways of monetisation Growth driver New customer loyalty APIs are the centrepiece of the connected world The required foundation for data, platforms and ecosystems -> Only the API defines the frame -> Complete overview -> Internal IT does not limit -> Third parties develop new services “for me” -> End of financial data silos -> APIs allow access to data -> Infinite resources and ideas -> Create context and relevance for the user

23. APIs are not an end itself, but part of the strategy and mindset. Clashes of thought patterns: Openness <-> Isolation Third parties <-> Do it on your own Ecosystem <-> Silo API as a part of a business strategy A google search for “Banking API” only displays one single bank!

24. Banks usually do not have APIs, but something they call “interfaces”. The big difference between an API and an interface is that interfaces can be used by third parties and APIs are build for third parties. API & Banks Are there any APIs from banks? No results while searching for “API” at the two biggest banking IT service providers in Germany.

25. What is ﬁgo doing?

26. After two years around 500 developers are using the API for different use cases: • Nine API calls per second or 24m per month • 160.000 daily users • figo is connected to more than 50m bank accounts at more than 3,100 financial sources figo is the missing link Fulfilling the need of aggregation and banking API

27. Account aggregation -> Kontoalarm, Moneymeets Algo banking -> Fincite Bank account switching tools -> FinReach, ﬁno, dwins Online subscription check -> Aboalarm Real time risk management -> auxmoney Scan & pay -> organize.me Open position management -> Debitoor, Fastbill P2P payments -> Cringle Travel expenditures -> Xpenditure Innovation labs and POCs -> Bankathon, UBS Exemplary use cases on top of ﬁgo API Focus on the user and not on products

28. The figo technology can be easily used by banks: • Account aggregation (multi banking services) • Foundation of an API layer (Groundwork for X2SA) • Absorb new ideas (banking app-store, POC platform) How can banks benefit? Banks can harness the figo technology, developer community and use cases

29. Best-Practices a. Banking Apps b. Account switching service c. Investing solution d. Risk management e. SME solutions f. Others

30. Banking App: Kontoalarm A banking app focused on cost control and prevention of unwanted debiting Link: https://itunes.apple.com/de/app/kontoalarm/id737679841?l=en&mt=8

31. Banking App: KontoPilot The Banking App from Deutsche Post (German Post) Link: https://itunes.apple.com/de/app/e-post-kontopilot/id853741578?mt=8

32. Banking App: organize.me Just one single app to scan, archive and pay your invoices Link: https://itunes.apple.com/de/app/organize.me/id818586986?mt=8

33. Banking App: Wyze.me A PFM solution to automate your ﬁnances

35. Account switching service: fino Is going to be used by comdirect, Commerzbank, … Link: http://fino.digital/ The implementation of figo will be invisible for the user.

36. Account switching service: FinReach (Finleap) Cooperations with Sutor Bank and DKB Link: http://www.ﬁnreach.de/#accountswitch The implementation of ﬁgo will be invisible for the user.

37. Account switching service: DWINS New bank account through an easy switch Link: http://www.dwins.de/ The implementation of ﬁgo will be invisible for the user.

39. Investing solutions: Fincite ﬁgo is the foundation of robo advisory solution from Fincite for banks Link: http://ﬁncite.de/

40. Investing solution: moneymeets Social trading and community platform Link: https://www.moneymeets.com/home

41. Investing solution: Aktienfreunde Implementation of investment portfolios in order to track and compare trends Link: http://aktienfreunde.net/index

42. Investing solution: Equity Farmer Implementation of investment portfolios for better investment recommendations Link: http://www.equityfarmer.com/

43. Investing solution: Hatch Deﬁne saving goals and save automatically through rounding up while paying with your card.

44. Investing solution: Prosper Quick and easy investing in ETFs with a mobile app

46. Risk management: Auxmoney Real-time scoring based on account transactions The implementation of ﬁgo will be invisible for the user. Link: https://www.auxmoney.com/faq#q5

47. Risk management: Cringle Veriﬁcation of bank account for P2P payments in real-time The implementation of ﬁgo will be invisible for the user. Link: https://www.cringle.net/

48. Risk management: Decimo Automatic bank account check for incoming transactions The implementation of ﬁgo will be invisible for the user. Link: http://www.decimo.de/

50. SME solutions: Debitoor Smart banking for SME: Accounting can be fun Link: http://feedback.debitoor.de/knowledgebase/articles/604638-zahlungen-zahlung- buchen-dokumente-ﬁgo-ba

51. SME solutions: Xpenditure Gathering of expenses through readout of bank account & credit card transactions Link: https://xpenditure.com/de/ﬁgo

52. SME solutions: Candis Supports you with gathering, organising and paying of incoming invoices Link: http://www.candis.io/

53. SME solutions: MIA MIA allows the user to interact with their bank in the easiest way - via texting

54. SME solutions: Fastbill FastBill was build for Small Businesses and Entrepreneurs: Invoices, easy to make, beautiful to see Link: https://www.fastbill.com/en/

55. SME solutions: Minnits Gathering of expenses through readout of bank account and credit card transactions Link: http://minnits.de/

56. SME solutions: Skyline Software for certain industries - here: building cleaner Link: https://skyline-web.de/handbuch/zahlungsverkehr/27-die-ﬁgo-app- kontoumsatze-abrufen-und-zuordnen

58. Others: Smart Statement by organize.me Automatic analysis of email attachments including matching of invoices to bank account transactions

59. Others: #more Categorisation of bank account transactions through self-learning algorithm

60. Others: Trust Pay Create and execute fully automated commercial agreements including payment

61. Others: Vertragscheck Subscription and contract veriﬁcation based on transactions, possibility of cancellation and notiﬁcation of duration

63. Required parts of a successful API mission: • Intention to open up • Desire for speed • Strong believe in platforms as the foundation for banking of the future • Commercialisation of the API • Creation of an own ecosystem for the user APIs are worthless without a proper mindset Building an API is easy, the consequences are the true challenge

64. Banks require new infrastructure - ﬁgo can be a part of that One system but with different speeds and responsibilities Systems of record - Core banking system Systems of differentiation* - API layer like figo Systems of innovation - different frontends © 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. „I do not know what I need at the moment, I need to experiment“ *Also referred to as “Uniqueness” „I know what I need, but my requirements are unique and there no bundles available for me” „I know what I need: a standard product which has no USP.“ Owner: Third parties or innovation labs - permanent releases Owner: Internal IT - regular updates Owner: Outsourcing - Rarely new releases

65. FinTech startup role model Number 26 Separation of the systems Core banking system and card processor Data buffer and API-Layer iOS App / Android App / Web-App / CRM © 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. Owner: Number26 Owner: Wirecard Bank Owner: Fiducia GAD / Wirecard Processing FZ LLC

66. First examples of APIs from banks in Germany Trading and payments Comdirect API: Developed for 2nd Bankathon in November 2015 Fidor Bank API: Payment

67. The digital frontend is the future of banking Future of banks is banking • The digital customer fronted is crucial for success • Bank(ing) is part of daily life • It is an “everyday-OS” • This happens mobile and in the right context • It is all about relevance, which is determined by the user • In order to achieve this, the right setup and skills are required • Technology is part of all of that, but mindset is and will be the driving force

68. André M. Bajorat E-Mail: Mobile: amb@figo.io +49 172 4574783 Address figo GmbH Burchardstr. 21 20095 Hamburg Web www.figo.io @figoAPI Let’s change the way we bank today!

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