Digital transformation of the German banking industry. With many examples of ING'DiBa, Deutsche Bank, Commerzbank, HVB, Sparkasse, Fidor Bank, Solaris Bank, N26, kapilendo, niiio, crowd, cloud, blockchain, crypto, API, platform, P2P, ...

1. Digital transformation
Frank Schwab, January 2017
German banking industry

2. Year 2000

3. 2002 2015
ING*DiBa benefits from 1st digital wave
Customers
1.8 millions
8.5 millions
Profits
-4 millions EUR
1,115 millions EUR
Employees
914
3.749
FrankSchwabSpeaks.com Source: annual reports ING*DiBa

4. ING*DiBa – 10x business volume
2002 2015
Deposits in billion EUR
19.2
121.1
Loans in billion EUR
4.6
98.0
2002 2015
FrankSchwabSpeaks.com Source: annual reports ING*DiBa

8. PayPal 2x Deutsche Bank
Market cap, Nov 2016
[in billion EUR]
17
Deutsche Bank
44
PayPal
Deutsche Bank PayPal
Customers 25,000,000 169,000,000
APIs 0 > 25
Employees 100,000 8,000

9. 1st Welle

10. But

12. No
Business model

13. 2017

14. IBM Mainframe
Sun Server
Intel blade
Thin clients
Fat clients
AIX Server Server Farm

17. Investment
needs

18. No interest rate business

19. Profits

20. Roland Berger FinTech Study, March 2016

21. Alipay

22. 2015
289 millions mobile user / month
8.5 millions merchants
52orders per user per year
24,000 employees

23. > 400 FinTechs

24. Crowd

26. 1 million EUR in 9 minutes and 23 seconds

27. Fidor: Facebook Like Interest Rate

29. Peer to peer

33. Crypto

35. 642 currencies
703 exchanges

36. 10 %
-8

37. Blockchain

38. Blockchain
time
Public register
Transaction blocks

40. Smart Contracts
Public register Transaction block with
conditions
Condition
Example
Shares: dividend payment

41. Smart Contracts – Example car finance

43. AI
^

44. Amelia, Source: IPSoft
IT Service Desk Agent
SEB Bank
3 weeks
700 employees
4,000 calls

45. Robo
advisory

49. Over rated
Gartner Hype Cycle

51. Over rated
Under rated
Gartner Hype Cycle

52. Mobile

56. Proceses
100% STP

57. < 60 seconds

59. Cloud

63. API

69. Plattform

73. All just hype?

74. 36

75. BPO; 396
Insurance; 1.515
FinHCIT; 2.087
FinMgmtSol; 4.173
IB / Wealth; 4.702
Banking/Lending; 9.296
Payments/Ecommerce;
13.543
36 billions USD in FinTech investments in 2016
[in million USD]
1.525 transactions
337
432
293
186
141
10531
FrankSchwabSpeaks.com Source: Financial Technology Partners

76. D.A.CH FinTech scene overtook the UK
- with over $1,3B investments (VC + venture debt) in 2015
2.50%
13.9%
150%
Banking%
9.40%
20% 0,7% 5.5%2%
Lending%
358% 1% 0.5%
10% 20% 14.20% 5% 230%
49.8% 0.5%
Insurance%
1% 3.5% 7%
Investment%
5.5% 10% 0.27% 2% 4%
0.6% 1.6%
Blockchain%/%Other%
*%Source:%%TechFluence%
Payment%
150%
Chart shows funding in € mn. Estimates based on disclosed deals only- no liability for errors.

77. Customer
paymentsSecurities
Loans
Deposits

78. PayPal further develops its business step by step
2000 2006 2010 2015
Online payments
P2P
Account
Cards
Loans
POS
Cash
FrankSchwabSpeaks.com Source: annual reports PayPal

79. IT defines retail
banking of the future
= new KPIs

80. IT costs per user per year in USD
200
Tier 1/2 Bank eBay
7,4
Facebook
3,8
Google
3,4
FinTech
10
FrankSchwabSpeaks.com Source: annual reports

81. Customer acquisition costs in EUR
50 - 200
Traditional banks FinTech
5 - 25

82. What do
German banks
do?

84. Commerzbank
Startup-Garage
Comdirect
Venture Capital
CommerzVentures
Main Incubator
Commerzbank

85. UniCredit / HVB
45 millions EUR invested in 2016

86. DZ Bank / German union banks: Hackathon, March 2016
Source: https://twitter.com/dzbank/status/705424223838146560/photo/1?ref_src=twsrc%5Etfw

88. Quo vadis?

89. 2030

90. Loans
Assets
Payments
Banking Services

92. R I P

93. New banking products build on new technologies
Crowd P2P Crypto
Cloud API
^
AI MobileBlockchain Plattform
FrankSchwabSpeaks.com

94. Diffusion of innovation
Longer than we think
Faster
than we
think
time
diffusion

95. Banking disrupted
New
Traditional
BankingService
NewTechnologyLegacy
Niche
Financial
infrastructure
provider
Er
Successful
disruptors
FrankSchwabSpeaks.com

96. German retail banking 2030
2015 2030
Saving banksPrivate banks Union banks FinTechs Non Banks
FrankSchwabSpeaks.com

97. Frank@FrankSchwab.de