A Point of View on the threat of Fintechs and Neobanks in the Financial Services category and what banks should do to respond and continue to unlock business and customer value and drive growth. Banks should look beyond just embracing the latest Fintech and look to reinvent themselves as the Exponential Bank of the Future.

1. Exponential Banking
Reinventing Financial Services in a World of Exponential Change

2. Why We Are Here
The Problem Statement
Technology is rapidly accelerating the
transformation of society as a whole –
changing industries, businesses, lifestyle
and culture.
Particularly in banking and financial
services, the global emergence of FinTech
continues to disrupt the traditional financial
services landscape. Increasingly banks
and FIs are under pressure to innovate to
overcome these challenges and to tap on
new opportunities to address the unmet
needs of customers.
The Ambition
Bank XYZ in Singapore is undergoing a
digital transformation that goes beyond
just embracing the latest FinTech. It is
about putting customers at the core,
focusing on delivering what customers
what, when they want it and how they
want it in a really frictionless way.
The ambition is to leverage on financial
technology as opportunities to reduce
friction between consumers and financial
services thus opening up new growth
opportunities for the bank.

3. A Primer To A Bigger Conversation
WHAT:
Value Drivers
For Growth
WHY:
Drivers of
Exponential
Change
HOW:
Transformation
Roadmap
Exponential
Growth
Opportunities

4. In A World Of Exponential Change
Macro Environment
Technology
Competitive Dynamics
Consumer
New generation of digital natives /
Digital becomes mainstream
Evolution of the customer journey - Increased
demands and expectations
Innovation in payments and cryptocurrencies
Lack of trust in FinTech innovations
Fintech funding and growth in SG
DBS leads the way as Asia’s Best Digital BankHighly progressive regulatory approach /
Regulation Sandbox
Non-tradition entrants in payments
(Grab, Go-Jek, Razer, Singtel)
Push towards cashless society
Tension between innovation & protection
Rise of blockchain / distributed ledger technology
Cybersecurity concerns + KYC/AML
Mobile as the great equalizer
Move towards ecosystem brands
Open Banking / APIs
Nimble startups without legacy technology stacks
Data as a competitive advantage
BANK
XYZ

5. Key Value Drivers For Growth
Automation / Cost savings
Improve customer
experience
Acquire new customers
Create new revenue streams
Create a sustainable
competitive advantage
Transaction migration, automated customer service
Friction-free, provide personalized services.
A focus on customer lifetime value and total relationship balance
Mobile first digital bank, ePayments
Monetization beyond core banking
services
Step change &
future proof the
bank
Exponential
Incremental

6. Exponential Growth Opportunities
Opportunity 1: Extend value across the customer journey
§ Address customer expectations and create a
frictionless and consistent brand and service
experience across differentiated channels and
devices.
§ Focus on real-time engagement with customers
through the entire customer journey. Create a
Financial Supermarket to offer a curated mix of
internal and 3rd party offerings that gives customers
an easy one-stop access to financial products and to
address financial needs through a single integrated
platform.
§ Determine the core FinTech technologies to pursue to
reach the unbanked / underserved and new customers
in their journey – ePayments, mobile digital bank, P2P
lending
Opportunity 2: Collaboration and Investments
§ Bank XYZ is uniquely able to balance the tension
between innovation and protection
§ Leverage on brand legacy to address consumers trust
issues in embracing FinTech solutions
§ Determine the core areas in FinTech to engage in and
then decide on the innovation gap - if we should
develop internally, partner with or invest in/acquire
FinTech disruptors. Overlay with short-mid-long term
goals
§ Reasons to partner with FinTechs include access to a
range of innovative technologies, business models,
disruptive behaviors and ideas that a bank may not have
the capacity, capability or culture to develop internally.
§ Need to develop a workaround for different data
standards and interoperability - Embrace open banking
initiatives and open / API architectures.

7. Exponential Growth Opportunities
Opportunity 3: Data Analytics and Monetization
§ Use real-time data more effectively internally to obtain
better insights for product development, cross-sell,
customer purchasing behavior and predicting demand /
growth opportunities. Ensures products and services are
better meeting the needs of customers and improving
the overall customer journey
§ Extract value from data as a core asset by monetizing it
with 3rd parties. This leverages on the impact of Open
Banking and includes creating new offerings such as
reports and benchmark analysis based on bank data or
to allow individuals to use their bank credentials to
access secure 3rd-party online services.
§ In addition, when used responsibility, non-identifiable
bank data contains a rich set of exclusive information on
customer demographic and lifestyle preferences that
could be used for telco, retail, CPG, automotive etc.
Opportunity 4: Establish a secure perimeter
(Cybersecurity)
§ Cybersecurity is viewed as one of the most important
and present threats in the industry
§ Pay to play opportunity – As consumer trust is
paramount + operating with regulatory framework, we
need to get this right in order to leverage on all other
opportunities.
§ It is more likely a question of “when” rather than “if” a
breach will occur – vital for Bank XYZ to have an
effective response capability so that attacks can be
quickly and effectively detected, analyzed and
responded to.

8. Exponential Growth Opportunities
Opportunity 5: Beyond Banking
Grow beyond your core and into relevant ecosystems
§ Embrace the broader role a bank can play on behalf of
customers
§ Extend out from the core business (account services, line
of credit, secured loans, credit cards, investments) into both
banking and non-banking ecosystems
§ Banking ecosystems include – Financial education,
accounting, loyalty discounts, account consolidation,
budget management
§ Non-banking ecosystems include – Business process
outsourcing, stock management, health services,
subscription management, home services, telco services
§ Allows you to form a network of value across industries and
create your own ecosystem to provide services customers
want at a lower cost and with greater convenience => Drive
new revenue streams.
§ Tap on existing customer base and operational capabilities,
strengthen engagement and capture data that will provide
360 view of customer needs. McKinsey & Company

9. Transformation Roadmap: How Do We Get There
Priority 1: Simplify legacy systems and update your IT stack to get ready for the “new normal”
Prepare for a world where change is constant and where digital comes first
Stop over-investing in legacy systems and adopt an aggressive PaaS and SaaS based model
Priority 5: Plug the weakest links – Pay attention to cybersecurity and put measures in place
Consumer trust in financial services is paramount especially when it comes to adoption of innovation.
Cyberattacks are not a matter of “if” but “when”
Priority 2: Get more intelligent about your customer needs
Leverage on your data and the power of analytics / AI to give customers more
Understand and anticipate their needs and provide rich, compelling and personal services to them.
Priority 3: Embrace openness and collaboration
Collaboration at scale - Prepare your architecture to connect to anything, anywhere.
Priority 4: Build your Army - Make sure you have the necessary talent and skills
Recruit domain experts from outside the industry, develop robust learning modules for internal upskill and
foster a culture of collaboration, innovative thinking and agility.

10. Key Takeaways
Beyond just embracing the latest
Fintech
Reinvent Bank XYZ as the
Exponential Bank of the future
Overlay Drivers of Exponential
Change with Value Drivers for
Growth
5 High Level Exponential Growth
Opportunities Identified
1
2
Responding to category
disruption & the threat of fintech
upstarts / virtual banks
An opportunity to lead the
change within the category3