the impact of digital technology on financial services

ACOI PresentationThe Impact of Digital Technology on Financial Services

@TSSG_WIT@BarryMDownes

Barry Downes, CEO 25/11/2015

Agenda

• TSSG Introduction

• Key Technology Trends

• The Impact of Digital Technology on Financial Services

• Opportunities

• Next Steps

www.tssg.org 2

About me• CEO of TSSG, an International Research Institute hosted by WIT.

• Previously, Founder of FeedHenry Ltd, a mobile cloud platform, sold to Red Hat Inc. (NYSE: RHT) for $82 million in 2014.

• Also set-up and led TSSG’s Venturing team which has produced 14 start-ups with 3 additional launching in the next 12 months.

• Originally worked in the USA for Infinium, a leading ERP software company.

• On return to Ireland worked for AIB Bank on their Retail Banking Systems and later led the redevelopment of their Home Mortgage System as a consultant for an AIB and IBM venture called Resolution Technology.

• Later delivered Insurance systems for RSA in Dublin and Scottish Widows in Edinburgh as a consultant for Phoenix Technology Group.

• Been out of Financial Services for the past few years but coming back to the community and looking at it afresh both from the perspective of TSSG supporting the industry through innovation projects and also that of an investor.www.tssg.org 3

4

TSSG• International Research Institute hosted by WIT. • Founded by Prof Willie Donnelly in 1997 and led

by CEO Barry Downes. • Has 140+ staff and is 100% self funded.

• Expertise in key areas relevant to EI/IDA TIME cluster:

• networks,• mobile and• datamining and security services.

The Telecommunications Software and Systems Group (TSSG) at WIT

• Completed over 110 direct industry projects for start-ups in Ireland over the past 3 years and has spun out a number of leading international start-ups such as FeedHenry Ltd.

EXPERTISE

• On doing world class research and innovation - then turning this into economic impact in the South East and Ireland by supporting EI and IDA clients and by creating and supporting start-ups.

FOCUS

IMPACT

May 1, 2023

Innovation Model

Research Units

www.tssg.org 6

Networks Mobile Communications Services

TSSG Core Focus Areas

Network VirtualizationSoftware Defined Networking (SN) & Software Platform & Infrastructure as a Service

Mobile Cloud Platforms (PaaS) and advanced mobile applications

Communication Services Platforms (PaaS) and

applications e.g. Web RTC

TSSG Core Focus Areas

Architecting and Engineering advanced

services in mobile, IoT and security.

VR/AR Communications, 3D User Interfaces,

Education, Simulation and enabling hardware

Predictive Analytics Social Network Analysis

Data Security and Privacy

Services Engineering

Virtual and Augmented Reality

Data Mining and Security

Drivers ofInnovation in Financial Services

ICT Drivers

• Cloud Computing

• Mobile Technology

• Micro-services Architectures

• Big Data

• IoT

• Security

• BitCoin and BlockChain

From Systems of Record

www.tssg.org 11

TRANSACTIONAL

Source: RedHat

To Systems of Engagement

www.tssg.org 12Source: RedHat

It’s a Changing World

www.tssg.org 13Source: RedHat

Emergence of bimodal or 2 Track IT

www.tssg.org 14Source: RedHat

Mobile is the catalyst – Node.js is the tool

www.tssg.org 15

1)Benedict Evans, Mobile is Eating the World(October 2014) http://benBevans.com/benedictevans/2014/10/28/presentaion-mobile-is-eating-the-world

2)IDC Reveals Worldwide Mobile Enterprise Applications and Solutions Predictions for2015. http://www.idc.com/getdoc.jsp?containerId=prUS25350514

Source: RedHat

Micro-services Architecture

www.tssg.org 16

Cloud, API, Modular, Scalable – ideal for the Payment Services Directive

Source: Pivotal

API

PSD2

• As a result of new EU rules – PSD2

• Third Parties will soon have direct access to bank accounts and

• Will be permitted to initiate payment orders on these accounts on behalf of account holders.

• This potentially puts distance between you and the account holder and could deprive you of access to valuable transaction data.

• And you will need to provide an API to these Third Parties.

Data is at the Core

www.tssg.org 18

TSSG Data Lifecycle

www.tssg.org 19

End to End unified Communications

Sensor Networks

Wireless access Networks

Networkoptimisation

RDBMSNoSQLGraph

Data Storage

SemanticAnalysis Sentiment

Analysis

Context Enrichment

Location Based

Data Enrichment

Distributed Non-Distributed

PredictiveAnalytics

Social NetworkAnalytics Decision

SupportData Analysis

Context Awareness

Recommendation

Prediction

TrendingData

ServicesPrivacy Trust

Security

Infrastructure

Test-beds

Example - TSSG Ceartas Project • Using Social Network Analysis in the Criminal Intelligence

Domain– Internal Intelligence

• Land Registry• Ports Authority• Revenue• Court Transcripts

– Open Source Intelligence (OSINT)• Newspapers• Internet Forums• Social Networking Websites

• Uncover people and relationships previously unknown to the authorities.

• S.N.A. techniques to discover social patterns in criminal organisations.

www.tssg.org 20

05/01/2023 21

TSSG WIZEONI Project• Problem

– IoT contributing to digital management headaches for individuals: touch point fragmentation, privacy concerns

– Privacy & Security are increasingly under scrutiny and are acting as inhibitors to enterprise adoption of IoT

• Solution– To develop a commercially viable Data

Platform as a Service (DPAAS) to address problems of the IoT industry.

• Impact– Created a DPAAS solution that allows

enterprises to deliver meaningful IoT services in a privacy preserving, scalable manner .

www.tssg.org

Driving Digital Transformation

www.tssg.org 22Source: RedHat

But don’t forget Security

www.tssg.org 23Source: KPCB

But don’t forget Security

www.tssg.org 24Source: KPCB

TSSG EU Programme IPACSO

www.tssg.org 25http://ipacso.eu/

Software is Eating the World

www.tssg.org 26

And Mobile is going to be key - here is why …

www.tssg.org 27

Millennial Smartphone Behavior, USA, 2014

Source: KPCB

Mobile Users 1995 -> 2014

www.tssg.org 28

How Software is Eating the World

www.tssg.org 29

Tweet from Aaron Levie - Box

www.tssg.org 30

Example – Offline Payments

www.tssg.org 31

Example – Online Payments

www.tssg.org 32

Impact on Financial Services

Let’s look at this from an Open Innovation Perspective

www.tssg.org 34Source: Henry Chesbrough

Where is FinTech Innovation happening?

www.tssg.org 35

Fintech Start-up Sector Map

www.tssg.org 36

FinTech Funding last 5 Years

www.tssg.org 37Source: CBInsights

www.tssg.org 38

Top UK Start-ups 2014

No of Companies by Category

www.tssg.org 39

FinTech start-up Maturity

www.tssg.org 40

No of Investments by Top FinTech Investors

www.tssg.org 41

FinTech Unicorns

www.tssg.org 42

Insurance Sector Map

www.tssg.org 43

Which Sectors are seeing the most innovation?

www.tssg.org 44

BitCoin and BlockChain

What is BitCoin and BlockChain

• Video

• https://www.youtube.com/watch?v=YIVAluSL9SU

www.tssg.org 46

BitCoin Sector Map

www.tssg.org 47

Where is BitCoin Innovation Happening?

www.tssg.org 48

Innovation

www.tssg.org 49

Adoption by Banks

www.tssg.org 50

Opportunities and Next Steps

Summary

• Significant forces driving change – cloud, mobile, big data, blockchain.

• Significant innovation occurring in the FinTech start-up sector outside of Ireland that may not be that easy to see right now but which will have a big impact on business in the future.

• Significant challenges – Security, existing systems, regulation.

• Important new EU rules – PSD2

• = Major threats.

A motivating Example

www.tssg.org 53

Let’s look at this from an Open Innovation Perspective

www.tssg.org 54Source: Henry Chesbrough

Some Options

www.tssg.org 55Source: Avinash Swamy

Some Questions for You - Mobile

• Do you have a Head of Mobile and do you already have apps deployed for your customers?

• If so how do they compare in usability and engagement to the apps customers use everyday?

• Can your customers make P2P Payments, regular transfers and pay bills from their mobile today?

• Can you approve a personal loan for an existing customer with a salaried account in real time, instantly on mobile?

www.tssg.org 56

Other Questions• Do you have a Venture fund that invests in FinTech inside and outside of

Ireland?

• Do you have a skunk-works team that can create new and related FinTech start-ups that can do things the existing business might find hard to do?

• Do you have a FinTech Incubator that attracts start-ups to co-locate with your organisation?

• Have you put a team in place to make your organisation easier to partner with for start-ups?

• Do you have a team in place that is analyzing how your organisation can compete with the Unicorns when they eventually do enter the Irish market?

www.tssg.org 57

Working with TSSG

Thank You

Questions?

www.tssg.org 60

Barry Downes, CEO

barrydownes

@barrymdownes

BarryMDownes

bdownes@tssg.org

+353 51 302932

+353 87 9075535