MoneyConf Madrid Update on FinTech 2.0

Victor MatarranzGroup Head of Strategy

First wave of FinTech (“1.0”) delivered new options for customers

BANK

Impact in banking is still limited

Personal finance Payments

Wealth Lending

We, banks, face some challenges

Legacy systems

Regulation

Risk averse culture

Insufficient agility

Customers behavior and expectations are evolving radically

• Accessibility• Simplicity• Customization• Top-notch user experience• Real-time service• Value at low-cost

49% of Millennials prefer banking through mobile and more than one quarter are already completely reliant only on a banking app

Source: Salesforce research - What Millennials Expect from Their Banks Report

Love is the answer

Fintechs

• Agility

• Risk taking

• Disruptive mindset

Banks

• Customer scale• Comprehensive

product portfolio• Robust infrastructure

and deposit insurance• Brand• Experience & expertise

(risk, regulation, enterprise level IT)Fintech 2.0

the perfect partnership

FinTech 2.0

Financial institutions are creating strong infrastructures to internally support innovation

Focused on FinTech startups

Full-fledged digital bank and spearhead for innovative services and products

Customers1 M 

Santander’s vehicles to foster this collaboration

Kabbage

To serve the ‘smaller’ SMEs in the UKwith their Working Capital needs up to £100,000

Fully‐automated online experience

From a 2‐12 weeks process to…Few minutes from application to decision1 day to fund

Ripple

Launched last monthInternational transfers over blockchainBetween £10 and £10,000 It connects to Apple Pay and uses Touch ID

Time & cost drastically reduced New types of global transactions enabled

In the future, more partnerships will allow us to serve our customers in better and more innovative ways

Low cost delivery models

Financial inclusion

Alternative lending

Payments

Risk & client analytics Artificial

Intelligence

Distributed ledger

Internet of Things

e-Investment advisory

Banks work with you throughout your entire life…

So what does the Bank of the Future look like?

Your child’s account

Your student account,your loan

Your paymentsYour mortgage

Financing your startupFinancing yourchildren’s education

Helping you manageyour wealth Helping you through

retirement

Banking

Internet

Internet

Banks

From To

But, like the internet, banks will be with you in a different way

Helping people and business prosper✓Built around the relationship with customers – the life of the customer✓

A3: Anytime, Anyhow, Anywhere✓Open, collaborative space: Banks + Fintechs✓Simple, Personal and Fair✓

Some ingredients we are using to build this new type of bank