the state of the play: the world fintech report key findings

#WFTR17

Bill SullivanGlobal Head of Market Intelligence

Capgemini Financial Services

#WFTR17

@WFSullivan3

#WFTR17

#WFTR17

Banks and Fintech Firms’ Relationship Status: It’s Complicated

- The Wall Street Journal, 18-Nov-2015

No rest for banks as fintech challenges loom

large - The Banker, 10-Jun-2015

Banks Are Right To Be Afraid of the FinTech Boom

- Time, 8-Jul-2015

- Payments Industry Intelligence, 15-Jul-2016

Technology threatens the insurance business

- The Economist, 16-Mar-2015- Tech Crunch, 5-Aug-2015

- Forbes, 22-Dec-2015

We Are All Familiar with the Media Hype around FinTech

#WFTR17

#WFTR17

Our World FinTech Report Is a Multi-Prong Collaboration

World FinTech Report 2017 Agents of Change Executive Roundtables Finance Connect

FINTECH Conference

#WFTR17

#WFTR17

Check Out Our Agents of Change Already Released

#WFTR17

#WFTR17

Today’s Three Themes from World FinTech Report

FinTech’s gaining traction and raising bar, but long way to go1

Incumbents actively addressing FinTechs with mixed results2

Leadership and culture are critical to applying innovation3

#WFTR17

#WFTR17

Global FinTech Financing Activity ($billion), 2008-15

Source: CBInsights

$ bi

llion

2008 2009 2010 2011 2012 2013 2014 20150

5

10

15

20

0

300

600

900

1200

1.1 1.7 1.8 2.3 2.8 4.3

12.6

17.8

163220

317437

582

748848

1,062

Dea

ls

Exponential Growth in FinTech Financing Since 2013

#WFTR17

#WFTR17

China and India Lead Customer Adoption of FinTech

ChinaIndia

UAE

Hong Kong

Spain

Singapore

Turke

y UKU.S.

Australia

Japan

Canada

France

Belgium

Netherlands

84.4%76.9%

69.6%

53.5%53.3%53.0%51.6%48.8%45.8%42.8%40.6%39.6%36.2%30.4%29.8%

Source: Capgemini and LinkedIn WFTR Voice of Customer Survey, 2016

Customers Using At Least One Non-Traditional Firm for Financial Services, 2016

#WFTR17

#WFTR17

Younger, Tech-Savvy, and Affluent Lead Adoption

Customer Usage of Non-Traditional Firms, 2016


#WFTR17

#WFTR17

Trust Advantage Flips with Positive Experience


0%

15%

30%

45%

60%52.9%

56.3%

Customer Trust for Traditional and Non-Traditional Firms (%), 2016

Trust for Traditional and Non-Traditional Firms for Customers with a Positive

Experience (%), 2016

0%

15%

30%

45%

60%

36.6%

23.6%

Gen Y and Tech-Savvy customers have higher trust in traditional firms, they

also have higher distrust in traditional firms

#WFTR17

#WFTR17

Traditional Firms Regaining Value Perception

Customer Value Perception for Traditional vs. Non-Traditional Firms, 2016

Source: Capgemini and LinkedIn WFTR Voice of Customer Survey 2016

Ability to access services from other institutions through your FS

institution’s Apps

Contextual experiences

Forte of Traditional Firms

Even Competition Forte of Non-Traditional Firms

Personal interaction

User experience

Security and Fraud Protection

Access to product/services more innovative and relevant to me

Transparency Ability to integrate my social world with my financial world

Quality of service

Better value for moneyConvenience

Brand

Timely and efficient service

Low Importance Medium Importance High Importance

Non-Traditional Firms Advantage Noted in

2016 WRBR

#WFTR17

#WFTR17

Most Firms Struggling to Meet Customer Expectations


Top Three Moments of Truth for Customers, by Domain, 2016

#WFTR17

#WFTR17





#WFTR17

#WFTR17

Incumbents See FinTechs As Potential Partners

Fintech Firms Will Not Survive on Their Own

Fintech Firms Pose a Significant Threat

Fintech Firms Are Good Acquisition Targets

Fintech Firms Are Setting the Bar Higher

Fintechs Provide Opportunity for Partnership

22.4%

43.1%

53.7%

62.7%

76.7%

Executives’ View of FinTech Firms (%), 2016

Source: Capgemini and LinkedIn WFTR Executive Survey, 2016

#WFTR17

#WFTR17

Active Partnering with FinTechs & Building In-House

Acquisition of FinTech Firm(s)

Others

Setting Up of Accelerator

Partnering with an Educational Institute

Investment in FinTech

Developing In-House Capabilities

Partnership/Collaboration with FinTech

18.6%

26.3%

29.6%

34.3%

38.0%

59.2%

60.0%

Firms’ Activeness in Various Approaches (%), 2016


#WFTR17

#WFTR17

Relatively Confident FinTech Strategy in Place

Confidence Level of Executives About Strategy to Address the Challenges Posed By FinTechs (%), 2016


Medium LowConfidence Level High

13.0%

43.0%

44.0%

#WFTR17

#WFTR17

Significant Opportunities to Better Deliver Results


Effectiveness of Achieving Results while Implementing FinTech Capabilities (%), 2016

Very Effective; 10.0%

Moderately Effective; 82.5%

Not Effective; 7.5%

#WFTR17

#WFTR17





#WFTR17

#WFTR17

Four-Step Framework to Effectively Apply Innovation

Source: Capgemini Financial Services Analysis, 2016; https://www.capgemini.com/applied-innovation-exchange/applied-innovation-exchange-framework

Facilitate the discovery of emerging technologies,

sector issues, and how these impact your organization

Co-locate to help shape ideas and insights into

business models, prototypes, and technical

architectures

Guide executive alignment and deployment to ensure innovation is adopted at

speed and scale

Help advance innovation processes, improve

proficiency, and implement best practices

Organizational Culture

Clear Vision for Innovation

Senior Leadership Buy-In and Commitment

Capgemini’s AIE Framework to Apply Innovation

#WFTR17

#WFTR17

Executive Leadership Support and Buy-In

Shifting the Cultural Mind Set of the Organization

Clear Strategic Vision and Plan

Willingness to Take Calculated Risk

Willingness to Think Outside of the Box

Strategic Budget Allocation

Willingness to Replace Legacy Technology

Ensuring Innovation Plan and Business are in Sync

64.0%

50.7%

29.3%

17.3%

17.3%

17.3%

12.0%

10.7%

Leadership and Culture Are Key Success Factors

Key Success Factors on Applying Innovation (%), 2016


#WFTR17

#WFTR17

Selecting Right Partners and Engagement

Model

Commitment from

Leadership

Protecting Customer Data

Preserve Culture of

FinTech

Being Open to Ideas from

Other Industries

Creation of Sandbox

Environment

Source: Capgemini Financial Services Analysis, 2016

Collaboration Will Require New Ways of Working

Incumbents and FinTechs – Pillars of Collaboration Strategy

Pillars for Collaboration

Strategy

#WFTR17

#WFTR17

Closing Thoughts

• FinTech is clearly gaining momentum and driving change in the industry

• Emerging markets, Gen Y, and affluent are earliest adopters of FinTech

• We have a seen an explosion of activity by incumbents to adapt to this change

• We are still in the very early stages as firms search for the right formula

• Most innovation to-date focused on incremental vs. transformational change

• Firms can benefit from systematic approach– Discover, Devise, Deploy, & Sustain

• Bigger disruption could be on way with Blockchain, Big Tech and Platformification

The information contained in this presentation is proprietary.© 2017 Capgemini. All rights reserved.

www.capgemini.com

in collaboration with

About CapgeminiWith more than 180,000 people in over 40 countries, Capgemini is one of the world’s foremost providers of consulting, technology and outsourcing services. The Group reported 2015 global revenues of EUR 11.9 billion.

Together with its clients, Capgemini creates and delivers business, technology and digital solutions that fit their needs, enabling them to achieve innovation and competitiveness. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore®, its worldwide delivery model.

Rightshore® is a trademark belonging to Capgemini

www.WorldFinTechReport2017.com #WFTR17

THANK YOU!

http://www.facebook.com/Capgemini

http://www.linkedin.com/company/capgemini

http://www.twitter.com/capgemini

http://www.youtube.com/capgemini

http://www.slideshare.net/capgemini

the state of the play: the world fintech report key findings

Economy & Finance