dws16 - fintech forum - yves gassot, idate digiworld

FinTechUnbundling the bank model?

Co-organized by

IDATE DigiWorld - Atelier BNP Paribas

15-17 November 2016

Copyright © IDATE 2016, 2

FinTech: a booming sector


FinTech: Challenges vs. New Opportunities

Source: BNP-Paribas


Main Sub-segments of the FinTech

Source: BNP-Paribas

Blockchain


Blockchain Key trends

Blockchain is a technological disruption in secured infrastructure. • Secure and immutable data storage

• With no need for a trusted third party

Being used more and more for FinTech applications: payment solutions,

investment, loans, speculation, back-office tools…

Potential outside the realm of finance, as a tool for managing

property rights and automating contracts, but legal uncertainties remain.

Veteran trusted third parties are adapting to the shift, opening up

possibilities for new products and services: managing software portfolios,

contractual expertise, cheaper services.

Current technical limitations with respect to large-scale deployments

are limiting the ability to offer decentralized consumer applications.


The blockchain ecosystem

Blockchain

initiators

P2P node

developer

P2P node

operator

“miners”

Apps that use

the

blockchain

UserAssociated

services

Blockchain infrastructures Applications and services

Source: IDATE DigiWorld, Blockchain, October 2016


Blockchain and FinTech

Thanks to massive financial backing, the blockchain's financial applications

still account for the majority:

• A banking system rebuilt around cryptocurrencies

• Using the blockchain to streamline traditional services’ costs

Far from being a threat, the blockchain opens up major opportunities for the financial industry.

Cryptocurrency economy Optimise traditional processes

• Exchange platform

• Wallet app

• Price speculation

• Loans & investments

• Blockchain audit

• Private blockchain & back-office

• International interbank payments

• Capital market

• Smart contracts for payments when due, or on

delivery

• Insurance

• Shareholder agreements

Mobile payment


The payment ecosystem

A very segmented mobile and online payment market

Source: IDATE DigiWorld, Mobile payment, April 2016


Mobile payment market:Mobile commerce (m-commerce) payment market

Online payment systems are still dominated by debit and credit cards

• Debit and credit cards account for 78% of online checkouts according to TSYS.

• Alternative online payment was led by PayPal:

- 12% of online checkouts according to TSYS

- mobile payment volume reached 66 billion USD.

• Similar services from other players are less

used by mobile websites and applications.

• Amazon Payment was catching up in 2015:

- over 23 million users

- Transaction volume rose 150% YOY

- 200% rise in number of merchants using Amazon Payment.

Evolution of worldwide e-commerce and m-commerce market

(Billion EUR)


12201418

16061792

19692136

263 369497

654792

944

2014 2015 2016 2017 2018 2019

E-commerce revenues in bn €

of which M-commerce revenues in bn €


Mobile payment market:Mobile commerce (m-commerce) payment market

Growth in m-commerce transactions is steady and strong

• M-commerce revenue growing faster than in overall e-commerce (CAGR: 26.5% vs 10.8%).

• The share of m-commerce in e-commerce is rising, from 26% in 2015 to 44.2% in 2019.

Trends

• 40% of online payments occurred across

multiple devices in Q4 2015, both on

mobile and PC.

• Growing popularity of in-app shopping

for physical goods and services, rather

than only for digital goods.

• Greatest barriers are on security and

privacy issues.

M-commerce revenues, in bn€ with annual growth rate, and its

share in E-commerce revenues, in %


+49%+40%

+35%+32%

+21%+19%

0%

10%

20%

30%

40%

50%

0

500

1000

1500

2000

2500

2014 2015 2016 2017 2018 2019

E-commerce revenues in bn €

of which M-commerce revenues in bn €

M-commerce share in E-commerce, in %


Mobile payment market: In-store mobile payment market

In-store mobile payment is in its early stage

• Installation of NFC-enabled point-of-sale (POS) terminals will increased considerably:

- From 21.4 million in 2014 to 74.9 million worldwide in 2019 at a CAGR of 28.4%, according to Berg Insight.

• This market will grow fast at a CAGR of 74%, but its share of trillions of total POS

transactions is tiny.

Remaining barriers

• End-user adoption: low awareness, concerns

around ease of use, and security and trust issues,

involving tokenisation and HCE.

• Business model: disappointing added value

(such as a data-based approach) to merchants if

commission fees are not very competitive.

• Integration of mobile payments into legacy POS systems and omnichannel strategies.

- .

Global in-store mobile payment volume

(Billion EUR)


4.511.0

24.4

44.0

70.6

100.4

2014 2015 2016 2017 2018 2019


Agenda

• Latest FinTech trends by Atelier BNP-Paribas

• Round-Table 1

Disruptions in the Financial ecosystems

• Keynote

Alexis Collomb: Blockchain: what impact on the financial

system?

• Round-Table 2

Digital transformation in the banking industry

• Closing keynote

Jean-Hervé Lorenzi, Président du Pôle Competitivité

Finance Innovation

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