facing tomorrow's challenges today - showcased by card and ...€¦ · find out about your...

Facing Tomorrow's Challenges Today - Showcased by Card and Payment Transactions A whole new Industry in the Making

Roger Winkler

Monex AG

September 2, 2015

September 2, 2015 Tomorrow's Challenges Today - Showcased by Card and Payment Transactions

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Mobile is changing the world, and in the middle of it ... the finance sector.

Would I be concerned if I were a bank? As an IT services provider for the finance industry

I AM!

Rhetorical Question


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Because disruption is going on in nearly all areas of banking. But see yourself, here are a few examples...

Rhetorical Question


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Payment Trading Investing Advisory

eCommerce Bitcoins

POS Card Trans.

Factoring Lending

PFM Banking

API Banking

M & A

Contracting

Why you should be concerned!

FinTech Startups - An Overview

“What's common among all the companies is that they're actively making their own markets, fulfilling demand where there previously might have been none - especially since the financial crisis in 2008. But they're all offering something new, exciting, and financially promising.” (Clare Flynn-Levy of Essentia Analytics) “We only invest in companies that are disrupting the experience for consumers in financial services. Over the next ten or fifteen years we are going to see a whole new field of financial services brands that are being built.” (Meyer “Mickey” Malka, the founder of the venture investment firm Ribbit Capital) “If you think about financial services products over the past twenty years not much has changed. Applications have come online and things have gotten faster, but we think there’s a lot more transparency that we can create and a lot more efficiency.” (CreditKarma chief executive Ken Lin)


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Disruption

Monex Info-Event 6 27.03.2015

IT Paradigm Change

Server-centric Client-Server Cloud (server-centric) Terminal Desktop PC Laptop Palmtop Smartphone Tablet (Google) Glass (Apple) Watch AR ...

Native Development Responsive Design based on HTML5, CSS3 and JavaScript

Monolithic Architecture Microservices Architecture

Integration of cloud solutions based on REST APIs (best-of-breed)


CI CD waterfall agile methodology


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What are your threats?

Competition

Regulation

Next Generation of Clients

(generation Y)

Increased Transparency

(pricing portals, social networks)

Disruption (new business

models / market participants)

Scandals (crash, sub prime

crises, fx/libor manipulation)

Bank

Technology and IT Paradigm

Change

Tax (tax treaties, capital tax)


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What are your threats?

Behaviour patterns and user requirements are changing

faster and more radically than we would have imagined.


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Fear has never been a good consultant.

Fear paralizes and makes you freeze up. You must move instead!

An old chinese saying goes: «When the wind of change blows, some build protection walls, others build windmills.»

How to deal with your concerns


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What are your opportunities?

New Clientele

New Markets

Bank

Technology and IT Paradigm

Change

New Business Models

Cooperation and Standardization

Innovation and Creativity


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Real Innovation and Creativity:

Create value for your customers!

Create convenience for your customers!

Innovate!


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Find out what your added value is and where it is generated.

That’s where disruptive competition will attack and push between you and your client.

Innovation? Yes, but do it wisely! New apps, better apps? Yes, do what you have to do, but not more!

It is very hard to think disruption within your own bank. Because at the end of the day you don’t want to destroy yourself with new ideas. The idea that is poison for your business model will come from the outside, from people and companies completely foreign to the finance sector.

They are in a position to find solutions to inefficiencies, you cannot see.


Creativity

Regularly check the fintech startup scene and your competition.

Brain storm.

Go talk to your customers. Ask how their business and IT requirements change.

Talk to employees, friends and family. What would they change if they could?

Continously ask yourself, if what you do, could be done more efficiently?

Find creative people within your organization and outside.

Create an environment and culture where creativity can thrive.

Reward creativity.

Encourage people to speak up, even if their ideas are disruptive ;).

Create a think tank and idea pool. Sometimes good ideas just come at the wrong time.

Use forums and social networks for discussion.



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Cooperation Example 1 It’s easy to build an app where clients transfer money

within your bank. Why not cooperate with other banks to expand the

service over a whole group of banks?

Example 2 It’s easy to provide cash management services for companies over their accounts at your bank. Woulnd’t it be cool, if your customers could use the service over all their accounts at all their banks? BTW: There are a couple of companies and products around, for instance MultiCash, that deliver such

services since years. Yes, disruption isn’t all that new. Conclusion Go find cooperations and solutions where your own bank’s boundaries are the limiting factor for

your customer’s needs!


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Standardization

Standards could help speed up cooperation. They would make cooperations easier and simpler.

But careful, if the standardization process is slow, it will slow you down too!

Rules & Regulations Rules and regulations will be adjusted to support and not hinder new business models. This may take time, but it will happen. If you’re lucky this will earn you time because competition will be held out of your

business. But it can also weigh you in false security. Pressure on politics will rise until market distortions are removed. Progress will find it’s way.


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Creativity Example 1 How does the fact that business customers move to cloud solutions that provide RESTful

APIs, influence their interactions with your bank? What are your opportunities? Why not provide your banking services as RESTful APIs and lobby for integration of these

services into the cloud solutions that your customer’s use? Ever heard of the Open Bank Project or figo?

This would make customer’s business more efficient, which means that you add value to their business.

Industrie 4.0 in Germany is all about this. Most banks focus on bringing their services to the front (e.g. portal), but what is the real

benefit for business customers? Compared to seamless integration into their ERP, web shop or whatever solution?

Think about payments and card transactions (incl. PayPal, Apple Pay, Android Pay, NFC etc.), lending, interest payments, cash management, treasory (fx, fiduciaries, money market), etc.!


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Creativity

Example 2 Let’s have a look at an earlier example: your customer wants to send a certain amount of

money (money transfer) to whoever. Easy within your own bank. Less easy, but still possible with reasonable effort within a cooperating group of banks. An Australian bank came to a fairly easy solution that is really easy for the customer to

manage. Value added, customer satisfaction guaranteed: Send money to anybody who’s email address you’ve got. It’s really as simple, the only thing you need is the amount of money and an email

address. The receiver gets an email from the bank with directions. He must turn in his bank

and account information, which then will receive the money. BTW: Not to mention that the bank gets a lot of email addresses they could use to

advertise their services, if legally and ethicly justifiable.


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Creativity

Example 3 Find out about your client’s value chain and how you could be part of it or at least

support it. Provide a convenience that your customer can provide to his customers. See what PayPal did. And they weren’t a bank at the time. But you were and you didn’t.

Now they are a bank, even accepting Bitcoin. PayPal grew their business around security concerns in the payment process. Clients

didn’t and don’t trust internet providers enough. PayPal helped internet shops provide a secure way to pay and thus do their business.

Conclusion Client loyalty depends on (market) opportunities! Sometimes it can be enough not to interfere with the client’s business. Sometimes active

support of the customer’s business is required.


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Consultancy If you have partners that have proven good

and creative, stick with them, use their help. If not, go find creative resources. Remember this is not about traditional

consultancy. Don’t start another BPR project! This is about creativity, fintech startups,

technological and social change. Don’t take the traditional road or all you will

be going to find, is what you already know or have.

Be creative looking for creative resources ;). There is so much information online, but

don’t get lost in the process. Learn to be efficient combing through this

vast amount of information. Use concentraters, condensers and summarizers.


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Hints See transformation as a chance. Take your fate in your own hands, the chance is real. Don’t react,

act! Face the challenges – what doesn’t kill you makes you strong – and make them your competitive

edge. Use Avaloq as a toolbox and data warehouse, make your services available in RESTful APIs to the

public (e.g. cloud solutions) and use them yourself in your various front channel solutions. Focus on the microservices architecture and services it provides. Keep an eye on quality,

performance and scalability! Get yourself in a maneuverable position. Let companies specialized in web front end development take care of the front implementation.

Don’t get seduced by «interesting and funny» technologies. Focus on creativity and innovation instead, finding your own and other market players inefficencies

and make them your new business model. Agility and flexibility are key. Don’t let keywords like “User Experience” blind you. It’s all about added value and convenience. Regular Tech-watch and startup-screening are recommended tasks.


«State-of-the-art» Web Development am Beispiel «AccountingForce»

Topics Worth Noting to Start Your Quest IoT – Internet of Things Big Data In-Store Mobile Payment will reach mass market

volume until 2019 and will be used by two thirds of the consumers. Apple Pay and Android Pay will lead by volume.

PFM – Personal Finance Manager Paymit – powered by SIX (UBS and ZKB are first movers eWallet, mWallet Virtual currencies, e.g. bitcoin Card companies undergo fundamental change too.

They face “avoid middleman strategies” too. Blockchain 2.0 Social change (home office, employees always

reachable, flexible work hours, …) Apple Pay, Samsung Pay, Android Pay, NFC Cloud and interconnection of cloud solutions by open

APIs AR – Augmented Reality Social Networks AI – Artificial Intelligence (IBM Watson, Speech

Recognition, self-driving cars, ...) The Internet of Sound


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Clients expect services to be

interconnected and full of context.

Showcase CAS – Card Administration Service by Monex


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We did what we had to do… Requirements of five Cantonal Banks to replace CardOne. Added a few more use cases in the process. Cut down on operation costs. Use the Avaloq toolbox and its features (customization, extension, etc.) to benfit from the

bank’s and Monex’ huge know-how and resource pool. Guarantee release compliance in both directions: Avaloq and card companies. Build a community solution to share costs.

…but kept added value and convenience for the banks’ customers in our minds (to name a few):

Application Content of 2nd embossment line Limit changes per date Termination

Thus the implementation was structured in a way that card services could easily be provided to clients through front channels in the future. Although the immediate provisioning of client services was out of scope.



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Advantages of a full Integration into Avaloq

Look and Feel - Short training period and steep learning curve. GUI known to employees. Known customization tools.

Less Expensive, Less Administration and Less Risks during implementation and in production. Release compatibility guaranteed.

Use of the Avaloq «Toolbox» - Extendability, integration (web portal, client onboarding process, client closing process, direct debiting scheme) and customization (Avaloq Script, AMI, object model extensions, translations, ...).

Use of available Avaloq know-how (projects, operations, users).


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Avoid redundencies. Reuse available validations. Keep data synchronized between bank and card companies. Use Avaloq workflow to centralize or decentralize card administration.

Community Approach to Share Costs. Pool ideas and profit from know-how transfer and shorter time to market. Spend more time focusing on your customers and their user experience.


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CAS features...

...connects to card services from SIX, VISECA, Jaywalker and CardX.

...automatic tasks for address changes, name changes, CRM issue creations and many more.

...country-specific shipping. ...order cards, send data changes to card systems.


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CAS features in conception... ...Apple Pay, Google Pay, Samsung Pay, NFC chip cards... ...Swiss Bankers Travel Cash Card.

...Geo-blocking. ...extended eligibility rules.


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CAS Added-value Services by Monex... ...Incident Managment and/or on-site support, 1st and 2nd level support. ...guarantee release compatibility with third-party card systems.

...administration, organization and reconciliation of the CAS community and its requirements including the change management. ...Migration and data enhancement service and support.

...best practices know-how and large project and card management know-how.


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CAS integrates with your Processes Seemlessly.

Card transactions issued from web portal, eBanking or mobile app, client desk or contact center.

Card transactions issued by other Avaloq processes like client onboarding, client closing, name or address change or product change.


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Manual data entry (web, eBanking, client desk etc.) and automatic data entry (other Avaloq processes) with: Automatic filling of account, BP and person

data. Reduced end user complexity thanks to field

validations and visibility (see what you need to see).

Control Check Point: Payment delay, blockings, warnings,

disposable balance and credit line. Field validations checking limits and

eligibility constraints (age, client category etc.)

Rule sets implementing eligibility rules.


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Downstream process initiation: Manage objects and orders like CRM issues

(payment delay), debit advice orders (in a direct debiting scheme) and post-its (limit exceeded).

Customer-specific workflows like 4-eyes check.

Print reports and output like card application for signature, card renewals.

Orderbook checks to control card orders. Execute tasks like data export to third-party

systems.


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If you are interested in CAS, if you want to see what it looks like, come to our booth, we would be pleased to show you CAS in a live demonstration.


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How it all fits together

Transformation indicated by disruption. Threats and opportunities. CAS showcase. CAS built and running on the ACP. Focus on added-value and convenience, interconnection and

context. Outlook Customers will bring part of the card workflow to the front using AFP. Think of

card applications, limit changes, loading of pre-paid cards, geo-blocking, name and address changes etc.

Think about offering an API on which third-party companies can integrate card services into their apps.


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How it all fits together

Central - Customers will use more cloud services. System and data barriers will become less obvious. Interconnection will provide seemless use of systems and data.

Push - Data will flow to the user. Forget about the user fetching it.

Tomorrow's Challenges Today - Showcased by Card and Payment Transactions

35 September 2, 2015

Vielen Dank für Ihre Aufmerksamkeit

36 Tomorrow's Challenges Today - Showcased by Card and Payment Transactions

September 2, 2015

Thank you for your attention!

facing tomorrow's challenges today - showcased by card and ...€¦ · find out about your...

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