technology moving faster than the banks

GFT Group 25-Apr-16 1

Technology

moving faster

than the Banks

Philippe Guenet

April 2016


Philippe Guenet

ESC Marseille Provence - Promo 1995

Back then :

ESC claim to fame

Started work in Internet / eCommerce

Self-made into Technology

Architect / CTO in Consultancy (Vodafone / New International / M&S / O2 / Ladbrokes / etc)

Now:

GFT – Specialised Financial Services Consultancy

Executive Delivery Manager

Working with tier 1 investment banks

Introduction


What technology means to Banking?


The journey of money

Retail Banking Commercial & Corporate Banking

Wealth and Private Banking Investment Banking

€10

€1.000.000

Wholesale markets

Corporate

Finance

Market

access

Risk &

Compliance

Funds

Brokerage

servicesBuy-side


What technology means to Banking?


@genda

• What is “tech disruption”?

• How are Banks coping?

• Trends & solutions


Current Technology trends

Source: dilbert.com


What digitalisation means?

User Experience

Customer

Experience

INTERNET

MOBILE

CROSS-CHANNEL

SOCIAL

INTEGRATION

SELF-SERVICE

ALWAYS ON 24/7

WEB

IoT

AUTOMATION

PERFORMANCE

STANDARDS

EXCEPTION

MANAGEMENT

OPEN

TECHNOLOGY

COST REDUCTIONS

OperationsInnovation

Disruption

NEW MODELS

NEW CUSTOMERS

FEEDBACK

NEW

PARTNERSHIPS

ECOSYSTEM

NEW

TECHNOLOGIES

GLOBAL


Fintech = Financial Services Technology Start-ups


What are Fintechs about?

Source: FintechInfo.com – Fintech Mind Map


Source: FintechInfo.com – Fintech Mind Map

What are Fintechs about?

Payments

Insights

Blockchain

Security

eFunds

Crowd lending

Utilities

Infrastructure

Crowd funding

Personal banking


The revolution of Bitcoin


Blockchain, biggest disruption to come


Changing world of Banking

“Banking is

necessary,

Banks are

not.” Bill Gates


Future challengers?

(ApplePay)

(PayPal)(Amazon Web Services)


So, if technology is so

critical, what are banks

doing about it?


Banks pre 2008


And then…

What happened in

2008?


2008


2008

Sub Prime collapse

Global Financial Crisis

Systemic risk, rapid contagion

Collapse of Lehman Brothers

Banks too big to fail

State intervention


2008 – Lessons learnt

Systemic weakness (OTC)

Limited aggregated risk management of

counterparty trades

Highly manual reporting

Growth from M&A resulted in

substantial IT legacy

Insulation between banking and

investment arms necessary


And then…

But it is what happened

since 2008 that

matters more…


Investment banks : “between the rock and the hard place”

The world of Investment Banks has

changed for ever

Recapitalisation

Regulatory Compliance

Collaterisation of trades

Transformation of OTC markets – more

vanilla / lower margins

Ring fencing Retail vs Investment banks

Low interest rates removing volatility from

money markets

More Flow-Business

Punitive fines for failing Controls

“New Normal of Banking”

Meet Regulatory Compliance

Cut Costs + Refocus Business


Digitalisation : also “between the rock and the hard place”

Technology has changed how customers

engage

Digital 24/7 self service vs face-to-face

Digital payments

New entrants on profitable Business

Banks are slow to disengage from Legacy

Joined-up cross-channel experience

Cut and reposition high street presence

Fight increasing Fraud and Financial-Crime

(KYC, AML)

“New Normal of Banking”

The future is Digital but how quickly can one

transform the present?


Trends and Solutions

for a rapidly changing

world of Banking?


Turn Technology from a Constraint to an Advantage

Untangle the spaghetti of IT legacy

Reduce duplication of systems

Modernise technologies

Golden source of Data

Real-time

Straight-through processing – reduce exceptions

Mutualise non-differentiated capabilities (Utilities)

Leverage Ecosystems of Fintechs rather than

compete

Embrace Open Standards

Do it fast!!

“New Normal of IT”

Simplify Architecture, master Data, use open

standards, reduce costs, accelerate change


New Management Techniques

Lean management techniques

have brought transformation to

Automotive and manufacturing.

IT is going through its industrial

revolution. Same needs, same

solutions: Lean IT.


Inflection point

Banks are challenged but intrinsically resilient

Investment Banking needs to rapidly readjust by mastering the constraints of IT

All forms of Banking need to digitalise by embracing innovation and new ways to engage with customers using Technology

The Ecosystem is a threat as well as an opportunity

There will be casualties. Mastering Technology will play a key role in successfully building the future of Banking


Thank you

Philippe Guenet

[email protected]

@WeAreLeanIT

mailto:[email protected]