June 16, 2016 – Bari (Italy)

Scenario: asset management Users play a key role (The Roar of the Crowd)

• Individual investors represented 90% of the asset management industry’s net new flows in 2014

• Individual investors will account for nearly 120% going forward, as annual organic growth rates shrink below 2% by 2020

• Individual investors will change the asset management industry in 4 profound ways

•  Products: >$3trillionofdemandbetweennowand2020formul5-assetandbenchmark-agnos5cstrategiesworldwide

•  Services: >70%ofU.S.financialadvisorswantmoreinvestment-oriented,resource-intensiveadvicefromassetmanagers,

•  Productivity: distribu5ngtoindividualsis>1/3lessefficientthansellingtoins5tu5ons,reducingindustryleverage

•  Regulation: policymakersworldwidewillcallforobjec5veanddiscretelypricedinvestmentadvice,re-arrangingeconomicsforassetmanagers

June 16, 2016 – Bari (Italy)

Source:TheRoaroftheCrowd:HowIndividualInvestorsTransformCompe99oninAssetManagement,CaseyQuirk,November2015.

Scenario: asset management • Individual investors will encourage

disintermediation, an opportunity and a threat for asset managers

• To conquer individual investors, the industry’s most powerful players will need to compete differently

Individual + Investors/Users

June 16, 2016 – Bari (Italy)

Scenario: banks & financial services • Digital Innovators in

financial services•  asignificantthreattotradi?onalbusinessmodelsofretailbanks

• Retail Banks’ business model amixtureof

ü Basicservices(bankaccounts,low-costchecking…)

ü Added-valueservices(investmentmanagement,creditcardfees,foreign-exchangetransac?ons…)

June 16, 2016 – Bari (Italy)

Source:MiklosDietz,PhilippHärle,andSomeshKhanna,Adigitalcrackinbanking’sbusinessmodel,McKinseyQuarterly,April2016.

Scenario: banks & financial services • Fintechs(Digitalstart-ups)canexploitthemismatchonbanking’sbusinessmodel(Schumpeter’sgale-crea?vedestruc?on)

• Digital Innovators:low-costaUackerstarge?ngcustomersinlucra?vepartsofthesector

• DigitalaUackersdisintermediateprofitablecustomer-facingbusinessesandavoidcapital-intensiveareas

• MostFintechs•  Don’twanttobebanks•  Don’taskcustomerstotransferalltheirfinancialbusinessatonce•  Offertargeted(andmoreconvenient)services

June 16, 2016 – Bari (Italy)

Fintechs •  NerdWallet(www.nerdwallet.com/)andBankBazaar.com(www.bankbazaar.com/)aggregatetheofferingsofmul?plebanksinloans,creditcards,deposits,insurance,andmoreandreceivepaymentfromthebanksforgenera?ngnewbusiness

•  Wealthfront(www.wealthfront.com/)targetsfee-aversemillennialswhofavorautomatedsoZwareoverhumanadvisers

•  LendingHome(www.lendinghome.com/)targetsmo?vatedinvestment-propertybuyerslookingforcost-effec?vemortgageswithaccelerated?mehorizons

•  Moneysupermarket.com(www.moneysupermarket.com/)startedwithasingleproductspringboard—consumermortgages—andnownotonlyoffersarangeoffinancialproductsbutservesasapla\ormforpurchasesoftelecomandtravelservices,andevenenergy

•  SchwabIntelligentPorTolio(hUp://intelligent.schwab.com/)Moneyfarm(www.moneyfarm.com)areonlinerobo-advisorservicesthatbuild,monitor,andrebalanceinvestmentpor\olios

June 16, 2016 – Bari (Italy)

Source:MiklosDietz,PhilippHärle,andSomeshKhanna,Adigitalcrackinbanking’sbusinessmodel,McKinseyQuarterly,April2016.

Fintechs’ Landscape

•  CustomerSegments•  Millennials•  SMEsandSmallBusinesses•  Underbanked

•  EnhancingUserExperience(UX)•  Alipay(hUp://intl.alipay.com),Chinesepaymentsservice:makesonlinefinancesimpler

•  Gamifica?onofsavingstrategiesandonlinefinanceservices

•  Compe??onsamongplayerscomparingusers’returnswiththoseofothers.Italsomakespeer-to-peertransfersfunbyaddingvoicemessagesandemo?cons(whatsappifica9on?)

June 16, 2016 – Bari (Italy)

Source:MiklosDietz,PhilippHärle,andSomeshKhanna,Adigitalcrackinbanking’sbusinessmodel,McKinseyQuarterly,April2016.

Fintechs & Venture Capital June 16, 2016 – Bari (Italy)

Acknowledgments •  ProgramCommiWeemembers

MathiasBauer,minewayGmbH,GermanyShlomoBerkovsky,NICTA,AustraliaPaulBlazek,cyLEDGE,Vienna,AustriaRobinBurke,DePaulUniversity,IL,USAKuan-TaChen,AcademiaSinica,TaiwanMarcodeGemmis,UniversityofBari,ItalyTommasoDiNoia,PolytechnicofBari,ItalyJohnO’Donovan,UniversityofCaliforniaSantaBarbara,CA,USAAlessandroGiuliani,UniversityofCagliari,ItalyDietmarJannach,TUDortmund,GermanyPasqualeLops,UniversityofBari,ItalyCataldoMusto,UniversityofBari,ItalyEetuMäkelä,AaltoUniversity,FinlandFedelucioNarducci,UniversityofBari,ItalyGiovanniSemeraro,UniversityofBari,ItalyJuhaTiihonen,AaltoUniversity,FinlandMarkusZanker,FreeUniversityofBozen,ItalyDavidZibriczky,BudapestUniversityofTechnologyandEconomics,Hungary

June 16, 2016 – Bari (Italy)

Acknowledgments

•  LocalOrganiza5on•  CataldoMusto•  VincenzoTamburrano

June 16, 2016 – Bari (Italy)

Acknowledgments

•  InvitedSpeakers•  Prof.AlexanderFelfernig(TUGraz,Austria)•  PietroLeo(IBM,Italy)

June 16, 2016 – Bari (Italy)

Acknowledgments

•  Sponsors§  FondazionePuglia§  SudSistemi§ Ques?onCube

June 16, 2016 – Bari (Italy)

Proceedings

• AvailableonlinehWp://www.di.uniba.it/~swap/finrec2016/finrec2016_proceedings.pdf

• CEUR-WSpost-proceedingsavailablesoon:emailtoauthors,URLonFinRec2016website

June 16, 2016 – Bari (Italy)

June 16, 2016 – Bari (Italy)

when…

…the Brexit scrabble will be solved

June 16, 2016 – Bari (Italy)