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DISRUPTIVE TECHNOLOGIES AND

REGULATIONS

Shashi Bhat, Citi (@shashibhat)

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2005 2013

VATICAN SQUARE ANNOUNCEMENT OF THE NEW POPE

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The Challenge Of Innovating Is Real

Other industry entrants

- Telcos, FANGs etc.

Challenger banks,

fintech eroding margins

Growing cyber threats,

divergence of regulation,

political and public

scrutiny

Horizontal customer

experiences the norm, pace

of change, different

benchmarks

Banks

Legacy drag – culture,

tech, process, models

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01 Dramatic

decrease in cost to

launch startups

02 Mobile

has become the

primary channel

03 End-to-end digital

experience is now table

stakes

04 Emergence of

enabling legislation -

challengers

Factors driving the acceleration in un-bundling?

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A Path to Irrelevance With Customers

Banking Customer

Mobile

Social

Cloud

Information Etc…

Things

Wearable Technology

APIs

APIs

APIs

APIs APIs

APIs

APIs

Source : Gartner – Banking APIs and App Stores: Enabling Innovation at the Edge

PSD2 will create enabling regulatory framework

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Top 10 Most Popular APIs for Mashups (All)

Google Maps 2,536

Twitter 799

YouTube 686

Flickr 630

Amazon Product

Advertising 427

Facebook 418

Twillio 357

Last.fm 242

eBay 223

Google Search 187

A Path to Irrelevance With Customers

Top 10 Most Popular APIs for Mashups (Financial Services)

PayPal 37

Zillow 30 Amazon Marketplace Web Service 16 Amazon Fulfillment Web Service 5

Stripe 5 Amazon Flexible Payments 4

Authorize.net 4

billomat (online billing) 3 Blinksale (online invoicing) 3

Foxrate (FX) 2

Banks 0

Source: Gartner, ProgrammableWeb (April 2014)

Source : Gartner – Banking APIs and App Stores: Enabling Innovation at the Edge

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May 2015

BBVA replaces its

President/COO

with its Digital Head

January 2015

Capital One buys

spend-tracking app

startup Level Money

May 2015

Deutsche Bank

outsources entire

wholesale banking

infrastructure to HP

August 2014

NZ bank Westpac

incorporates Moven

startup’s money-

management tools

March 2015

UK government says it

is pondering mandatory

open-standard bank

APIs

June 2014

Fortune Magazine: Venture

investment in global

Fintech tripled between

2008 and 2013 to $2.97

billion, will reach $8 billion

by 2018.

October 2014

Capital One buys

design agency

Adaptive Path

February 2014

BBVA buys banking

startup Simple ($117M)

October 2014

Capital One buys

eCommerce platform

AmeriCommerce

April 2015

BBVA buys digital UX

firm Spring Studio

2013

Poland’s mBank

reinvents/rebuilds itself

from scratch in just 14

months, with Accenture

July 2013

Italy’s UniCredit

outsources its IT

to an IBM Cloud

in multibillion deal

Different Banking Models evolving

October 2014

Australia’s

Commonwealth Bank

runs in-house

startups

July 2014

One of Google’s

“wildest designers”

leaves for Capital One

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What should banks focus on

Social media – Instagram, Snapchat, Peach, Pinterest

Social payments – messenger, social media etc.

Wearables (watch, glass, band)

Authentication & Security - Biometrics, Trusted identity

Mobile wallets

Gamification in banking

DLT/ Block chain

Machine learning/ AI, Contextual offers, Big Data

Cloud

VR, AR, MR – chat bots

8

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