Banking As A Service In the FricBonless Economy

Transcription

1 Banking As A Service In the FricBonless Economy Humphrey Chen EVP Corp hchen@ndbancgroup.com October 29, 2014

2 Market Opportunity Context Mobile Payments Comprise a Small but Rapidly Growing Share of Global Payments Mobile Payment Growing 12x faster than card payment from Card Payment Growing 3x faster than total consumer spending from s Total Addressable Market Retail Purchases $160bn Mobile Payment $10tn Purchases Made with Card $30tn Retail Purchases Global Mobile Payments Transac3ons Growing Fast E CAGR of ~60% Transac<ons in billions E 2014E Bank Providers Non- Bank Providers Payment Volume in US Consumer Spending is Currently Dominated by Plas3c 2012 US Card Transac3on- Credit Cards Debit Cards Cash 19.6% 21.9% 25.6% based Revenues Networks, $10bn Acquirers, $11bn Issuer Processors, $4bn Internet Coupons Drive Significantly Higher Redemp3on Rates Despite Much Lower Distribu3on vs. Free Standing Inserts 100% 80% 60% 88.8% 10.2% 15% 10% Checks Electronic Prepaid Cards Other 2.2% 2.1% 13.1% 15.4% Issuers, $42bn 40% 20% 0% 0.6% 0.4% Free- standing Insert Internet % of coupons distributed RedempBon rate 5% 0% Source: The Nilson Report, Morgan Stanley Research, World Payments Report 2013 / CapGemini, Gemalto and Inmar 2

3 nd bancgroup Leadership Team Gordon A. Baird CEO Robert B. Willumstad Chairman Rich Garside* President and COO Humphrey Chen EVP Corp Dev Lawrence R. Miller EVP Leading innovation in financial and payment services for the global mobility markets. Former leader in Wireless in New Technologies & New Business Development. Gordon A. Baird Leading payments and banking executive Provided over $10 billion of financing on consumer, commercial and corporate receivables Designed and managed banking and securitization programs for consumer credit cards, auto loans & leases, equipment leases, installment loans and corporate receivables US dollar and multi currency facilities Robert B. Willumstad Managed largest financial services company in the world as President and COO of Citibank and member of the Board of Directors of Citigroup Managed one of the largest insurance company s in the world as Chairman of the Board and CEO of AIG Former Member of the Board, Mastercard Board of Directors of S.C. Johnson & Son, Inc. Rich Garside Former Executive Vice President and Co-Head of Operations and Technology for Citigroup Managed 114,000 employees across Operating and Technology group Former Chief Operating Officer for Citi Cards Businesses *= in process Alvin Hageman (Not Pictured) Provided over $70 billion of financing for consumer and commercial finance businesses in the US and internationally Collateral types included consumer credit cards, trade receivables, installment loans, mortgages, auto loans, dealer floor plan financing, MLB finance Country head for Citibank in Thailand, Eastern India, Burma, Liberia, and Sierra Leone Humphrey Chen Former Executive at Verizon Wireless focused on New Initiatives Led Verizon s NFC non-payments identity initiatives for tap to unlock, tap to represent Founded Verizon s 4G Venture Forum and Verizon s 4G Venture Forum for Connected Cars Formerly led Avaya s Unified Communications Product Management team Led Competitive Strategy & Sales Enablement in Microsoft s Real-Time Collaboration team Lawrence R. Miller Reretired CEO of South Trust Bank and currently serves as President and CEO of Independence National Bank and is on its Board of Directors. He graduated from Newberry College with a B.S. degree in History. He has additional degrees from the LSU School of Banking and the National Commercial Lending Graduate School of Oklahoma University. He has received the Distinguished Alumni Award from Christ School and the Service and Loyalty Award as well. 3

4 PlaYorm- as- a- Service Offering Compelling Value BANKING PAYMENTS Fed Membership Pla>orm- as- a- Service ACH Processing FDIC Insurance Open ConnecBvity Intraday Funding Web Services Enabled Debit Card Issuer Deposit OperaBons ATM Real- Time Processing Compliance Security EFT Mobile & Internet Payments On Us Se`lement ReporBng

5 Partner & Consumer Value Proposi3on Enabling digital payments and banking experiences that offer: Increased UBlity for Partners Value- added Service GeneraBng AddiBonal Revenue Streams CreaBng Be`er Consumer Experiences Convenient Fast Customer AcquisiBon, Engagement and RetenBon Lower Cost Broadly Accepted Data & AnalyBcs Secure Cost Savings Inclusive

6 DisrupBve Business Model aspects Transforma3ve possibili3es Legacy Model BANK PLATFORM! SETTLEMENT &! PROCESSING! COSTS! Model High cost / Brick- and- mortar Low cost / Mobile- first (~50 60% cheaper) ~5 party schemes ~1 to 7 day se`lement ~3 party scheme Capable of instantaneous se`lement* ~2% to 5% of transacbon amount < ~1% of transacbon amount Closed Front end customized API s** Rapid deployment RestricBve White- label Customized DEVELOPMENT &! INTEGRATION! BRANDING! MORE FLEXIBLE, FASTER, CHEAPER SOLUTIONS * Out- of- network se`lement restricted by speed of counterparty systems ** ApplicaBon Programming Interface (API) 6

7 Old- World Banking Architecture Vs. Our Modern Back- End Old World Banking Technology Modern $ on Modern Smart Phone PlaYorm Stodgy Inflexible High- Cost Slow Network Can t Connect to New API s High Tech Fiber Lower Fees Modern Flexible / High Tech A`racBve to Consumer Lower Cost Without security compromise

8 Mobile Infrastructure Architecture CAPABILITIES Fully customizable user interface Template or a la carte Plamorm/operaBng system agnosbc Lightweight message presentabon Business analybcs Rewards and rebates Decision and anb- fraud processing Real- Bme data monitoring and customer insight Global banking plamorm (language, currency, regulabon, etc.) U.S. specific banking core Scalable transacbon processing Tailored and dynamic business events and fees Hardware and database agnosbcism allows pairing to the most reliable and agile current technology 8

9 Business Model focus areas Digital banking and payment services provided as plamorm- as- a- service 2 Transac3on, service fees and spread income provide predictable revenues, defensible margins, strong growth prospects Enabler providing seamless low cost access to a mulbtude of payment and banking capabilibes Rewards/Digital payments value- added markebng and loyalty solubons FDIC insured bank accounts as well as other types of stored value and loyalty points accounts Innova3ve technology focus enabling significantly improved consumer experiences

10 Partner Segments MOBILE CARRIERS CONSUMER TECH RETAIL Person- to- person payments Bill pay Mobile top up InternaBonal remi`ances Prepaid debit card $ Person- to- person payments Proprietary payments Coupons, rewards M- commerce M- coupons E- commerce POS payments SOCIAL MEDIA BANK SPECIALTY CONSUMER APPS Proprietary payments Social media credits AdverBsing In- stream commerce Be`er person- to- person payments Mobile banking Bill pay InternaBonal remi`ance Specialty apps OTHER : (alternabve financial services, government payments, emerging payment providers)

11 Thank you! Humphrey Chen EVP Corp Development humphreyc Linkedin/in/humphreychen