2015-06-15-奥纬咨询-The_Fintech_2.0_Paper_20页_610kb

Fintech 2.0 Summary

Core Content

This document, The Fintech 2.0 Paper, is a collaborative effort by Santander InnoVentures, Oliver Wyman, and Anthemis Group. It outlines the evolution of fintech from Fintech 1.0 to Fintech 2.0, emphasizing the need for collaboration between banks and fintechs to drive fundamental changes in the financial services industry. The paper explores how digital technologies such as the Internet of Things (IoT), smart data, distributed ledger technology, and frictionless processes can be leveraged to transform banking operations and create new value for customers.

Main Viewpoints

1. Fintech 1.0 vs Fintech 2.0

• Fintech 1.0 has primarily focused on simple propositions like e-wallets and P2P lending.
• Fintech 2.0 is expected to bring fundamental changes to the core infrastructure of the financial services industry.
• Fintech 2.0 is a collaborative endeavor where banks and fintechs combine their strengths to innovate.

2. The Need for Collaboration

• Banks have regulatory compliance, trusted brands, and historical data as advantages.
• Fintechs offer agility, innovation, and cost-effective solutions.
• Collaboration is key to achieving Fintech 2.0, as it allows for the sharing of data, brand, distribution, and regulatory expertise.

Key Opportunities for Fintech 2.0

1. Applications for the Internet of Things (IoT)

• Trade Finance: IoT can reduce costs by enabling real-time data sharing, eliminating manual checks and paper documentation.
• Valuation of Real Assets: IoT allows for continuous monitoring of collateral assets (vehicles, real estate, commodities), improving valuation accuracy and risk management.
• Benefits: Increases transparency, reduces costs, and expands access to trade finance for SMEs.

2. Being Smarter with Smart Data

• Data Utilization: Banks have access to vast amounts of data but struggle to convert it into value.
• Smart Data Applications:
  • Right time and channel to contact: Use data to optimize customer engagement.
  • Fraud detection: Analyze patterns across transactional, location, and social data.
  • SME credit scoring: Use real-time trade data to assess creditworthiness.
  • Budgeting advice: Combine historical spending data with customer goals to offer personalized financial advice.

3. Embedding Distributed Ledger Technology

• Distributed ledgers enable peer-to-peer transactions, real-time settlement, and irrevocable records.
• Benefits:
  • Reduce operational costs.
  • Increase transparency and reduce settlement risk.
  • Support smart contracts, which can automate processes in trade finance, securities, and more.
• Potential Impact: Could reduce banking infrastructure costs by up to $15–20 billion annually by 2022.

4. Creating Frictionless Processes and Products

• Frictionless banking is the next frontier, especially in mortgages and long-term savings.
• Mortgage Process:
  • Digitization of the process can reduce cost, time, and customer dissatisfaction.
  • Example: Danish house purchase process uses real-time data and electronic signing, streamlining the transaction.
• Frictionless Saving and Investment:
  • Robo-advisors and personal finance management (PFM) tools can provide automated, personalized investment and savings advice.
  • These tools need to integrate all customer assets (real and financial) for a comprehensive view.

Conclusion

• Fintech 2.0 is poised to bring major disruption to the financial services industry, similar to how digital technology transformed other sectors.
• Banks and fintechs must work together to achieve Fintech 2.0.
• Collaboration is essential for innovation, cost reduction, and enhanced customer experience.

Key Information

• Fintech 1.0 has focused on simple digital propositions such as payments and lending.
• Fintech 2.0 will involve deep integration of digital technologies into core banking processes.
• IoT can improve trade finance and collateral valuation.
• Smart data can be used for fraud detection, customer engagement, and SME credit scoring.
• Distributed ledger technology offers real-time settlement, irrevocable records, and smart contracts.
• Frictionless processes are critical for mortgages and savings, with the potential to transform customer experience.
• Collaboration is the key to success in achieving Fintech 2.0.

Summary of Benefits

Final Note

The paper concludes that Fintech 2.0 is not just about competition, but about joint innovation. Both banks and fintechs have unique strengths and must work together to realize the full potential of digital transformation in financial services.