Trends in the payments market Challenging financial institutions - PowerPoint PPT Presentation

Trends in the payments market Challenging financial institutions Helle Reiff Koggersbøl equensWorldline

Customers and business models are changing Global exposure leading to fickle & ► demanding customers Consumer experiences are ► transposed into the corporate space Expect individualized services and ► expect that you know their needs Have low attention span, require ► immediacy Anywhere & anytime - mobile ► Convenience & user friendliness ► Business models change and are ► increasingly becoming event/subscription based

Friend or foe? Fintech vs BigTech vs “new” banks ► Cherry picking, revenue migration Digitally based/cloud native – agile, cost efficient…entry barriers Disintermediation vs cooperation Digital leadership and financial performance 12% 38% 50% Digital Digital The rest active focused Accenture/Caterpillars. Butterflies and Unicorns/2019

Outdated legacy systems – a concern Biggest inhibitor of necessary payments transformations 2/3 71% of leaders agree that business agree that existing opportunities are systems are the biggest inhibitor of not realized due to outdated core necessary payments systems transformations 1. Source: Accenture, “Back - office, it’s time to meet the customers” 5 2. Source: Finextra , “Payments transformation: Modernising to stay relevant in the digital age.”

Quick look at last weeks news…from Finextra

Just being there ▪ Compliance/standardization – > commoditization -> price pressure ▪ PSD2 & open banking – foundation for a paradigm shift? ▪ Banks still fairly reluctant, sharing ▪ Instant payments & request for 80% payment of IT budget ▪ AML/KYC/Fraud spent on existing software that needs constant updates to meet regulatory requirements Source: Financial News, https://www.fnlondon.com/articles/banks-face-spiraling-costs-from-archaic-it-20170912

Sounds like a challenge Trends are both reinforcing each other and pulling in different directions One size doesn’t fit all - considerable differences Regional, target audience, level of digitization

Some of the impacts… Volume ▪ 24/7 & instant ▪ Revenue decreasing + moving to ▪ new entrants Compliance and non-differentiating ▪ services Cost base, legacy & technology ▪ Individualism ▪ Agility ▪

Stick to it and look outside.. 12 38 50 % % % Digital Digital The rest active Strategy – utility-full service focused ▪ Front end or scale Accenture/Caterpillars. Butterflies and Unicorns/2019 ▪ Balance digitization & ▪ new services & compliance Modular and micro-services ▪ Look outside – to bring the best ▪ services forward Let somebody else do the ▪ commodity “parts” Use data to personalize your ▪ services Don’t forget your IT department ▪

"If you want to go quickly, go alone. If you want to go far, go together.“ African proverb Thank you Helle Reiff Koggersbøl Meet me at the equensWorldline stand W134