Banking trends for 2016 include increasing disruption of banks from new technologies, especially in payment services. To drive innovation and counter threats, banks are investing in new technologies, partnering with fintech companies, and improving security systems. They are also leveraging digital technologies, cloud services, analytics, and distributed ledger technology to enhance customer experience and reduce costs. Additionally, banks are transforming legacy systems, fully integrating risk management and compliance practices, and embracing financial inclusion to ensure business growth.

1. Banking Trends for 2016

2. 2Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Banks are facing an increasing threat of
disruption
Profitable aspects of
banking business are being targeted
Customer expectations are
creating a need for innovation
Payment services are facing
the highest level of disruption
Source: Capgemini Financial Services Analysis, 2015;

3. 3Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Banks are making investments to drive
innovation
Partnering/
Collaborating
Incubators/
Accelerators
Innovation
Labs
Investing in
FinTechs
Acquiring
FinTechs
Source: Capgemini Financial Services Analysis, 2015;

4. 4Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
To counter cyber threats, banks are investing
more in Security Systems
450
mn
Customers using
banking services
through biometrics by
end of 2015
40%
Increase in cost of
managing cyber
security infrastructure
by 2025
$13.5
mn
Total average
annualized cost of
cyber crime in financial
services firms in 2015
Source: Capgemini Financial Services Analysis, 2015; 2015 Cost of Cyber Crime Study: Global, Ponemon Institute; “Why Cyber Security Will Cost 40% More In 10 Yrs”, CXOtoday, News Desk,June 12, 2015; ”Biometrics will be main banking identity
authorization method by 2020, says report”, Justin Lee, Biometricupdate.com, June 2, 2015

5. 5Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Banks are increasingly using cloud services
for core business activities
$191
bn
The global cloud
market is estimated
to reach $191bn by
2020
70%
Percentage of cloud
initiatives of major
global banks
leveraging private
cloud (Dec 2014)
Scalability
Flexibility
Agility
Source: Capgemini Financial Services Analysis, 2015; “Benchmark Your Enterprise Cloud Adoption, Forrester Research, Inc., Sophia I. Vargas, Dave Bartoletti with Glenn O’Donnell, Michael Caputo, August 12, 2015; Cloud Heat Map in Banking, 2015,
Gartner, December 10, 2014

6. 6Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Banks will continue to leverage digital
technologies to enhance customer experience
Enhanced
Mobile Banking
Services
Analytics Driven
Personalized
Services
Advisory Role of
Physical
Branches
24%
Percentage of new
analytics initiatives
are focused on
customer
experience in 2015
Source: Capgemini Financial Services Analysis, 2015; Analytics Heat Map in Banking, Gartner, 2015

7. 7Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Banks are increasingly taking up legacy
systems transformation
Driving Agility Better Time to Market
Competitive
Differentiation
80%
Percentage of banks
expected to replace
their core banking
systems within the
next five years
Source: Capgemini Financial Services Analysis, 2015; “80% of banks to replace core systems ’within five years’”, Elliott Holley, Banking Technology, 16 March 2015

8. 8Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Banks are exploring distributed ledger
technology as an opportunity
Efficiency
Speed
Transparency
$ 15-
20 bn
Distributed ledgers are
expected to reduce
banks’ infrastructure
costs by $15bn–$20bn
per annum by 2022
Source: Capgemini Financial Services Analysis, 2015; “The Fintech 2.0 Paper: rebooting financial services”, Santander InnoVentures, Oliver Wyman, and Anthemis Group, 2015

9. 9Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Banks are working to fully integrate risk
management and compliance practices
$ 230 Billion
Total Litigation Costs Paid by
U.S. and European Banks
(2009-2014)
Increased
Regulations
Increased Spending
on Automation
Enabling Employees
with Decision
Making Tools
Compliance
Procedures for
Third-Party Vendors
Source: Capgemini Financial Services Analysis, 2015; “European banks face $52 billion in litigation costs: Morgan Stanley”, Reuters.com, 13 Jan 2015

10. 10Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Banks are embracing advanced analytics in
addition to traditional business intelligence
solutions
Proportion of Overall
Analytics Initiatives by Banks
Traditional BI: 28%Advanced Analytics: 72%
Risk Management
Business
Strategy
Fraud Analytics
Customer
Analytics
Source: Capgemini Financial Services Analysis, 2015; Analytics Heat Map in Banking, Gartner, 2015

11. 11Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Banks are focusing on financial inclusion and
awareness
Pressure on
Business Growth
Enhance Financial
Awareness
Enhance Customer
Engagement
Need for PFM and
Gamification
Source: Capgemini Financial Services Analysis, 2015;

12. The information contained in this presentation is proprietary.
© 2013 Capgemini. All rights reserved.
www.capgemini.com
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