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CWIN17 New-York / Reclaiming control of customer experiences with blockchain
- 1. Reclaiming Control of Customer
Experiences with Blockchain
Geraldine Balaj, Capemini
Dion Lisle, Capgemini
New York, September 25th
#CWIN17
- 2. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 2
Distributed Ledger Tech (DLT) – Core Concept
Copyright © Capgemini 2014. All Rights Reserved 2
Intermediary : Trust, not truth DLT : Truth, not trust
Data types
• Transaction data
• Any type of data
DLT Core attributes
• Immutability
• Consensus
• Auditability
• Transparency
TODAY TOMORROW
- 3. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 3
The 5 Pillars of DLT Innovation
DLT Research
and Thought
Leadership
POV Design &
Development
Partner with
leading DLT
Start-ups
Participate in
leading Open
Source
initiatives
Capgemini released
“Evaluation Framework”
(2015) and a Viewpoint
on “Smart Contracts”
(2016)
Capgemini’s network
of Applied Innovation
Exchanges (AIE)
offers a unique setting
for POV elaboration
Capgemini collaborates
with leading DLT start-
ups (e.g., Symbiont,
BigChainDB)
Capgemini continues
to expand its team of
DLT experts
Capgemini participates in
leading open source
distributed ledger projects
(Hyperledger, R3)
Build a team of
DLT Experts
- 4. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 4
What Who How
Private Securities Capital Markets Firms Digital Asset ledger for issuing private securities to investors
Syndicated Loans Lenders and Borrowers Shared loan ledger allows lending syndicate to form and arrange
loan
Ripple Integration Banks and Payment
Service providers
Connector for lower cost ‘peer to peer’ Foreign Exchange
between banks
PSD2 Compliance Banks, Payment
Services, Customers
Authorizing access to customer bank accounts by payment
providers
Business Identity Small Businesses,
Institutions
Businesses control ‘self-sovereign’ business identity information,
verified and shared.
Fiat - Relay Users of ‘Dapps’ and
Banks
Distributed app users able to ‘Cash-out’ from cryptocurrency
more easily.
Loyalty Consumers, Retailers,
Card Providers
Digital loyalty point wallets and decentralized exchange. ‘Pop-up’
coalition loyalty schemes.
Social Loyalty Communities, Charities Charitable / welfare donation and non-cash value earning and
redemption for the financially excluded to improve social welfare
Examples of Early Successes on Blockchain
- 5. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 5
What is a Blockchain?
Blockchain’s key features:
Distributed ledger creating a single shared view of transactions - every
participant in the network has simultaneous access to a shared view of information
Peer-to-Peer Network with no centralised authority. Technology replaces the
need for a third party to authorise transactions and manage updates
Trusted by use of consensus, verification is achieved by network participants
confirming changes with one another in real-time
Smart contracts - the ability to run additional business logic means that shared
agreement on the expected behaviour of a transaction can be embedded
Copyright © Capgemini 2014. All Rights Reserved 5
A blockchain is a type of distributed ledger of all transactions in a network. In the original Bitcoin
blockchain implementation, each participant, or node, in the network confirms transactions without the
need for a trusted third party / intermediary using a consensus mechanism based on key encryption
hashing techniques.
- 6. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 6
Blockchain vs Distributed Ledger: The Difference
Someone in a network
requests a
transaction
The transaction is broadcast to other
computers (nodes) in the network
The network of nodes validates the
transactions using agreed
algorithms
The transaction is
complete
The new block is added to the
network’s blockchain, in a way
which is permanent and
unalterable
The verified transaction is
combined with other transactions
to create a new block of data for
the ledger
Blockchain is one type of a Distributed Ledger framework, the below describes how a Block is validated in the
Blockchain model.
Copyright © Capgemini 2014. All Rights Reserved
- 7. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 7
Permissioned
Public Bitcoin
Financial
Institutions
Public
Trustless
Trusted
Distributed Ledger Landscape: 2 Models Have Emerged
??
? ? ?
? ?
?
Distributed
Databases
11
Financial Services & the Regulated Markets
- 8. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 813
Business
Logic Layer
Smart
Contracts,
Encryption &
Consensus
Blockchain
Layer
Public or Private
Blockchains
Technology
Platform
Providers
Consortia Based
Platforms
Physical
Layer &
Cloud
Hosting
Cloud Services
Proof of
Work
(P)BFT
Proof of
Stake
IBM
BLUEMIX
CUSTOM
*Not exhaustiveCloipsytright © Capgemini 2014. All Rights Reserved
OR OR OR
1
• Payments & Loyalty Programs
• Post Trade & Back Office Automation
• Trade & Supply Chain Finance
• Syndicated / Commercial Lending
• Asset Management & Servicing
• Structured Products & Bespoke Bilateral Trades
• Identity Management & Attestation participation
• Fraud Detection / Dispute & Arbitration Management
• Digital Records Management / Proof of Ownership
• KYC / AML as part of broader Client Onboarding
Value Exchange Information Exchange
The DLT ecosystem continues to rapidly evolve
Enterprise Ethereum
- 9. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 9
A Typical DLT Innovation Journey
Define Business
& Opportunity
Statement
Identify Pilot
Ecosystem
Execute proof of
concept
Pilot
Planning
Go Live
• Define goals and
success factors
• Cross LoB
analysis to identify
and rank use
case(s) for proof of
concept (POC)
• Determine which
product/customer
segment offers the
highest value to
support POC
validation
• Engage selected
channel partners for
partnership and
innovation piloting
• Evaluate platforms /
blockchain (and other
technology) vendors
to the vision,
capabilities and
requirements
• Build and test
distributed ledger
scenarios,
leveraging
Capgemini’s
PoC’s
• Leverage the AIE
for joint
development with
start-ups
• Coordinate with
selected channel
partners on
specific data sets
required for
simulation
• Collaborative build
of Deployment
Playbook
• Make adjustments
to configuration
and logic and
refine data sets as
necessary
(iterative)
• Establish Success
criteria to include
lessons learned,
key transaction
metrics, and
finalized business
case prove points
• Establish Launch
Playbook and
finalize business
case for solution
expansion,
adoption, and
maintenance
• Focus on all
aspects of a
project (agile
methodology,
integration
services,
operations and
support, etc)
• Scale development
with the Right-
shore Team
- 10. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 10
Rapid, potential for Near Real Time Settlement (Next Generation STP): payments and other
money movements and other servicing events (e.g. corporate actions)
Improved Risk Management: market/delivery/counterparty/liquidity– near real-time view of all
exposure and ability for “smart contract” to react to various market events.
Improve post-trade transparency: single, immutable ledger to aggregate multi-dimensional
views of common reference and transaction data
Simplified Reconciliation /Increased automation: for illiquid/manually intensive markets,
resulting in lower cost, higher efficiency on top of a single, immutable data framework. More
automation = greater visibility to firms’ liquidity/ capital / credit position.
Improved capital efficiency: Reduced settlement cycles coupled with multi-party and multi-leg
interaction over single conduit provides real time management of capital reserves
Improved derivative clearing: through tokens or “smart contracts”– ability to embed custom
attributes (meta-data); aggregate risk view across asset types enabling margin and collateral
optimization
New Market & Service Offering (Utility) Opportunities: Standardizing transaction framework
facilitates entry into new markets or deployment of new services, traditionally rooted in “Tech
Giant” firms.
Deleverage Balance Sheet /
Manage Risk
Cross Asset Class
Standardization
Enhanced Interoperability
(Smart Contracts)
Industry Objectives Benefits Unique to DLT
Transparency / Single
Source of Truth Audit Trail
Capital & Liquidity
Management
Financial Services Transformation – Where DLT is Helping
YOUR Customers
- 11. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 11
- Transforming the Loyalty Business Model
Solution Deep Dive
- 12. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 12
Loyalty points
Thanks for
the Coffee
Loyalty points are immediately available
(upon authorization of the transaction)
Rewards can be redeemed instantaneously
Alice
Mocha Coffee
+ 4 Points
You have earned a
free coffee on
your next visit
- 13. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 13
Easy on-boarding
This is a great loyalty
service I can offer to my
clients. Thanks to
Discover I can win more
repeat customers for my
business.
Easy on-boarding
Cost effective Loyalty Solution for small and medium businesses
Bruce
- 14. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 14
Transfer of points between different members
Can I get an
upgrade for a
1000 car rental
points?
Alice
Points can be immediately transferred between different members
(like people from the same household)
Transfer 1000 Points
Bob
Airline Points:
12.345 Points
Car Rental
Points:
3,234 Points
- 15. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 15
Decentralized exchange
My hotel notified
me about a drink
promotion for 100
Hotel Points
Alice
Decentralized exchange
People decide the market price value for exchanging loyalty points
Exchange
1000 Airline Points
For
100 Hotel Points
- 16. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 16
Specific rules (promotions) per partner (using SmartContracts)
Thanks for staying
with us. You will
receive 1,400 hotel
points and 200 extra
points for your current
stay
Each partner can define specific rules (promotions)
These rules are easy to update from their own access portals.
- 17. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 17
Combining value
By combining all my
hotel, travel and car
rental points I am
able to get some
great gifts
Combining value
Analytical tools can combine points to provide you with purchase options.
Airline Points:
12.345 Points
Car Rental Points:
3,234 Points
Hotel Points
1.600 Points
Total Value:
$125.67 (UPS)
----------------------
Discover Points
+2,392 Points
- 18. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 18
New Business Models: Loyalty Intermediary with DLT (1/2)
Bank X
Administered
Blockchain
Administrators Role:
Centralized administration via
Blockchain
Initiates points generation based on
Electronic Payments transactions
flowing through card system
Creates trusted environment for multiple
merchants to participate
Validates transactions (fraud prevention)
Merchant Role:
Responsible for loyalty rules
Links loyalty solution to its personal
rewards exchange solution
Validates transactions (fraud prevention)
- 19. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 19
• Enhanced consumer (mobile)
experience
• Immediate access to Balance
Information
• New capability to Transfer
Points
• New capability to define
Market Prices
• Decentralized nature provides
better security against hacks
• A Cost-effective solution for a
Loyalty Solution
• Standardized tracking of
loyalty points across different
merchants
• Smart contract capabilities
• Templates and API’s for fast
deployment
• Provides option to “Buy Back”
or create other incentive
schemes for usages
• Applied innovation of
Digital Currency
• New business model –
add on service
• Growth in electronic
payment services
• New SAAS offering that
creates stickiness
• Transparent database,
auditable by many
New Business Models: Loyalty Intermediary with DLT (1/2)
- 20. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 20
A multi-tenant distributed ledger platform for loyalty and rewards
Situation Capgemini Solution Valued Delivered
Target client: A major global
payments and cards provider
Business Challenges
Loyalty is a key growth opportunity
for the retail industry. Payments and
card providers are keen to provide
new business offerings to manage
and maintain a secure and common
loyalty solution for their clients in
retail.
Existing solutions are facing a
number of obstacles:
• Loyalty solutions are stand-alone
and not integrated
• There are no standards available
• Loyalty programs lead to large
liabilities for retailers
• Points are not easily transferable
for consumers
• Significant barriers of entry for
small and medium sized
companies
Capgemini developed a proof of
concept with distributed ledger
technology in 12 weeks
Our approach included:
• Detailed analysis on the market
opportunity based on Capgemini insiders
and industry experts
• Elaboration in agile approach for
requirements, development and testing
of mobile based solution for loyalty
• Integration of the mobile solution with a
distributed ledger platform: BigChainDB
• Extension of smart contract capabilities
of the solution
• A team of 4 DLT experts and 2 UX
mobile developers
A distributed ledger solution that
includes:
Standardized tracking of user loyalty
transactions and balances across different
and differentiated loyalty schemes
between consumers, suppliers and
merchants
Maintains balances as well as
automatically calculating loyalty points,
using a smart contract algorithm.
Offers a digital decentralized exchange to
consumers and merchants to exchange
loyalty tokens based on the value
perceived
Provides digital ownership for the loyalty
tokens to consumers with some
safeguards in place (through smart
contract code)
Creates a new innovative solution offering
to payment and card service providers for
their merchant client base
Case Study: Loyalty and Rewards Proof of Concept
- 21. Session’s Title | Date
Copyright © 2017 Capgemini and Sogeti. All rights reserved. 21
Thank You!