This workshop will provide readers with a global overview of the Fintech world, market dynamics and how London has managed to become a leading Fintech hub. They will learn about the various business models that fall under the Fintech umbrella (Payments, Money transfer, Crowdfunding, Lending, Data & Analytics) and also discuss new banking models that are trying to inspire and shape the bank of the future.

1. (Almost) everything you need to
know to start in Fintech
University College London
MSc Technology Entrepreneurship
Friday 22th August, 2014
Sophie Guibaud & David Meinhart

2.  What is Fintech?
 Global overview of the industry
 Where is Fintech?
 What makes London so special?
 Business models in Fintech
 Topic 1: New banking models
 Topic 2: Technology & Finance
Agenda

3.  What is Fintech?
Agenda

4. What is Fintech?

5.  Payments
 Lending
 Crowdfunding
 Data and analytics
 Personal Finance
 Money Transfer
 Digital Currencies
 …
Technology applied to financial
services

6. Fintech in numbers
440 companies
$3B investment in
2013
$950m invested in Silicon Valley in 2013 vs. $780m
invested in UK+Ireland since 2004
51% YOY growth rate in London vs. 23% in Silicon
Valley vs. 26% Global
70% of European
fintech funding for
UK startups

7. How has Fintech become so dynamic?
 Lack of trust in banks
 Lack of lending facilities offered by banks
 Banks more focused on applying regulations
than investing in tech
 Internet is changing the way we interact with
money
Need for Innovative, Transparent & Inexpensive
Financial Services
=
Fintech

8.  What is Fintech?
 Global overview of the industry
Agenda

9. Focus Areas within Fintech
Deal Share
Source: CB Insights, FinTech Investment Landscape, 2014

10. Notable Fintech exits
Source: CB Insights, FinTech Investment Landscape, 2014

11. Focus Areas within Fintech
Investment Share
Source: CB Insights, FinTech Investment Landscape, 2014

12. Notable Fintech investments
Source: CB Insights, FinTech Investment Landscape, 2014

13.  What is Fintech?
 Global overview of the industry
 Where is Fintech?
Agenda

14. or
Where is Fintech?

15. US on a global level?
Source: Accenture, The Boom in Global Fintech Investment, A new growth opportunity for
London, 2014

16. UK and Ireland in Europe? (1/2)
Source: Accenture, The Boom in Global Fintech Investment, A new growth opportunity for
London, 2014

17. UK and Ireland in Europe? (2/2)
Source: Accenture, The Boom in Global Fintech Investment, A new growth opportunity for
London, 2014

18.  Since 2008, Fintech financing in UK and
Ireland has grown at twice the rate of Silicon
Valley
 In 2013, UK and Ireland together accounted
for more than half of Europe’s Fintech deals
(53%)
 In 2013, UK and Ireland accounted for more
than two-thirds of its total financing (69%, or
$265 million)
 Nearly 135,000 financial-services technology
workers in the UK
A significant opportunity for London

19.  What is Fintech?
 Global overview of the industry
 Where is Fintech?
 What makes London so special?
Agenda

20.  Historical leader in Finance
 Historical leader in Start-ups
 Availability of Talents
 Availability of Funds
How has London become
the leader in Europe?

21. What is boosting London as the
center of Fintech?

22. Fintech Accelerators

23. Launched on August 6th 2014
Fintech Governmental body

24. Traditional
players
Banks New
Comers
Banks having traditionally only accounted
for 10% of Fintech innovations whilst VC
backed companies have supported 60%
Fintech Investment Funds

25. Incubators Government Investors
The development of a positive ecosystem
is vital to provide a fertile environment for
start-ups and entrepreneurs
Who will boost London as the centre
of Fintech?

26.  Most of UK fintech ventures are still in their
infancy
 Most venture capital investments are still first
round
 Availability of funding remains scarce
compared to the US
 Fintech companies often lack the expertise,
access, and resources to effectively sell to and
collaborate with banks
Critical Challenges

27. Global Research
 Accenture, The Boom in Global Fintech
Investment, A new growth opportunity for
London, 2014 Read more
 Accenture, The Rise of Fintech, New York’s
Opportunity for Tech Leadership, 2014
Read more
 EY & UK Trade & Investment, Landscaping UK
Fintech, 2014 Read more
 CB Insights, FinTech Investment Landscape,
2014 Read more
Enrich your knowledge

28. Blogs & Websites
 TechCrunch: http://techcrunch.com/
 Finextra: http://www.finextra.com/
 Tech City News:
http://techcitynews.com/
 Wall Street & Technology:
http://www.wallstreetandtech.com/
Enrich your knowledge

29.  What is Fintech?
 Global overview of the industry
 Where is Fintech?
 What makes London so special?
 Business models in Fintech
Agenda

30. Focus on Fintech business models

31. Fintech map
Source: www.venturescanner.com

32.  Payments
 Money transfer
 Crowdfunding
 Lending
 Data and Analytics
Selected case studies

33. Payments
Source: iZettle

34.  Concept
An app & a chip-card reader to accept
payments
 Problem
High investment in card services,
inefficiency of cash
 Target
Mostly B2B
 Business model
From 2.75% to 1.50% fee per transaction
Payments

35. Money transfer
Source: Transferwise

36.  Concept
Peer-to-peer online money transfer
service
 Problem
High fees from traditional banks to
transfer money abroad
 Target
Mostly B2C
 Business model
0.5% fee per transfer
Money transfer

37. Crowdfunding
Source: www.crowdfundinsider.co.uk

38.  Concept
Online equity crowdfunding platform for high-
growth start-ups
 Problem
Start-ups lack early-stage capital / Individuals
cannot invest in start-ups
 Target
B2B / B2C
 Business model
7.5% fee on money raised by start-ups / 7.5% on
profits by investors
Crowdfunding

39. Lending
Source: www.independent.co.uk

40.  Concept
Online payday lender to short-term personal
cash loans to consumers
 Problem
Traditional banks do not provide automated and
real-time cash loans
 Target
Mostly B2C
 Business model
Interest Rate (1% / day) & Transfer, Extension
and Late payment fee
Lending

41. Lending
Source: www.chipshopawards.com

42. Data and Analytics
Source: DueDil

43.  Concept
Due diligence tool and online company database
 Problem
Difficulty to find clear and comparable
information about companies
 Target
Mostly B2B
 Business model
Credit to enterprise plans from £24.99 / month to
£2,499 / year
Data and Analytics

44.  What is Fintech?
 Global overview of the industry
 Where is Fintech?
 What makes London so special?
 Business models in Fintech
 Topic 1: New banking models
Agenda

45. Topic 1:
Focus on new banking models

46. +
Traditional & digital banks

47. Traditional & digital areas
Source: Accenture, A Critical Balancing Act: US Retail Banking in the Digital Era, 2013

48. Rise of mobile banking
Source: Accenture, A Critical Balancing Act: US Retail Banking in the Digital Era, 2013

49. Enable the digital model
 Overcoming rigid
legacy technology in
the back-office
 Powering an analytics
driven front-office
 Positioning more
products in digital
channels
 Generate more sales
from digital accounts
Revamp the branch
 48% consumers would
be inconvenienced by
the closure of nearby
branches
 New branch formats to
lower building cost by
33% and operation
cost by 25%
̶ “Light” branches
̶ Kiosks
̶ Full-service “hubs”
̶ Flagships

50. 2 types of Emerging Disruptors
Source: Accenture, A Critical Balancing Act: US Retail Banking in the Digital Era, 2013

51.  Emphasize social responsibility
 Focus on customer centricity and empowerment
 Present simpler fee structure to customers
 Provide personal financial management tools
 Embedded with social media (particularly
Facebook)
 Leverage Big Data and analytics
 Offer mobile bill pay, P2P, remote-deposit, free
 ATM access
Characteristics of Emerging
Disruptors

52. Who could the
emerging disruptors be?
Source: Grant Thornton, Can Challengers Banks disrupt the power of the banks?, 2014

53. Futures of banks
Backbone Innovators
Hybrid?
2014
2020

54. The everyday bank
Source: Accenture, A Critical Balancing Act: US Retail Banking in the Digital Era, 2013

55. Who will the winners be?
Source: Grant Thornton, Can Challengers Banks disrupt the power of the banks?, 2014

56.  Simple
Creating better interface
and user experience for
customers
 Bankable
Offering externalised
innovation for minimum
investment
Selected Case studies

59. Demo time !

60. Global Research
 Accenture, The Everyday Bank, 2014
Read more
 Accenture, A Critical Balancing Act: US Retail
Banking in the Digital Era, 2013
Read more
 Grant Thornton, Can Challengers Banks
disrupt the power of banks?, 2014
Read more
Enrich your knowledge

61.  What is Fintech?
 Global overview of the industry
 Where is Fintech?
 What makes London so special?
 Business models in Fintech
 Topic 1: New banking models
 Topic 2: Technology & Finance
Agenda

62. Disruptor, Disrupted
 Starting out, big data and police tape
 Lessons learned about team
 Regulations protecting the public

63. Tech in Fintech – Not so different
 Speech reco and HFT
 How fast can you change the telly?
 ‘Yay’ or ‘Nay’
 Stock going up or stock going down
 Pattern matching, lots of data, latency
sensitive

64. Good Innovation, Good Product,
Bad Timing
 The innovation that was carbon trading
 Wolves of Wall Street saving the
rainforest
 From acid rain (US start) to EU
Airspace (EU end)
 Still opportunities here…

65. Tech in Finance: Why London?
 Validate or fail fast
 The world in the square mile
 Talent: top tech, teams from all corners
and cultures
 Regulation is just a tube ride away, and
is pro-business

66. Examples of Disruptors
 Buying rooftop space at car dealers
 Twitter effect, celebs moving pink
sheets to AP hack
 NLP IM Bots
 Still $T’s notional traded voice and IM
each day

67. Key of the Sector: The Talent Edge
 No customers
 Battle for top engineering talent
 Good engineering is rewarded, no sales
and marketing
 Differentiate by culture and work/life
balance

68. What’s next for Technology and
Finance
 Where have the flash boys gone?
 Machine learning frontier plus unique
data
 Trading on sport events, bitcoin, online
ads

69. Back to FinTech - Relationships
 Entire process was heavily dependent
on bank relationship
 It’s a relationship that starts from an
early age
 Both personal and business
 Day 3 in London, had accounts open
 Huge, un-tapped potential for cross
selling

70. Movies, Books, and
Magazine Articles
 Wolf of Wall Street, vampire squid,
Flash boys
 Flash boys – Engineering w/o sales &
Marketing
 Wolves – information arbitrage
 Vampire – global reach for info arb with
flashboys and engineers to amplify.
Regulations simply shift staff to other
unregulated entities
 Nerds on Wall Street

71.  What is Fintech?
 Global overview of the industry
 Where is Fintech?
 What makes London so special?
 Business models in Fintech
 Topic 1: New banking models
 Topic 2: Technology & Finance
Agenda

72. Thank you for your
attention!
Any
questions?
Sophie Guibaud David Meinhart
sg@bnkbl.com david.meinhart@gmail.com
@SophieGuibaud