psd2 future of digital banking - meniga the future of digital banking ... mckinsey global retail...

Download PSD2  Future of Digital Banking - Meniga   The Future of Digital Banking ... McKinsey Global Retail Banking, 2015 Payments Lending ... PSD2  Future of Digital Banking

Post on 08-Apr-2018

220 views

Category:

Documents

4 download

Embed Size (px)

TRANSCRIPT

  • PSD2 & The Future of Digital BankingBragi Fjalldal, CMO & VP Business Development

  • About Meniga

    Meniga is helping leading banks around the world personalize their digital customer experience

    CONTINENTS COUNTRIES OFFICES CONSUMERSEUROPENORTH AMERICAASIAAUSTRALIA

    18 LONDONREYKJAVIKSTOCKHOLM

    35 MILLION

    AFRICA

    +30 clients across 18 countries

  • Menigas Products & Services

    DATA CONSOLIDATION & ENRICHMENT

    PERSONAL FINANCE BUSINESS FINANCE

    DIALOG ENGAGEMENT PLATFORMCARD-LINKED

    OFFERSCONSUMER DATA

    ANALYTICS

    Digital Banking Products Marketing Products

    PSD 2AccountAggregation

  • Agile FinTechs put pressure on banking profit pool

    Source: Accenture; Bain & Company; Forbes; McKinsey; Meniga analysis

    0

    5

    10

    15

    20

    25

    2010 2011 2012 2013 2014 2015

    Global Fintech Investment (USD B)

    In consumer finance up to 40% of revenues and 60% of profits are at risk of loss by 2025

    McKinsey Global Retail Banking, 2015

    Payments

    Lending

    Wealth

    Other

  • Source: CB Insights

    Digital banking is an increasingly crowded space

  • However, GAFAs are the biggest immediate threat

    Customer dis-intermediation is one of the biggest risks retails banks face today

  • and now PSD2 is set to accelerate competition

    PSD2 is paving the way for consumers to authorize 3rd party providers to have direct access to two

    aspects of their bank account

    Access to account and transaction data

    Ability to authorize payments directly from account1 2

    Account Information Service Providers (AISP)

    Payment Initiation Service Providers (PISP)

  • There is time, but it takes time to prepare well

    2016 2017 2018 2019 2020

    Jan/2016 Jan/2017 Jan/2018 Sept/2018-March/2019

    PSD2 enters into force, 20

    days after publication

    European Banking Authority provides

    draft of PSD2 Regulatory Technical

    Standards

    EU Commission will take 3-9 months to approve standard

    EU member states will have 2

    years to transpose legal

    text into national law

    Once EU commission adopts PSD2

    Technical Standards, there is an 18 month

    period for industry to implement

    Source: European Banking Authority; Openbankproject

  • PSD2 is not just a threat it is also an opportunity

    Can banks transform the relationship with their customers from monthly chores to weekly or even daily meaningful dialog?

  • PSD2 : Banks must prepare to comply & compete

    PREPARE TO COMPLYPrepare IT architecture for dealing with real-time third party access to account data & payments; do the groundwork well before standards are finalized develop and test your API in good time

    PREPARE TO COMPETEDevelop market-leading post-PSD2 products and services ahead of your competitors use your API to bring innovative personalized digital banking solutions to market as soon as you can

  • PSD2: Banks have several strategic options

    Basic Compliance

    Comply with bare-bone PSD2 requirements

    Enable 3rd party access as required by law

    Develop advanced API platform with granular & more enriched data access (e.g. standing orders, demographics, market data analytics)

    Monetize access to data & build close relationships with AISP/PISPs

    Develop data platform connecting banks, merchants and consumers

    Expand service offering to non-financial products/ services in partnership with TPPs with potential for new revenue streams (e.g. CLO, real-time market intelligence)

    Strategic Options (not mutually exclusive)

    Become the best OpenAPI provider

    Expand ecosystem beyond banking

    Defend position as leading channel to integrated financial services

    Improve existing offerings & develop new services based on enriched, aggregated data to address unserved financial needs (e.g. PFM & BFM)

    Compete with TPPs

    Provide the best digital banking UX

    Bank as back-end service provider Bank owning & expanding customer relation

    Source: Accenture; OpenBankProject; PWC; Meniga analysis

    Prepare to Comply

    Prepare to Compete

  • PSD2: How Meniga products & services can help

    Strategic Options

    Bank as back-end service provider Bank owning & expanding customer relation

    DATA CONSOLIDATION & ENRICHMENT

    PERSONAL FINANCE

    BUSINESS FINANCE

    CARD-LINKED OFFERS

    CONSUMER DATA ANALYTICS

    DATA CONSOLIDATION & ENRICHMENT

    PERSONAL FINANCE BUSINESS FINANCE

    DIALOG ENGAGEMENT PLATFORMCARD-LINKED

    OFFERSCONSUMER DATA

    ANALYTICS

    Digital Banking Products Marketing Products

    PSD 2AccountAggregation

    ACCOUNT AGGREGATION

    Basic Compliance Become the best OpenAPI providerExpand ecosystem

    beyond banking Provide the best

    digital banking UX

    CONSUMER DATA ANALYTICSPSD2 API

  • PSD2 & Meniga : One-Stop compliance & innovation

    DATA CONSOLIDATION

    PSD2 API DIGITAL INNOVATION API

    PERSONAL FINANCE BUSINESS FINANCE

    CARD-LINKED OFFERS

    CONSUMER DATA ANALYTICS

    DATA ENRICHMENT

    Step 1: Prepare for XS2A compliance Consolidate transaction & account data in

    Meniga repository outside of core-banking systems

    Establish efficient synchronization process (batch/pull/push)

    Optimize data for single-user queries Meniga willing to establish & maintain API

    based on local regulation once available

    Single-source transaction database serving PSD2/XS2A API

    Core banking system shielded against Denial of Service (DOS) attacks

    Rapid response times : avg response time

  • DATA CONSOLIDATION

    PSD2 API DIGITAL INNOVATION API

    PERSONAL FINANCE BUSINESS FINANCE

    CARD-LINKED OFFERS

    CONSUMER DATA ANALYTICS

    DATA ENRICHMENT

    Step 2: Enrich & augment data to form competitive innovation platform

    Enrich data beyond regulatory requirements : categorization, merchant mapping, location mapping, etc

    Add more data to Meniga repository, e.g. standing orders/direct debits, loan products, savings products, etc

    Expand API to encompass broader functionality

    PSD2 & Meniga : One-Stop compliance & innovation

  • DATA CONSOLIDATION

    PSD2 API DIGITAL INNOVATION API

    PERSONAL FINANCE BUSINESS FINANCE

    CARD-LINKED OFFERS

    CONSUMER DATA ANALYTICS

    DATA ENRICHMENT

    Step 3: Build on innovation platform to enhance proposition to personal & SME customer base

    Invoke Meniga PFM & BFM services to build world-class, personalized UX for personal & SME customers

    Dramatically improve quality & quantity of engagement

    Activity feed, reports/insights, challenges, cash-flow management, etc

    PSD2 & Meniga : One-Stop compliance & innovation

  • DATA CONSOLIDATION

    PSD2 API DIGITAL INNOVATION API

    PERSONAL FINANCE BUSINESS FINANCE

    CARD-LINKED OFFERS

    CONSUMER DATA ANALYTICS

    DATA ENRICHMENT

    Step 4: Expand data platform connecting banks, merchants and consumers

    PSD2 & Meniga : One-Stop compliance & innovation

    Partner with Meniga to offer personalized Card-Linked Offers to personal banking customers & transaction based market analytics to corporate customers

    Develop tangible value to customers & new revenue streams for bank

  • Competing after PSD2 : value from financial data

    TargetedCard-Linked Offers(CLO)

    Personalized Digital Banking (PFM)

    Data-driven SME banking (BFM)

    Real-Time Market Intelligence

    Transform Customer Engagement

    Develop New Revenue Streams

  • Partner with service providers to develop powerful innovation platform

    Differentiate in functionality and digital user experience

    Examples of digital banks powered by Menigas digital innovation platform

    Competing after PSD2 : Personalized Digital Banking

  • Competing after PSD2 : Personalized Digital Banking

    Meaningful engagement based on highly personlized financial advice & services

    An environment that facilitates continuous dialog with the customer

    Notification-driven engagement mixing core banking with personal finance advice, advanced PFM functionality and offers

  • Automated, notification driven PFM

    Notification of unusual spending & low-balance warnings

    Personal finance insights

    Insightful expense reports

    Foursquare-like info nuggets on spending behavior

    Playful savings challenges

    Personalized offers

  • Competing after PSD2 : Data-driven SME Banking

    Compelling digital banking environment for SMEs : consolidated accounts and overview of income & expenses

    Help customers improve cash conversion cycle through automated cash-flow management and peer comparison

  • Competing after PSD2 : Card-linked offers

    Use data to source highly personalized, deep offers

    Card-linked infrastructure secures seamless execution and opportunities for positive engagement

    Potential to develop significant, new revenue stream for banks

  • Competing after PSD2 : Card-linked offers

    20% average discounts

    Offers across 15 verticals

    5-10% offer conversion rates

    x3 more engagement from active offer users

    10 ARPU (Average Revenue Per User/annum)

    Metrics from Menigas CLO program

  • Competing after PSD2 : Real-time market intel

    Unique and disruptive str

Recommended

View more >