Christoffer O. Hernæs

Fintech – friend or foe?

Incumbents are facing a «perfect storm» of factors thatwill transform the industry

• Regulatory changes adds to complexity and are challenging business models‒ MifID II prohibits provision fees

‒ PSD 2 opens up the infrastructure

• Technological innovation creates vast possibilities and changes‒ Distributed ledgers and cryptocurrencies

‒ Deep learning for robo advisore and pre approvals

• Banks are considered irrelevant by millenials

• Interest rates are declining

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• Regulatory changes adds to complexity and are challenging business models‒ MifID II prohibits provision fees

‒ PSD 2 opens up the infrastructure

• Technological innovation create new possibilities‒ Distributed ledgers and cryptocurrencies

‒ Deep learning and pre-approved credit

• Changing consumer behavior

• Increased competition

We are facing a «perfect storm» of opportunities thatwill transform the industry

The ecosystem for financial services is changing and much of the innovation is coming from elsewhere

Savings Funding

Deposits andcurrent account

Capital marketsFX and

«Remittance»

Payments

Valueadded

services

• Customer and partners of the past could

become the competitors of the future

• Global technology giants, Facebook,

Google, Apple are well positioned to take a

role

• Investments in fintech reached 3 billion

USD in 2013 and is excpected to exceed 8

billion USD by 2018

Fintech activity level in Scandinavia is high

• Klarna

• Bambora

• iZettle

• Seamless

• Behaviosec

• Tink

• Qapital

• FundedByMe

• Trustly

• Toborrow

• Trustbuddy

• Mondido

• Cryex

• Betalo

• Lånbyte.se

• Insplanet

• Swish

• Wywallet

• Coinify

• Wallmob

• MobilePay

• Swipp

• Meewallet

• Clearhaus

• Coders Trust

• Cranberger

• Lendino

• Dansk

Faktura Børs

• Beeptify

• RiskButler

• Booomerang

• Betternow

• Aidbuilder

• Donation

Road

• mCash

• Edgefolio

• Meawallet

• Zwipe

• Encap

• Banq

• KolibriFX

• Lettspart

• Risk-Partner

• Islero

• Bidra.no

• QuantAlliance

• Fronteer

Solutions

• Valyou

• Strex

• BitSwapr

Fintech in ScandinaviaOver 60 Companies

More than 500 MUSD invested

Payments

Infrastructure

LendingInvestments/trading

OtherBitcoin/Blockchain

Crowdfunding

Risk Butler

What areas are at high risk of disruption?

Payments FundingSavings and investments

Risk and credit

• P2P-payments• Mobile POS and in--

app purchases• Remittance and FX• Cryptocurrencies

• Crowdfunding• P2P-lending• «Flash loans»• Invoice financing

• Robo-advisors• Deep learning and

evolutionaryalgorithms

• Self service portals

• Big data• Social networks• Internet of Things• Predictive analysis

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Banks represent trust and have distribution power

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Regulations tend to backfire

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Incumbents are at risk of becoming a utility

Collaboration is the key to succes

• Norgwegian banks have a long tradition fo collaboration

• Collaboration between banks and fintech startups could increase agility and innovation for banks and provide distribution power for fintechs

• There needs to be a business model that is mutually beneficial

• Roles need to be defined and clear

• How can banks approach fintech collaboration?

‒ Acquisitions

‒ Partnerships

‒ Accelerator programs

‒ Collaboration with exisiting players in the startup ecosystem

‒ Open Ecossytems and APIs

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Thank youChristoffer O. Hernæshttp://hernaes.com

@hernaes