Chris Skinner

www.thefinanser.com

the future of global

banking

SEPA

€50m

http://www.amazon.co.uk/Future-Banking-Globalised-Skinner-Chronicles/dp/047051034X/ref=sr_1_1?ie=UTF8&s=books&qid=1214062513&sr=8-1

MiFID

<50

http://www.amazon.co.uk/Future-Investing-Europes-Markets-after/dp/0470510382/ref=pd_sim_b_6

http://thefinanser.co.uk/fsclub/2009/02/the-new-eu-regulator-and-liquidity-risk.html

http://thefinanser.co.uk/fsclub/2009/03/robobank-no-human-hands-needed.html

http://thefinanser.co.uk/fsclub/2009/03/jibun-bank-the-mobile-only-bank.html

“Asia has around 600,000 villages and maybe 600 to 700 million

unbanked people there. If you want to get to that mass,

technology is the only thing that works.

“Today, in a bank like ICICI Bank, you have less than 15% of

transactions taking place within a branch. Five years back, 95% of

the transactions took place within a branch. So you have an idea

of what happens when the technology touches the unusual.

“If I look at cost per transaction, it is about a tenth of a western

bank. That is entirely because we could leapfrog a generation of

technology.”

K V Kamath, CEO, October 2006

http://thefinanser.co.uk/fsclub/2009/04/africas-mobile-revolution.html

http://thefinanser.co.uk/fsclub/2009/04/creating-a-bank-that-rocks.html

http://thefinanser.co.uk/fsclub/2008/07/bbva-the-first.html

http://thefinanser.co.uk/fsclub/2009/06/a-spanish-first-social-banking.html

“We can move into a new country with credit cards with an

investment of $1-$2 million, mainly on marketing, because we

don’t have to build all that infrastructure. We can move into a

country with full service banking for under $10 million, which is a

fraction of our competitors. We just open a building and sell,

because everything is delivered through the network.”

Ken Harvey, CTSO

http://thefinanser.co.uk/fsclub/2008/12/-hsbc-banking-on-the-network.html

the future

©Chris Skinner +44 790 586 2270 chris.skinner@fsclub.co.uk

the critical point

1969 1979

1989 1999

1959

2009

The times, they are changing

33

1999

Mailing

10,000 people

Twice weekly

Brochures

10,000+

Annual update

Meetings

40 UK

8 Ireland

6 CEE

Newsletter

1,000 people daily

Text only Website

Non-interactive

Custom-build

$150,000

$100,000

$100,000

$300,000

$150,000

$800,000

34

2009

Mailing

10,000 people

Twice weekly

Brochures

10,000+

Annual update

Meetings

40 UK

8 Ireland

6 CEE

Newsletter

1,000 people daily

Multimedia Website

Non-interactive

Custom-build

$150,000

$149

$10,000

Free

Gone

$160,000

1975

2000

2010

European Order Book Volumes

Figures sourced from FESE

Value of Equity trading, March 2009

Exchange / MTF Order Book Trades Order Book Turnover (EUR m)

1 London Stock Exchange 17,279,867 123,650.0

2 Euronext 15,365,479 116,839.0

3 Deutsche Borse 8,118,311 95,835.8

4 Spanish Exchange (BME) 2,832,093 60,682.8

5 Chi-X Europe 10,554,888 57,168.5

6 Borsa Italiana 6,227,802 45,937.2

7 SWX Europe 2,875,388 45,495.4

8 NASDAQ OMX Nordic 4,802,676 43,150.6

9 Turquoise 3,309,508 22,567.8

10 Oslo Bors 1,240,279 11,397.7

11 BATS Europe 1,760,985 8,277.7

12 SIX Swiss Exchange 462,090 2,802.3

13 Wiener Borse 440,927 2,781.6

14 Warsaw Stock Exchange 1,200,689 2,545.6

15 Athens Exchange 669,246 2,228.3

In a Best Price Routing world

Under best price routing, research shows that there would be a significant shift in liquidity and market share to the new MTFs, while the incumbent exchanges would lose market share.

Source: Equiduct Orange LFA

Potential Market Share Changes Under Best Price Routing

-8%-6%-4%-2%0%2%4%6%8%

10%12%14%16%18%20%

MTFs Euronext LSE Deutsche Borse

Po

ten

tial m

arke

t sh

are

chan

ge%

Nov-08 Dec-08 Jan-09 Feb-09

DoBuild customer confidence

Cut costs

Focus upon operational efficiency

Reduce branch overheads / branches

Invest in mobility services

Don’tAnger the customer

Cut for the sake of cutting

Ignore new business models

Stop innovating

Further Reading

A Directory of Social Financehttp://thefinanser.co.uk/fsclub/2009/04/a-directory-of-social-finance.html

Blog Index (from April 2009)http://thefinanser.co.uk/fsclub/the-week/

The Future of Banking: in a Globalised World http://www.amazon.co.uk/Future-Banking-Globalised-Skinner-

Chronicles/dp/047051034X/ref=pd_bxgy_b_img_b

The Financial Services Club Library (members only)

www.thefinanser.com