ARTUR (DERVISH) DERWISZYNSKIHead of Industry, Financial Services, CEE at SAP

35. Finančna Konferenca, Portorož, May 8th 2018

MASSIVE DISRUPTION IN FINANCIAL

SERVICES

1ST LAYER OF DISRUPTION: CUSTOMERS

• Clinton

Telephone 75 years

Radio 38 years

Television 13 years

Internet 4 years

YouTube 10 months

PokemonGo 19 days

HOW MUCH TIME TO GET 50M USERS

Millennial Disruption Index, April 2017

71% of millenials

rather go to a dentist

than listen to a Bank

Advisor!

Customers go mobile

9,100Branches

closed in

2017

50,000Banking

jobs cuts

1997Level of

employment

2.8 m people

48,000Branches

closed

since 2008

Source: The European Banking Federation, 2018

5000m

2017

25k

1985

750m

2000

AT&T + &^$*@(! -> MOBILE IS NOT WORTH INVESTING (IN 1985)

NOKIA + ‘TOO FRESH TO DISCLOSE’-> SMARTPHONES ARE NOT FOR CALLING (IN 2004)

• First attempt - idea rejected

• Total cost €1.14M

• Rhineland-Palatinate Court of Auditors said “unrealistic”

2ND LAYER OF DISRUPTION: REGULATIONS

• Revised Payment Services Directive (aka PSD 2 / PSD II)

• General Data Protection Regulation

• …more to come…

227M active accountsLess than 10 ppl in compliance reportingRegulators/agencies – direct accessOne database for all finance

VS

3RD LAYER OF DISRUPTION: COMPETITIVE ENVIRONMENT

New Technology

Banking is being extensively disrupted and re-imagined

New EntrantsIndustry convergence

Fully Personalized Lifesystyle & Location based

Consumer

Propositions: Etc. Etc. PSD II ….

INDUSTRY IS NOT A BAREER

• Amazon Lending: $1bn in SMB loans in 2016

• Tencent: 1b active (!) users, 350m bind banking account with WeChat

• Tesla: no driver insurance starting 2020

• Uber: the highest number of new SMB accounts in 2015; morethan Wells Fargo, BofA and Chase – TOGETHER !!!

https://www.sfchronicle.com/business/article/Facebook-isn-t-a-bad-actor-Zuckerberg-tells-12823194.php

• Amazon Lending:• $337M 2015 -> $661M 2016 -> $692M 2017

4TH LAYER OF DISRUPTION: TECHNOLOGY

• Merger – 2000

• Last data warehouses modernization – 2017

• Number of databases acting as a ‘single point of truth’ – 57 (average for unicorns – 3)

• Bernie Madoff -> Chemical Bank (1986) -> CMB takes over CB (1991) -> 22y ‘operating’ a scheme

Incumbents are Fighting Back …

The voice

biometrics

authentication

capability

identifies

customers through

their voice print,

which, similar to a

fingerprint, is

unique to each

person. > 1 million

banking clients in

Asia Pacific are

using this today 3

Money’s best

Mobile App for its

broad

functionality:

transfers, call

back scheduling,

touch ID, remote

security

disabling, intuitive

menu, branch

locator, rewards

& more2

Business Review

Weekly’s most

innovative

company for its

CommBank

Property App

which ties

property

searching,

affordability

pricing & loan

eligibility. 6

1.Rabobank.com2.Money.com3.Citigroup.com4.Barclays.com5.DBS.com6.Afr.com

Most innovative

traditional bank

at Dutch Fintech

Awards for its

ability to adapt

to digitalization

trends,

streamlining &

upgrading

existing

products &

validating new

services 1

Rise, a community

of FinTech

startups, along

with corporate

clients and other

experts, to work

on Barclays’

customer and

business

opportunities and

together help to

create the future

of financial

services. 4

“World’s Best

Digital Bank” by

Euromoney for

embracing

biometrics, AI &

intuitive

technology 5

Customer

EngagementCompliance

(IFRS, BIII…)

Profitability

Existing Legacy

Product

Agility

Incubation

Rapid & agile protoyping

End-to-End business processes in a box

Design thinkinh

Expand step by step into industry fluidity

Share experiences to plan long term transformation

(buy time)Discrete

critical

improvements

… by balancing Digital Improvement and Disruption …

Collaborate & Co-Innovate with FinTechs

The Patterns of Success are Emerging

Inclusive

Digital

Culture

Rejuvenated

Talent Pool

Collaboratio

n with 3rd

parties

Custom

er

Centricit

y

Investments

in Next-Gen

Technology

… and at the same time leverage Key Disruptive Technologies!

Artificial

Intelligence Hyper-

Connectivity (IoT)

Open

Architecture

(API)

Natural

Language

Processing

Cloud

Blockchain

LEONARDO HIGHLIGHTS - 70 FINANCIAL SERVICES USE CASES ANDPROTOTYPES

Artificial

Intelligence Hyper-

Connectivity (IoT)

Open

Architecture

(API)

Natural

Language

Processing

SAP

Cloud

Blockchain

378.000CORPORATES

How SAP helps?

25INDUSTRIES

Hyper - Connectivity

Natural Language Processing

Open Architecture

Blockchain

AI

Cloud

PARTNERSHIPS

TECHNOLOGY

Digital Core Banking E2E

EXECUTION

Innovation Services

Leonardo Centers

Partners

Building a Vibrant Innovation Ecosystem

with You!Customers

System

Integrators

Technology

Partners

Venture Capital

.

Fintechs |

Insurtechs

Digital Partners

Accelerators

SAP Start-up

Programs

Digital Transformations for Customers of all Sizes

All Regions

cloud hybrid on premise

Global

Regional

Local,

Specialized

97% of Banks in the Forbes 2000 innovate with SAP solutions.

All areas of a banks value chain

• 12,000+ banks in 142 countries are SAP customers

• SAP supports 200 million+ active bank accounts

• Our banking customers manage 70 trillion+ in assets

97%

All Lines of Business

All Deployment Options

Retail

Banking

Commercial

Banking

Capital

Markets

Wealth

Management

Central

Banks

Fintech

SAP is global leader in driving digital transformation!

31.12.2017:600.000 visitorsTop 100 attraction in DE

MAKEBIGBUSINESSDREAMS

COME TRUE

Thank youArtur Dervish Derwiszynski

GEIERLAY FACTS AND FIGURESLocation: Mörsdorf

Construction: cable-stayed bridge

overall length: 360 m

Width: 0.85 m running surface, 1.40 m cable railing (trapezoidal cross-section)

Longest span: 360 m

construction height: 1.5 m (including cable railing)

Load capacity: 76.5 t

building-costs: 1,140,000 euros

start of building: May 26, 2015

Completion: September 30, 2015

Opening: October 3, 2015

Toll: no

% of people not entering the bridge: 20

Visitors (as of 31.12.2017) 600.000