Presenter Sid Nandi's presentation from IDEAS - Int'l Data Engineering and Science Association Conference at UTD.

1. Sid
Nandi
FOUNDER & CEO,
DIGITAL TAAS
Digital Cracks
in Banking
RISING POWER
OF FINTECHS

2. Drive business transformation by extending core capabilitie
s
to create a
sustainable digital enterprise.
Enterprises which are insightful enough to detect market
trends, agile enough to quickly respond and competent
enough to deliver differentiated valuepropositions.
Develop key strategies, define targeted plans and
deliver execution certainty designed to quickly
actuate critical outcomes.
Capabilities which are critical to their
competitive success in the marketplace and
adaptable to future disruptiveforces.
Sid Nandi
Purpose
Enable the future.
Founder & CEO, CTO, Tax & Head of Client Managing Director, Senior Architect, BE& MS Computer
Digital TaaS Accounting – Govt, Facing Technology, International S&P, Cap Gemini Science & Engg
Thomson Reuters Custody & Fund Settlement Ops, Ernst & Young University of Texas
Services, Bear Stearns (JPM) @ Arlington
JP Morgan
Investment Bank
Career Progression

3. 1
Ubiquitous distribution
through branches
2
Unique expertise around
credit underwriting
3
Special status of beinga
regulated institution
• supply credit
• foster economic growth
• insurance on liabilities (deposits)
Banking Status
Historically banking has been one of the business sectors
most resistant to disruption:
Consumer stickiness
& inertia moving to
another financial
services provider.
Gravity towards
established and
branded banks for
protection during
turbulent times
Development of
inherent flaws in
their business
model .
Focus all about
generating more
revenue.

4. Institution Fee Income Rank by Asset Size
$5.6B 3
5.3B 2
4.5B 1
$1.3B 5
1.2B 6
1.0B 9
707M 19
$660M 12
634M 4
Wells Fargo
Bank of America
Chase
U.S. Bank
PNC Bank
TD Bank
Regions Bank
SunTrust Bank
Citibank
BB&T $632M 11
What is wrong withthis?
1
Retail banking industry
made $11B revenues
from overdraft & ATM
fees in 2016 (61% of
profits).
2
$4B maintenance charges
on checking accounts just
to keep the accountsopen!
3
$34.6B fee income
generated by banks on
deposit accounts in2016

5. What has changed?
Financial crisis
had a negative impact
on trust in the banking
system.
Customer experience
has taken centerstage
across industry verticals
with personalization as
a key driver.
Mobility
has undercut the
advantages of physical
distribution channels.
Massive increase in the
availability of customer
data with cheap
computing power
leading to proliferation
of startup businesses.

6. What is a Fintech?
fin·tech
[ˈfinˌtek] | noun
1. Computer programs and other technology used to support or
enable banking and financial services.
“A technology firm that focuses on financial products and services.”
While there are banks which want to consider themselves as FinTechs,
the key is to understand if they have technology at the core driving their
business decisions and outcomes?
The sector is shaped by
shifting market conditions,
new regulations and changes
in consumer demands and
behaviors.
Over the past decade the fintech
companies have matured
significantly forcing incumbents
to rethink their business models
and embrace digital innovations.
Digital attackers disintermediate
profitable customer-facing
businesses and avoid capital-
intensive areas.

7. Disproportionate Returns
¹ Revenues generated by carrying loans and other assets already sold and sitting on the books.
² Asset management includes investment and pension products. Only insurance sold by banks is included.
Source: Analysis and data provided by Panorama (a McKinsey Solution)

8. Fintech Trends
Key fintechtrends
• Blockchain
• Application program- ming
interfaceecosystem
• Paymentinfrastructure
• Big databaserisk
assessment
• Anti-money laundering and
know your customer
machinelearning
• Cybersecurity
• Next-generation personal
• Peer-to-peer lending
and investment
• New digital lending
• Aggregator comparison
engine
• Next-generation
• Trading
• Next-generation collateral
management
• Trade analytics
• Robo-advisory
• Social investing
• Crowdfunding
• Investmentacross
regions engine
• Telematics
• Social integration
• IoT andconnected
devices
• PreventionCapitalmarkets
andinvestment
banking
Operations and
infrastructure
Retail
Beyond banking
InsurancePayments
Wealth
management
Small
andmidsize
enterprises
Next-generation
digitalmarketing
Digital
model
reinventors
Virtual
market-
place
Retail value
chain and
coupons
Digital for
unbanked
• Mobile payments
• Internationalremittances
• Mobile point-of-sale
devices
• Otherpayment
processing
• One-stop shopfor
businesses
• Peer-to-peer corporate
lending and investment
• Next-generation lending to
smalland midsize
enterprises
• Digital cash management
Source: Panorama by McKinsey

9. Rising Investments
The level of venture-capital investment in financial technology has
recently accelerated.
Globalinvestmentinfinancial technology,
$ billion
Asia– United StatesEuropeOther
+42% peryear
4.0
2.4
1.81.72
4
6
8
10
12
14
1.2
+54% peryear
+6% peryear
+33% peryear
12.2
2.6
+205% per year
+8% peryear
0
2008 2009 2010 2011 2012 2013 2014
Source: CB Insights; analysis of data provided by McKinsey Panorama (a McKinsey Solution)

10. 1. Nerdwallet and BankBazaar.com aggregate offerings from banks in loans, credit cards, deposits, insurance - They also get paid
by banks for generating newbusiness
2. Wealthfront provides automated wealth management solutions which attract fee averse millennials.
3. Lending home provides cost-effective mortgages with accelerated time horizons.
4. Alipay (from Alibaba), chinese payments service makes online finance simpler and intuitive with gaming strategies
5. Holvi payments (acquired by BBVA) offering banking services to SMB’s expanded to online sales platform, book keeping, expense
claims & cash flowtracker.
6. Social Finance (SoFi) offers financial products and services to students & young professionals which has expanded to career and
networking services.
7. Stripe ($5B), an online payment system enables merchants to launch their website and accept payments within mins vs 5-7 days
for legacy payment companies
8 China’s Tencent (gaming and social networking) launched WeChat, a messaging platform, which offers instant loans without
collateral (unto $30K) with credit bureau data
Fintech
1,042 Companies | $15.1B Funding
Fintech stories

11. Highly automated, scalable
technology solutions.
No physical distribution
channels.
Advanced data analytics usage
to more effectively credit score
consumers.
AI/ML usage to exploit
consumer interactions on
social media to offer more
personalized services.
Millennials, small businesses
& underbanked love their
solutions - cost effective,
remote delivery & distribution
and innovation.
What is really working forthem?

12. Digital Transformation Themes

13. Banking with Fintechs
WANT
WANT
Digital Expertise
Innovative Culture
Agility Shift
Holistic Experiences
Scale
Customer Acquisition
Data
Better Valuations
Fintechs
Banks

14. Q&A