1. Vladislav Solodkiy
Managing Partner @ Life.SREDA VC
Banks and
regulators in 2016

2. Life.SREDA I Life.SREDA II Asia
Banking on
Blockchain Fund
Moscow Singapore London
2012 2015
2016
2014
13 investments
(US, UK, Germany, CIS)
A new venture fund dedicated to
investing in the blockchain ecosystem
7 successful exits 8investments
(South East Asia)
Research & Vision
Influelce on the whole infustry trough
own blogs fintechranking.com and
semi-anual Fintech research “Money of the Future”
www.www.
fintech-research
.com .com
Bank-as-a-srevice and open API playAccelerator in Singapore
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First BaaS-platform for Asia
is very necessary for the future
fintech development
Life.SREDA is supporting a strategic fintech
project: open API Pan-Asian platform BAASIS
Life.SREDA VC Executive summary

3. and become the most active strategic partners and potential buyers for FinTech startups
WHY BANKS INVEST
IN FINTECH:
They buy
(for up-sellcross-sell)
«Outsource» R&D and new products
development
To buy talents and drive internal changes
To buy knowledge and access to new
complimentary industries
To buy a for their brands
Jay Reinemann
The head of BBVA ventures
“Invest in insights
Banks are
interested
For now it looks more
like play and PR, not
the real business
Experience of large banks
like Goldman Sachs and
BBVA shows huge potential
43%
20%
7%
10%
Startup programs to incubate
FinTech companies
Partnering
with FinTech companies
Setup venture funds
to fund FinTech companies
Launched own
FinTech subsidiaries
Acquired
FinTech companies
20%
Banks
&
FinTech

4. ~30% banks
invested via their own
venture instruments
– VCs, accelerators, incubators
Banks are getting more and more active in FinTech
Barclays, Goldman, CITI, Santander and BBVA are leading the show
Major Bank Investments to VC-backed Fintech Companies
-2015 -2016
more companies
funded by banks
in 2016
+61%
Top South-Asian banks are starting to follow
Chinese/HK/Japanese/Korean megabanks
with playing active role in FinTech: DBS, OCBC, UOB, Siam Commer-
cial Bank, Mandiri, RHB, MayBank, CIMB, KasikornBank and others
laucnehd a bunch of initiatives related to fintech
Leaders are
mainly from developed
fintech regions
US, UK, Europe.
Note/source:Source:Mattermark,
Life.SREDAVCanalysis,Crunchb
23
15
13
8
3 3 3 3 3
2 2
1 1 1 1 1 1 1
17
9
7
6
4
6 6
5 5 5
4 4 4 4 4
3 3 3
2
1 1
2
1 1 1 1
2
Barclays
GoldmanSachs
CitiGroup
Santander
BBVA
WellsFargo
Commerzbank
MorganStanley
HSBC
CreditSuisse
BNPParibas
MitsubishiUFJ
Mizuho
JPMorgan
CapitalOne
China
DevelopmentBank
UBS
Sberbank
China
ConstructionBank
CreditAgricole
SocieteGenerale
ICICI
SiamCommercialBank
OCBC
MandiriBank

5. however partnerships in 2016 seemed to be safer
and more convenient for banks
Banks’ partnerships with financial technology start-ups
are developing,
Enable Citi card members to use their
Citi Cards with PayPal online, in-app
and in stores
P2P payments, provides making
payments via the social networks
Offering investing advice and
data-driven recommendations
P2P-lending. Enables local SMEs to
borrow short-term business loans
Study and test blockchain technology
to enable payment transactions
Provides direct financing to SMEs
To contribute to the acceleration of
the rollout of its digital strategy
Online wealth management
platform
Automotive pricing and information
website for car buyers and dealers
Offering its clients access to equity
crowdfunding opportunities
Use Fincast to advise customers on
the types of financial products they
need to meet their investment goals
To offer a TD and Westpac
branded spending app
An extensive interest was shown
by banks and financial institutions
partnering with robo-advisors,
digital wealth managers;
In addition, there is a growing
tendency by banks to partner with
crowdfunding companies
(Santander, UOB, Belfius Bank, Alfa
Bank, etc);
Asian banks are widely partnering
with Fintech accelerators in order
to pilot new products with fintechs
residents;
Many pilots were initiated in 2016
between blockchain companies
and banks worldwide
(SG, SCB, Barclays, etc)

6. Venture/debt investments and acquisitions from banks
Q4 D N/A
Q4 A $8,3M
Q3 A $8,3M
Q3 undisclosed
Q2 A $14M
Q3 $19.67M
Q2 $33MD
Q2 $56M
Q2 D $75M
As mentioned earlier,
partnerships and investments are
closely linked, however,
investments primarily focused on
realizing returns;
Investments generally go from
venture instruments of banks:
VCs, accelerators, debts financing;
Asian banks are getting involved
and investing through
the partnerships with accelerators
(StartupBootCamp Fintech, Nest, etc.)
Q4 $100M

7. Overall trend
In order to achieve leading positions on the market banks should shift a strategy from
«competitive with Fintech» to «collaborate with Fintech»
Increasing customer requirements for banking services along with growing pressure from
the Fintech startups will shift bank’s strategy to «if you can’t beat them, join them» approach.
Collaborative Fintech investments
vs Competitive Fintech investments ($ Bln)
The expectations of clients are higher than ever,
and are broadly consistent across various
sectors and contexts
Efficient. Users want processes to be streamlined and
cohesive, with key functions ‘bundled’ for user
convenience.
Real-time. The trajectory of digitalization has led to
near-instant transactions and up-to-the-second visibility
over cash-flows.
Integrated and flexible. Users expect a one-stop portal
with seamless reconciliation across their user profiles.
Accessible. Users expect channel convergence and access
to services on multiple devices through a user-friendly and
instinctive interface.
Individualized and contextually relevant. Users expect
advisory services, information and suggestions reflecting
their transaction and activity history and other user-specific
data.
1 2
71% 56%
29%
2014
Collaborative
Competetive
0.0
4.0
8.0
12.0
16.0
20.0
2015
44%
+15%

8. Banks and Fintech. For what reason?
Clearly, not all of today’s banks will survive. The survivors will be those that reimagine
relationships with their customers and partners.
Fintech offers banks access to technologies, brings new ideas to market at speed,
enables to add value from bank’s data and changes bank’s culture
Successful
Partnership
Why banks need FinTech?
Acces to ideas
Acces to new technology
Acces to agility: speed to market
Acces to expertise around data
Exposure to different culture
Acces to customers - trust, inertia
Acces to clearing and Central Bank
settlement
Acces to in-depth payments expertise
Acces to data
Avoidance of regulation
Why FinTech need banks?

9. Key areas of development in a traditional retail bank
Mobile and digital
Digital customers are already there
Technology is accessible to all
Focus is to attract new young generation
Services based on customer behavior:
Prior to payment transaction (predictive)
At the moment of transaction (instant)
After payment transaction
Partnering with Big-tech?
Partnering with Schemes?
Partnering with Fintech?
Joint venture with GP
Operational excellence and digitalization
Cost reduction and optimization
Areas of synergy
Data-rich solution:
Dynamic business steering
Behavior-driven marketing
Data-rich consumer and applications
Data monetization
and analytics
P&L - Internal Processes
Value Added Services
(New revenues)
New Business Models
Key Areas for Retail
BANKS
Development areas

10. Operation
Who will control and develop?
How to integrate? How to invite foreign projects?
E-wallets
Neobanks
mPOS
Onlineacquiring
Cashregister/POSsolutions
Crowdfunding
Crowdinvesting
Onlinelendingforindividuals
P2Ploans
SMELending
Onlinescoring
Trading
Wealthmanagement
Remittances
Pricecomparison
PFM/PFP
InsurTech
RegTech
Acounting
Blockchain
Business
Who will possess clients / startups?
Value
How to help partners to expand
to other markets?
Fintechs
forretailforSME
it is expensive it takes time it is not main business / KPI
Banks’ pain

11. Price
comparison
Remittances
Wealth
management
Trading
Online
scoring
SMELending
P2Ploans
Onlinelending
forindividuals
Crowdinvesting
Crowdfunding
E-wallets
Cashregister
POSsolutions
Online
acquiring
mPOS
Neobanks
RegTech
Acounting
InsurTech
PFM/PFP
Blockchain
Bitcoin
There are more than 20 verticals in Fintech
and more than 20 leaders in each vertical
(about 5K Fintechs total)
How to connect?
Banks’ pain: With whom to work?

12. Strategies for Banks to survive the coming change
How can traditional banks move from
traditional banking to the digital
distribution of data in a globalized
network?
Do large incumbents have to partner with
FinTech or will FinTech companies eat the
banks’ lunch?
Change the technical architecture and the
organisation to become a customer centric
digital platform or launch a new bank with
digital as core. While the majority of banking
executives may feel comfort today, this may
represent the calm before the storm as some
very tough structural decision will be required
around investment in systems, distribution
and new innovative products. Being big and
strong may not be enough to win the battle for
the customer in the future. Speed and agility
count just as much…if not more.
Independent commentator on the financial markets and fintech,
author of the bestselling book Digital Bank & ValueWeb, contributor
to BBC News, Sky News, CNBC and Bloomberg and was voted one of
the most influential people in banking.
David is a FinTech Strategist, Speaker, Scholar & Writer, who is
continually voted as one of the most popular business and FinTech
influencers. He spends his time these days helping banks, regulators &
governments be better. David is CEO of 11:FS and was most recently the
Global Director of Digital Banking in Gartner.
The most significant trend of 2016 onwards will
be the ‘platformification’ of banking, where both
existing banks and startups begin a strategic
shift towards becoming banking platforms, much
like how Amazon is a platform in retail. A
plug-and-play business model that allows
multiple participants (producers and consumers)
to connect to it, interact with each other and
create and exchange value. Banks will use IT
companies to build a FinTech marketplace and
take care of the partnership model, because
banks have not been successful in the past
managing partnerships.
Chris Ckinner David Brear

13. In
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It enables banks to evolve
and vital for fintechs as a helper
in overcoming regulatory barriers
as well as optimizes time
and money consumption before
going to market.
is very necessary for the future
fintech development
First BaaS-platform for Asia

14. APAC
South Korea permits for
banks to invest in Fintechs
Currently financial laws, financial institutions are
allowed to buy stakes only from companies in the
same business sector. The FSC have included
fintech companies in the scope of the financial
industry.
#banks #2016
SouthKorea
MAS establishes
a dedicated Fintech Office
MAS and the National Research Foundation opened
a dedicated FinTech Office to serve as a one-stop
virtual entity for all FinTech matters and to promote
Singapore as a FinTech hub.
#opportunity
Singapore
MAS established
a regulatory sandbox.
To allow more flexible application of the regula-
tions, while maintaining safeguards to protect
consumers and the wider financial system.
Singapore
Financial Sector Technology
& Innovation scheme
MAS committed $225M ($166.48M USD) under the
“FSTI” scheme to provide support for the creation of
a vibrant ecosystem for innovation.
Singapore
6 P2P Lending Licenses
Granted in Malaysia
Six P2P lending licenses were granted in Malaysia
recently, making them the first authorized platforms
in the ASEAN region.
#p2p lending #license #2016
SouthKoreaMalaysia
Korea has launched
a platform for banks
The platform allows financial institutions to build
services that automatically populate financial
information for new customers.
#banking #2016
HongKong
Hong Kong to launch
banking fintech 'sandbox'
HongKong
Hong Kong establishes
a Facilitation Office
HK Monetary Authority established the FinTech
Facilitation Office to facilitate the healthy develop-
ment of the FinTech ecosystem in Hong Kong and
to promote Hong Kong as a FinTech hub in Asia.
#opportunity #2016
P2P Firms Regulation
in Indonesia
The draft regulation proposed that a Fintech
company is required to have Rp. 2 billion in working
capital and is required to show Rp. 2.5 billion
applying for a business license.
To help maintain Hong Kong's competitiveness as
a financial hub by supporting the development of
fintech in the banking sector
Indonesia
Malaysia issues the Fintech
Regulatory Sandbox
To experiment with FinTech solutions in a live
controlled environment which is accompanied by
the appropriate safeguards
#opportunity
Malaysia
Establishing an infrastructure
Regulation activities in the APAC and Asia
Most of activities are focused on establishing
an early stage infrastructure and development
Source:Fintechranking.com
Key message

15. EMEA
Regulation activities in Europe
Most of activities are focused on controlling
and regulation of existing regimes
UK sets out open banking API
framework
Aimed for the creation of an open banking standard
that makes it easy to share and use financial data,
arguing that the move would improve choice for
customers, promote competition;
#regulation #bank #UK
OpenBankingThe cohort of the regulatory
sandbox closed
69 firms from a diverse range of sectors, geogra-
phies and sizes have been accepted. 24 applications
met the sandbox eligibility criteria and were
accepted to develop towards testing
#regulation #opportunities #UK
Sandbox
A specially created
“Fintech” licence
Plans to encourage crowdfunding and the market
testing of new technologies. FinTech firms, with a
minimum of $300k in capital, are allowed to accept
funds from clients, up to $99m, which remain
outside the depositor protection scheme and are
not subject to the same regulations, auditing and the
capital requirements applied to banks.
#Implementation #Switzerland #EU #2016
Banking
Standardized mobile and
internet payments (PSD2) in EU
PSD2 enables bank customers, both consumers and
businesses, to use third-party providers to manage
their finances. In the near future, customers may be
using Facebook or Google to pay bills, making P2P
transfers and analyse spending, while still having
money their safely placed in current bank account.
#Announcement #Payments #Global #2017
Payments
Solvency II is a programme
for insurance regime
It introduced a new, harmonised EU-wide insurance
regulatory regime. The Solvency II programme is
divided into three areas, known as pillars: Financial
Requirements (Capital Requirement and etc),
Governance & Supervision (Own Risk & Solvency
Assessment) and Reporting & Disclosure (Insurers
required to publish details of the risks facing them).
#Implementation #Insurance #EU #2016
Insurance
Controlling & Regulation
Source:Fintechranking.com
Introducing a European
Standard for e-Invoicing
The European Commission announced the
e-invoicing directive require all 28 EU member
states to use specific e-invoicing standards for all
B2G e-invoices by November 27, 2018. Europe’s
current e-invoicing adoption rate of 24 percent is
expected to rise to 95 percent by 2024 and accrue
savings of approximately 64.5 billion euros ($72
billion) per year for businesses.
#Announcement #e-invoicing #EU #2018
e-Invoicing
Key message

16. USA
In May, the third and final
part of the 2012 JOBS Act,
Regulation Crowdfunding,
went into effect
Regulation Crowdfunding allows any American
startup or small business to raise up to $1 million
from friends, family, and followers on debt and
equity crowdfunding platforms registered with the
Securities & Exchange Commission (SEC).
During the course of the year:
21 debt and equity crowdfunding platforms
were launched and one, Ufunding Portal, shut
down by the SEC because it seemed to be
missing some of the statutory requirements
required of a funding portal.
Investors committed $19 million to the 186
campaigns and transfered $17.9 million to the 79
funded campaigns.
Over 21,000 individual investments were
recorded for 2016. The average investment was
$833, and the average number of investors in a
funded campaign was 331
The average valuation for a funded campaign
was $5.3 million.
#crowdinvesting #results #USA #2016
Crowdfunding
Financial technology
start-ups to get a license
to bank
The Office of the Comptroller of the Currency are
planning to create a new type of banking license (for
example, trust banks and credit card banks) that will
allow upstart financial technology companies to
expand more quickly across the country. A special
purpose national bank must conduct at least one of
the following functions: fiduciary activities, receiving
deposits or lending money.
The licenses from the Office of the Comptroller of
the Currency, which oversees many national banks,
will be available to companies like Square and
Lending Club that accept deposits, facilitate
electronic payments or lend money.
Many technology firms have been pushing for some
sort of new regulatory system that would allow
them to cut through the patchwork of state and
federal laws that govern financial activities and make
it hard to expand nationally.
The OCC acknowledged that Fintech companies’
business models vary widely and that therefore each
application should be reviewed individually.
#p2p #license #USA #2016
Banking
Shaping certain sectors
Regulation activities in the US
Most of activities are focused on shaping
certain sectors within an industry
Source: Fintechranking.com
Key message

17. Key initiatives in bank-as-a-service
and open banking areas
BAASIS, launched in 2016 in Singapore, is
an open-API Bank-as-a-Service platform,
aimed to connect banks and FinTech
startups across Asia Pacific region. Currently
is in integration phase with several banks on
different markets.
In 1H 2016 was launched solarisBank,
banking-as-a-platform startup with a full
banking license in Germany. It provides
account and transaction services, compli-
ance and trust solutions, working capital
financing, and online loans for fintech
startups.
Bancorp – industry leading US-based
largest bank-as-a-service platform, hosting
100+ non-banks with processing volume of
$200+ billion USD annually. Different
clients of different size, including google
wallet, PayPal, T-Mobile, yodlee and others
In 4Q 2016 Citi launched global API
Developer Portal aimed to open architec-
ture to facilitate collaboration with FinTech
companies. APIs includes account
management, p2p payments, money
transfer, rewards, investment purchases
and account authorization.
Otkritie, the biggest privately-owned bank
in Russia, through the process of integrat-
ing with leading digital bank for SMEs
Tochka, developed its own modern
API-platform, that was later used to
integrate with fintech startups, including
mobile bank for retail clients Rocketbank.
In 2H 2016 BBVA launched its API market-
place, aimed to offer other companies a
way to leverage BBVA’s capabilities to build
their services. Fintech startups has an
access to such APIs as PayStats, Connect,
Accounts and Cards
The UK government in 2016 has set up the
Open Banking Working Group (OBWG) in
order to create an open banking standard
that makes it easy to share and use financial
data. It includes development of open API to
enable services to be built using bank and
customer data
In Q4 2016 the Korean Government
launched an open banking platform for
financial institutions (16 banks) that will allow
them to build services that automatically
populate financial information for new
customers. The platform will essentially serve
as database of consumer financial informa-
tion that is accessible via API.
In 4Q 2016 The Monetary Authority of
Singapore (MAS) published 12 sets of data
from MAS’ Monthly Statistical Bulletin as APIs.
MAS is encouraging financial industry players
to publish open APIs on their datasets, to
allow users to connect information and offer
innovative solutions
Startups and tech companies Banks Government initiatives

18. APIs and Open Banking will start to shift the banking landscape with more traction in Europe and
Asia, but we’re likely to start seeing the gap between leaders and laggards widen
William Sullivan, Head of Global Financial Services Intelligence for CapGemini
Open banking and API are all the rage
The hype around banking APIs will increase, even overtaking cryptocurrencies.
Major banks will launch public API platforms
APIs are arguably one of the biggest topics in the industry.
The business model for profiting as a platform is key here, and many are still struggling with it
Global regulators will embrace fintech competition and regulatory concessions …
Africa will embrace APIs … financial inclusion will become a mainstream and actionable topic …
and the US will embrace change in the regulatory and political system
2015 was all about blockchain. 2016 saw an explosion of interest in machine learning and artifi-
cial intelligence. 2017 will be the year of open marketplaces and platforms.
Platforms support the rapid cycle deployment of microservices into a financial marketplace...
any bank with old legacy technology will start to look like a dinosaur
Shamir Karkal, Head of Open APIs at BBVA
David Brear, CEO and Founder of 11:FS
Chris Skinner, Author and CEO of The Finanser Ltd
Simon Taylor, Co-Founder of 11:FS

19. www.
fintech-research
.com

20. Thank you
Vladislav Solodkiy
Managing Partner @ Life.SREDA VC
vsolodkiy@lifesreda.com
www.slavasolodkiy.me