The Future of Financial Services - World Economic Forum

1 The Future of Financial ServicesHow disruptive innovations are reshaping the way Financial Services are structured, provisioned and consumedAn Industry Project of the Financial Services Community | Prepared in collaboration with DeloitteFinal Report June 20151 ContactFor feedback or questions, please contact:R. Jesse McWaters, Lead (212) 703-6633 Consistent with the World Economic Forum s mission of applying a multi-stakeholder approach to address issues of global impact, the creation of this report involved extensive outreach and dialogue with the Financial Services community, innovation community, academia and a large number of Financial technology startups.

2 The dialogue included numerous interviews and interactive sessions to discuss the insights and opportunities for collaborative thanks are extended to the industry experts and emerging disruptors who contributed their unique insights to this report. In particular, the members of the Project s Steering Committee and Working Group, who are introduced in the following pages, played an invaluable role as experts and patient are also very grateful for the generous commitment and support to Deloitte Consulting LLP in the , an entity within the Deloitte1 network, in its capacity as the official professional Services advisor to the World Economic Forum for this refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL )

3 , its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide Services to clients. Please see for a more detailed description of DTTL and its member firms. This report contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the Deloitte network ) is, by means of this report, rendering professional advice or Services . No entity in the Deloitte network shall be responsible for any loss whatsoever sustained by any person who relies on this of Research :How will customer needs and behaviours change in an increasingly cashless payments landscape?

4 28 How will the evolution of decentralised or non traditional payment schemes change the role of traditional Financial institutions? ..43 Insurance:How will disaggregating forces across the value chain transform the insurance industry? ..58 How will an ever more connected World impact the value delivered by insurance providers? ..72 Deposits and Lending:How will emerging alternative models of lending change the market dynamics of traditional lenders? ..86 What will be the Future role of Financial institutions in response to continually shifting customer preferences?

5 100 Capital Raising:How will the evolution of distributed capital raising impact the role of traditional intermediaries? ..112 Investment Management:How will the empowerment of individuals through automated systems and social networks transform the business of investment management?..127 How will the externalisation of key processes transform the Financial ecosystem? ..139 Market ProvisioningHow will smarter and faster machines transform capital markets? ..153 What impact will better connected buyers and sellers have on capital markets? ..163 Contact ..1783 Acknowledgements4 John FlintChief Executive Officer, Retail banking and Wealth Management, HSBCJ ason HarrisChief Executive Officer, International Property and Casualty, XL GroupMichael HarteChief Technology Officer, BarclaysRob HeyvaertCorporate Executive Vice President, FISD avid PuthChief Executive Officer, CLS GroupHenry RitchotteChief Operating Officer, Deutsche BankJoanna RotenbergChief Marketing Officer and Head of Strategy, BMO Financial GroupNeeraj SahaiPresident, Standard & Poor sWilliam SheedyGlobal Executive, Corporate Strategy, M&A.

6 Government Relations, VisaLance UgglaChief Executive Officer,Markit GroupDieter WemmerMember of the Board of Management, Finance, Controlling, Risk (CFO),Allianz SEOliver BussmanChief Information Officer, UBS AGAnn CairnsPresident, International Markets,MasterCardDavid CraigPresident, Financial and Risk,Thomson ReutersFred CrawfordChief Executive Officer, Alix PartnersStephen CrossChief Executive Officer, Aon GRIP Solutions, AonAnna EwingExecutive Vice President, Global Technology Solutions, NASDAQA cknowledgementsMembers of the Steering GroupThe following senior leaders of global Financial institutions have provided guidance.

7 Oversight and thought leadership to the Disruptive Innovation in Financial Services project as its Steering Group:5 Robert HedgesManaging Director,AlixPartnersNeil MummVP Corporate Strategy, VisaMatthew LevinEVP and Head of Global Strategy, AonVictor MatarranzDirector of Strategy & Chief of Staff to the CEO, SantanderMax NeukirchenHead of Strategy, JP Morgan ChaseChristine O ConnellGlobal Head of Strategy & Business Development, Thomson ReutersKosta PericDeputy Director Financial Services for the Poor, Bill and Melinda Gates FoundationRobert PalatnickManaging Director and Chief Technology Architect, DTCCP eter RutlandSenior Managing Director.

8 CVC Capital PartnersNicolas de SkowronskiChief of Staff,Bank Julius BaerJohn SmithIT Director, Group Head Office,Prudential PLCHuw Van SteenisHead of Financial Services Research, Morgan StanleyAndrew TarverHead of UK Operations,FIS / CapcoColin TeichholtzPartner & Co-Head of Fixed IncomeTrading, Pine River CapitalFabien VandenreydtHead of Markets Management, Innotribe & the SWIFT Institute, SWIFTD erek WhiteChief Design & Digital Officer,BarclaysRob Galaski (Project Advisor)Deloitte CanadaRachel BaleVP Mobile Converged Payments, MasterCard WorldwideTom BrownPartner, Paul HastingsFrancis BouchardGroup Head of Government and Industry Affairs, ZurichFabrizio CampelliHead of Group Strategy,Deutsche BankEricson ChanChief Information Officer Hong Kong and Greater China, Standard CharteredRobert CoppolaChief Technology Officer of S&P Capital IQ and S&P Dow Jones, McGraw HillChristof EdelGlobal Head of Trading Strategy & Business Development, Thomson ReutersJohn EdgeChairman,Digital Stored Value AssociationIgnacio A.

9 GoicoecheaHead of IT and Operations, BanorteAcknowledgementsMembers of the Working GroupThe project team would also like to acknowledge the following executives of global Financial institutions who helped define the project framework and shape strategic analyses as its Working Group:6 AcknowledgementsList of innovators and subject matter experts (1 / 2)In addition, the project team expresses its gratitude to the following innovators and subject matter experts who contributed their valuable perspectives through interviews and workshops (in alphabetical order).

10 Asheesh AdvaniCEO, CovestorJeremy AllaireCo-Founder & CEO, CircleGiles AndrewsCo-Founder & CEO, ZopaRadhika AngaraChief Marketing Officer, FastacashYoni AssiaCEO, eToroJolyon BarkerDeloitte UKAlex BatlinGroup CTO, Applied Innovation and Market Research, UBSInga BealeCEO, Lloyd sNick BeecroftEmerging Risks and Research Manager, Lloyds of LondonEric BenazehDirector, International Development, MenigaSarah BillerPresident, Capital Market ExchangeStephen BingleBusiness Development Asia, Smart EngineDave BirchDirector, Consult HyperionJosh BottomleyGlobal Head of Digital, HSBCC atherine BrownGroup Strategy Director, Lloyd sChris BryckiCEO, StockspotOlaf Carlson WeeHead of Risk, CoinbaseUlf CarlssonGeneral Manager, North Asia & Japan, NasdaqBhaskar ChakravortiSenior Associate Dean, The Fletcher School of Law and Diplomacy, Tufts UniversityJames ChappellCTO, Digital ShadowsGongpil ChoiSenior Advisor, Korea Institute of FinanceJonathan CoblentzCFO, Progresso FinanceroClaire CockertonCEO / Founding Director, Innovate FinanceCharlotte CowellHead of Product, Wealth Management.