BSL Fintech special / english-french

Robo-AdvisorMobile payment executionBlockchain APIs & “open banking”

Crypto-monneyInvesting

TradingCrowd Blockchain

Big DataCrypto-monneyPersonal Finance Management

Investing TradingCrowd Lending

SummaryIntroductIon 8 / 72

Christian Marchand, Consultant FINTECH

IntervIew 10 / 74Paolo Buzzi, CTO and co-founder of Swissquote

artIfIcIal IntellIgence 14 / 78Marco Abele, Head of Platform Management & Digitalization at Credit Suisse in Switzerland

BIg data / Smart data 17 / 81Philippe Henderickx, Head of Strategic Sales Banking at Swisscom

oPen BankS and aPIS 20 / 84Ben Robinson and Aaron Phethean are respectively head of strategy and marketing, and head of the MarketPlace at Temenos

communIty management 24 / 88Olivier Collombin, Founder of E-merging, the social network for private wealth professionals and co-founder of Money ID

BlockchaIn 27 / 91Daniel Gasteiger, CoFounder of Nexussquared – Accelerating Blockchain Ideas

PerSonal fInancIal management 30 / 94David Hamilton, CEO at eWise

cryPto-money 34 / 98Alexis Roussel, co-Founder Bity

IncuBator & vISIon 38 / 102Markus Graf, Head Innovation Management DGI at SIX Group Services AG

crowdfundIng 41 / 105Vincent Pignon, President of Swiss Crowdfunding Association

contactleSS 46 / 110Sebastien Piolat, Head of Business Development, SMARTLINK

dIgItal vault 51 / 115Dr. Tobias Christen, CEO at DSwiss AG





Investing TradingCrowd LendingRobo-AdvisorMobile payment execution

Blockchain APIs & “open banking”Crypto-monney

Investing



Investing TradingCrowd Lending32 / 96

one-stop-application makes life easier and their spending more controllable. It is no wonder that many people have difficulties managing their finances given the high number of financial relationships an individual has: credit cards, savings accounts, current accounts, investments accounts, brokerage accounts, insurance policies, pension plans.

Data privacy and security are keyBanks clearly understand the customers’ demand for sim-plicity, aggregating all of their financial accounts in one place and delivering easy-to-use digital Money Manage-ment tools. So in a world where personal data security is increasingly under threat, how do financial institutions of-fer their customers comprehensive Account Aggregation and Personal Financial Management tools without becom-ing the custodian of customer data and therefore a larger target for hackers and increasing the risk of data loss?

The answer to their concerns is to understand the ar-chitecture of data aggregation models and opt for a cli-ent-side aggregation model, where all the data remains private to the customer.

While on the surface, most Account Aggregation solutions look the same, lurking below are substantial differences in how data is accessed and aggregated for the customer.

In broad terms there are two types of Account Aggrega-tion; “Server-Side” where customer accounts and infor-mation is aggregated by a server owned and managed by a third-party service provider, and “Client-Side” where customer accounts and information is aggregated on the customers chosen device (their mobile, tablet or PC).

In a “Server-Side” model, customers, having accepted Terms & Conditions that provide “Power of attorney” to the service provider, disclose their online credentials to the service provider. These credentials are stored on the server and are used by the provider to perform aggrega-tion. Aggregated data is also stored on the server for pro-cessing and ultimately access by the customer. The inher-ent risks associated with disclosure of online credentials to a third-party and the swelling amount of personal finan-cial information stored by the provider, even if encrypted, are obvious and significant downsides to this approach.

Conversely, the “Client-Side” model, invented and pat-ented by eWise in 2000, never requires the customer to disclose their online credentials to a third-party and all aggregation is performed on the customer’s chosen de-vice. All data and information is encrypted and stored on the customer’s device in a Personal Data Vault, where the

customer can choose to share their data with the service provider or any third-party through permission manage-ment (privacy controls). In line with security best practice, encryption keys are not stored on the device but rather on “zero-knowledge” servers.

In the client-side model, a financial services firm or Ac-count Aggregation service provider never becomes the custodian of the customer’s online credentials. Through permissions granted by the customer, information they hold with external financial services providers maybe shared with the service provider from the Personal Data Vault. This approach not only offers customers greater control and choice over the personal data, it eliminates the compliance, legal and security risks of online creden-tial custody for the service provider.

Personal data sharing through explicit customer’s per-mission is the only way to keep their trust

An effect of implicit credential sharing through the serv-er-side aggregation model means that the service provider has access to user’s financial data and can then anonymise and sell that data. In a quest for better opportunities to cross-sell and increase revenue, sensitive and personal data has become paramount. There is a very high demand from companies and financial institutions to acquire personal data. But taking care of user’s privacy also takes care of the bank’s objective. The goal of getting more insights in order to achieve better cross-selling opportunities could be achieved in a private and secure way that is mutually beneficial. With client-side aggregation, customers take control over their data and benefit from choosing who they want to share their data with through a granular permission management dash-board. Customers get control back over their personal data and the bank is positioned as a trusted partner.

Benefits for banks implementing a Personal Financial Management solution and added value for customers

Successful PFM implementations involve a shift away from focus solely on internal products to increasing scope





Investing TradingCrowd LendingRobo-AdvisorMobile payment execution

Blockchain APIs & “open banking”Crypto-monney

Investing



Investing TradingCrowd Lending33 / 97

to cover external institution accounts and services in the financial picture they present to their customer. This cul-ture shift, the perceived compliance risks, and complexity of adjusting well established digital channels are causing financial institutions to be hesitant in adopting and com-mitting to these solutions.

Questions are being raised such as: What are the benefits of PFM? What is the Return on Investment? What is the added value for customers?

There are a significant number of benefits for both cus-tomers and banks. We can easily highlight three main key benefits: increased customer loyalty, increased product penetration per customer and increased digital engage-ment.

Loyalty is key in obtaining a long-term client base, with the implementation of PFM and increased engagement, clients are less likely to switch to other service providers. A European bank, client of eWise, reduced churn by 50% with the adaption of PFM. Thereafter, the bank achieved a 30% increase in balance among users through relevant cross-selling offers. It was also demonstrated by another customer that with the right execution and customer ex-

1 Western European weighted average = 0.31 visit per user / day – Cap Gemini & Efma , 2014 World Retail Banking Report

perience the bank achieved 1.01 e-banking visits per day, after the first month of launch, which is +225% more en-gagement than Western European weighted average of 0.31 e-banking visits per day1.

Enabling clients with tools to be financially savvy has re-sulted in an increase in loyalty and they become less likely to change providers. Businesses can benefit from the rich data collected and created from PFM solutions through insights gained from data shared by the user. Customers spending habits allows for a personalised approach to client relations, increasing cross-sell services tailored to their needs with direct revenue generation.

The encouragement of using digital money management tools to achieve goals and improve financial management can reduce costs in other channels.

Through Personal Financial Management a more hands-on-approach to financial management and insights not only gains trust, moreover, a smart approach that will im-prove the overall services provided by the implementer.

BSL Fintech special / english-french

Technology

Transcript of BSL Fintech special / english-french