How to Create Platforms and Aggregate Services

28/02/2018

Daniel Farmache

Cornel Dinu

Industry Similarities in the Past: The Brick & Mortar Model

Banks Travel Agencies

Rule 363

1. Similarities2. Lessons from travel3. API in Banking

Today: the Shift to Online

Banks Travel Agencies

SimilaritiesTravel lessonsAPI in Banking

The Travel Industry in the New Gen

Flights

Hotels

Car rental etc.

But also:

• Seats

• Luggage

• Special

needs

• Cancellations

• Changes

• Boarding

Single

platform

Embedded

API

• More flights

• Higher room occupancy

• Better pricing

Cu

sto

mers

Pro

vid

ers

Challenge: Future-Proof Your Business Model

USD 30+ bn

Largest travel company

No significant assets

… or Kodak

Travel Industry – Road to API (Application Programming Interface)

1 2 3

Future API with live online

marketplace

Breakthrough – Online

… though sometimes no cash

Classic - GDS

Veltravel’s Open Ecosystem – The Fintech of Travel

• Aggregation and price comparison for all the travel services from the best global/local suppliers

• Customer benefit: combine various travel products in a single package and pay in a safe online system

+ 15 other best-in-class

suppliers

API in Travel

APIn is possible

Endless software communication & integration

Results: Different Valid API-Based Business Models

• Advertises as best price finder• Does not sell to clients• Sells ads

• Does not advertise as best price finder• USP: best options + easy + affordable• Still finds best price• Sells directly to clients

Banking & Travel – Evolution Similarities

1 2 3

FutureAPI in BankingOpen Banking

PSD2

Breakthrough - OnlineClassic - GDS

Issue: Lloyds Business Model for a Certain Client Segments

Profit / client <= 0 after 10ySame offering

Travel card of choiceValuation 2x in 11/2017

@US$ 0.3bn

Lesson from Travel: Make Money From Every Opportunity

USD 15bn market cap2-3% converted clicks

Rest of 97-98%

Extra revenue from selling ads (to competition)

How can classic banks leverage their unique competitive advantages

to future-proof their business model

and succeed in the new paradigm? Think

Think size & trust

Think synergies( + )

The essence of strategy is choosing a unique and valuable position rooted in systems of activities that are much more difficult to match. – Michael Porter

Travel Cross-sell Module for Banking: A Digital & Mobile Travel Solution for Bank Customers

New Income Stream

Up-sell & Cross-sell

with Banking

Products

Client Loyalty

Programme

Ready-to-use,

Integrated Solution

No Implementation and

Maintenance Costs for

Partner Bank

New Business Line:

Travel

Thousands of Travel

Offers Available

Worldwide

Internal Travel Portal

for Employees

Corporate Travel

Solution

Real Time

Reporting & Sales

PARTNER BANK

API-ing Banking – A Travel Partnership

www.veltravel.com/?affiliate=partner_bank

Link in the Main Menu, redirecting to

co-labeled travel booking page in local

languages

A Tested Model

Travel Cross-sell Module: Why Would It Work for Banks?

Why it works Unique client benefitsNumerous configurations at

banks’ discretion

✓ ✓✓

• Banks

• Edge: robust client base, with

sunk acquisition costs

• Challenge: engaging dormant

accounts and maintaining

margins

• Veltravel

• Challenge: ongoing customer

acquisition

• Edge: solid revenue stream

once customers are acquired

• Synergy

• Banks share the client base,

Veltravel shares the revenue

1. Excellent product offering

2. Best price guaranteed – stop

shopping around

3. Trust stemming from bank

endorsement

• Loyalty points

• Zero FX and withdrawal fees

during trip booked through

Veltravel (outcompeting travel

FinTechs such as Monzo and

Revolut)

• Free prepaid travel credit on credit

or debit cards to activate dormant

clients and engage them on

Veltravel

• Etc.

New travel solution

for Partner & non-

Partner Bank

customers

targeted through

Partner’s website or

marketing campaigns

Travel Section Business Model Building Blocks

Benefits Generated

Direct measurable revenues from travel sales margin

(see revenue model)

New leads for other banking products

New clients for Partner Bank

Other Benefits for Partner Bank

Total Partner Bank group

active customers:

10 M

Potential customers:

3%

Total travel sales generated:

€ 150 M

Total commission/profit

generated for Partner Bank

€ 6 M

Stimulate & increase

transactions volumes

Increase visibility & customer base

Increase bank interaction and

response to customer needs

acting as partner of future

Partner Bank Ecosystem

No promotion costs for external

providers, just internal promotion

using Partner Bank internal channels Revenue calculating model

Partner Bank Benefits

Revenue Model

– 1 year estimate –

(first-round effects only, directly from Travel)

Customer Travel as a New Business Line? Why Digital & Mobile?

The travel sector boasts double-digit

growth in most countries, significantly

superior to other industries1

Travel – A Smaller, Multi-Annual “Mortgage-like” Event for Clients

80% of the travel bookings and sales

take place online in developed EU

countries and similar trends all over

the world

2

• Change in customer behavior, higher spending in entertainment and

travel

• More accessible travel offers (lower flight prices, increase of

accommodation offers)

• Open borders, more countries & continents to visit

• 35% via mobile (tablet & smartphones)

• 35-60% increase in bookings via smartphone

Source: Criterio Travel Flash Report, October 2016

The Name of the Game Today: New & Profitable Business Opportunities

Additional income from digitalisation (without cannibalising the “classic” business)✔

Maximise value generation of industry-specific assets✔

Easy to use and cost-free✔

Key to winning the game:

API-based offering

Thank you