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The blockchain, the future of banking? - Dennis de Vries, KPMG
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Transcript of The blockchain, the future of banking? - Dennis de Vries, KPMG
The Blockchain, the future of Banking?
Dennis de Vries
8 April 2015
2© 2015 KPMG Accountants NV, registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.
vs
Payment infrastructure comparison
traditional banks cryptocurrencies
3© 2015 KPMG Accountants NV, registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.
Client Client Facing layer
Product System
Transaction Processing Clearing Transaction
ProcessingProduct System
Client Facing layer Merchant
Process flow domestic paymentThe fascinating journey through time of a single payment
4© 2015 KPMG Accountants NV, registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.
Process flow international paymentNon-Euro cross border payments take at least 3 days to settle
Source: www.swift.com, http://www.10588.com/pub_web/swift/books/us2m/doc/aig.htm
5© 2015 KPMG Accountants NV, registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.
The cost of paymentsGlobal Payment Revenues estimated at USD 1,000 billion
Source: https://www.bcgperspectives.com/content/articles/financial_institutions_pricing_global_payments_2014_capturing_next_level_value/
6© 2015 KPMG Accountants NV, registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.
The cost of paymentsAverage global remittance fee 7,5%
Source: http://remittanceprices.worldbank.org
8© 2015 KPMG Accountants NV, registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.
vs
Payment infrastructure comparison
traditional banks cryptocurrencies
9© 2015 KPMG Accountants NV, registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.
Client Client Facing layer Mining Client Facing
layer Merchant
Process flow cryptocurrencySimple IT infrastructure allows for real time processing of payments
10© 2015 KPMG Accountants NV, registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.
Statement 1: Cryptocurrency parties are unreliable?The core transaction processing infrastructure seems to operate flawlessly
Bitcoin developers:Maintain the bitcoin
protocol forming the basis for the infrastructure
Miners: Validate transactions in
order to earn bitcoins and transaction fees
Payer
Bitcoin exchange: Facilitate transfer of
traditional currency into bitcoins and vice versa.
Bitcoin wallet companies: Simplify bitcoin activities
for participants
Recipient
Bitcoin core transaction processing
infrastructure
Bitcoin facilitators
11© 2015 KPMG Accountants NV, registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.
Statement 2: Cryptocurrencies are too volatile?Service providers have already addressed the merchant side
Reduce Risk
With Bitpay you can eliminate the risk of Fraud, Chargebacks, and Identity Theft from internet payments.
Monetize New Markets
You can now accept a payment from any country on Earth, with no risk of fraud.
Reduce Hassle
You can eliminate the need for PCI Compliance and expensive security measures.
Bank Direct Deposits
You will receive a direct deposit into your bank account every business day.
Wi-Fi Mobile Payments
You can accept mobile payments over wi-fi and 3G/4G without the need for NFC terminals.
All-Inclusive Pricing
Clear, simple pricing, with zero transaction fees and zero hidden charges.
Source: https://bitpay.com/
12© 2015 KPMG Accountants NV, registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.
Statement 3: Cryptocurrencies facilitate anonymous payments?Public character of the blockchain results in new tracing possibilities
Client identification Transaction screening
13© 2015 KPMG Accountants NV, registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.
Statement 4: Regulators will ban cryptocurrencies?US and UK regulators increasingly focus on technology agnostic regulations
Source: www.coindesk.com
15© 2015 KPMG Accountants NV, registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.
Summary analysisCryptocurrency technology provides interesting alternative to existing infrastructure
Banks Bitcoin
Open during weekdaysfrom 07:00 to 17:00 hours Availability 24/7/365
Batch processing Processing Real time
1 day settlement for Euro, 3 days settlement for non-Euro Settlement
Real time Transaction validation time protocol dependent (Bitcoin 10 minutes)
Transaction engines from 1970/80sBank specific, non standardized IT architecture Global uniform standard
Guarantee instead of true paymentNo immediate access to money
Merchantperspective Immediate payment
Up to 3%, paid by the merchant Cost of payments Minimal, close to free
Requires bank account Access Requires internet
16© 2015 KPMG Accountants NV, registered with the trade register in the Netherlands under number 33263683, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.
About the presenter
Dennis de VriesSenior manager, Financial ServicesKPMG Accountants N.V. Tel +31 206567451Mobile +31 643817117Mail [email protected]
ResumeDennis de Vries started his career in 1996 as internal auditor at ING Bank, performing operational and compliance audits in the Dutch Retail Banking network. As from 1999 he specialised in financial audits, acting as internal group auditor for ING Bank and the international branch network and working in close cooperation with external auditor KPMG. In 2007 he was appointed as Head of Internal Audit ING Lease, holding responsibility of the internal audit of ING Lease’s 30 subsidiaries across Europe.
In 2010 he was appointed Business Manager ING Lease, providing direct support to the ING Lease CEO and the management team during the divestment of ING Car Lease and other strategic changes. In 2011 he was appointed Business Manager Transaction Services, the Commercial Banking division providing payments & cash management, trade finance and working capital solutions to business clients. As part of this role he researched cryptocurrencies on behalf of the Executive Board of ING Bank during 2014.
In 2015 he joined KPMG as a senior manager Financial Services, servicing large banks and leasing companies. He is a member of the KPMG Payment Group with a focus on cryptocurrencies. Dennis de Vries is a Dutch CPA (Register accountant).
https://www.linkedin.com/in/dennisdevries22