The Future of Financial Services

The Future of Financial Services

How disruptive innovations are reshaping the way financial services are structured, provisioned and consumed

An Industry Project of the Financial Services Community | Prepared in collaboration with Deloitte

Final Report June 2015

Forward

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. The dialogue included numerous interviews and interactive sessions to discuss the insights and opportunities for collaborative action.

Sincere 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 mentors.

We are also very grateful for the generous commitment and support to Deloitte Consulting LLP in the U.S., an entity within the Deloitte1 network, in its capacity as the official professional services advisor to the World Economic Forum for this project.

Contact

For feedback or questions, please contact:

1 Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), 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 about for a more detailed description of DTTL and its member firms.

R. Jesse McWaters, Lead Author jesse.mcwaters@ +1 (212) 703-6633

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 report.

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Table of Contents

Acknowledgements................................................................................................................................................................................................... 4 Executive Summary..................................................................................................................................................................................................... 10 Reading Guide.............................................................................................................................................................................................................. 24 Detailed Research Modules....................................................................................................................................................................................... 27

Payments: How will customer needs and behaviours change in an increasingly cashless payments landscape?.......................................................................................... 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? ....................................................................... 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 Provisioning How will smarter and faster machines transform capital markets? ............................................................................................................................................ 153 What impact will better connected buyers and sellers have on capital markets? ....................................................................................................................... 163

Contact Details................................................................................. .......................................................................................................... 178

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Acknowledgements

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Acknowledgements Members of the Steering Group

The following senior leaders of global financial institutions have provided guidance, oversight and thought leadership to the "Disruptive Innovation in Financial Services" project as its Steering Group:

Oliver Bussman Chief Information Officer, UBS AG

Ann Cairns

President, International Markets, MasterCard

John Flint

Chief Executive Officer, Retail Banking and Wealth Management, HSBC

Jason Harris

Chief Executive Officer, International Property and Casualty, XL Group

Joanna Rotenberg Chief Marketing Officer and Head of Strategy, BMO Financial Group

Neeraj Sahai President, Standard & Poor's

David Craig

President, Financial and Risk, Thomson Reuters

Michael Harte

Chief Technology Officer, Barclays

William Sheedy

Global Executive, Corporate Strategy, M&A, Government Relations, Visa

Fred Crawford

Chief Executive Officer, Alix Partners

Rob Heyvaert

Corporate Executive Vice President, FIS

Lance Uggla

Chief Executive Officer, Markit Group

Stephen Cross Chief Executive Officer, Aon GRIP Solutions, Aon

Anna Ewing Executive Vice President, Global Technology Solutions, NASDAQ

David Puth Chief Executive Officer, CLS Group

Henry Ritchotte Chief Operating Officer, Deutsche Bank

Dieter Wemmer

Member of the Board of Management, Finance, Controlling, Risk (CFO), Allianz SE

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