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9/24/2018
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How Financial Cooperatives Cope with Big Technology’s Trends – Payments, Remittances,
Artificial Intelligence.
How Financial Cooperatives Cope with Big Technology’s Trends: Payments; Remittance: Artificial Intelligence.
Murray Gardiner, TemenosSeptember 14th 2018
9/24/2018
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1. Sylvia Paraguya, CEO NATCCO, Philippines
2. Atty Gloria Fulatan, Chair PFCCO
3. Murray Gardiner, Business Director, Temenos Inclusive Banking
Introduction
1. Introduction
2. Fintech world: the future is mobile
3. ACCU Platform: NATCCO & PFCCO experience
4. Commercial Banks: Financial Inclusion strategies
5. Digital Financial Inclusion: more than just paying the bills
6. Fintech: competition is at the door
7. Fintech Future is now: Temenos Marketplace
1. Blue Code optical payments and interoperability scheme
2. Finn AI, artificial intelligence
3. Neuroprofiler, machine learning and financial behavior
8. Credit Union Digital Transformation: Lessons learned from financial inclusion
Agenda
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FintechThe future is mobile
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Inclusive Banking is all about mobile, payments
and digital
Inclusive Banking is all about mobile, payments
and digital
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FintechACCU Platform: Kaya example
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ACCU PLATFORM: SG Channels pre-integrated to T24 IBS
Smart App
T 24 IBS Stand‐alone instance‐ Pre‐configured model bank for financial inclusions‐ Pre integrated to middleware‐ Integration to bank T24 core system
Customer App‐ Fund Transfer‐ Send / Receive Money‐ Bill Payment‐ Balance Inquiry‐ Mini Statement
Core Banking System
Mobile Wallet
Agent App‐ Account Opening‐ Cash Deposit‐ Cash Withdrawal‐ Fund Transfer‐Bill Payment‐Balance Inquiry
Agent Teller ServicesRealtime Payments‐ Integrated with CBS /MIS‐ Transaction processing‐ Inter ‐bank transfers‐ Intra ‐bank transfers‐ OTC Services
Bulk Electronic Funds & Voucher Transfer‐ Upload data of users to send payment and vouchers in bulk
Pay BillIntegration to existing utility companiesIntegrate with Payment Aggregators
Communications‐ USSD ‐ SMS‐ Mobile DataAirtime Purchase
Integratewith mWallets
Integration with FSPs
Payment Services
Telcos
Government / NGO
Administration
Integration with CBS
Bulk Payments , Vouchers Fees , limits & Commissions Business logic for all connected systems Automated SMS alerts & Notification Transaction monitoring & Auditing Blacklisting
Admin WebUser interface for web browser
Integration Layer + Payment Gateway ( Digiwave)
Payment Platform
ATM
ATM InterfaceCash OutCash InBill PaymentBalance InquiryMini Statement
Card not present ATM
Merchant App‐ Instant cashless settlement with Blue CodeCash withdrawals
Mobile token instant settlement scheme
‐
SME merchant acquisition
‐Retail services merchant acquisition
‐ Merchant loyalty program management
Low cost non card domestic scheme
Optical Merchant Payment
Reconciliation & SettlementSettles electronic funds transfer on accounts
Merchant
Smart App
Smart App
SME merchant acquisition
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FintechTier 1 Banks: Digital Transformation
T24 IBS Integration: “Digital Banking Platform in a Box”
Platform & applicationsPlatform &
applications 5Channels: mobile applications; quality services, cash in/out, DFAs, USSD ATMs, and smart phone apps. Local
channels
Bank LegacyBack Office
Bank LegacyBack Office
QR non-PCI platform
QR non-PCI platform 3
Blue Code mobile (non-card based) token payments; silo inter-operability; domestic schemes; merchant acquisition
SME Agency bank outletsSME Agency bank outlets 4
SMMEs agency banking; agent network & merchant acquisition – cash points and customer interaction
1T24 IBS, MB stored value account and all financial product management and administration
Modern digital core bankingModern digital core banking
2Integration framework, Switch, payment hub, FC and Data Analysis
MiddlewareSI
MiddlewareSI
Platform
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T24 IBS Integration: “Digital Platform in a Box”
BI Data AnalyticsBI Data
Analytics 7Temenos Insight and DFAs geo-location transactional analysis analytics
Fintech Marketplace
Fintech Marketplace 9
Callsign; Neuroprofiler; Blue Code; Pushfor; Metaco; several others
Operationalefficiency
Operationalefficiency 8
Middleware and payments switchSI, optical mobile payments, scheme interoperability, TLC, other Temenos
6T24 IBS to replace a smaller bank legacy or run parallel to a tier 1 legacy;
Continuous Core Releases
Continuous Core Releases
Inclusive Banking Fintech
Bank LegacyBack Office
Bank LegacyBack Office
FintechFinancial inclusion is more than just paying bills
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Financial Inclusion Business Model
Structured contract savings
Bill pay Short term instant cash flow loans
Term loans for SMME
SME cash flow and capex finance
Insurance brokerage
Electronic payments: P2P, P2G, G2P
Social payments
ATM Non-card OTP
Optical payments
SME and merchant acquisition
Airtime Top up and others
Providing quality affordable and profitable financial products to more people
Remittance Interoperable Domestic scheme
Mobile phonee-wallets
Savings and transaction accounts
Align technology for digital today: key elements
Strong corebanking
1
Cloud Service
2 3
Better DigitalUX
4
Clear DigitalStrategy
5
DefendDisintermediation
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FintechSerious competition is at the door
China
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Huawei Mobile Money Boosts Financial Inclusion through Capacity Building in Developing NationsSep 22, 2017
Company Shares Practices and Experiences at IFCFI[Beijing, China, September 22, 2017] At the International Forum for China Financial Inclusion (IFCFI), Huawei, as an important partner of the Bill & Melinda Gates Foundation (Gates Foundation) Level One Project (LOP) initiative, was invited to participate in the forum and shared its practice and experience in the area of Africa mobile payments and financial inclusion platform construction.
Ant Financial, the payments and financial services arm of Chinese e-commerce giant Alibaba, is expanding to Africa.
In a partnership with the United Nations Economic Commission for Africa (ECA) along with the International Financial Corporation, the firm says it will promote digital financial inclusion in the continent through investments and technical assistance. The offering will target smaller businesses and would look to cater to largely unserved consumers, including displaced people and refugees with no official documents or identity papers.
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FintechThe future is now…..
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FintechOptical non-card based payments
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Platform subscription based service
Token based mobile payment service
End connection from the banks platform to the retailer
By-pass Visa / Maestro
No data passes across network
Token expressed as bar code or 8 digit code
Retailer consumes message via scanner, smart phone or any other device – no proprietary HW or SW
Either data message or API connection
Bank is merchant and can be acquirer
27Blue Code mobile optical payments and merchant acquisition
MORE VIDEOS
MY BANK LOGO
TokenA new 20 digit token triggers each payment directly from a users bank account (no cards involved).
#1 UsabilityWinner of the mobile
payment study by Mücke & Sturm
© Confidential BC Capital AG
SecureTransactions without user names and account numbers, enables security by design. No data means no PCI constraints.
FlexibleBlue Code is an SDK so it can be built into (banking) apps. Cash registers connect through a merchants API, and vending machines with our BLE module.
PowerfulBlue Code can do Android & iOS, any transmission technology (Scan, Bluetooth, NFC), and Omni-channel.
What is Blue Code?
e.g. M-Com
www.bluecode.com
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A shopping experience ... PLAY
IOT• Blue Tooth connections for devices:
• Vending machines• Parking meters• Office equipment• Movie tickets• Train and bus tickets• Many new applications
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FintechExample: Artificial Intelligence
Artificial intelligence
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Machine-learning+ Behavioral Finance
Asks a few quesitons
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Predicts personal financial literacy
TIME GAME
Which choice would you make?
In 0 days In 3 days
Get 50 £ in 0 days Get 100 £ in 3 days
Predicts personal behavior
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Predicts personal bias
Builds personal profiles
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B+Good Borrower• Low impulsivity• Quite Optimistic• Good perception of risk
1
0.8
0.6
0.4
0.2
0
0 3 6 9 12 15 18 21 24 27
Years
Scores personal behavior and likelihood
the individual willhonour their commitments
Value
Reference point
Losses Gains
Outcome
1
0.8
0.6
0.4
0.2
00
1
0.6 0.80.40.2p
1
0,80,60,40,2
00 3 6 9 1
215
18
21
24
27
Quasi HyperbolicHyperbolicExponential
Value of
discount
function
Years
Its all about BIG data
CUs must own their data
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FintechCredit Union Digital Transformation:
Lessons learned from Financial Inclusion
Navigating Your Digital Transformation Journey
44
HumanResources
TechnicalReadiness
PartnershipsInnovation Digital Culture
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How Digitization Benefits Credit Unions 45
• Staying competitive
• Centralized cloud based operations
• Building relationships with members that are mobile,
young, tech-savvy
• Offering a range of modern digital cooperative financial
services, not just payments
• Keeping savings and revenues inside the movement
• Sustainability through new transaction revenues –
should be 40% or more
• Consistent and enjoyable member user experience
How Digitization Benefits Credit Union Members 46
Members enjoy access to their savings and loan accounts from their mobile phones;
Convenient Access
Remittances, bill-payments, account information, P2P transfers, air-time top-up, insurance and other online services can be easily included in digital channels.
Value-added Services
Equal access to innovative financial tools and resources to uplift their economic situation.
Driving Financial Inclusion
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Pressing Questions for all Credit Unions worldwide
How do we increase our competitive advantages?
How to transform and improve member services?
How do we improve the efficiency, service quality?
How share information to become one network?
How to attract the youth and the underserved?
Credit Union Digital Transformation
Complacency is the biggest threat…
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