swiss payment forum

Real Time Economy

Swiss Payment Forum 27-‐28.11.2013 Bo Harald

Real Time Economy – a new paradigm

1.   Background 2.  The Real Time Economy program 3.  The base is structured e-‐invoicing -‐ establish it fast 4.  Move to the next layers – Data ExtracHon

5.  e-‐ and mobile banking criHcally important 6.  Conclusion

1.  The effects of digitalization in an open global economy on us, our customers and national economies have become very clear: there is nowhere to hide.

2. Only proactive actions to improve the value proposition and reduce the cost-base will secure the future.

Challenges in a borderless world

Real Time Economy services

deliver both In the same click!

Technology moving from process enabler to smart Networked Economy driver

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1980 1990 2000 2010 2020

Personal Computing

Process Automation

Networked Economy

2. Trends and Megatrends (1/2)

1.  Capability of IT is doubling at constant price on yearly basis (ignore at your peril..)

2.   Customers expect net-‐based services – Google and Facebook—like

3.  Opportunity to build and interconnect vast data volumes > moving from self-‐service to service

2. Trends and Megatrends (2/2)

4. Cloud service opportunity > new levels of interconnecHvity and in-‐cloud innovaHon

5. Enabling automaJon of everything > cut SME administraHve cost in half and corresponding savings in the public sector (total potenHal 4,5bn€/pa in ICT2015 path2)

6. Real Time compleHon across networks is increasingly expected and needed – new value dimension

Your customers have clear goals..

1.   Sell more 2.   Create customer delight 3.   Lower costs

Digital innovaHons – incremental all the Hme and disrup.ve from Hme to Hme -‐

in products, services, sales and administraHve processes.

How can you help customers to proceed – beZer and faster? Create value in new dimensions..

Speed up digitalization!



General dilemma

1.  The highest performing companies have well developed systems for killing ideas that their customers don't want.

2.  As a result, these companies find it very difficult to invest adequate resources in DISRUPTIVE technologies -‐ lower margin soluHons -‐ that their customers don't want –

3.   unJl their customers want them. 4.   And by then it is too late!

Clayton M. Christensen in The Innovator’s Dilemma


1.  Background 2.   The Real Time Economy program 3.  The base is structured e-‐invoicing -‐ establish it fast 4.  Move to the next layers – Data ExtracHon


RTE – NaJonal Co-‐InnovaJon program

Full SEPA

2006 2008 2009 2010 2012

FVC FIA1 FIA2 SME50

Full SEPA (Full Single European Payment area)

-‐ SEPA payments -‐ E-‐invoicing

FVC (Full Value Chain)

-‐ Harmonizing value chain development

FIA 1 ( Fully Integrated AccounHng 1) 1.1.2009-‐30.6.2010

-‐  E-‐accounHng reference (HliöinHviite) -‐  Standard for Electronic Financial ReporHng (www.raportoinHkoodisto.fi ) -‐ Global e-‐invoicing standard ISO20022 -‐ European e-‐invoicing work

FIA 2 (Fully Integrated AccounHng 2) 1.8.2010-‐30.12.2011

-‐  Electronic Financial Statement and XBRL -‐ Fully Integrated Payroll (FIP): Payroll reporHng codes and pracHces -‐  Real-‐Time VAT -‐ European e-‐invoicing work

SME 50 (’AdministraHve costs in half…’) 2012-‐2013 1.   AFA – Automated

Financial AdministraHon

2.   FAR – Fully Automated ReporHng

3.   ERM – Enterprise Risk MiHgaHon

4.   SIM – Sustainability Intelligence Management

SME50 – Overriding MoJvaJon Cu;ng Administra.ve costs in half + …

SME 50 is building on the EC DG Enterprise public sector “red tape” iniJaJve (reduce cost of administraHve burden by 25% by 2012).

SME 50 focuses on soluHons for automaJon of administraJve processes to 1. cut costs (addiHonal 25%), 2. lower risks and 3. improve financing and cash management within the enterprises.

SME 50 automates processes to, 1. save costs, 2. lower risks, 3. improve cash management and 4. collect taxes due for the public sector

4.3.2014 Photo: www.sxc.hu

Real-‐Time Economy for:

1. Better Productivity

2. Better Service

3. Better Environment

4. Better Co-innovation

5. Better Jobs

Photo: Sachyn


1.  Background 2.  The Real Time Economy program 3.   The base is structured e-‐invoicing -‐ establish it fast 4.  Move to the next layers – Data ExtracHon


How to get there – e-‐invoicing

Two key recommendaJons implemented:

-‐ New VAT direcHve – equal treatment -‐  ISO20022 global message standard

(UNCEFACT CII v2 based) Next:

Harmonized and automated VAT-‐reporHng

2010-‐11-‐21 15

Crystal clear mindset: Paper invoices have NO future in EU

EC Expert Group on e-‐Invoicing

e-‐Invoicing Business case

-‐  Enterprises in Finland can save 2,8bn€/year in b2b (Employer’s AssociaHon)

-‐  The municipals can save 150m€/year (Municipals AssociaHon) -‐  The state sector can save 150m€/year (State Treasury) -‐  Investment needs are minimal/small How get there fast? 1.  Simple tool for even the smallest enterprises 2.  StandardizaHon to speed up ERP-‐adjustments 3.  Charge for paper 4.  Deadlines – public sector FIRST out

Example from globally leading manufacturer of fine paper

United Paper Mills le/er to suppliers:

“Esteemed trading partner, UPM moves to electronic invoice pracHces from 1.7.2009 onwards. In pracHse this means that the company only accepts electronic invoices.

…. From the beginning of 2010 UPM will have to return paper invoices to the senders….”

Model case: NO scanning


1.  Background 2.  The Real Time Economy program 3.  The base is structured e-‐invoicing -‐ establish it fast 4.   Move to the next layers – Data ExtracJon


Bigger reporJng picture

Seller Buyer1 Invoice file Operator E-Invoice file (any format)

Buyer2 E-mail (PDF)

Mail

Buyer3

Extracting data

Domestic VAT

EU - VAT

Tax inspection

Intrastat

Forecasting

Real Time Cash flow forecasts

Account statement 3.0 > Real Time accounting

Real Time Invoice

financing

Real-‐Time VAT

ISO20022

ISO20022

ISO20022

ISO20022

ISO20022 ISO20022

StandardizaJon breakthrough in extended payments

Seller Buyer

Biller’s Bank

Payment Infrastructure

Buyer’s Bank

Biller Service Provider

Buyer Service Provider

Invoice

Invoice Invoice

2010-04-07 21

20022/11649 creditor reference

20022 payment

20022 XML account statement

20022 XML account statement

20022 e-invoice

Coming: ISO20022 for factoring ISO 20022 Tax Invoice ISO 20022 e-order


1.  Background 2.  The Real Time Economy program 3.  The base is structured e-‐invoicing -‐ establish it fast 4.  Move to the next layers – Data ExtracHon

5.   e-‐ and mobile banking criJcally important 6.  Conclusion

….simple insight - that the only thing scarce in a world of abundance is human attention.”

Less Jme for any one thing... > quest for

clarity, clinical simplicity, holisJc collaboraJve offerings and repeatability

simple insight

My name is Guy

Same Guy

Bank customer Bank corporate customer Utility customer

Citizen in public sector service

Operator customer Operator corporate customer

Corporate utility customer

Enterprise in public sector service

Mr. Same Guy

Pankin asiakas Pankin yritys-asiakas Sähköasiakas

Terveyskeskusasiakas Operaattoriasiakas Oprin yritysasiakas

Sähkö yritysasiakas

Often used and trusted e-tools for e-id, e-signatures, e-payments, payments-integrated e-invoicing

Banks & insurance Utilities

Telecom Public sector

Same familiar e-tools - embedded

Same familiar e-tools.. Same familiar e-tools - embedded

Same tools across: - Roles and - Services

26 2010-11-21 2006-03-23

Innovation ladder example from banking

High volume service improvements

Big productivity improvements 1. e-banking usage

2.e-banking credentials connecting 3rd parties 3. Bill payment habit > e-

commerce payment

5. Receive e-invoice for 1-click or automated

payment 4. Send e-invoice – just like a payment

6. Integrate e-invoice with account statement >

automated accounting

7. Extract VAT data from e-invoice > automated

reporting

8. Mobile payment approvals

Not user friendly.. Economy of repetition

The best innovaHon is open

Reuse of a familiar tool For new purposes

It is all about human behaviour….

o  "What I hear, I forget. !  What I see, I remember.

"  And what I do, I understand.“

Time to connect..

EU focus on e-‐invoice

Only banks can make the mass market breakthrough using:

1. ready standards (ISO20022)

2. omnipresent net-‐banks as interface,

3. the payment system for transport and

4. their massive sales power for MAKING IT HAPPEN.

II.1 What are the driving forces for the EU to act

1.  The total costs of (cash & electronic) payments to the economy ranges between 3 - 4% of GDP.

Payments-integrated e-invoicing will have a similar impact !!

2. A shift to electronic payments* (example: Nordic countries) can half average cost of producing payments over a period of ten years and has a positive impact on consumption and GDP growth (10% increase in e-payments # 0,5 increase GDP).

EU-commission slide:

Nordics leading the revolution

#1 Sweden #3 Finland

Of course..

"We tend to overesJmate the effect of a technology in the short run

and

underesJmate the effect in the long run.”

Amara’s law

Especially so – as digital innovaHons x-‐ferHlize each others – and this may take Hme..


1.  Background 2.  The Real Time Economy program 3.  The base is structured e-‐invoicing -‐ establish it fast 4.  Move to the next layers – Data ExtracHon

5.   e-‐ and mobile banking criJcally important 6.  Conclusion

Of course..

"We tend to overesJmate the effect of a technology in the short run

and

underesJmate the effect in the long run.”

Amara’s law

Especially so – as digital innovaHons x-‐ferHlize each others – and this may take Hme..

2006-03-23

Start early – let mature – implement gradually

“ICE AGE” “ICE AGE”

“Any hype will do” Early start: “Explorer” Late (re)start: “Panicky follower”

Technology is only developed when used

The early automobiles:

•  They looked like horse carriages •  They didn’t go faster

•  They open had break downs

•  They where a good deal noisier

•  and a man with a red flag had to go in front

•  There where absolutely no ra8onal reason to use them

-‐ but they where the start of a revolu8on!

Should be remembered

It is not DEMAND that creates SUPPLY

It is the other way around

Henry Ford

go where it is going!”

“Do not go where the puck is >

2010-11-21 39

Wayne Gretzky

The future is not planned nor prognosed

Thank you [email protected],

http://boharald.blogspot.com

It is created !

Video: http://www.youtube.com/watch?v=Kb3q2viAbbk&feature=youtu.be

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