September 2015 Total Solutions and Innopay presented the results of a survey among corporates on their views towards Fintech. 70% of the corporates are following the B2B FinTech market, but have not engaged yet. The two main reasons not to engage are 1) lack of sufficient knowledge about, and insight into the impact of using FinTech solutions, and 2) concerns about the continuity of FinTech company. Innovative companies have already embrased FinTech. The comming years the early majority will onboard.

1. Results of the survey held among corporates about
their view towards FinTech
FinTech: from ‘Nice to Know’
to ‘Need to Know’
Robi Dattatreya, Douwe Lycklama en Pieter Nijs
16 September 2015

2. 2 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
In 1998 ABN AMRO launched its innovative
online FX and MM dealing platform…
…10 years later, online FX
and MM dealing has
become mainstream

3. 3 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Payer
Bank Bank
Payee
Traditionally, banks are the place to go for
initiating and receiving payments
SWIFT, correspondent banking, etc.

4. 4 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
PSD2: The EC wants more innovation and
competition in the banking sector
Payer
SCT, SDD
Cards, Cheques
ACH
Visanet, Banknet
Real Time Gross
Settlement
Bank Bank
Payee
SWIFT, correspondent banking, etc.

5. 5 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
FinTech: Innovation ‘on top of’ banking
Payer
SCT, SDD
Cards, Cheques
ACH
Visanet, Banknet
Real Time Gross
Settlement
Bank Bank
Payee
SWIFT, correspondent banking, etc.

6. 6 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Financial Institution (FI)-services
FinTech: Positioning in four different ways
New services (non-FI)
4: ‘Diversification’
2: ‘Direct
competition’
Traditional FI’s
1: ‘Disintermediation’
3: ‘Supplier’
Source: Innopay analysis

7. 7 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Financial Institution (FI)-services
FinTech: Positioning in four different ways
New services (non-FI)
Source: Innopay analysis
Traditional FI’s

8. 8 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Most corporates follow the FinTech market
Not at all
We follow the market passively
We follow the market actively
We talk to various parties
We work with a FinTech-party

9. 9 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Major concern is supervision and continuity
We want to maintain our relation of trust with our bank
We doubt the adequacy of supervision
We are uncertain about the continuity of FinTech-parties
We are uncertain about consequences to internal processes
We are uncertain about the added value to our corporate

10. 10 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Survey concern 1: regulatory supervision
Many FinTech-companies are supervised

11. 11 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Survey concern 2: continuity | FinTech has
moved towards Early Majority Acceptance
Innovators
2.5%
Early Adopters
13,5%
Early Majority
34%
Late Majority
34%
Laggards
16%
Your
Company?

12. 12 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Financial Institution (FI)-services
Four Examples of FinTech service offerings
New services (non-FI)
1: ‘Disintermediatie’
Source: Innopay analysis
4: ‘Diversification’Traditional FI’s

13. 13 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Pro Quidity competes with banks to optimise
the working capital in your supply chain
From Amsterdam
<10 employees
Established 2014
Pro Quidity offers ‘reverse factoring’ to SMEs: it finances your outgoing
payments to SME suppliers, on the basis of your creditworthiness
Positioning 2:
‘Direct competition’

14. 14 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Your supplier Your corporate
Reverse factoring is financing your payments,
on the basis of your creditworthiness
Factor
1. Delivery
2. Approval of
invoice
3. Paym
ent of invoice* 4. Payment
to factor
*On the basis of your creditworthiness, not that of your SME supplier

15. 15 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Reverse factoring ensures a healthy supply
chain – and direct benefits to you
• SME suppliers often lack the creditworthiness for traditional factoring
• Pro Quidity offers such suppliers a helping hand
• Reverse factoring: financing your outgoing payments
• Ensure healthy suppliers with your own creditworthiness
• Ensure longer payment terms (to the factor)
• And ensure early payment discounts – as the factor already pays!

16. 16 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Cashfac offers Virtual Bank Account-
technology to corporates and banks
From London
±80 employees
Established 1992
Cashfac offers Virtual Bank Account-technology that enables clients to
centralise their cash- and transaction management
Positioning 1:
‘Disintermediation’

17. 17 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Virtual Bank Accounts enables you to allocate
funds without separating them physically
Entity A Entity B Entity C
Payables
Suppliers
Salaries
Taxes
ReceivablesCustomer1
Customer2
Customer3
Payables
Suppliers
Salaries
Taxes
Receivables
Customer1
Customer2
Customer3
Payables
Suppliers
Salaries
Taxes
Receivables
Customer1
Customer2
Customer3
EUR
EUR
= Current account = Mirror Account = Virtual Account
Legend
‘Real’ world
Virtual world

18. 18 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
• Centralise multi-entity transactions – and POBO/COBO subsidiaries• Centralise multi-entity transactions – and POBO/COBO subsidiaries
Virtual Bank Accounts enable you to
centralise at different levels
• Self-service your bank accounts
• Minimalise the number of Current Accounts
• Connect multi-bank accounts
• Reconciliate ‘straight-through’
• Centralise multi-entity cash

19. 19 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
You could use Virtual Bank Accounts to
POBO/COBO subsidiaries
Entity A Entity B Entity C
Payables
Suppliers
Salaries
Taxes
ReceivablesCustomer1
Customer2
Customer3
Payables
Suppliers
Salaries
Taxes
Receivables
Customer1
Customer2
Customer3
Payables
Suppliers
Salaries
Taxes
Receivables
Customer1
Customer2
Customer3
EUR
EUR
‘Real’ world
Virtual world
Payment On Behalf Of Entity B
= Current account = Mirror Account = Virtual Account
Legend

20. 20 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Earthport offers banks a hub for faster cross-
border payments
From London
±150 employees
Established 1997
Earthport offers a cross-border payments hub that enables clients of
banks to pay to other countries both faster and cheaper
Positioning 3:
‘Supplier’

21. 21 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Banks can take a shortcut on the existing
infrastructure
Bank
VS
Bank
NL
SWIFT, correspondent banking, etc.

22. 22 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
While cross-border payments are rerouted via
banks today, with costs at every bank…
Payer
VS
Payee
NL
$ $

23. 23 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
Earthport functions as a central hub that can
connect a bank to other banks – directly
Payer
VS
Payee
NL
$
$
$

24. 24 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
‘Distributed ledger’-technology such as Ripple
can do the same… and more in the future
Bank
VS
Bank
NL
SWIFT, correspondent banking, etc.

25. 25 FinTech: from ‘Nice to Know’ to ‘Need to Know’ – 2015 ©
FinTech = Need to Know!!
Get in the driver’s
seat!
Robi Dattatreya, Total Solutions, www.ts.eu
Douwe Lycklama en Pieter Nijs, Innopay, www.innopay.com
16 September 2015