OLIVER WYMAN IBERIA CASE COMPETITION “BEING ENTREPRENEURS” OCTOBER, 2016
© Oliver Wyman
The opportunity of your dreams You have just finished your studies and got a job at one of the largest Spanish Banks. After a couple weeks in the Company you are having some beers with your new-hire friends and you realise that all of you had the same dilemma before applying: was it better to start your career in a large corporate or to become an entrepreneur? A discussion begins around the topic: advantages here – disadvantages there. Things get really interesting when one of the group says out loud what already was in everyone's mind: “guys, we need to do something together”. A short silence invades the table. It is not that unrealistic, you all get well along, want to create something new, each one comes from a different background and together you could contribute to launch something exciting. As time (food and drinks) pass by, the flow of ideas – some realistic, other closer to fantasies – does not stop... Could it be something technologic? Maybe a new service? How about the next generation investment algorithm? National? Global? The aura does not break until the waiter interrupts the discussion – It’s 2am and the whole bar is empty. Suddenly all your imaginary CEO, CFO, … roles vanish and reality hits back: tomorrow 7am wake up and back to your desks. You leave the place a bit frustrated, however something has changed, you know that if the opportunity arises, you will definitely catch it. You wake up next morning, and you can’t believe the e-mail you read on your phone… © Oliver Wyman
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The opportunity of your dreams From: Bank CEO To: #Bank_AllStaff
Today, 7.02am
FinTech start-up competition 2016 Dear All, As you already know, we are living really challenging times. The industry is evolving fast towards new technologies, and clients are becoming more and more demanding about services offered. We believe that in the future FinTech will be the heart of our business and that it needs to become part of our culture. With this in mind, the Bank is launching the first “FinTech startup competition” open to all members in our Bank. Our innovation department is planning to launch a new FinTech service in one of these three segments: 1. Crowdfunding/Crowdlending, 2. Payments or 3. Personal Finance, however, we would like our staff to be the core driver of this new opportunity. That’s why, we invite anyone in the Company to share their ideas and proposals with us. The winning team will be directly integrated to the new initiative and start working on a daily basis with the Executive Team to make their vision a reality. Additionally, the bank will invest €200,000 in the start-up and be ready to provide additional funding once the start-up becomes successful. Full details available in attachment. Please, send-in your ideas and business plans before October 23rd . We are excited to hear from you, and best luck to all! CEO
Before you finish reading the full e-mail, a whatsapp pop-up appears on your phone “You have been added to Being Entrepreneurs group” and you receive a pdf titled “FinTech insights” from one of your friends © Oliver Wyman
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Your friend’s insights © Oliver Wyman
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The FinTech market can be segmented into six large areas based on a basic financial products classification
1. Lending
FinTech taxonomy structure
1.1 - P2P lending 1.2 - Crowdlending/crowdfunding 1.3 - Credit 1.4 - Other on lending
2. Payments
2.1 – Direct Debit 2.2 - Platforms 2.3 – Point of Sale Terminal 2.4 - Others
3. Investment/ markets
3.1 – Robo/Quant advisor/ financial advisement 3.2 - Trading platforms 3.3 - Investors SSNN
4. Currency
4.1 - Currency 4.2 – Bitcoin/ Blockchain
5. Equity Finance
5.1 - Equity Finance 6.1 - Personal financing
6. Others
6.2 - FS comparators 6.3 - Financial infrastructure/ administration 6.4 - Real Estate 6.5 - Others
Source: Spanishfintech.net © Oliver Wyman
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The FinTech sector has been growing exponentially in last years attracting over $22BN in investments in 2015, driven mainly by North America Global FinTech Financing activity 2012-2015
Number of >$50M FinTech deals 2015-2015 94
30,000
1,108
1,200
14
1,100 25,000
22,265
871 772
20,000
900 800 700
610 15,000
600
12,688 10,000
500
52 6 6 61
400
20
300 5,000
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Deal Volume #
Investments $M
In terms of key transactions Europe remains competitive compared with the APAC region
1,000
4,590 3,175
100 0
0
2012 APAC
2013 Europe
RoW
North America
2014
2015 Global deal volume
9 1 5
2
1
13
2013
2012 RoW
40
1
6
200
Europe
2014 APAC
2015 North America
Note: Only deals with amount reported by CB Insights Source: Accenture analysis on CB Insights data
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FinTech phenomenon has also landed in Spain with multiple players lining up to exploit the opportunity
Why?
How in Spain?
• Population culture has evolved to
• Madrid has already become a FinTech
a digital live style in almost all aspects (with a growing % of digital natives)
• …not reacting to this new wave would
• World financial crisis has crashed population trust into traditional financial entities
• Digital technologies have arrived to Financial Services due to its cost reduction growing trend
• “Banking is not somewhere you go, but something you do”
originator center within Europe … displace the country from top positions in the financial services industry
• Key national players have already set the bases for these new market conditions: – Traditional banks and big corporates – such as Santander, BBVA or Telefonica as an example have already invest in digital innovation – Business schools – launching new programmes and investigating papers focused on Digital – Hedge funds – investing in FinTech startups
Fuente: IEB: La transformacion digital de la banca española – Estudio Banca Digital España 2015 and press research
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We already have a well populated FinTech map covering all key content areas related to Financial Services Spanish FinTech map per category (3Q 2016) 1.1 - P2P lending
1.2 - Crowdlending/crowdfunding
2.1 – Direct debit
2.2 – Platforms
1.4 - Other on lending
1.3 - Credit
1. Lending
2.3 – PoST
2.4 – Others
2. Payments
3. Investment/ markets
Checkowt
3.1 - Robo advisor/ financial advisement
3.2 - Trading platforms
3.3 - Investors SSNN
4. Currency 4.1 - Currency
5. Equity Finance
4.2 – Bitcoin/Blockchain
5.1 - Equity Finance
6.1 - Personal financing
6. Others
6.2 - FS comparators
6.3 – Financial infrastructure
6.4 - Real Estate
6.5 - Others
administration
Source: SpanishFinTech.net map as of Sep 2016 © Oliver Wyman
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The challenge
© Oliver Wyman
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Final submissions need to be delivered in a 10 – 15 slides ppt presentation The Bank at this early stage would expect a business plan covering the following concepts: Remember to add a one page Executive Summary at the beginning of the presentation containing all key assumptions and conclusions!
1
2
3
Concept ( 4 – 5 slides)
Market Context ( 2 – 4 slides)
Business Case ( 5 – 7 slides )
• Competitors analysis • Which segment have you – Functionalities, differences chosen with our proposition, price, (Crowdfunding/Crowdlending, client reviews, … Payments or Personal Finance)? – Size (ie. núm. downloads), Why? market share,.. • Introduction to the new concept – Others – Name, logo, • Gross market size estimation brand/commercial strategy – Key functionalities description and design – Principal value added, key strengths,… – Target customers, geographies, etc – Others
• Launching Plan (calendar, tasks, human resources, …) • Business volume projections (downloads/clients/…) • Economics – Revenue model (sources of income, price, ..) – Costs model (initial investment and OPEX breakdown, ..) – Financial Projections (revenues and costs evolution,…) Note: source of any external information used must be specified
This framework is just a guidance, feel free to suit it to your particular case!! © Oliver Wyman
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To have a better understanding of current market context, almost all key players in the industry have recently issued interesting reports on the content but you can also identify other relevant sources to be further investigated Key information data sources Reports examples
Relevant webpages on the topic
For a deeper understanding of the FinTech industry in Spain you can visit:
http://spanishfintech.net/ http://fintechspain.com/
For national statistics (incl. digital) you can refer to:
INE Eurostat http://www.worldbank.org/ http://www.imf.org/external/country/
For apps downloads and customer valuations:
https://play.google.com/store/apps/cate gory/FINANCE?hl=en
This is just a starting point, go ahead and have a look on the web!!! © Oliver Wyman
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Case Competition logistics THE DELIVERABLE needs to be a Power Point presentation with a maximum length of 10-15 slides Use this file title: SCHOOL_TEAM NAME
SUBMISSION • Will be via e-mail, presentations must be sent to
[email protected] – Deadline is at 23:59 on Sunday 23rd October – We will announce and communicate THE FINALISTS on 29th October 2016 – We will have a canapé and drinks reception with the finalists on the evening of Thursday 3rd November – The final round, will then take place in our office on Paseo de la Castellana 216 (Madrid) on Friday 4th November • We will arrange travel and accommodation for the finalist teams • All presentations, documents and stages will be conducted IN ENGLISH!!!
• All suggestions/proposals should be properly supported by quantitative analysis • Internet research on company results, market trends, etc. is allowed © Oliver Wyman
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For any doubts, please contact us at
[email protected]
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