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The Future of Financial ServicesHow disruptive innovations are reshaping the way financialservices are structured, provisioned and consumedAn Industry Project of the Financial Services Community Prepared in collaboration with DeloitteFinal Report June 2015

ForwardConsistent with the World Economic Forum’s mission of applying a multi-stakeholder approachto address issues of global impact, the creation of this report involved extensive outreach anddialogue with the financial services community, innovation community, academia and a largenumber of financial technology startups. The dialogue included numerous interviews andinteractive sessions to discuss the insights and opportunities for collaborative action.Sincere thanks are extended to the industry experts and emerging disruptors who contributedtheir unique insights to this report. In particular, the members of the Project’s SteeringCommittee and Working Group, who are introduced in the following pages, played an invaluablerole as experts and patient mentors.We are also very grateful for the generous commitment and support to Deloitte Consulting LLPin the U.S., an entity within the Deloitte1 network, in its capacity as the official professionalservices advisor to the World Economic Forum for this project.ContactFor feedback or questions, pleasecontact:1 Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of memberfirms, 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 www.deloitte.com/about for a more detailed description of DTTL and itsmember firms.R. Jesse McWaters, Lead Authorjesse.mcwaters@weforum.org 1 (212) 703-6633This 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 beresponsible for any loss whatsoever sustained by any person who relies on this report.1

Table of ContentsAcknowledgements . . Executive Summary . Reading Guide . Detailed Research Modules .Payments:4102427How will customer needs and behaviours change in an increasingly cashless payments landscape?.2843How will the evolution of decentralised or non‐traditional payment schemes change the role of traditional financial institutions? . Insurance:How will disaggregating forces across the value chain transform the insurance industry? .58How will an ever more connected world impact the value delivered by insurance providers? . 72Deposits and Lending:How will emerging alternative models of lending change the market dynamics of traditional lenders? . 86What will be the future role of financial institutions in response to continually shifting customer preferences? . 100Capital Raising:How will the evolution of distributed capital raising impact the role of traditional intermediaries? . 112Investment Management:How will the empowerment of individuals through automated systems and social networks transform the business of investment management?. 127How will the externalisation of key processes transform the financial ecosystem? . 139Market ProvisioningHow will smarter and faster machines transform capital markets? . 153What impact will better connected buyers and sellers have on capital markets? . 163Contact Details. . 1782

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AcknowledgementsMembers of the Steering GroupThe 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 BussmanJohn FlintJoanna RotenbergChief Information Officer,UBS AGChief Executive Officer, Retail Bankingand Wealth Management,HSBCChief Marketing Officer and Head ofStrategy, BMO Financial GroupAnn CairnsJason HarrisNeeraj SahaiPresident, International Markets,MasterCardChief Executive Officer, InternationalProperty and Casualty, XL GroupPresident,Standard & Poor’sDavid CraigMichael HarteWilliam SheedyPresident, Financial and Risk,Thomson ReutersChief Technology Officer,BarclaysGlobal Executive, Corporate Strategy,M&A, Government Relations, VisaFred CrawfordRob HeyvaertLance UgglaChief Executive Officer,Alix PartnersCorporate Executive Vice President,FISChief Executive Officer,Markit GroupStephen CrossDavid PuthDieter WemmerChief Executive Officer, Aon GRIPSolutions, AonChief Executive Officer,CLS GroupMember of the Board of Management,Finance, Controlling, Risk (CFO),Allianz SEAnna EwingHenry RitchotteExecutive Vice President, GlobalTechnology Solutions, NASDAQChief Operating Officer,Deutsche Bank4

AcknowledgementsMembers of the Working GroupThe project team would also like to acknowledge the following executives of global financial institutions who helped define the project framework and shape strategicanalyses as its Working Group:Rachel BaleRobert HedgesNicolas de SkowronskiVP Mobile Converged Payments,MasterCard WorldwideManaging Director,AlixPartnersChief of Staff,Bank Julius BaerTom BrownNeil MummJohn SmithPartner,Paul HastingsVP Corporate Strategy,VisaIT Director, Group Head Office,Prudential PLCFrancis BouchardMatthew LevinHuw Van SteenisGroup Head of Government and IndustryAffairs, ZurichEVP and Head of Global Strategy,AonHead of Financial Services Research,Morgan StanleyFabrizio CampelliVictor MatarranzAndrew TarverHead of Group Strategy,Deutsche BankDirector of Strategy & Chief of Staff tothe CEO, SantanderHead of UK Operations,FIS / CapcoEricson ChanMax NeukirchenColin TeichholtzChief Information Officer Hong Kong andGreater China, Standard CharteredHead of Strategy,JP Morgan ChasePartner & Co-Head of Fixed IncomeTrading, Pine River CapitalRobert CoppolaChristine O’ConnellFabien VandenreydtChief Technology Officer of S&P CapitalIQ and S&P Dow Jones, McGraw HillGlobal Head of Strategy & BusinessDevelopment, Thomson ReutersHead of Markets Management, Innotribe& the SWIFT Institute, SWIFTChristof EdelKosta PericDerek WhiteGlobal Head of Trading Strategy &Business Development, ThomsonReutersDeputy Director Financial Services forthe Poor, Bill and Melinda GatesFoundationChief Design & Digital Officer,BarclaysJohn EdgeRobert PalatnickChairman,Digital Stored Value AssociationManaging Director and Chief TechnologyArchitect, DTCCIgnacio A. GoicoecheaPeter RutlandHead of IT and Operations,BanorteSenior Managing Director,CVC Capital PartnersRob Galaski (Project Advisor)Deloitte Canada5

AcknowledgementsList of innovators and subject matter experts (1 / 2)In addition, the project team expresses its gratitude to the following innovators and subject matter experts who contributed their valuable perspectives through interviewsand workshops (in alphabetical order):Asheesh AdvaniJeremy AllaireGiles AndrewsRadhika AngaraYoni AssiaJolyon BarkerAlex BatlinInga BealeNick BeecroftEric BenazehSarah BillerStephen BingleDave BirchJosh BottomleyCatherine BrownChris BryckiOlaf Carlson WeeUlf CarlssonBhaskar ChakravortiJames ChappellGongpil ChoiJonathan CoblentzClaire CockertonCharlotte CowellEugene DanilkisBruce DavisThomas DelucaMarten Den HaringSamir DesaiMaciej DolinskiMatt DooleyPaul DrakeLeigh DrogenAron DuttaGrechen EffgenJohn FawcettCEO, CovestorCo-Founder & CEO, CircleCo-Founder & CEO, ZopaChief Marketing Officer, FastacashCEO, eToroDeloitte UKGroup CTO, Applied Innovation and Market Research, UBSCEO, Lloyd’sEmerging Risks and Research Manager, Lloyds of LondonDirector, International Development, MenigaPresident, Capital Market ExchangeBusiness Development Asia, Smart EngineDirector, Consult HyperionGlobal Head of Digital, HSBCGroup Strategy Director, Lloyd’sCEO, StockspotHead of Risk, CoinbaseGeneral Manager, North Asia & Japan, NasdaqSenior Associate Dean, The Fletcher School of Law and Diplomacy,Tufts UniversityCTO, Digital ShadowsSenior Advisor, Korea Institute of FinanceCFO, Progresso FinanceroCEO / Founding Director, Innovate FinanceHead of Product, Wealth Management, MetLifeCEO, MambuJoint Managing Director, Abundance GenerationCEO, Advanced Merchant PaymentChief Economist and Product Officer, Digital Reasoning SystemsCo-Founder & CEO, Funding CircleCEO & Founder, Friendly ScoreManaging Director, Connected Thinking AsiaManaging Director, Strategy & Business Development, Standard &Poor’sCEO, EstimizeHead of Strategy for Financial Markets, CiscoHead of Business Development, ZipcarCEO, QuantopianLin FengClare Flynn LevyCEO, Deal GlobeFounder & CEO, Essentia AnalyticsDave GirouardFounder & CEO, UpstartColin GleesonDeloitte UKMatthew GoldmanCEO, WallabyRussell GouldProduct Manager, Mobile Wallet Solutions, VodafoneIan GreenCo-Founder & CEO, eCo FinancialJulia GrovesChair, UKFCASarah HabberfieldDeutsche BankWilliam Harris Jr.CEO, Personal CapitalJilliene HelmanCEO, Realty MogulDylan HigginsCEO, Kopo KopoDorothy HilleniusDirector Group Strategy, INGReid HoffmanInnnovator, Investor and AuthorBrian HongManaging Director, Financial Services, CVC Capital PartnersKaori IidaSenior Editor, Economic News Division, NHKBert Jan Van EssenManagng Director & Co-Founder, Dragon WealthPaul JungSony KapoorVice-President, Head of Emerging Products and Innovation, North Asia, VisaInc.Managing Director, Re-DefineBrad KatsuyamaCEO, IEXTom KeeneAnchor & Editor-at-Large, BloombergJames KennedyCTO, Asia Pacific, UBSDamian KimmelmanDavid KirkpatrickCEO, DueDilFounder & CEO, TechonomyAndy KooperFounder & CEO, LeapfrogInvestmentsChristian LanngCEO, TradeshiftFrancine LacquaAnchor & Editor-at-Large, BloombergRenaud LaplancheCEO, Lending ClubChris LarsenCEO, RippleMichael LavenCEO, Currency CloudGerard LemosChairman, UK Payments CouncilMax LevchinFounder, AffirmMichael LiCEO, CTQuanSandra LinhanCEO, LarkNektarios LioliosManaging Director, Startupbootcamp FintechKen LoCo-Founder & CEO, ANX6