Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support...

49
Digital Finance Roadshow 2020 Next Generation of Deal Making

Transcript of Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support...

Page 1: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Digital Finance

Roadshow 2020

Next Generation of Deal Making

Page 2: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 2

Digital Finance - Next Generation of Deal Making

Topic

Recap Roadshow 2019 – Advanced Text Analytics

Deloitte M&A Radar - A tool to simplify and support the M&A origination process

Org Radar - Visualisation and Intelligent Analytics for Organisational Optimisation by Deloitte

Artificial Intelligence – AI Innovation Services at Deloitte

Page 3: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Digital Finance - Next Generation of Deal Making

Recap Roadshow – Advanced Text Analytics

Page 4: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 4

Introduction – what is Smart Contracts?

DocumentsStructuredinformation

Through sophisticated searches over content and metadata, relevant contracts are identified and grouped by work stream

Quality assurance through four-eyes principle followed by in-depth review and analysis as required; export to a structured format

Review & export

Read documents, perform deduplication and OCR, and identify language, document types and faulty files

Relevant fields are defined. In an iterative process, suggestions for the data points are made automatically and manually reviewed, improving quality with every learning cycle

Train & tag

Smart Contracts

Quick review: Locate and structure relevant contracts

Deep analysis: Review contracts and extract relevant

information

Classify & groupPre-process

Page 5: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 5

Smart Contracts – classical vs. AI-enabled approach

Scanned or digital PDF documents are assembled, structured and reviewed

Relevant data points are identified and reviewed manually

Data is retyped into an excel or similar database

Slow

Expensive

Inconsistent

Assemble and review documents

1,000 Documents

Extract data for analysis

Exported results are quickly validated by dedicated trained reviewers

~4 WEEKS TURNAROUND€€

Documents are uploaded through an automatically processed and structuredinterface and

Provisions are identified, highlighted and extracted in real time, leveraging AI

Fast pace

Reduced cost

Improved accuracy

~20 WEEKS TURNAROUND

€€€€

-

-

-

+

+

+

Classical approach AI-enabled approach

Identify relevant

information

Page 6: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 6

Key benefits of using Smart Contracts

Accelerated resultsQuickly analyze documents through the optimized interface and automated workflow. Save resources by significantly reducing the time needed to identify, structure, and review contracts

AI-enabled self-learning Documents reviewed by human experts feed into a learning cycle to provide better and more accurate suggestions at consistent quality. Complete with 4-eye reviewing capability, audit trail and overview of data source and origin

Type and structure agnosticSupports over 140 languages and is accurate even with different document types and layouts

Highly scalableA built-in workflow to streamline processing large volumes of documents and a solid review process generate reliable data

Structured outputLeverage formatted and structured data directly in downstream solutions

Page 7: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 7

Innovative Use Cases for Automated Contract Analysis

Carve-out Contract Separation

• Ensure Day 1 readiness wrt contractual coverage of the carve-out unit

• Know and mitigate financial and contractual risks related to contract assignment

• Minimize one-time and ongoing costs

Ethics Risks in Research

• Identify and structure relevant contracts including historical documents

• Perform automated risk-scoring using metadata, content search and automatic classification

• Find and extract risk-relevant clauses for manual review of high-risk contracts

Redaction of Legal Clauses

• Define sensitive clause types per contract type

• Identify and, if required, review sensitive clauses

• Automatically redact identified clauses via integration with industry-standard redaction tools

Page 8: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 8

Machine-aided VDR support by Deloitte within a large scale international Carve-out

Globally acting client with more than

7500 employees

“Sub” Carve-outs due to

competitive law requirements

11 countries in scope

Key player in international

petrochemical industry

1,5bn Carve-out with ~2500

employees in scope

Supported by

Analytics

enhanced PMO

Page 9: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 9

Details / deep dive next slide

Year

Month 1 Month 2 Month 3 Month 4 Month 5

Preparation

a) Initial data collection (~4000 docs)1)

b) Redaction

Q&A phase / expert sessions

Rolling provision, redaction and upload of documents (~1000 docs)1)

Seamless machine-aided redaction process by Deloitte

VDR opens

5 daysInitial data dump

Q&A begins

Data uploaded in VDR1 dNew data provided

1

2

Deloitte

Client

Deloitte end-to-end redaction support

21 3 4

Data uploaded in VDR

Provision of client data to Deloitte Carve-out team

Redaction by Deloitte analytics team

GDPR compliance checks

Preparation of Data for VDR upload

Upload into VDR

1) multiple formats and languages

Deloitte Client Details / deep dive next slide

Page 10: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 10

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

T~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Automated redaction process – Deloitte Assisted Redaction (DAR)

Patterns & Lists

• Names• Addresses• E-mails• Keywords• …

Document Set

T~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

~~~~~

Sample

> Example list

Input DAR Validation Output

Page 11: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 11

Key benefits of using DAR – Worthwhile to consider for your next deal?

Skyrocketing quantities ~3000 documents in 96 hours

Rapid processing48h during Q&A phase

Highly scalable due to built-in

workflow to streamline processing large volumes of documents

Low costs through reduced manual

effort and efficient use of time and resources

High flexibility facilitates usage in

states of high uncertainty

Automated processing of

complex and inhomogeneous data in various languages

One interface due to of end-to-end

process

Consistent quality through

repetitive and automatically applied redactions and a solid validation process

Superior type and structure agnostic supports nearly all common

data types and delivers accurate and consistent results

CheaperBetter Faster

Page 12: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 12

Contacts

Thomas Menzler

Partner

DE - München

Financial AdvisoryOperational Transaction

Services

[email protected]

Michael Dornauer

Senior Manager

DE - München

Financial AdvisoryOperational Transaction

Services

[email protected]

Klara Weiand

Senior Manager

DE - Berlin

Financial AdvisoryAnalytics

[email protected]

Thomas Fritzsche

Partner

DE - Berlin

Financial AdvisoryAnalytics

[email protected]

Maximilian Wevers

Senior Manager

DE - Düsseldorf

Financial AdvisoryAnalytics

[email protected]

Page 13: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Digital Finance - Next Generation of Deal Making

M&A Radar

Page 14: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 14

… AS A RESULT WE DEVELOPED THE M&A RADAR

OUR CLIENTS OFTEN TELL US…

A tool to simplify and support the M&A origination process

Deloitte M&A Radar

Structured support to identify M&A targets would be a

strong value add

A comprehensive and predictive tool which allows for benchmarking

will significantly enhance our analysis process

We want to be one step ahead of our competitors with information

and insights that are not readily accessible

The M&A Radar is a Deloitte system that combines different data sources, AI, predictive technology etc. into one single tool to empower our clients during the M&A

process and reduce time to market.

Page 15: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 15

From data to action

Deloitte M&A Radar

DATA01 TRANSFORM02 ANALYSE03 ACTION04

SHORT LIST TARGETASSET LONG LIST

INVESTOR(i.e. competitor)

INDUSTRY

Self-learning AI Engine

M&A Radar

SEtc.

Page 16: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 16

Selection of successful visits at various clients

Deloitte M&A Radar

Prospective Meetings:

A significant number of additional meetings have been set up

Client: PE with small-cap focus

Discussion points: Follow up of 23companies in the Consumer, Tech,

Services sectors X

Client: PE with large-cap focus

Discussion points: Companies

>€400m revenue analyzed in

various sectors

Client: PE with large-cap focus

Discussion points: Deep dive of

24 companies in various sectors

Great tool - we

should be

using it on a

regular basis!

Feedback from clients

We attempted building

a tool but lacked the

expertise to make the

development viable

It was incredible to be

introduced to so many different

companies I would have

normally not come across

Meeting follow-ups

• Provide short company profiles (1 Pager) for the identified companies• Provide discussion papers (20-30 pages), as applicable• Connect client with relevant Deloitte experts • Provide market overviews • Ongoing monitoring of selected companies by Deloitte BD team; contact client

as soon as company comes to market

Client: PE with small-cap focus

Discussion points: 17 assets

identified and analyzed across all

sectors X

Client: PE with mid-cap focus

Discussion points: Review of 11companies in various sectors

Client: PE with mid-cap focus

Discussion points: Analysis of 13companies in the Consumer sector

Page 17: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 17

A flexible database and visualization tool with further planned capability expansions

Deloitte M&A Radar Outlook…

UPCOMING UPDATES

Expected upcoming deals (i.e. Opportunity

Newsletter)

Web Scraping (capture loose data)

Analyst reports as well as other company

generated reports

Additional sources (i.e. Pitchbook, Capital IQ etc.)

Strategic and other M&A active companies

Expanding regions until the tool is global

Additional information / KPIs

Industry etc. expertise and trends

ADDITIONAL DATA EXPANDED SCOPE

Page 18: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 18

AI POWERED DEAL ANALYSIS

One Global Tool to empower the M&A process and reduce time to market

Deloitte M&A Radar Outlook…

DEAL ORIGINATION

Predictive technology

matching assets to

potential buyersEmpowering

the M&A process

ONEGlobal Tool

TREND IDENTIFICATION

Algorithms analyzing trendsto identify related deal opportunities

BENCHMARKING

Dynamic benchmarking analyses including deal support comparisons

KNOWLEDGE

Customizable access to focused information for origination and deal realization

Page 19: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 19

Deloitte M&A Radar

Self-learning AI Engine

M&A Radar

SEtc.

Contact us to see how the M&A Radar could work for you

Page 20: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 20

Contacts

Sharmeen DreesPhilipp Spyra

Partner

DE - Frankfurt

Financial AdvisoryTransaction Services

Senior Manager

DE - Düsseldorf

Financial AdvisoryC&I Opportunities

[email protected] [email protected]

Page 21: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Digital Finance - Next Generation of Deal Making

Org Radar - Visualisation and Intelligent Analytics for Organisational Optimisation by Deloitte

Page 22: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 22

ORG RADAR

A pragmatic, bottom-up, intuitive tool todiscover simplification and cost reduction potentials in your organisation by directly identifying implementable measures “on the fly”.

Page 23: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 23

Organisational Efficiency & Hygiene – Rationale

Running Cost Improvement - Framework

RADICAL OPTIMISATION OF PERSONNEL COSTS

Non-addressable personnel costs

(e.g., due to scope)

Total personnel costs prior

optimisation

Addressable personnel costs

Gross potential based on

organisational anomalies (tactical)

Gross potential based on broader

organisational improvement (structural)

Adjustment after calibration with top management and functional leaders

Total personnel costs after

optimisation

-€…b

A

TACTICAL

opportunities on badge-ID level

STRUCTURAL

opportunities, e.g., shadow-org.

Deloitte approach for Org. Efficiency & Hygiene

1 2

Radical optimisation of personnel costs requires full transparency of ‘as-is’ situation enabling comprehensive detection of all ‘organisational anomalies’

Page 24: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 24

Organisational Efficiency & Hygiene – Methodology

Running Cost Improvement – Our Solution: Org Radar

Our innovative methodology and digital accelerators allow new perspectives on organisational structures – a more holistic and specific perspective at the same time

• Visualisation of 10,000+ roles and more within one single chart

• Allows fast + intuitive navigationwithin even complex org. structures (zoom-in & -out within seconds)

• Immediate and objectified view regarding org. hygiene principles

• Possibility to detect thousands of ‘org. anomalies’ and inefficiencies

• Coloring of nodes by HR attributes for multi-dimensional assessment

• Ability to unlock even hidden potentials (shadow organisations)

• and many more…

CONVENTIONAL ‘CARTESIAN’ ORG. CHARTS RADIAL ORGANISATIONAL CHARTS ADVANTAGES OF INNOVATIVE APPROACH

CEO

CEO

L1L2

L3

L4L5

L6L7

L1

L2

L3

∑ ~1,500 roles∑ 50 roles

Highest possible resolutionand big picture at the same time

Limited possibilities forholistic org. hygiene assessment

Page 25: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 25

Organisational Efficiency & Hygiene – Selected Levers

Running Cost Improvement – Our Solution: Org Radar

We conduct multi-dimensional analyses to create a new level of transparency and unlock even hidden improvement potentials to streamline the organisation

Selected Levers for Organisational Optimisation

Multi-dimensional HR attributes allow fast identification of improvement potential

SPAN OF CONTROL

• Reporting layers

• Managers w/o report

• Functional outliers (incl. sub-functions, job titles)

• Geo outliers

• Salary outliers/compensation schemes

• Management grading

• Low-cost vs. high-cost countries

• Workforce composition

• Etc.

15

20

0

5

10

7

No. of directreports

No. of managers1

• Area corresponds to €...m of fully-loaded personnel costs

• Typically, over 20%+ of roles within large-organisations are flagged after multi-dimensional assessment

• Conversion rate of role elimination opportunities strongly depending on need for action by top management

• Additionally, org. hygiene principles and future design dimensions to be defined along major competing dimensions (i.e., regions, functions, business line/products)

1. Manager defined as role within organisation with at least 1 direct report

25

Page 26: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 26

Org Radar - intuitive visualisation and intelligent analytics of organisational structures

Summary

Intuitive core visualisation. The radial core visualisation of Org Radar makes discovering anomalies and fragmentation in organisational structures much easier.

Intelligent analytics. The analytics capabilities of Org Radar allow our clients to unveil simplification and cost reduction potentials in their organisation.

Flexibility and fully interactive drill-down capability. Org Radar offers various filtering and drill-down options that can be easily adapted to our client’s preferences.

Identification of implementable measures “on the fly”. Redundant layers, hanging managers, outliers in span of control or salary bands, functional and geographical fragmentation.

Versatile dashboards. Analyse the distribution of organisational levels across departments, compare functional units across regions and explore high/low cost country exposure.

Page 27: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 27

Contacts

Thomas Rotter Dr. Alexander SticklerDr. Philipp Kinzler

Partner

DE - München

Financial AdvisoryRestructuring Services

Senior Manager

DE - München

Financial AdvisoryRestructuring Services

Manager

DE - Frankfurt

Financial AdvisoryFA Analytics

[email protected] [email protected] [email protected]

Page 28: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Headline Verdana BoldDigital Finance - Next Generat ion of Deal MakingThink big - Start small - Scale fast: Startups as Driver of AI Innovation

FA – Roadshow 2020

Digital Finance - Next Generation of Deal Making

What can startups do for you? AI Innovation Services at Deloitte

Page 29: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 29

Technological change is increasing rapidly, creating a continuous dynamic with far-reaching changes.

Technological cycles

• Computers in

offices

• Mini computers

• Word processing

• Spreadsheets

• Computers for

home use

T E C H N O L O G YC O R E

T E C H N O L O G YE N A B L E M E N T

T E C H N O L O G YC O L L A B O R A T I O N

T E C H N O L O G YE N G A G E M E N T

D I G I T A L

E X P O N E N T I A L

• Mainframe-

computers

• Comprehensive

distribution of

computers

• Network computing

• Email

• Relational databases

• Client-server

applications

• Internet revolution

• “Browser Wars”

• Customer loyalty

• Intranet

applications

• Broadband internet

• Smartphones

• Tablets

• Cloud computing

• Big data analytics

• Social media

• Wearables

• Sensing

• Home automation

• Smart car

• Cryptocurrency

• Quantum computer

• 3D printing

19701980

19902000

2010

2020

Page 30: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 30

The last ten years of IT have been about changing the way people work. The next ten years of IT will be about tranforming your business.

Aaron Levie, CEO of Box

Page 31: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 31

AI is the ability of computers or machines to perform tasks that are typicallythought of as requiring human judgement or intelligence

Types of AI Specific domains and applications of AI

Page 32: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 32

What can AI do for you?

Make the same decisions faster

e.g., improve customer experience by responding real-time while they are shopping online, or assess transaction risks in real-time.

Make better decisions

e.g., connect the shop floor to the ‘top floor’ with business intelligence and data visualization to build preventative approaches for equipment maintenance.

Make the same decisions cheaper

e.g., combine data from inside and outside your organization to add richness and granularity to better understand your customers or business performance.

Make innovations in products and services

e.g., provide location-based services to maintenance managers using connected devices, equipment and other physical assets in the ‘Internet of Things’.

Page 33: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 33

Ethical, moral and

legal concerns

Limited availability of AI experts in the market

High costs of expertise and technologies

However, many corporates face obstacles when developing AI themselves

Integration in existing

processes and systems

No trust in AI

Page 34: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 34

BERLIN

Sectors: FinTech, Artificial Intelligence, Big

Data/Analytics, Internet of Things, Blockchain

Venture Capital: $2.9bn / Startups: 1 200

SILICON VALLEY

Sectors: FinTech, Artificial Intelligence, Big

Data/Analytics, Life Sciences, Adv. Manufacturing &

Robotics, AdTech Gaming

Venture Capital: $39bn / Startups: 10 200

TEL-AVIV

Sectors: Cybersecurity, Artificial Intelligence, Big

Data/Analytics, Life Sciences, Manufacturing &

Robotics

Venture Capital: $0.9bn / Startups: 700

Venture Capital

No. of Startups

Ecosystems

Also, AI is happening everywhere fast… and sometimes even better

Page 35: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 35

Increased complexity and decentralization require new innovation processes

Page 36: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 36

We decode every single AI startup funding and founding in Europe to anticipate where markets are heading so you can make informed decisions

We guide you through.

WE ANALYSE & DECODEAI innovation signals to build better assets

for our clients, the market and Deloitte.

Every time someone founds a new venture, this

entrepreneur is placing a bet on a future.

Every time someone invests into a startup, this investor

is buying a stake of the future.

Page 37: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 37

GERMAN AI MOONSHOTS

VISIBLE ON THE HORIZON?

DOMESTIC FUNDING STILL

ON A LOWER LEVEL

35% of German AI startups generate revenues < €1 million

40% of the startups surveyed expect growth rates of >50%

65% of the startups surveyed operate scalable business models

BUT, HIGH GROWTH

RATES

1.2bnOver the past ten years, German AI startups have raised venture capital of €1.2 billion.

<20%Of this, however, the proportion of German venture capital was less than 20%.

80%of AI ventures in Germany have collected a maximum of one seed round.

45%of all German AI startups have < 10 employees.

1/17Only 1 out of 17 Ventures that are part of the AI Unicorn Leaderboard are born in Europe (Graphcore).

>60%more AI startups in Germany, compared to the previous year.

50%of the sampled startups claimed to be working on AI solely for marketing purposes.

AI is becoming a strategically important sector for Europe and it will continue to be a driver for winning innovation strategies

AI Startup Market Intelligence

Page 38: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 38

2020 German AI StartupLandscape

AI TECH STACK

500+STARTUPS

BUSINESS INTELLIGENCE & CONSULTING

DOMAINS

Agriculture

Automotive, Travel & Mobility

180+ 80+ ENTERPRISE FUNCTION 200+

40+

Business Intelligence & Consulting

Research & Development

Consumer Products & Retail

Defense & Security

Fintech / Insurtech

Life Science & Healthcare

Human ResourcesInfrastructure, Real Estate & Home Living

Multi-Functional

Processes & Automation

Manufacturing & Logistics

Communication

LegaltechMedia, Sales & Marketing

Infrastructure, Real Estate & Home Living

Consumer Products & Retail

Life Science & Healthcare

Defense & Security

Agriculture

Fintech / Insurtech

Automotive, Travel & Mobility

Manufacturing & Logistics

Processes & Automation

Business Intelligence & Consulting

Research & Development

Human Resources

Media, Sales & Marketing Legaltech

Communication

Multi-FunctionalEven an advanced

model with a narrow scope will have a

hiccup or two, usually.

There are already a few AI startups that are actually building their own platform,

interfaces and networks, but what does that tell us?

The horsepower required to build the model varies greatly depending on what kind of AI is being

leveraged.

The dirty secret of AI is that the lion´s

share of work usually revolves around

finding the right data and getting it into

shape.

Based on our research, there is a large gap between startups who have achieved some mastery of AI Tech and the rest who have not

Finding AI startups is not hard… but understanding their real value proposition requires expertise

Page 39: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 39

Collaboration in global Deloittenetwork, data ingestion by crawling engine and additional APIs

Data cleansing, data enrichment and real-time update of relevant information, e.g., description, website and funding

Pre-classification by domain community, complete mandatory fields

Startup self-assessment

Deloitte Due Diligence Light (Commercial and AI Tech) based on proven and uniform approach

Project-specific Due Diligence (Red Flag and confirmatory report)

We get in touch with the founder team directly and put the venture and their AI algorithms to the acid test

Discover AI startups, emerging technologies and winning business models

RELIABLE

DATA

DOMAIN

INSIGHTS

#1 DEEP TECH

LEADER

SAFETY &

SECURITY

THOUGHT

LEADERSHIP

Page 40: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 40

We support you in ideation, screening, scouting and application of Artificial Intelligence

End-to-end AI innovation service offering

AI START AI CHALLENGE AI SCOUTING AI INTEGRATION

AI NEW GROWTH

FACTORY

Based on your specific problem and pain points, we identify AI use cases and winning AI innovation strategies for your company with our Design Thinking coaches and product designer.

Find the best idea for your AI challenge on our collaborative innovation platform. We offer access to a large network of AI startups, experts, researchers and industry partners.

Find the best partner in our curated AI startup portfolio with our AI Scouts, who have a direct contact with relevant startups.

Implement the AI solutions in your productive environment with our experts in all relevant domains.

Develop completely new AI technologies and startups as contract work with us.We invent, develop, test and scale-up the necessary structures to establish the young venture quickly and successfully on the market.

IDEATE SCREEN, SCOUT & MATCH APPLY

Page 41: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 41

Enhancing Credit Risk Assessment

Natural Language Processing (NLP)

Automatic analysis of company reports to assess credit risks and allow improved investment decisions

SituationInternal credit risk assessment is carried out manually.

ProblemMore available data and regulatory requirements increase efforts for individual analysts.

Solution A product concept aiding the analyst by automating

core steps of fixed-income analysis steps.

The text mining approaches include different levels of text granularity – word, topic, text.

Process automation and machine-learning-improved methods secure competitiveness.

Word Embedding

Keyword Extraction

Machine Learning Topic Modelling

Term-Frequency Analysis

Sentiment Analysis

What methods were used?

Page 42: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 42

Developed and validated a new business model, incorporated and ramped-up a new FinTech company, built and launched Scorable, an AI-based SaaS credit risk assessment tool

Impactwww.scorable.comBuilding the AI FinTech Scorable

Initial idea

Ampega Asset Management identified the opportunity for an AI-based credit risk assessment tool as an offering for 3rd party users

Built and launched product

Conducted user tests with early adopter clients and developed several prototypes before publicly launching Scorable’s first release

Ramped up venture

Incorporated and operationally ramped up the new company, hired a team of 30+ people and developed Scorable’s brand identity

Developed venture concept

Evaluated market need and business case, developed a product concept and validated the idea’s technical feasibility to secure funding

Page 43: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 43

Automated information extraction from documents to reduce repetitive tasks

Optical Character Recognition (OCR) and Computer Vision (CV)

SituationStructured and scanned documents were processed individually and by hand. The information needed to be registered and cross-checked with a data base to validate the corresponding client information and initiate necessary action.

ProblemRepetitive task that consumed time.

Solution Standardization of incoming documents and

preprocessing scans by CV techniques.

Information extraction with OCR and object detection.

50% faster and leaner processes.

Confidential and document specific parser(75% confidence rate). Machine Learning

Object Detection

OCR Feature Extraction

Productive Docker Solution

What methods were used?

Page 44: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 44

Impact of digital tools on your company’s mostrecent transactions

M&A Digital Accelerators

35 %

40 %

51 %

53 %

HOW HAS THE USE OF DIGITAL TOOLS AND ACCELERATORS

IMPACTED YOUR COMPANY’S MOST RECENT TRANSACTIONS ?

Provided additional insights to our model

Minimized risks and uncertainties through

more analysis in the diligence phase

Helped plan for post-close

operations / integrations

Increased speed to close

“Sellers are sharing more data.

With the right digital tools and

techniques to analyse that data,

buyers get significantly better

information than was

previously possible with a team

of people pounding away on

spreadsheets.”

ANDY WILSON

PARTNER, M&A SERVICES

DELOITTE & TOUCHE LLP

Page 45: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 45

AI Use Case landscape for the deal lifecycle

PRE - DEAL DEAL EXECUTION POST-CLOSING

• Automated combined financials

(for MergeCo)

• Automated Carve-Out Financials

• Automated due diligence process with

natural language processing and

generation

• Real time target screening, market

sensing and deal matching with

sentiment analytics

• Leverage AI to generate standardized

& fit for purpose Day 1 Planning and

Blueprinting deliverables

• Assisted VDR document classifier, data

extraction (e.g., table miner) and

analysis (financial, HR, IT, Legal, Ops)

• Automated synergy initiative identification

• Continuous environment scanning

and competitive game boarding

• Intelligent bots to automate manual

Command Center and PMO activities

• Harness and master data with

natural language processing

• Advanced valuation & modelling

analytics (peer group analysis,

benchmarking, WACC derivation, …)

• Automated financial benchmarking in

the peer group

• Machine Reading Comprehension for

Bidder Engagement in Question

Answering

• Virtualizing Blueprinting &

Walk the Walls with Augmented Reality

• Cultural readiness assessment using NLP+

++

Page 46: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 46

We screen and scout AI startups to boost digital transformation of your business model and to start winning growth stories based on credibility and trust.

We anticipate disruption relevant for your business model and support you from ideation to integration, of course, also in the event of AI incubation and co-creation.

Become a central point of our European AI ecosystem and discover AI domain insights.

Connect with us

Page 47: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 47

Contacts

Jan Hasse

Senior Manager

DE - Köln

Financial AdvisoryAnalytics

[email protected]

Oliver Salzmann

Partner

DE - Düsseldorf

Financial AdvisoryAnalytics

[email protected]

Page 48: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

Deloitte 2020 48

You need further information about our Financial Advisory Events?

Nadine Schönlau

Senior

DE - Düsseldorf

Financial AdvisoryC&I Eventmanagement

[email protected]

We look forward to staying in contact with you... Due to changes in data protection regulations, we need your documented consent to send you newsletters, updates, event invitations and similar communication.

Page 49: Digital Finance - Deloitte United States · 2 Deloitte Client Deloitte end-to-end redaction support ... (1 Pager) for the identified companies • Provide discussion papers (20-30

This presentation contains general information only, and none of Deloitte GmbH Wirtschaftsprüfungsgesellschaft or Deloitte Touche Tohmatsu Limited (“DTTL”), any of DTTL’s member firms, or any of the foregoing’s affiliates (collectively, the “Deloitte Network”) are, by means of this presentation, rendering professional advice or services. In particular this presentation cannot be used as a substitute for such professional advice. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this presentation. This presentation is to be treated confidential. Any disclosure to third parties – in whole or in part – is subject to our prior written consent.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, 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/de/UeberUns for a more detailed description of DTTL and its member firms.

Deloitte provides audit, risk advisory, tax, financial advisory and consulting services to public and private clients spanning multiple industries; legal advisory services in Germany are provided by Deloitte Legal. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s approximately 312,000 professionals are committed to making an impact that matters.