RED TO BLUE �RONALD VERBRUGGE – CEO�

�We’re living in a transformational

era for Financial Services. Our children will look back at these past

decades and laugh at how we banked” �

�Bradley Leimer, Mechanics Bank, California�

The FINTECH Revolution�

What started �once upon a time �

in 2007…..�

08-09 BNP Paribas Freezes Funds as Loan Losses Roil Markets�08-14 Goldman and Investors to Put $3 Billion Into Fund�08-15 Countrywide Financial ‘risks bankruptcy’�08-17 Fed Cuts Discount Rate to 5.75% to Ease Credit Crunch�08-21 SachsenLB Has EU3 Billion in Subprime, Person Says�08-22 H&R Block Taps Credit Line, Cites `Unstable’ Markets�08-22 Lehman, Accredited, HSBC Shut Offices; Crisis Spreads�08-23 Fed lends $2 billion to banks to ease credit woes�08-29 Basis Yield Files Bankruptcy Over Subprime Defaults�09-06 ECB injects 250 Billion euros into markets�09-14 Northern Rock Gets Emergency Bank of England Funding�09-17 Government guarantees Northern Rock deposits�09-17 NovaStar Can’t Pay Dividend, Forfeits REIT Status�09-18 Stocks Surge on Big Fed Rate Cut �

continued in 2008..�

04-30 Citigroup Increases Stock Offering to $4.5 Billion�03-11 Central Banks inject $200 billion of liquidity into markets�03-14 JPMorgan and Fed Move to Bail Out Bear Stearns�03-25 Seeking Fast Deal, JPMorgan Quintuples Bear Stearns Bid�03-31 U.S. Treasury Backs Regulatory Overhaul, Broader Fed Role�04-01 UBS writes down another $19 billion�04-01 Deutsche Bank to write down $4B�04-04 MBIA Loses AAA Insurer Rating From Fitch Over Capital �04-08 Washington Mutual Raising $7 Billion�04-14 Wachovia’s Loss a Grim Sign for Banks�04-18 Citigroup Reports Loss on $15 Billion of Credit Costs�04-21 Funds to invest up to $8bn in National City bank �04-22 Merrill Raises $9.55 Billion in Sales of Debt, Preferred Shares�04-22 RBS aims to raise $24B in new capital �04-29 Citigroup Sells $3 Billion of Stock to Boost Capital �04-29 HBOS Plans to Raise 4 Billion Pounds in Share Sale�

�05-06 Fannie Mae to raise $6bn new capital �05-07 Town of Vallejo, California goes bankrupt �05-09 Citigroup to wind down $400bn of assets�05-19 Banks Keep $35 Billion Markdown Off Income Statements�05-26 UBS Falls After Saying More Mortgage Losses Possible�06-02 Morgan Stanley, Merrill, Lehman Ratings Cut by S&P �06-02 Bradford & Bingley shares plunge as lender warns on profits�06-05 MBIA, Ambac, $1 Trillion of Debt, Lose S&P AAA Rating�06-09 Lehman Brothers to post $3 bln loss; sets $6 bln stock sale�06-09 Lehman to post $2.8 billion quarterly loss�06-09 Lehman Cuts $130 Billion of Assets to End Bear Stigma�06-12 KeyCorp to raise $1.5 billion, cut dividend 50%�06-18 Fifth Third Falls on Plan to Raise $2 Billion, Cut Dividend�06-25 Countrywide Sued by California Over Mortgage Loans�06-25 Countrywide Financial Faces Suit Over Mortgage Loans�

�

05-06 Fannie Mae to raise $6bn new capital �05-07 Town of Vallejo, California goes bankrupt �05-09 Citigroup to wind down $400bn of assets�05-19 Banks Keep $35 Billion Markdown Off Income Statements�06-30 Florida Sues Countrywide�07-07 Freddie Mac, Fannie Mae Plunge on Capital Concerns�07-10 U.S. Mulls Future of Fannie, Freddie�07-11 IndyMac Seized by U.S. Regulators Amid Cash Crunch�07-18 Barclays and HBOS cash calls shunned�07-25 National Australia Bank tumbles on new $830m provision�07-28 Merrill Has $5.7 Billion of Writedowns, Sells Shares�08-08 Auction-Rate Buybacks: The Bottom Line�08-20 Fannie Mae and Freddie Mac shares fall on fears of size of potential losses�08-20 Lehman’s secret talks to sell 50% stake stall �09-07 Paulson Engineers U.S. Takeover of Fannie, Freddie�

06-30 Florida Sues Countrywide�07-07 Freddie Mac, Fannie Mae Plunge on Capital Concerns�07-10 U.S. Mulls Future of Fannie, Freddie�09-15 Lehman Files Biggest Bankruptcy After Suitors Balk �09-15 Bank of America to Acquire Merrill as Crisis Deepens�09-15 Fed Widens Collateral, Banks Set Up $70 Billion Fund�09-16 Fed to lend $85 billion to AIG, take 80 percent stake�09-18 Lloyds TSB seals £12.2bn HBOS deal �09-25 WaMu (US), Assets Sold to JPMorgan in Record Failure�09-29 B&B nationalisation is confirmed�09-29 Iceland nationalises Glitnir bank �10-03 Dutch part of Fortis is nationalised�10-06 Hypo Real Gets EU50 Billion Government-Led Bailout �10-07 UK makes massive rescue plan for banks�10-08 Fed Will Lend Directly to Corporations�10-12 Australia to guarantee bank deposits for three years: PM �

10-13 RBS, HBOS and Lloyds to get $64 billion from U.K. �10-13 Fed Says ECB, Others to Offer Unlimited Dollar Funds�10-13 EU Nations Commit 1.3 Trillion Euros to Bank Bailouts�10-13 Germany Pledges EU500 Billion in Bank Rescue Plan�10-15 European central banks pump $250bn liquidity�10-15 EU backs emergency accounting changes�10-16 ECB Widens Collateral Rules, Slashes Required Ratings�10-13 EU Nations Commit 1.3 Trillion Euros to Bank Bailouts�10-13 Germany Pledges EU500 Billion in Bank Rescue Plan�10-15 European central banks pump $250bn liquidity�10-15 EU backs emergency accounting changes�10-16 ECB Widens Collateral Rules, Slashes Required Ratings�10-16 ECB gives Hungary €5bn credit line�10-16 Swiss banks raise emergency funds to fight crisis�10-22 Wachovia reports 23.9 billion loss�

is continuing today….�

-  Euro crisis�-  Spain, Portugal, Italy, Cyprus on the edge of bankcrupcy, still �-  Many banks were nationalized saved by the tax payers�-  The credit crisis was turned upside down, companies no longer get financed�-  Many houses are “under water” �-  Discussions of the rich countries to return to their former currency�-  People no longer can get mortgages�-  House prices dropped with 30% - 40% in many countries�-  The banks that did not go bankrupt, fired 40% -to 60% of their personnel �

The word BANK..ruptcy got a totally different meaning the past years, don’t you think? �

COMPLEXITY + LEGACY = � BOOM!�

-IT Legacy�-Cultural Legacy�-Organizational Legacy�-Historical Legacy�-Political Legacy�

Consumers TODAY�

Consumers today? �

•  30% would consider a branchless digital bank�

•  75% only wants a bank to be transaction driven instead of relationship driven�

•  55% wants a bank to proactively recommend products and services for their financial needs �

•  50% is interested in real-time and forward looking spending behavior �

                       

Would you bank with a new independent �Fintech company ?�

75% of People < 35 years say� �

YES!�

Bankers TODAY? �

AUTHENTICYTY �LOVE �

PURPOSE �

The Bank of the future is about �

SO, THAT MEANS DEEP TRANSFORMATION!��By the Banks?��No of course not, by�

YOU! �

By me?��I Am An IT-er ��WHAT CAN I DO?�

YOU �

TECHNOLOGY �

FUTURE OF FINANCE �

+ �

= �

+ �INNOVATION �

•  It is up to you to create the real POWERSHIFT�

•  People in the driverseat �•  Banks in the backseat �

TOGETHER  

Trust

Save

Lend

Invest

Purchase

Share Risks

Create

Vote

Share Knowledge

Negotiate

Create

Play

Carry Complain

Choose

Share

Experience

Near future?�Changed position of people in the power balance�

1.  People own their financial data at the bank �2.  People make money with their own data, marketing

is dead! �3.  People group in closed communities, they own�4.  People organize their purchase power, together �5.  People create transparency�6.  People create the financial products they need�7.  Communities employ their own financial experts�

1.  FSI’s (banks, insurance cie’s) focus on operational excellence (faster, cheaper, better) �

2.  Banks merge and a few back office hubs will remain�3.  Banks loose all of their retail clients�

Near future?�Changed position of banks in the power balance�

FINTECH! �Finance is Dead, long live �

FINTECH main categories�

1.  Extensions of banks on their traditional services�

2.  Independent extensions on top of banking services�

3.  New initiatives replacing traditional Financial services�

FINTECH�

Some current FINTECH examples�1.  Personal Finance�

a)  Mint �b)  Betterment �

2.  Crowdfinance �a)  Lendingclub (peer to peer) �b)  Symbid�c)  MUNT mortgages�

Of course: Wearable first �

Some upcoming FINTECH trends�1.  Virtual Finance Agents�

a)  Robo Analytics (Big data, Machine learning, functional programming) �

b)  Physical health decision support engines��

2.  Networking Finance��3.  People like me�