Australia - Korea Business Council Technology Trends & Fintech Overview 2 October 2015

A Digital Story… Do you know what this is?

Disruptive technology is creating the context for change and innovation Key Technological Milestones to FinTech1 Interactive visualisation 1985 2020 2015 2010 2000 2008 1995 1990 Blockchain and Bitcoin Wearables Predictive analytics Algo banking QR Code Open Source Online Banking E-Commerce Social Networks Smartphones NFC Semantic Web Open innovation Free and open software Apps Crowd-sourcing Crowdfunding Cloud Gamification Big Data Tablets Data and Analytics Internet 4.0 Biometry Internet of Things Artificial Intelligence Industry 4.0 Quantum Data and Analytics Real-time decisioning Mobile phone network Dot.com Era Source: 1 EY Analysis/Dapp, T. (2014) FinTech – The digital ®evolution in the financial sector: Algorithm-based banking with the human touch

Digital is changing how we work in the world 1 Vulnerability Costs Trust 3 2 …a thousand cuts Low attention span Higher expectations Digital natives 4 Legacy Compliance Capex

FinTech is dynamic and disruptive “Technology applied to financial services (Fintech) has a significant impact on our daily lives, from facilitating payments for goods and services to providing the infrastructure essential to the operation of the world’s financial institutions.” Sue Langley, CEO, UKTI Financial Services Organisation, Landscaping UK Fintech, EY & UKTI, 2014 Expansion of digital connectivity has unleashed potential for the Financial Services industry and has raised consumer expectations with a preference for more digital, faster and cheaper services Rise of FinTech Globally FinTech investment increased threefold from US$ 4.05 billion in 2013 to US$12.2 billion in 2014 Loss of trust in the incumbent financial institutions : “Only 44% of customers have complete trust in their Primary Financial Service Provider” C. 4000+ entrepreneurial startup seeking to attack existing FS profit pool US is the leading supplier for FinTech, however investments in Europe are growing at almost double the level of investments in Silicon Valley New regulatory requirements and economic downturn have enhanced the need for incumbent to be cost effective and have restrained innovation opening the door for more nimble alternatives While US, UK, Nordics and Germany are leading1 FinTech centers in the world, Hong Kong is the frontrunner in Asia Sources: EY Global Consumer Banking Survey 2014 and CB Insights 1 Based on investments as of 2014 2 Statistics presented are for banks only

And is delivering innovation across the financial services sector… FinTech Innovation Hotspots Deposits & Lending Investments Insurance Payments Enterprise P2P lending Crowdfunding Money management tools Engaged investing Visualisation tools Algo advice Social Insurance Wearables Integrated payments Contactless payments Cybersecurity Big data analytics Compliance monitoring Current innovations Wave 1: Open data Identity Management Financial inclusion Internet of Things Autonomous vehicles P2P payments Off-rail payments Blockchain Smart contracts Future innovations Wave 2:

The world’s largest financial services organisations are talking about Fintech, innovation and disruption “We are looking for innovative and disruptive technological ideas and solutions that will support the transformation of the banking industry. Digital disruption is driving an unprecedented transformation of our industry and radical new technologies present a unique opportunity for a step-change to our client offering.” “Silicon Valley is coming. There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking. They are very good at reducing the “pain points” … and we are going to have to work hard to make our services as seamless and competitive as theirs. And we also are completely comfortable with partnering where it makes sense.” Jamie Dimon, Chairman & CEO - JPMC April 8, 2015 Sergio Emotti, CEO - UBS March 25, 2015 “We are aiming to better serve our customers and improve our daily interactions with them by embracing the FinTech companies which have potential to bring new approaches to the insurance model.” Henri de Castries, Chairman & CEO - AXA May 26, 2015 ? “What we see today, is the way we are attracting customers and the way our customers are choosing to observe and be part of their financial lives has been fundamentally changed by FinTech.” “I’m not sure I understand [FinTech]. It’s totally surreal, I mean… there’s so many moving parts.” James Gorman, CEO - Morgan Stanley March 10, 2015 Michael Corbat, CEO- Citigroup June 17, 2015

Global Value and Volume of FinTech investment ($bn)¹ Fundraising in the FinTech space has been gaining momentum over recent years – and is expected to continue Global Value and Volume of FinTech investment ($bn)¹ VC invested over $50bn in 2014 in the US alone 1 CB Insights and Accenture, Banking Reports Research

Does your business strategy work in a digital world?

Thank You! Please direct any questions to: Meredith Angwin (meredith.angwin@au.ey.com) Anita Kimber (anita.kimber@au.ey.com) Young Suk Kim (金 永 錫) (young-suk.kim@kr.ey.com)

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