1. IT.Can Fintech Evolution/Revolution
October 23, 2017
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2. Quick Facts: PayPal IMPORT $4.2 Billion
>$100B market cap, almost $13B in projected revenue 2017
203 markets globally, ~18k employees
218M customers including 17M merchant customers
26% YOY growth in payments 54% YOY growth in mobile commerce
Canada 5th largest market (after US, UK, DE & AU), 1st international market for PayPal (est. 2006)
45% gender & ethnic diversity on Board, 100% gender pay equity globally
IMPORT
$4.2 Billion

3. Myth #1: Fintech is new Usage Guidelines
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Myth #1: Fintech is new
©2015 PayPal Inc. Confidential and proprietary.
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4. Myth #1: Fintech is new
Indeed, there are numerous instances in which nonbanks have been able to provide “bank-like” services at lower cost (or higher rate of return) to the individual or corporate customer…”
– US Federal Reserve Bank of Minneapolis, 1982
Whether it’s money transmission from a 100 years ago (Western Union as a development to their telegram business), ATMs in the 1970s (developed by IBM in partnership with Lloyds), cheque imaging, electronic bill payment even the adoption of digital wallets (PayPal), the notion that the role of technology and non-bank competition is something entirely new is simply false. This has been going on for a long time.

5. WEF Beyond Fintech report from this year: payments, insurance, deposits & lending, capital raising, investment management, market provisioning

6. Toronto Financial Services Alliance: Building Toronto into a Global Fintech Leader

7. Myth #2: Fintech operates outside the existing financial ecosystem
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Myth #2: Fintech operates outside the existing financial ecosystem
©2015 PayPal Inc. Confidential and proprietary.
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8. Myth #2: Fintech operates outside the existing financial ecosystem
Banks (and networks) are gatekeepers
Fintechs must collaborate with incumbents to operate
Obligations flow downstream to customers
Card Rules
PCI DSS
OSFI guidance, e.g B-10
Code of Conduct for the Credit & Debit Card Industry
Often coupled with the notion that fintech is new, is the that fintech is occurring outside the traditional system. The truth is that – perhaps with the exception of certain developing countries – fintech innovation is largely taking place in connection with the existing financial system in partnership with traditional financial institutions.
And, of course, banks themselves are investing billions into fintech, internally and through acquisition.
Some models seem to by-pass traditional financial structures.
Marketplace lending
Crowdfunding
Mobile money
Prepaid or closed loop debit cards
Bitcoin and other cryptocurrencies
However, even in these models, the traditional financial system is a key part of the process. Much of the capital for marketplace lenders comes from institutional investors. Crowdsourced funds are deposited in traditional financial institutions and so on. Bitcoin which does represent a more radical departure, has thus far had a minimal impact on the market.

9. Myth #3: Fintech is unregulated
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Heading: PayPal Sans Big Thin 37pt Subheading: PayPal Sans Big Light 18pt
Usage: Use this slide as a section divider to better organize chapters of content within a presentation.
Additionally, this slide can be used as a high impact quote or descriptor to reinforce content messaging.
Myth #3: Fintech is unregulated
©2015 PayPal Inc. Confidential and proprietary.
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10. Myth #3: Fintech is unregulated
Many new fintechs are unregulated; they can operate in Canada without setting up base here. The resulting regulatory gap makes it all the more important that Canadian consumers understand how fintechs operate. – Lucie Tedesco, Commissioner, FCAC
New tech often captures the attention of regulators. There is often an assumption that because technologies are novel, there is a regulatory gap.
But most of what fintech is about is improving the customer experience and partnering with the existing financial infrastructure to hold deposits, enable investments, etc.
Standalone innovations can be disruptive and force traditional systems to evolve, but it is through partnership with established financial services providers that fintechs are best able scale solutions. Which also means that much of the risk associated with financial services will remain with traditional institutions or be mitigated by the rules that apply to those institutions.

11. Myth #3: Fintech is unregulated
New tech often captures the attention of regulators. There is often an assumption that because technologies are novel, there is a regulatory gap.
But most of what fintech is about is improving the customer experience and partnering with the existing financial infrastructure to hold deposits, enable investments, etc.
Standalone innovations can be disruptive and force traditional systems to evolve, but it is through partnership with established financial services providers that fintechs are best able scale solutions. Which also means that much of the risk associated with financial services will remain with traditional institutions or be mitigated by the rules that apply to those institutions.
PayPal is subject to well over 100 domestic laws, plus laws with extraterritorial application and foreign laws which impact our global shared services.
PayPal is regulated as a bank in Europe, as a quasi-bank in Australia, and as a money transmitter in most other jurisdictions including the US and Canada

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