1. Presented to Mr Kaarmann and Mr Hinrikus Smurfit Digital Marketing
TransferWise
A Sustainable Disruptor
Presented to Mr Kaarmann and Mr Hinrikus
Smurfit Digital Marketing
David Madigan
Monika Ghita
Geoff O’Brien
Weiran He

2. Your challenge
How must TransferWise defend against the Blockchain threat and become the No.1 FX remittance provider globally?

3. Our recommendations First Second
Create a Digital Financial Ecosystem (named “Argent”)
Second
Hire key C-level executives in Compliance and IT Security
Third
Hire Consensys Blockchain Consulting to address Blockchain threat

4. Agenda Implementation Recommendation Analysis Weiran He Geoff O’Brien
Monika Ghita
Implementation
David Madigan
Agenda
Weiran He

5. Analysis Implementation Recommendation Analysis Geoff O’Brien
Monika Ghita
Implementation
David Madigan
Analysis

6. Banking Industry Global Outlook
Manufacturing Financial Services
Existing banks retain major complex financial regulation and risk
Lending & Deposit Taking
ROE 4-5%
Existing Incumbent Banks own relationship with Customers
High Cost to Serve
Customer Facing Financial Services
Digital Banks
Progressive Incumbents
Low cost to serve
High Digital capability
ROE 15-20%
Banks are under threat but have a role in future

7. Competitive Analysis – January 2019
TransferWise
Remittance Companies (e.g. Western Union)
Commercial Banks
Other Digital Banks (Revolut, CurrencyFair)
Blockchain
Price
Trust
Speed
Coverage
Convenience
IT Systems
Good
Medium
Bad
TransferWise must continue to build customer volume

8. “McKinsey Disruptive Model”
Profit
Clear
Detectable
Inevitable
New Normal
Disruptor
TransferWise
Profit point
Incumbent
Time

9. TransferWise Threats
KYC, AML and compliance with International Sanctions
Future Development of Blockchain capabilities
Reliance on banks to provide liquidity
TransferWise well positioned but must address threats

10. TransferWise Financials
TransferWise performing strongly versus Western Union

11. Recommendation Implementation Recommendation Analysis Geoff O’Brien
Monika Ghita
Implementation
David Madigan
Recommendation

12. Your Questions
Feasibility
Will you, TransferWise, be able to accomplish your mission?
Yes
Will TransferWise be able to replace incumbent banks in the mainstream remittance market?
Will banks remain TransferWise’s long-term strategic partners?
Will TransferWise create a sustainable business model?
Yes (but not alone)
Following our recommendations TransferWise will not be disrupted by Blockchain technology

13. Alternative strategies
1. Buy/Partner with a Blockchain company
2. Create a Digital Financial Ecosystem
3. Partner with Western Union
Technology is not capable to handle high volume transactions.
Partnerships are necessary to create a holistic ecosystem.
Difficult to attain because WU is a direct competitor.

14. Alternative strategies
Buy / Partner with a Blockchain Company
Create a Digital Financial Ecosystem
Partner with Western Union
Is it consistent with mission, vision and values?
Does it address competitive threat?
Does it help drive increased revenues?
Is it an optional customer solution?
What is the size of the opportunity?
Good
Medium
Bad
Creation of a Digital Financial Ecosystem is the best option for sustainable growth

15. Recommendations
1. Create a Digital Financial Ecosystem (called “Argent”)
2. Hire key C-level executives in Compliance and IT Security
3. Hire Consensys to address Blockchain threat
Application development ($2.5m development + $1m annually thereafter)
Dashboard based app hosted in AWS
APIs from partner providers will developed by each partner
Partnership negotiations
N26, Degiro, Nutmeg, Trussle, FundingCircle, Zopa
Head of Compliance from the NY Fed ($200k + equity)
Chief Information & Security Officer from PayPal ($175k + equity)
Consultancy engagement fee ($240k annually)
Global Ethereum blockchain expert with offices in New Jersey, Dublin and Hong Kong

16. Argent: The Digital Financial Ecosystem
TransferWise Remittance
PSD2
EU Regulation
Zopa
P2P lending - SME
N26
Online Bank
Funding Circle
P2P Lending - Personal
Argent
Degiro
Online Trading
Trussle
Mortgage Broker
Nutmeg
Investment & Pensions

17. Argent: The Digital Financial Ecosystem
Remittance
Bank Accounts
N26
Current Account
Online Trading
Investment & Pension
Mortgage
P2P Lending

18. Argent: The Digital Financial Ecosystem
My Bank Accounts
Current
Savings
1,000
2,000
3,000
Lloyds
HSBC
Barclays

19. Argent: The Digital Financial Ecosystem
Degiro – Online Trading
Equities
Buy
Sell
AAPL
1, $180
1, $181
JPM
1, $30 KO
1, $48
ETFs
Index Funds

20. Implementation Implementation Recommendation Analysis Geoff O’Brien
Monika Ghita
Implementation
David Madigan
Implementation

21. Implementation Timeline
Phase 1
Phase 2
Argent Rollout
Partnership agreement
Platform Development
Platform Rollout
Personnel
Hire CISO and Head of Compliance
Appoint Consensys
Acquisition / partnership?
Blockchain
US Financial Ecosystem
Partnership agreement
Platform Development
Platform Rollout
2019
2020
2021
2022

22. Financial Projections
Implies a valuation of $13bn based on 6x 2023 Net Income

23. Risks and contingencies
Difficulty sourcing ecosystem partners
Blockchain advanced quicker than expected
International AML and Compliance Issues
Security and System Resilience
Contingencies
Explore other options e.g (Trussle -> Habito, Degiro -> Schroders)
Constantly monitoring Blockchain market via Consensus engagement. Options include:
Acquisition
Blockchain partnership
In-house Blockchain development
Hire a head of compliance from the NY Fed offering competitive salary ($210k), share options and relocation package
3 Additional compliance staff
Hire a chief information and security officer from Paypal costing $175k 1 2 3 4
A variety of risks have been considered with appropriate contingencies

24. Smurfit Digital Marketing
TransferWise
No.1 FX Remittence Provider globally
Smurfit Digital Marketing
David Madigan
Monika Ghita
Geoff O’Brien
Weiran He