1. TransferWise: Disruptor or Disrupted
HEC Montreal
CSC Consulting
Olivier Cohen, Brandon Jacobs, Jessica Drolet, Richard Wallace

2. The Problems facing TransferWise
How can TransferWise:
Maintain its competitive edge and meet the challenges posed by new disruptive technologies
Become market leader in remittance industry
Achieve zero-fees

3. The Key Issues
1. Overcome concerns regarding money laundering and illegal activity through the platform
2. Manage emergence of blockchain technology eroding competitive advantage
3. Redefine nature of long-term relationship with established banks
4. Grow sustainably towards zero-transaction fee

4. TransferWise Going Forward
Strategy
1. Create joint innovation hub with AI and fintech firms to drive new technology development
2. Partner with select banks to take-over their remittance services
3. Licence tech breakthroughs to finance reduction of fees to near-zero
4. Partner with tap-to-pay providers

5. Internal / External Analysis
Strengths
Established reputation
Novel business model
Large client base
Attractive pricing
Fast transactions
Weaknesses
Reliance on banking relationships
Dip in profits
Security concerns
Links with Bank under scrutiny
Opportunities
Expansion to new markets
Partner with popular tech. and social media platforms
Threats
Regulatory concerns
Potential for fraudulent use
Blockchain Technology
TransferWise has high-potential for growth and market leadership, despite hurdles

6. Remittance Market Analysis
Threat of entrants – Med / Low
Incumbents already established
Banks and other institutions
Supplier Power - Low
Banks
Financial institution
Customer Power - High
Axed on convenience
Price sensitive
Secure and safe
Competition
Branks, Western Union, TransferWise
Threat of Substitutes – Med / High
Blockchain
Similar “halawa”-based technologies
Market still ripe for disruptors like TransferWise but also exposed to further disruption from blockchain

7. Alternatives
1. Partner with AI innovation hub and Fintech start-ups to develop new technologies to meet current challenges
Leverage partner expertise to develop new technology
Improve productivity internally
License tech. services to other companies as new revenue source to offer additional liquidity
2. Convert TransferWise to a new crypto currency leveraging latest blockchain
Currency will traded on crypto markets
TransferWise becomes digital wallet
Revenue through low transaction fees

8. Alternatives
3. Expand offering of financial services to finance zero-fee target
Apply for investment licensing in UK, EU, and USA
Leverage technology to enable Exchange-Traded Funds (ETF) investments
Use revenues to fund improvements in security and technology
4. Re-focus on large commercial clients
Offers high-volume accounts
Reduces risk of fraud
Different segment from blockchain

9. Decision Matrix Alternatives Reduce the risk of fraudulent activity
Mitigate threat from blockchain
Establish a new relationship with banking partners
Deliver progress towards zero-fees
1. Partnerships in AI and Fintech and leverage innovation Hub 3 4
2. Convert to blockchain technology 2
3. Offer new investment services 1
4. Re-focus on commercial clients

10. Decision Matrix Alternatives Reduce the risk of fraudulent activity
Mitigate threat from blockchain
Establish a new relationship with banking partners
Deliver progress towards zero-fees
1. Partnerships in AI and Fintech and leverage innovation Hub 3 4
2. Convert to blockchain technology 2
3. Offer new investment services 1
4. Re-focus on commercial clients

11. Decision Matrix Alternatives Reduce the risk of fraudulent activity
Mitigate threat from blockchain
Establish a new relationship with banking partners
Deliver progress towards zero-fees
1. Partnerships in AI and Fintech and leverage innovation Hub 3 4
2. Convert to blockchain technology 2
3. Offer new investment services 1
4. Re-focus on commercial clients

12. Decision Matrix Alternatives Reduce the risk of fraudulent activity
Mitigate threat from blockchain
Establish a new relationship with banking partners
Deliver progress towards zero-fees
1. Partnerships in AI and Fintech and leverage innovation Hub 3 4
2. Convert to blockchain technology 2
3. Offer new investment services 1
4. Re-focus on commercial clients

13. Decision Matrix Alternatives Reduce the risk of fraudulent activity
Mitigate threat from blockchain
Establish a new relationship with banking partners
Deliver progress towards zero-fees
1. Partnerships in AI and Fintech and leverage innovation Hub 3 4
2. Convert to blockchain technology 2
3. Offer new investment services 1
4. Re-focus on commercial clients 14 11 9 10

14. TransferWise Going Forward
Strategy
1. Create joint innovation hub with AI and fintech firms to drive new technology development
2. Partner with select banks to take-over their remittance services
3. Licence tech breakthroughs to finance reduction of fees to near-zero
4. Partner with tap-to-pay providers

15. 1. Developing the Innovation Hub
Strategic partnerships with select A.I. and Fintech firms in a joint innovation hub
Develop A.I. technologies to automate security checking of transactions
Increases productivity, lowers costs
Faster transactions
Develop new fintech programs to drive TransferWise platform innovation, reduce operational costs
Push towards zero-fees
Become market innovation leader
Push-back against blockchain

16. 2. Reshape Bank Partnerships
Target Select banks in operating countries for partnerships to handle all remittance services
Mutually beneficial
For TransferWise
Increase volume of customers
gain mainstream credibility
guaranteeing market share
For Banks
Increase attractiveness of their banking products
Long-term goal: monopolize remittance in banking sector

17. 3. Licensing Tech. Breakthroughs
Create additional revenue streams to finance zero-fees
Licensing system or sale to non-competitors
Open new division within TransferWise to license marketable technologies
Target fin-tech and financial services sectors
Large multi-nationals (airlines, oil & gas, mining, retail)
Provide additional liquidity for TransferWise operations

18. 4. Tap-to-Pay Partnerships
Expand services to point-of-sale transactions
Strategic partnerships with credit and digital wallet providers
Apple Pay
Interac/Cirrus
Visa/Mastercard
Back-end platform for their international transactions
Enables instant, low-fee international transactions for customers
The ultimate evolution of travellers cheques
Differentiates from blockchain cryptos through convenience and certainty

19. Alignment of 5 pillars and actions
Policy of 0% fee during emergencies
1.Price
Partnerships with reliable banks only
2.Trustworthiness
Increase by developing new technologies (innovation hub) and partnerships
3.Speed
From 50 countries to 150 countries
4.Coverage
Integrate into more channels (eg: Facetime, Skype, Whatsapp, Telegram, LinkedIn) and tap-to-pay
5.Convenience

20. Low-cost high impact marketing campaigns
Expats and diaspora
User-generated content “solving real customer problems” (contest + blogger outreach with cash transfer)
0% rate during emergency situations (natural disasters) + ~$2 donation to cause
On-campus activities and transparent ads on windows in high-education schools
Blog posts in top 20 languages
Sponsorships on business websites
Travelers
International students
Businesses, sole traders, freelancers

25. Risks Difficulty getting buy-in from banks
Mitigations
Difficulty getting buy-in from banks
Offering exclusivity in certain banks, emphasize differentiation from their competitors
Blockchain drives fees to zero before TransferWise can match
Diversified revenue streams through tech. licensing
Reticence from Tap-to-pay providers
Long-term plan to launch tap-to-pay wallet

26. Take-away Strategy Results  Clear path to zero fees
 Increase user base
 Diversified revenue streams
 Become market-leader in remittance
Strategy
1. Create joint innovation hub with AI and fintech firms to drive new technology development
2. Partner with select banks to take-over their remittance services
3. Licence tech breakthroughs to finance reduction of fees to near-zero
4. Partner with tap-to-pay providers

27. QUESTIONS