Us Fsi Reading The Global Payments Radar

Reading the global payments radar
Scanning for opportunities and potential

threats in the payments market
Ninth edition
“As some clients try to develop
cross-border strategies, Deloitte is
one of only a handful of firms with
truly global capabilities.”
Kennedy Consulting Research & Advisory
Kennedy Vanguard of cards and payments consulting providers1

Contents
Foreword 6
Assessing the lay of the land 7
Anticipating potential threats and identifying opportunities 8
Is your financial institution prepared? 9
Organized for your success 12
Spotlight on Deloitte's payment capabilities 14
Illustrative results, Deloitte's qualifications 26
Endnotes 29
Our global payments leadership 30
As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed
description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under
the rules and regulations of public accounting.
Deloitte provides audit, tax, consulting, and financial advisor services to public and private clients spanning multiple industries.
With a globally connected network of member firms in more than 140 countries, Deloitte brings world-class capabilities and deep
local experience to help clients succeed wherever they operate. Deloitte's approximately 169,000 professionals are committed to
becoming the standard of excellence.
Reading the global payments radar | Scanning for opportunities and potential threats in the payments market
Foreword
The Global Payments landscape is at a pivotal juncture: Economic recovery coupled with rapid innovation is redefining payments
as an engine for growth. Continued improvements in credit quality and encouraging employment numbers signal increased
demand for Payments related services and continue to further our optimism for growth for the industry. While rising interest
rates will continue to define the economic climate in the forthcoming months, it is imperative that leading issuers approach an
encouraging growth environment cautiously.
Innovation and structural transformation in the short and medium term will likely spell opportunity for incumbents, accompanied
by uncertainty and risk as disruptive marketplace offerings gain traction and mature.
As plastic gives way to mobile payments, consumer expectations and the roles played by traditional industry leaders are changing
precipitously. The ubiquity of advanced mobile devices coupled with increased transaction speeds has fueled the popularity of
mobile payment methods and cryptocurrencies, and reshaped both consumer and merchant demands, while introducing new
non-bank competitors, further fragmenting the space. Incumbent issuers, while under pressure, are uniquely positioned to play a
defining role in the future of new payment channels as technology continues to drive disruption and growth.
New actors and competitors will continue to drive a wedge between Issuers and Merchants. While opportunities and risks
accompany decisions to compete or collaborate, traditional banking institutions should ensure customer relevance be maintained
by turning to solutions that focus on helping merchants grow sales, offer instant credit to qualified consumers, and exploit the
availability of predictive, real-time analytics using payment and bank-owned data. Traditional providers of payments products and
services must evolve to serve this new era and capitalize on the opportunity to develop stronger merchant and consumer value
propositions.
Imminent structural transformation to the global payments infrastructure points to the growing maturity and acceptance of
innovation within the space, as governments around the world seek to enable real-time payment processing. The US Federal
Reserve continues to signal it will facilitate the industry’s move to an efficient and broadly accessible payments systems as part
of a vital and strategic priority for the US economy, reaffirming the need for incumbents and new entrants to question proven
business models and product offerings, in light of disruption that is decidedly here to stay.
Deloitte has been at the forefront of these changes, building strategies and some of the most advanced, innovative mobile and
analytic solutions. Over the past 10 years we have led the industry as a trusted advisor to nearly all of the largest stakeholders
including issuers, merchants, acquirers, networks, and processors.
We are pleased that Kennedy Consulting Research & Advisory named Deloitte the global leader in Cards & Payments based on
breadth and depth of consulting capabilities in their Consulting to the Banking Sector: Cards & Payments report. Deloitte also
ranked #1 for Cards & Payments Consulting globally based on revenue and market share.
On behalf of the payments leaders from each of the markets our network of member firms represents, we hope you find these
insights and our Payments Radar helpful as you navigate through the change, deciphering the threats from the opportunities.
Yours truly,
Brian Shniderman
6
Assessing the lay of

the land
Once considered a very stable industry,
many payments players are facing a period
The pace and scope of change may be very
significant. For those who are prepared to
Once considered a
of significant change. respond appropriately, the rewards could
be equally significant. The race will go to the
very stable industry,
The short-term revenue picture for the
payments industry, in particular credit card
nimble and well informed — the leaders
and fast followers with the information and
many payments
issuing banks, is unclear. On the one hand,
card issuer revenue is increasing due to
insights to move quickly on smart, well-
executed strategies.
players are facing
improvements in consumer credit quality
and decreasing consumer charge-offs, As always, Deloitte will be there to help our
a period of
both of which are driving improvements in clients in their efforts to anticipate trends, significant change.
revenue and net income for issuers. follow the right opportunities, mitigate risks,
and execute effectively on strategies that
However, there are obstacles ahead and are well conceived.
uncertain market dynamics that could
derail a return to historically “normal”
revenue performance: stagnant or
rising unemployment, interchange fee,
commoditization or regulation, and
systemic market disruption, such as
consumer de-leveraging, or shifting to
other payment platforms.2
With shifts in the traditional payments

market, including economic and credit
downturns forcing voluntary and involuntary
migration across products, converging
industries, the entry of nontraditional
competitors, and emerging new models
and innovations, the field has become more
active and uncertain, with no clear path to
leadership and no sure bets.
7
Anticipating potential
threats and identifying
opportunities
In recent months, we have found our
clients to be highly uncertain, and largely
unprepared, to address the current
environment. In any uncertain market,
properly anticipating trends is a prerequisite
to planning an effective response strategy.
The Deloitte payments team actively tracks,
evaluates, and prioritizes payments industry
trends using more than 25 business and
technology elements and a database
of market factors. Since 2007, we have
published a series of articles that address
the existing challenge of the global retail
payments environment. We prioritize trends
based on the following:
• Timing and assessed urgency associated

with each trend
• Significance in expected volume, velocity,
and revenue impact
• Degree to which strategic responses to
trends are actionable and executable
• Trends that drive opportunity ratings high
and fit with clients’ capabilities (the top 25
payments companies)
• Trends that represent significant downside
risk, if not addressed
Based on our most recent analyses, we see

several trends that are affecting the global
market today and beginning to define the
global payments industry of tomorrow.
8
Is your institution prepared?

Over the next 18 months, we anticipate the following trends will be among the most significant in defining and changing the payments industry.
Issuers Merchants
Compelling new payments alternatives and Innovative entrants to the payments ecosystem
e-wallets like Venmo, ApplePay, Alipay and Ripple make up 35% of all new Financial Technology firms
are emerging from startups and non-bank and are changing not only the way Merchants
competitors, upending traditional payments use technology to process payments but also the
ecosystem and experiences. Financial institutions ways in which they drive customer engagement
are recognizing the need to own or enable easy and ultimately satisfaction. Contactless
integration with new e-wallets, cryptocurrencies, Intermediation of technologies such as Apple Pay, Google Wallet,
and mobile solutions which are nimble and offer digital and Samsung Wallet, and Android Pay in-store as
creative payment options to remain competitive alternative payments well as frictionless initiatives out of store will
in the face of emerging alternative threats. The continue to gain traction. As a result Merchants
migration entails digital products, channels, will seek solutions offering these innovative
currencies, identities, and risks and requires functionalities in order to further utilize Payments
increasing cooperation between FinTechs and as a value-add, enhancing customer satisfaction
traditional players to bring seamless, resilient and retention.
solutions to market.
Consolidation and optimization of currently Increased Merchant adoption of Cloud and

divergent payments processes and systems Mobile enabled full-service Software solutions is
may be a major emphasis as banks seek cost radically changing how Merchants engage with
containment, as well as greater product flexibility customers and is driving down processing costs.
and revenue enhancement. Forward-thinking As merchant-facing payments services move from
Payments consolidation
payments providers will likely look to establish simple payment processing to true payments,
an enterprise payments system — leveraging
imperative, optimization, analytics and POS solutions, we expect additional
technologies to establish payments hubs — which and “hubs” consolidation with upstream players, additional
may drive down processing costs, help create optimization of the services offered, as well as
shared services, and facilitate the development of reduced costs for Merchants. Wallet consolidation
new payments products. is also expected as result of maturing customer
and merchant expectations.
A move to real-time systems globally has The mass movement to real-time payments
contributed to an environment in which is quickly gaining traction both globally (35
consumers, merchants, and financial institutions countries have adopted a form of real-time
expect ability to transact securely. The new processing and settlement) and more
standard is driving change for traditional FOPs, recently in the United States. As NACHA and
credit, debit, prepaid, etc. as consumers expect regulatory priorities evolve (such as the Fed’s
faster settlement, notifications, and consolidated recommendation to accelerate adoption of
reporting. Growing ubiquity of smart devices, Real-time, faster, secure ISO 20022 in the US), Merchants have come to
e-commerce, as well as innovation in P2P are also payments globally expect both faster processing and settlement
driving adoption of Real Time Payments. speeds, further accelerating the move to real-
time payments. Merchants stand to benefit from
faster payment execution and settlement through
optimized liquidity as real-time payments become
reality. Further, Merchants will continue to
prioritize Payment Rails offering not only greater
speed but also efficiency in the wake of change.
9
Issuers Merchants
Acquirers are positioning themselves to Acquirers will continue to look downstream

take a dominant role in emerging global B2B to remain competitive and offer value-add
e-payments in high-growth verticals. New services beyond payment processing, benefitting
gateways are emerging to fill unmet needs across Merchants in the form of lower costs and
untapped industries, leading to increased ease enhanced product offerings. Acquirers, in pursuit
in conducting cross-border and cross-industry of new, typically customer facing, disruptors,
Leading positions in
transactions. This will be done by removing will seek to offer POS and cloud enabled, omni-
hurdles associated with international B2B
emerging global channel solutions, analytics capabilities and other
payments, reducing costs, and simplifying payments and verticals downstream services in order to retain market
processes that, combined, enable members of share and advantageous pricing.
the value chain to better communicate, exchange
data, and accelerate growth. Digital payments
also enable far greater metadata to be sent along
with the payment.
Banks proactively apply analytic insight to find As merchant-facing payment solutions move
growth opportunities, build deep relationships, from simple, terminal based, payment processing
and link goals to front line performance. offerings to true software enabled solutions,
Integrating unstructured, streaming data Merchants of all sizes will increasingly benefit
generated by innovators provides the opportunity from increased analytics capabilities and as
to extend the analytics to enhance the customer a result, derive enhanced customer insights
Evolving role of
experience and proactively address real-time resulting ultimately in increased customer loyalty.
risks. This can feed robotics to improve efficiency
Predictive Analytics Vertically integrated POS/Payment Processor
and effectiveness of processes and campaigns. and Robotics solutions will also benefit from the additional data
Unstructured data also improves campaigns amassed and utilize it as a means to generate
by addressing risk in real-time. Frictionless more transactions via its vendors.
experiences will evolve, driven by data and
behind the scenes processing, linking behavioral
economics and trust for ‘app-less’ experiences.
The significant industry changes and the As new entrants aggressively seek Merchant
underlying challenges brought on by financial relationships, we expect lower processing costs
and regulatory reform and nonbank competition for Merchants and, as traditional terminal-based
will likely continue to feed the need for scale and providers purchase or partner with upstream
innovation in the drive toward healthy growth. players and as Issuers/acquirers seek new ways to
Low valuations and appetite from Private equity engage with Merchants downstream, we expect
firms, large incumbents and new entrants alike Continued M&A and private margin compression yielding lower processing
will continue to play a significant role, changing equity influence creates rates for Merchants as a result.
the dynamics in the industry, and infusing capital energy, capital, and
and energy into the system, while also introducing new threats in
new types of risk.
payments markets
Also, as Middle Market issuers’ needs change in
light of the evolving payments landscape, large
Issuer banks will seek to leverage their position
in the market to generate additional Payments
revenue via Agent Bank models.
As payments become increasingly seamless and As fraud losses and data breaches continue to
agile across channels, security and authentication rise, Security will remain a priority for Merchants
issues related to identity verification become (revenue lost due to fraud up 33%). Data breaches
further complicated. Aware of the growing are especially costly at the Merchant level, at
threats, industry players are investing in Becoming resilient and which trust is imperative in ensuring customer
EMV, biometrics, and real-time analytics to insusceptible to security threats loyalty and retention as well as in maintaining
drive innovation in fraud detection. Issuers, brand power. While EMV and other hardware
in particular, are firmly establishing analytics upgrades will continue to ensure more secure
techniques as part of a multilayered approach to payments, Merchants will look to their POS
combat data breaches and mitigate risk. software solutions to further mitigate risk.
10
Issuers Merchants
Interoperability and Consumerization will likely be As innovative, software driven entrants continue
the primary focus areas of an evolving business to focus on engaging Merchants, Merchants with
payments ecosystem. Leaders will create B2B B2B and G2B needs stand to benefit greatly,
experiences that resemble B2C across multiple not only from faster and more secure digitally
channels and move more aggressively towards Innovation in enabled and optimized payment processing but
the virtual payments space as industries and also from reduced fees as increased competition
Consumer Payments
transactions shift away from paper products. in the space continues to bring transparency to
Businesses and financial institutions will also to transform the pricing.
recognize the flexibility virtual payment solutions B2B Landscape
offer, including opportunities to address payment
pain points between various actors along the
payments value chain, and will gradually migrate
towards electronic payment forms.
Merchants moving towards Mobile POS, Mobile Merchants moving towards Mobile POS, Mobile
Payments, and Contactless Solutions will put Payments, and Contactless Solutions will put
additional strain on Issuers. As Merchants move The evolving The evolving additional strain on Issuers. As Merchants move
to systems which prioritize speed and ease of to systems which prioritize speed and ease of
relationship relationship
use such as rapid in-app Mobile Payments or use such as rapid in-app Mobile Payments or
contactless-enabled POS, customers are less
between Issuers between Issuers contactless-enabled POS, customers are less
likely to pay attention to their card Issuer (result and Merchants and Merchants likely to pay attention to their card Issuer (result
of rapid growth of ‘Invisible Payments’). Going creates an empowers of rapid growth of ‘Invisible Payments’). Going
forward, Issuers will look for new ways to build imperative Merchants to forward, we will likely see Issuer-led incentive
and incentivize customer loyalty which will for Merchant engage upstream programs geared towards Merchants to maintain
undoubtedly entail courting Merchants directly. Issuer brand and volume growth.
engagement and and prioritize
brand optimization value
Banks and leading financial institutions, such While the popularity of Bitcoin wanes, Merchant
as Standard Chartered, Barclays, UBS, Citibank, adoption of POS or Payment Processor solutions
and Deutsche Bank, are increasingly looking to enabling Cryptocurrency acceptance will stabilize
adopt blockchain technology to help streamline and only gain traction for certain Card Not
costly and risky cross-border transactions, Present Merchants. However, as fraud liability
Moving from experimentation
reduce operating expenses, increase visibility and increasingly shifts to Merchants in light of the
transparency across multiple parties, and secure
to implementation of national adoption of EMV, we foresee that
real-time settlements. Issuers are recognizing blockchain technology Payment Processors, Gateways and POS solutions
the benefits of distributed ledgers in rendering catering to Merchants will seek to emulate Issuers
payments processes more efficient, and are and financial institutions and develop blockchain
shifting from cautious interest to exploratory enabled solutions
proofs of concept.
11
Organized for your success:

Recognized by industry analysts as the leading global
financial services industry consulting organization for
our cross-border execution
Our global footprint in payments
Deloitte's Payments practice extends far beyond
Canada
our US borders. We serve clients that have
global reach and have pinpointed representative
countries where we have a footprint.
Increasingly, the opportunities and threats in

the payments industry transcend borders. As a
result, it has become essential that our clients
have an understanding of the inter and intra-
country implications of their actions (or in many
cases inactions). Recognized by industry analysts
as the leading global financial services industry
consulting organization for our cross-border
execution, Deloitte's Global Payments practice USA
brings deep market insights to our clients' most
important projects, and leverages Deloitte
member firms' 210,000 dedicated professionals
in more than 150 countries.
Mexico
Collective member firms

collaborated to help
four different countries
with their real-time,
faster, and secure
payments initiatives
Brazil
Representative joint efforts between Deloitte and its

network of member firms around the globe
Canada and the United States worked together to Brazil and the United States worked together
execute a postmerger integration and PMO for a to introduce a combined social networking
major processing platform migration. and mobile platform to issuers and large
financial institutions.
United States teamed with a Global Merchant
to implement a flexible and agile way for United Kingdom and the United States teams
rolling out and adopting alternate payments, establishing an e-wallet license and go-to-market
including: Alipay globally, PayPal in Europe, plan for issuer and network. Australia and the United States worked together
and Apple Pay in the US. to assist a leading financial services organization
South Korea and the United States teamed to to develop a target operating model, and devise
provide mobile payments strategy for a global the product, market and technology strategy to
Mexico and the United States worked together to
manufacturer and a large automobile company. transform the organization’s business based on
implement a merchant acquiring operation and
advise on a commercial prepaid strategy for joint the changing financial services landscape.
China and the United States developed a mobile
ventures and networks.
payments platform and joint ventures for networks.
12
Netherlands
Sweden
UK
Belgium
South Korea
China
Indonesia
India
Spain
Australia
Singapore
South
EAC Africa
13
Spotlight on Deloitte’s
payments capabilities
Mobile financial services and payments
Deloitte’s “Mobile Financial Services and Payments” offering Deloitte has the full life cycle experience and mobile payments
consists of end-to-end capabilities that very few can offer. and processing capabilities. We also have one of the most fully
Deloitte has mapped the market demand to our capabilities integrated global teams of mobile practitioners across more
and drafted a set of propositions as listed below: than 15 countries. The organization, through its network of
member firms, has an internal global collaboration call bringing
•• Mobile Financial Services (MFS) Integrated Market Strategy
practitioners from these countries together, allowing them to
•• MFS Operating Model and Organizational Design share ideas and collaborate on client issues. These collaboration
calls also support various client projects by sharing best
•• MFS Channel Integration, Product and Customer
practices from a number of countries across the globe.
Experience Design
•• MFS Infrastructure and Technology Integration Deloitte has a myriad of white papers and articles on mobile
payments underway. White papers, such as “Cell me the money”
•• MFS Risk Management and Security Plan
have been widely acclaimed and been used by a number
of organizations across the globe to understand the mobile
payments landscape.
Deloitte has one of the largest, most We have provided services across the full
focused, and successful global payments spectrum of payments-specific projects,
teams in the industry. covering virtually every major payments
function and instrument.
•• We attract and retain highly talented
senior leaders from top banks, card We have team members specializing in
companies, and leading strategy, strategy, operations, and implementation
operations, and IT consulting firms. and execution, which distinguishes us
from the competition for delivering
•• Our ability to combine consulting, tax,
executable strategy.
risk, and audit capabilities enables us
to incorporate in our service offerings,
We have effectively delivered payments-
analysis and perspectives of payments
related services for clients across the
issues rarely addressed by our
transaction activity chain, including:
competition. For example:
–– Tax implications to major card •• Most of the top 10 retail banks (based on
portfolio acquisitions DDA Net Interest Margin)
–– Risk analysis associated with new •• Most of the top payments processors
payments regulatory changes
•• Eight of the top 10 card issuers and two
–– Pricing implications from new
of the top-three debit card issuers
market entrants
14
•• Three major credit card networks The outcome can provide concrete results management, transaction processing,
within an implementation plan that reflects transaction support, and customer life
•• One of the largest debit card processing a clear set of priorities. cycle management.
networks and one of the largest third-
party debit card transaction processors In a recent application of the methodology, Deloitte’s payments hub implementation
Deloitte conducted an innovation scan and methodology introduces a highly
Deloitte Tax LLP and affiliates in Latin developed a prototype for consumers and flexible, services-based approach for
America work together to design and merchants to design and bid on their own consolidation and incrementally developing
implement a tax optimized business model highly relevant, dynamic affinity programs payment hubs. In a recent application
for the mobile payments joint venture enabled by social networking. We refer to of the payments hub implementation
between a global payments, a technology this as Social Network Affinity Programs methodology, Deloitte helped the client to
company and a global integrated (SNAP) Marketing. develop a detailed technical architecture
telecommunications operator. and road map for implementing a large,
SNAP Marketing is a way to use social global, multicurrency B2B payments hub
Deloitte is a dominant leader in serving networking sites and data, together with supporting card, Automated Clearing
the consumer business industry; as untapped consumer affinities, to expand House (ACH), wire and check-based
such, many of the largest US merchants and evolve card portfolios. It can potentially payments. A phase-based implementation
served by the payments industry are drive increased card member spend road map resulted in revenue generation
Deloitte clients. Through our global reach and new accounts by taking advantage events virtually every six months.
and collaborations, we have developed of special interest groups, allowing
firsthand experience through interviews consumers to create their own affinity Securing an online
with overseas merchants and gained programs. Simultaneously, it offers a way payments environment
insight on processing systems, payments for merchants to compete for customers, While the world continues to embrace
preferences, and trends in foreign markets. further driving incremental spend the convenience of online transactions,
through customized rewards to targeted
Third-party recognition
Mobile Commerce Daily recognized Deloitte
consumers.
Deloitte has one
& Touche LLP as the Mobile Commerce
Researcher of the Year.3
Implementing enterprise
payments hubs
of the largest,
Kennedy Consulting Research & Advisory
In the current regulatory environment, most focused, and
many of our financial services clients are
recognized Deloitte as the largest global
financial services consulting provider based
experiencing margin pressures related successful global
to their payments functions. The existing
on revenue.4 silos-based payment systems result in high payments teams
cost of operations due to duplication of
Turning payments innovation into an functionalities and services across different in the industry.
executable strategy payments instruments and products.
Innovation in the post-recession and In this scenario, our clients are looking
new, challenging regulatory environment to leverage significant cost benefits by
is one of the keys to many payments consolidating these diverse systems.
organizations’ growth plans. Determining
that the innovations can be executed is The Enterprise Payments Hub is a
equally important as resources are limited demonstrated solution to alleviate these
and should be effectively put to use. duplications and cost pressure challenges.
It consists of a centralized infrastructure
Deloitte’s payments innovation capable of processing multiple payment
methodology introduces a highly flexible instruments, providing efficiency, flexibility,
approach for identifying and creating and a single customer view. The solution
strategic options that can address the removes duplicate payment processing
known, and help anticipate and set in functions through the use of a central
place actions to address the unknown. set of services for channel interface
15
the level of security involving those Payments analytics — leveraging connectedness and technology advances
transactions has struggled to keep up, Payments Innovation and Increased Consumer Enablement will transform consumer and
leaving customers at risk. merchant behavior as Technology and Analytics advances enable financial services providers
to drive competitive advantage. Our Practice focuses on leading practices to separate
Many of the authentication products analytics hype from reality.
and systems currently in place and
available do not provide an independent
mechanism for customers to manage
Customer payments analytics of the future
and control their identity. For example,
in a typical username/password online
banking environment, a customer’s “secret” What can issuers do to understand How does a payments provider
(e.g., password) can be compromised by 'default payment' digital behaviors use real-time transaction flow
someone using a “fake” bank website to and drive growth? analysis to benefit merchants
capture and subsequently reuse their and consumers?
confidential information.
In an effort to secure the online What happens when a bank is What opportunities do real-time
environment, Deloitte Australia and unable to identify a new customers' fraud, credit risk, and marketing
Australian-based Emue Technologies needs preemptively? models provide?
have pioneered and patented the concept
of “mutual authentication” for secure
access to remote services. This “mutual
authentication” is designed to give both
the service provider (e.g., bank) and the
Separating myths from realities of payments analytics enables businesses to
customer an opportunity to identify each
quickly deliver insights/value.
other before initiating a transaction.
Unlike other one-way authentication
devices, this solution can be used across Myth Reality
multiple remote channels (e.g., telephone,
Cognitive technologies mimic the Cognitive is narrow artificial
web, Internet shopping, corporate VPN
human brain/think like humans intelligence designed for specific
systems), which makes it attractive from
do, thereby replacing need for use cases. Seamless human
a commercial perspective for issuers who
Human — Computer Interaction computer interaction is needed
not only want to prevent fraud, but also
want to offer an integrated approach to
authentication using a single platform. Collaborating with vendors/
Updated privacy regs and
innovators provides a method
consumer perceptions stymie
While building this concept, the developers for privacy compliant offers,
transaction analytics innovation
also considered customer convenience — transaction analysis, and insight
resulting in its proprietary software being
integrated into cell phones and credit cards.
New techniques learn from
Analytics techniques perform
experience, so payments firms
best when there is very good
can streamline decision making
data quality available
without waiting for perfect data
16
Deloitte’s Consumer Protection Center Can risk and compliance coexist with consumer’s finger touches the download
In the increasingly competitive payments innovation in mobile payments? button on the screen of a handheld device.
environment, banks need to provide a Innovation in mobile payments takes many Such a new mobile payment app could
differentiated customer experience to forms. At the local grocery store, “app- provide consumers with confidence in the
compete and meet growth objectives. heads” try to create ways to eliminate the end product and, most importantly, the
Due to regulatory requirements, many register all together. Car manufacturers safety of their data from the get-go.
institutions have invested in compliance and dream of ways to link service and car
complaint management technology. Deloitte owners’ bank accounts. Health care Risk and compliance in mobile payments
offers the Consumer Protection Center (CPC) providers consider ways to store records innovation should not be an afterthought;
to enhance those investments by capturing, in the cloud so customers can access their rather they should become part of the
analyzing, and acting upon complaint records through their handheld devices. innovation process. Watchdogs and
data to support compliance, customer Toll payment systems noodle with how to innovators are the new yin and yang of the
experience, operational risk management, make the payment of the toll easier and mobile payments industry.
and regulatory reporting. less reliant on the plastic pass in a
driver’s windshield. Developing the next generation
Specific analytical use cases start with of loyalty platforms
processes designed to meet new data Yet, while innovators think about ways to Current loyalty programs are inflexible,
aggregation and reporting requirements enhance existing or create new products leaving stakeholders frustrated and seeking
in order to mine the data and apply it to and services, consumers remain wary and ways to optimize their relationships.
generate a tangible return through concrete worry about their personal data being Emerging mobile and customer analytics
actions. Sample complaint use cases include: compromised. And regulators charged with capabilities present an opportunity to
protecting consumers continue to develop redefine the loyalty rewards experience.
•• Identifying repeat callers and escalated and refine rules and regulations that aim Deloitte has combined its Payments
complaints to protect an individual’s personal and practice’s product innovation and
•• Differentiating inquiries from complaints financial information. technology development capabilities to
design a groundbreaking new rewards
•• Measuring how complaint handling affects Faced with the dilemma of complying with redemption platform. This platform utilizes
future customer loyalty and satisfaction consumer protection regulations and predictive models to deliver targeted
•• Providing an early warning system of mitigating risk throughout the payments merchant offers through an innovative,
an increase in complaint volume or life cycle, it may seem as though risk social network-linked mobile application.
potential risk management and innovation in the
mobile payments world are doomed Deloitte’s rewards redemption platform
Sample use cases for applying to be mutually exclusive. benefits loyalty program stakeholders
complaint analysis in improving customer by enhancing the customer reward
experience include: Not so. Innovation forged in conjunction redemption experience:
with risk management may result in a
•• Applying regulatory text analytics to more symbiotic relationship that could produce •• Consumers: Analytics provide targeted,
accurately quantify the voice of customer innovative products and services that relevant offers that address consumers’
benefit from the application of a compliance actual wishes and needs.
•• Leveraging geospatial analytics
and risk lens. Involving the “watchdogs” •• Merchants: Targeted offers allow
frameworks to optimize channel
in compliance and risk in the innovation merchants to allocate marketing spend
distribution
process may eliminate having to fix products and enhance repeat purchases.
•• Measuring the impact of fraud, dispute, on the fly after they’ve been launched.
and holds on customer behavior •• Reward Issuers: Enhanced customer
Coupling the actions of developers and experience and improved point utility
•• Measuring churn by complaint category supports card loyalty and increases
innovators with compliance and risk
executives could prove a competitive rewards points turnover.
advantage. Working together, they could
enhance new products with controls that
could help mitigate risk. Their common goal
could focus not only on creating the “killer
app” but also could aim to avoid compliance
and risk pitfalls — before the first
17
Enter the blockchain — Decentralizing transacts with another party, information do not typically preserve the identities of the
payments for faster, safer, and cheaper about this transaction is checked against parties nor the transaction data, only the
transactions previous entries in the blockchain, proof of the transaction existence.
Cryptocurrencies’ underlying technology, preventing fraud and securely ‘hardening’
blockchain, may be the phenomenon’s the chain. Irreversibility: A blockchain contains
lasting innovation that will revolutionize the certain and verifiable record of every single
payments landscape. Blockchain technology The transformative potential transaction ever made. This prevents double
enables the transformation of a typical bank of blockchain: spending, fraud, abuse and manipulation
facilitated ledger system into a distributed Near real time: Blockchain technology of transactions. It presents challenges to
ledger system, making value transfer enables the near real time settlement of provide charge back capabilities but smart
and settlement more transparent, faster, recorded transactions, removing friction, contracts are addressing this.
cheaper, and safer. reducing risk and thus cost.
Censorship resistant: Work has been
Blockchain technology is a digital ledger No intermediary: Blockchain technology performed in crypto economics in order to
system that record transactions in an is based on cryptographic proof instead of ensure that blockchains continue producing
immutable way and is securely shared trust provided by a third party, allowing any new blocks and that blocks are not being
across all established parties. In a public two parties to transact directly. reverted or altered.
blockchain, everyone is able to transfer
and view the transaction records; in a Distributed ledger: The peer-to-peer
private, or permissioned, blockchain, only distributed network records a public history
the authorized parties are able to perform of transactions. Blockchain technology is
and view transactions. Every time one party distributed and highly available. Blockchains
18
Deloitte’s blockchain offering

Deloitte has been applying and operationalizing strategies for implementing blockchain for its clients for years. The following infographic
breaks down Deloitte’s blockchain offerings on a global scale.
1 Innovation and ideation

Strategy development 2
•• We identify relevant use cases to harvest the
benefits of blockchain technologies •• We lead you to define “where to play and
how to win”
•• Our thought leadership, developed in conjunction
with our ecosystem of innovation and blockchain •• We drive business, technology, integration
companies, enables you to make sense of the broad and talent strategy
innovation landscape •• We develop strategies to pilot and implement
•• We track over 200 blockchain companies blockchain based solutions
•• We define an iterative and flexible approach
to match the rapid changes in the ecosystem
4 Product development Prototyping 3

•• We mobilize our global practitioners to your •• We accelerate prototyping by using our existing
organization to re-engineer business processes or technology capabilities and industry experience
design new ones
•• We have prototypes up and running: Digital Bank,
•• We bring our broad set of services, across Loyalty & Rewards, and Smart Identity
compliance, technology, talent, operations and tax,
•• We have over 20 prototypes in development
to effectively integrate your blockchain solution
•• We deliver as one team in collaboration with

external companies
23 600+
Industries where we Global delivery network with Practitioners in our Ecosystem of technology
have deep business 9 development teams blockchain community and innovation companies
process knowledge from 40 countries (subset above)
19
Deloitte’s blockchain framework

Deloitte’s blockchain framework serves as a guide for organizations interested in utilizing blockchain technology. It can help guide decision
making by answering four key questions: when should organizations initiate blockchain pilots? How should they design the use cases?
When should they strengthen the system through smart contracts? Should they implement permissioned, permission-less, or consortium
blockchains? For organizations new to technology, the guided four-step process simplifies a complex, rapidly evolving field into a series of
discrete decisions.
Initiate Design Strengthen Implement
1. Do pre-conditions 2. Which applications 3. Do we need to 4. What blockchain will

for using blockchain are relevant for us? enforce contracts use to implement our
technology exist? automatically? solution?
•• Multiple parties generate Permissionless blockchain

transactions that change Increase trust through for interoperability, open
information in a shared smart contracts innovation, enhanced
repository Parties rely on contracts security, and access
•• Parties need to trust that that are automatically to greater, distributed
transactions are valid enforced when pre- computing power to verify
determined conditions transactions through proof-
•• Intermediaries are are met. of-work. Public blockchains
inefficient or not trusted currently handle fewer
as arbiters of truth Transfer value transactions per second.
•• Enhanced security is Parties buy, sell, and transfer values without
an intermediary (e.g., medical claims data, Permissioned or
needed to ensure integrity
cryptocurrency payments, intellectual consortium blockchain for
of the system
property, etc.) restricted access, authorized
If these conditions are not innovation, and greater
met, or are only partially Transfer and authenticate information number of transactions per
met, a standard database or Parties use the distributed ledger to validate whether data is second, which are verified
other solution may be more valid. (Note: this requires some trust that data is accurately through proof-of-stake.
suitable. stored).
20
Cross-border payments and blockchain •• Frictionless — Paperless front-end; Deloitte has developed a proof of
Blockchain technology stands to Competitive rates delivered by concept and accelerators to facilitate
fundamentally disrupt cross-border pathfinding algorithms cross-border payments over blockchain
payments and preliminary applications platforms. Applicable use cases include:
•• Immutable — Tamper-resident
include the following benefits: B2B Wholesale/Supplier Payments and
record creates a single source of truth
International Remittances. Deloitte’s has
•• Quick — Complete payments in near- for reporting
partnered with existing blockchain platforms
real time •• Transparent — Provide end-to-end for enhanced integration, such
•• Cheap — Reduce network costs for visibility of fund and ownership as Stellar and Ripple.
transactions to near zero (measured in •• Secure — Protected by cryptography
micro-cents) See below for a sample of Deloitte’s
and multi-key authorization
Cross-Border prototype in action:
•• Data rich — Enable sharing rich
transaction data and sender/receiver
information for AML checks
Customer-to-customer payment: Cross-border
Customer journey
Enter Select Confirm Receive

payment amount recipient transaction payment
Enablers
Federation FX rate Information Encryption/ Distributed Notification

lookup pathfinding handshake security ledger and receipt
Resolve recipient Find the most Share rich data Secure transactions Reach consensus Notify recipient
information based optimal FX (e.g., invoice number, using public-private and confirm of incoming
on recipient’s rate available terms) and sender/ key cryptography transactions on the transaction and
unique address on network receiver information distributed ledger post payment to
on blockchain from pre-selected between recipient account
network providers transacting banks
to pre-authorize
transactions
21
So what’s next? The Digital Bank’s design operates under The Digital Bank radically transforms
Blockchain technology is poised to have a core set of design principles, with an the relationship between people and
an impact across industries, not just emphasis on simplicity, including: money, relying on a customer-centric user
payments, as companies are discovering experience, and nimble architecture in
innovative ways to leverage the technology •• Design for “usefulness: Design principles anticipation of a radically changing industry.
to improve operations. Blockchain that not only ensure quality but also
technology is still relatively new, but it has deliver products, services, processes and See below for a sample of Deloitte’s Digital
already demonstrated the potential to help functionality useful to both the customer Bank Prototype offering in action:
businesses provide faster, cheaper, safer and the bank. Remove complexity and
and more reliable transactions and it will “process waste”.
Currency search Account home
likely play an increasingly important role in
•• Digitally enabled: Embrace recent
the evolution of the payments landscape.
technology advancements (web, social,
video, public cloud, mobile and modern
Deloitte Digital Bank
core componentized banking platforms)
Digital banking is about getting back to
to deliver an improved anywhere anytime
basics, connecting people and money to
customer take-on and service through an
make life happen,
automated self-service digital experience.
Our Digital Bank solution is about •• Banking anywhere, anytime: Fully

delivering the ‘art of the possible’ through a automated acquisition, service and closure
forward looking, customer-focused vision. processes to improve cycle times, drive
It is a scalable and high-performing core down operational costs, and improve
account and digital identity platform that overall effectiveness and usefulness.
can significantly reduce cost of delivery, Ability for instant/ Reimagining a banking
micro-cost of cross “account” to be simple
improve customer experience, enable Payments processing is core to the design of boarder payments and intuitive
a future digital-only bank, and provide the Digital Bank, especially around:
flexibility for the future. Deloitte’s Digital
Bank offers proof of concepts, prototyping, •• Performance and scalability: Efficient Recipient search Voucher in wallet
and product development capabilities. scalability is essential for competing in
today’s digital environment. The Digital Your Wallet +
Why a digital bank? Bank provides effortless and rapid Credit card
Rewards credit card

The culmination of a number of internal and scalability without an exponential increase
external pressures are driving the need for a in cost
digital bank, including:
•• Frictionless processing: The Digital Bank
allows for efficient processing in light of its
•• Customers have become more
seamless User Interface, removing friction Passes/Rewards +
sophisticated with their acquisition and Grocery store

from each transaction
use of financial service products Hotel loyalty program
•• Automation: Fully automated acquisition,

Preferred Airline Rewards
•• Regulatory changes have opened markets Transportation pass

service, and closure processes to improve
and opportunities (e.g. access to payment
cycle times, drive down operational costs Frictionless payments Wallet and loyalty in one
switches from non-traditional players —
and improve overall effectiveness in or out of the Digital location make payments
mobile operators, technology firms, Bank network sent by at merchants easy
retail stores personal finance platforms) phone or social media
contact information
•• Continuous pressure on cost for
traditional banking providers
22
Moving to real-time So what’s next?

The mass movement towards real-time Real-time payments are likely to
payment systems around the globe has significantly impact the way we transact
contributed to an environment in which and conduct business. Real-time payments
consumers, merchants, and financial can benefit merchants, consumers,
institutions expect to be able to pay friends financial institutions, and society by offering
and customers, settle bills, and transfer enhanced visibility into payments, enabling
money at the drop of a hat. While the better cash management and helping
concept of “paying now” is not a new one — businesses better manage day-to-day
cash is an immediate payment transaction operations by improving liquidity. The
instrument after all — the growth of “real- liquidity improvement could be especially
time payment” options has helped build a impactful to small merchants who may be
new standard among consumers and in the used to waiting days for their settlement,
market. This new standard is driving change possibly creating a positive impact on their
for traditional payment types — checks, cash flow. Further, Consumers could enjoy
credit, debit, prepaid, and the like — as the convenience of paying their bills at the
consumers have generally come to expect last minute without penalties and financial
faster settlement periods, notifications and institutions could provide better services.
consolidated reporting. Economies around the globe could be more
fluid than ever before.
Additionally, the growing ubiquity of smart
devices and booming online retail commerce While challenges remain to reaching this
is driving the rapid adoption of real-time utopian future state, we predict that real-
payments, globally. Increasingly, consumers time payments will likely generate new
may be turning to their smartphones when consumer behaviors and spending patterns,
they need to pay merchants, billers, peers thus increasing revenue for the payment
and others. players who are well-positioned to capitalize
on this evolution.
The private sector has typically driven
adoption to promote commerce and For more information please access:
governments have tended to lag behind, http://www2.deloitte.com/us/en/pages/
but now, global governments are taking consulting/articles/real-time-payments-
active roles. In example, The United changing-reality-of-payments.html
States Federal Reserve has released
Strategies for Improving the US Payments
System and has since engaged a Faster
Task Force (as well as more Secure) to Real-time payments can benefit
support the revolution of the United
States payments system. merchants, consumers, financial
How do real-time payments work? institutions, and society by offering
enhanced visibility into payments, enabling
Most existing real-time payment systems
offer an instant, 24/7, interbank electronic
fund transfer service that can be initiated
through one of many channels: smart better cash management and helping
phones, tablets, digital wallets, and the
web. In such a scheme, a low value real-time
businesses better manage day-to-day
payment request is initiated that enables an
interbank account-to-account payment fund
operations by improving liquidity.
transfer and secure transaction posting with
immediate notification features.
23
Default payments: The digital Our study reveals that as a percentage of Representative payment processor
marketplace reset you did not digital transactions, default payments were audit clients include:
see coming! a staggering 82 percent by number and 88
There is a new trend in the consumer percent by value! They made up 74 percent •• Alliance Data Systems
payments space that will impact payment of websites’ payment traffic and 87 percent •• Blackhawk Network Holdings
providers' position in the market place of digital apps. Of all transactions made for
as customer spend shifts increasingly to e-commerce retail items, 85 percent were •• Discover Financial Services
all forms of digital, from e-commerce to default, and this figure was 81 percent for •• Evertech, Inc.
m-commerce to in app payments. This is the financial services.
increasing behavior of consumers storing •• Fiserv, Inc.
card and bank account payment details to In our view, it is not a question of whether •• Global Payments
make payments for future transactions. default payments will alter the fortunes of
We call this “default payments.” If you have payment providers in the future but of how •• Heartland Payments Systems, Inc.
stored your credit card on a ride sharing soon. The acceleration of digital commerce •• MoneyGram International, Inc.
app, or linked your bank account to pay for and the merging of the physical world with
utilities, or tapped your smartphone at a the digital world will all but ensure that •• Vantiv
point-of-sale (PoS) terminal to pay with a default payments will become the norm in •• WEX, Inc.
card stored on a mobile wallet, then you the very near future.
are a default payment user! Our multidisciplinary approach and full
One outcome of the default payment trend complement of business capabilities
Default payments bring new challenges is likely to be increased competition among within the Payments industry — including
for incumbents, changing the dynamics card issuers to become the default payment audit, enterprise risk, tax, and consulting
of customer acquisition and retention as option. Now is an opportune time for card services — enhance the quality of our audits
payment decisions become less proactive. issuers, payment providers and retailers to through knowledge sharing and the broad
Not every card that a consumer owns is think of strategies to take advantage of the lens of perspective and resources we can
used for default payments, for example: default payment behavior, and become the bring to address your business challenges.
respondents in our survey (described “top-of-wallet” choice. The unique business and related financial
next) had an average of three credit cards, reporting risks within the payments industry
of which only 1.5 were used for default Deloitte — auditor of the future drive our approach to the audit. We:
payments on websites. Today’s business leaders deserve an auditor
who has a deep understanding of their •• Assess risk based on the structure and
The Deloitte Center for Financial Services’ business and industry — one who can operations of your organization.
Default Payments study is a first-of-its-kind deliver higher quality and less resource
•• Develop a refined view of risk that
study, incorporating a mobile diary that intensive audits that provide greater insight
pinpoints what could go wrong to
tracked 31,000 payment transactions over a and drive more business value. This is where
cause a material misstatement in
month, augmented with a 3,000-respondent Deloitte excels, and we are delivering the
the underlying account balances and
survey. With the rich results from these audit of the future — today. Today Deloitte
disclosures for the financial statements
two primary research tools, we answer leads the Big Four audit and accounting
of each reporting entity.
five questions: Why do consumers choose firms in the auditing of payment processors
a default payment option? Where do they (as defined by JPMorgan Data Processing •• Customize the nature, timing, and extent
use them? When do they use them? Which Outlook, 2016), nearly twice as many as the of the control and substantive procedures
types of payment vehicles do participants next closest competitor. we perform by matching the level of risk
feel most comfortable storing as default identified for each significant account,
payment choices? And finally, who uses class of transaction, and disclosure with
default payment choices and who does not? the relevant assertions.
24
At Deloitte, audit innovation enables our auditors to provide greater insight into your financial risks,
internal control risks, and strategic challenges. Deloitte is the leader in audit innovation, and our robust
tools and technologies allow us to effectively and efficiently support the audit and respond to your unique
and complex environment. We have successfully leveraged new technologies, using big data analytics,
and improving the audit delivery process in response to the needs of our payments clients and the ever-
changing environment in which we operate. Specific examples include:
Actual application Benefit to the client
Visualized revenue transactions recorded during the year and identify any transactions A more meaningful discussion with
that signify an anomaly or additional risk management regarding trends and anomalies
Obtained data extract of volume by day and recomputed volume by category that was Eliminated the need to perform detailed
important to apply by fee category selections of 75 volume transactions
For an entire loan portfolio: More robust risk assessment in order to

pinpoint significant risk more thoroughly and
• Visualized multiple segments by location across the United States (e.g., average balance, FICO score)
reduce substantive testing for certain aspects
to identify concentrations of risk
or assertions of the account balance
• Visualized average delinquencies and number of accounts by FICO score
Eliminated the need to perform detailed
• Created maturation of losses by vintage
selections of charge-offs by year originated
Used our Argus tool, which is an audit application that leverages advanced machine Ability to complete work in a shorter
learning techniques to easily process and extract key information from documents, to: timeframe and earlier visibility to
follow-up questions
• Assist with our evaluation of Service Organization Controls ("SOC") 1 reports received for SOX-
relevant outsourced service providers
• Compare the user entity controls ("UEC") between the SOC 1 reports received for 2015 and the
SOC 1 reports received during our 2014 audit of the company
• Quickly evaluate any changes in UECs as well as any general changes to the SOC 1 reports
year-over-year
Our commitment to audit innovation has been recognized with Deloitte’s acceptance of the 2015 Audit
Innovation of the Year award from the International Accounting Bulletin.
We believe an audit is more than an obligation for our clients; it’s an opportunity to see further and deeper
into their business. We strongly believe executing a fresh service delivery and innovative approach is a
true differentiator for Deloitte.
25
Illustrative results,
Deloitte’s qualifications
We have extensive capabilities and experience assisting issuers, processors, associations, and networks in their efforts to address a broad
range of business transformation and operational excellence challenges.
Representative
capabilities Select engagement examples
Payments strategy •• Global hotel and leisure company: Developed a comprehensive global payments strategy that enabled customer growth,
increased spend across payment channels, improved revenue recovery from fraudulent bookings, strengthened payment
security, and reduced operational overhead for property owners. The payments business case demonstrated a $130M+ net
benefit over 5 years, transforming payments from a cost center into a revenue driver for the client.
•• Credit payment company: Identified and analyzed pain points in the industry for their Magnitude, Timing, and Likelihood
within the framework of a three year time horizon. Assessed latest trends arising out of these pain points, presenting deep-
dive analyses of their development in addition to mapping the magnitude of their impact on issuers and acquirers.
•• Major credit card company: Aligned card network’s B2B product offerings with prioritized commodities and identified
potential value propositions across target markets. Developed go-forward action plans and use cases to highlight potential
significance and applicability of insights and recommendations in real-life scenarios.
•• Major card issuer: Analyzed pain points in the industry for their Magnitude, Timing, and Likelihood within the framework
of a three year time horizon. Assessed latest trends arising out of these pain points, presenting deep-dive analyses of their
development in addition to mapping the magnitude of their impact on issuers and acquirers.
Cross border •• Global corporate payments company: Identified the relative attractiveness of the cross-border B2B payments
B2B payments opportunity across the six target markets, enabling card network to prioritize and build a focused strategy. Recommended
potential additions and refinements to card network’s value proposition across target markets.
EMV migration •• Top 50 regional bank: Leveraged international payments practice to bring EMV expertise from countries that had
Strategy
undergone EMV migration already, helping to future proof client’s EMV strategy against possible scenarios that could
play out post liability shift. Built a card deployment strategy that remained flexible to allow for uncertainties in merchant
acceptance and vendor supply, targeted high-value, high-risk, and regularly traveling customers first.
Blockchain loyalty •• Global lodging company: Established burning platform for exploring blockchain applications and articulated how the
blockchain would create value for Marriott, hotel owners, and guests. Created blockchain impact scenarios for socialization,
including high-level roadmap, pilot design principles and a vendor list. Developed future state vision of transformative
reward liability management ecosystem.
Text and •• Super regional bank: Assessed the text and speech analytics program to generate a roadmap that accelerates the
speech analytics development of a system that detects potential noncompliance within complaints. Interviewed the complaints governance,
assessment compliance, product root cause analyst, and marketing analytics teams to understand requirements of the system
and existing policies / procedures. Defined technical constraints by involving analysts, architects, and information
technology teams. Performed a maturity assessment of the complaints program against the Deloitte complaints maturity
model. Defined a blueprint for the technical design of the text / speech analytics system. Prioritized opportunities and
recommendations into a plan / roadmap that clearly outlines the next steps to implementation and defines benefits of a
multi-generational plan. The potential noncompliance complaint analysis system will keep the number of manually sampled
complaints manageable, even as the bank defines a complaint as “any expression of dissatisfaction”.
Market assessment •• Major online payments platform: Provided market specific recommendations that helped the client identify key action
items for each market (i.e. collaborating with local networks, enabling prepaid, e-wallets with significant usage) to help
maximize market share uplift. Based on Deloitte’s assessment, the client initiated RFPs for payment vendors across target
countries leveraging capability assessment maps to refine potential partnership options.
26
Representative
Mobile payment •• Travel and leisure company: Identified current documentation and potential gaps, developed new documentation for
wallet, new product Business rules, Data sources, and Reporting requirements, and designed and documented 27 new processes. Coordinated
launch with system vendors to resolve Day 1 launch issues and supported the clarification of deliverables post launch.
Enterprise-wide •• Top 4 bank: Deloitte built an enterprise-wide complaint reporting and analytics system which helped the bank address
complaint reporting customer complaints and identify root causes more efficiently. Enhanced the data model for the common complaint capture
and analytics system system with the Deloitte complaints logical model. Developed five enterprise dashboards for complaints tracking. Built a
lexicon for 25+ regulations related to citations using the Deloitte process to citation mapping. Designed and implemented
machine learning models to reduce false positives from 95% to 50%. Streamlined complaint aggregation to reduce
processing time and reporting window. Standardized complaint attributes and provided clear view of top problems.
Post-merger •• Global leading financial technology firm: Established a central integration management office that focused on the
integration, revenue integration strategy and long-term growth opportunities. Developed a structure for identifying and validating the main
growth strategy revenue growth drivers based on trends identified in the major markets as well as the customers’ markets and segments,
and an estimate of their influence on the post-merger company’s sales.
Healthcare •• Major US regional bank: Mapped 2015 priorities against a repeatable business value/urgency framework and created the
advantage “order board” of priorities across teams. Designed and deployed metric dashboards to advise leadership to product and
Technology
modernization platform performance.
Consumer and •• Large payments player: Positioned client to compete in the global consumer credit market by building a flexible credit
merchant credit platform that can be rapidly and efficiently scaled to new markets. Enabled over $100M worth of credit purchases by almost
expansion 50K customers within one year of launch in US. Simultaneously launched in UK, where it scaled to $60M purchases by a
similar number of users in the same time frame. Established and owned a comprehensive quality management organization
focused on customer experiences end to end across the full portfolio, which was then leveraged by the client in multiple
future large scale programs.
Complaint data and •• Regional bank: Designed a complaint data and reporting system that serves as a foundation to expand the enterprise
reporting system complaints program to include asset management and business banking LOBs. Applied the Deloitte complaints logical
model as a blueprint for the complaints warehouse which significantly shortened the time to build the warehouse.
Designed and validated a monthly complaints dashboard that includes an overview, trending by complaint issue, trending
by source, and regulatory complaint SLAs. Developed a heat map method to prioritize complaint areas relevant to citations.
Established ad hoc analysis framework to investigate hotspots and map to processes. The framework for conducting ad hoc
analysis extended to support root cause analyses for customer experience and non-consumer product use cases.
mPos conceptuali- •• Global sports equipment and apparel retailer: Designed, delivered, and implemented national, in-store mPOS pilot
zation and application unifying the customer experience, improving retail growth, and enhancing customer service. Deloitte Digital
implementation conceptualized and implemented the best-in-class solution in under three months, laying the groundwork for enhanced
cross-channel inventory tracking, consumer insights and sales force optimization.
27
Representative
Payments strategy •• India-based telecom player: Deployed a 40+ member integrated team of consultants from the US, UK and India firms
and implementation across strategy, operations, technology and human capital/talent paired up with India based global delivery center.
Developed a holistic strategy to address needs of all key stakeholders in the ecosystem - consumers, merchants, agents,
govt. and banks. Led selection and integration of 20+ vendor platforms to provide a complete digital payments solution for
customers. Completed implementation from strategy through pilot in — 8 months. Set up a payments business that will
revolutionize payments in India with a goal of digitizing 500M+ transactions in the first year of commercial operations.
Core payments re- •• Large global payments processor: Set up and led a program that focused on improving operations and underlying
Operations
design and technology and infrastructure to process payments of all major instrument types with particular focus on Credit Card
re-platforming Payments. Defined end state Business Architecture, Production Ramp Strategy, and led E2E Quality Assurance Testing.
Program successfully improved the availability and system uptime to 99.99% and reduced end-to-end payment processing
latency to <2s.
Compliance program •• Top 4 bank: Obtained and analyzed Servicemembers Civil Relief Act (SCRA) related complaints to identify the level
assessment and and severity of SCRA regulatory compliance risks and enhancements to existing controls. Identified SCRA assessment
regulatory mapping stakeholders, gathered required complaints data, and other applicable information to perform assessment activities.
Analyzed existing complaints data and SCRA complaints controls to assess the level and trend of complaints related to
SCRA, including identifying complaints by source/channel, product/business unit, and potential SCRA regulatory issues.
Developed and conducted an SCRA testing plan. Recommended process / control improvements to reduce the incidence of
SCRA related complaints.
Representative
M&A — financial •• Payments service provider: Efficiently leveraged a cross-service-area (Consulting, FAS, Tax) and cross-border team (US,
due diligence and Canada, UK) to deliver complicated due diligence, synergy assessment, and integration planning efforts.
integration planning
Financial Advisory
Fraud risk •• Global bank: Performed a fraud risk assessment for account enrollment, debit and credit card transactions, and ACH
assessment transactions (including corresponding returns and refunds). Developed prioritized recommendations for strategic
enhancements across people, process, and technology to mitigate risk.
Sell-side advisory •• International stored-value and alternative payment solutions provider: Assisting the management team and
shareholders in providing a full range of sell-side advisory services, including: developing marketing materials, identifying
and contacting potentially interested parties, managing the due diligence process, and advising on transaction negotiations.
Core business Representative clients
Payments •• Alliance Data Systems •• Services •• Vantiv
•• Blackhawk Network •• Evertec •• WEX Inc.
•• Discover Financial •• Global Payments

Audit
Payroll •• Automated Data Processing •• Trinet
Core FSI processors •• Broadridge •• CDK Global •• Fiserv
28
Endnotes
1. Kennedy Consulting Research & Advisory; Consulting to the Banking Sector: Cards & Payments; Kennedy Consulting Research & Advisory estimates
© 2013 Kennedy Information, LLC
2. Deloitte Consulting Banking and Payments team, July 2011.
3. Source://www.mobilecommercedaily.com/2011/12/21/sears-is-2011-mobile-retailer-of-the-year?rr44b=no
4. Kennedy Consulting Research & Advisory; Consulting to the Financial Services Industry; Kennedy Consulting Research & Advisory estimates; © 2013.
Kennedy Information, LLC. Reproduced under license.
29
Our global payments

leadership
United States Brazil
Brian Shniderman Marcia Matsubayashi
Principal Partner
Deloitte Consulting LLP Deloitte Touche Tohmatsu
+1 602 738 7600 +55 11 5186 1619
bshniderman@deloitte.com mmatsubayashi@deloitte.com
Doug Zercoe Jefferson Lopes Denti

Partner Director
Payments Audit Lead Deloitte Touche Tohmatsu
+1 415 783 4199 +55 11 5186 1147
dzercoe@deloitte.com jedenti@deloitte.com
Leon Lewis Canada

Partner Soumak Chatterjee
Payments Tax Lead Senior Manager
+1 313 396 3543 Regional Payments Lead
leolewis@deloitte.com +1 6478788788
schatterjee@deloitte.ca
Prakash Santhana
Managing Director China
Deloitte Transaction and Daniel Zhi
Business Analytics LLP Partner
+1 212 436 7964 Deloitte Touche Tohmatsu China
psanthana@deloitte.com +86 2123166318
dzhi@deloitte.com.cn
Africa
Sharoda Rapeti France
Director Thierry Regnault de Montgon
Deloitte Africa Partner and Regional Payments Lead
+2711 806 5973 +33 1 40 88 22 36
srapeti@deloitte.co.za TRegnaultDeMontgon@deloitte.fr
Australia Germany
Chris Wilson Carsten Lehberg
Partner Partner
Deloitte Touche Tohmatsu Deloitte & Touche GmbH
+61 3 9671 7411 +49 711165547007
chrwilson@deloitte.com.au clehberg@deloitte.de
Richard Miller India

Director Divakar Goswami
Deloitte Touche Tohmatsu Specialist Leader
+61 3 9671 7903 Deloitte Consulting India
rimiller@deloitte.com.au Private Limited
+1 615 718 5910
dgoswami@deloitte.com
30
Israel Netherlands
Michael Sorin Timo Span
Senior Manager Partner
Deloitte Deloitte
+972 3 6085225 +31 882885164
msorin@deloitte.co.il tspan@deloitte.nl
Italy Roeland Assenberg van Eysden

Manuel Pincetti Director
Senior Manager Deloitte
Deloitte Consulting SRL +31 882882677
+39 0283323135 rassenbergvaneysden@deloitte.nl
mpincetti@deloitte.it
Portugal
Japan Nuno Fernando Carvalho
Yasuyuki Ogyu Partner
Director Deloitte Portugal
Deloitte Tohmatsu Consulting LLC +351 210422547
+81 8090810632 ncarvalho@deloitte.pt
yogyu@tohmatsu.co.jp
South East Asia
Akitaka Senda Mohit Mehrotra
Partner Executive Director
Deloitte Tohmatsu Consulting LLC Deloitte Touche Tohmatsu
+81 8033672630 +65 94529432
asenda@tohmatsu.co.jp momehrotra@deloitte.com
Korea Spain
Seung Woo Lee Juan Perez de Ayala
Partner Socio
Deloitte Consulting Deloitte S.L.
+82 266763813 +34 91 443 2673
seungwoolee@deloitte.com jperezdeayala@deloitte.es
Mexico United Kingdom

Salvador Hernandez Ian Foottit
Partner Partner
Deloitte Consulting Group Mexico Deloitte & Touche LLP
+52 55 5080 7126 +44 20 7303 4152
shernandez@deloittemx.com ifoottit@deloitte.co.uk
José Luis Ruiz Stephen Ley

Manager Partner
Regional Payments Lead Regional Payments Lead
+52 55 5900 3568 +44 20 7303 7386
lruizluna@deloittemx.com sley@deloitte.co.uk
31
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Reading the global payments radar

Scanning for opportunities and potential

Kennedy Vanguard of cards and payments consulting providers1

Assessing the lay of

With shifts in the traditional payments

• Timing and assessed urgency associated

Based on our most recent analyses, we see

Is your institution prepared?

Consolidation and optimization of currently Increased Merchant adoption of Cloud and

Acquirers are positioning themselves to Acquirers will continue to look downstream

Organized for your success:

Increasingly, the opportunities and threats in

Collective member firms

Representative joint efforts between Deloitte and its

Deloitte’s blockchain offering

1 Innovation and ideation

4 Product development Prototyping 3

•• We deliver as one team in collaboration with

Deloitte’s blockchain framework

Initiate Design Strengthen Implement

1. Do pre-conditions 2. Which applications 3. Do we need to 4. What blockchain will

•• Multiple parties generate Permissionless blockchain

Customer-to-customer payment: Cross-border

Enter Select Confirm Receive

Federation FX rate Information Encryption/ Distributed Notification

Our Digital Bank solution is about •• Banking anywhere, anytime: Fully

Rewards credit card

sophisticated with their acquisition and Grocery store

•• Automation: Fully automated acquisition,

•• Regulatory changes have opened markets Transportation pass

Moving to real-time So what’s next?

Actual application Benefit to the client

For an entire loan portfolio: More robust risk assessment in order to

modernization platform performance.

Core business Representative clients

Payments •• Alliance Data Systems •• Services •• Vantiv

•• Blackhawk Network •• Evertec •• WEX Inc.

•• Discover Financial •• Global Payments

Payroll •• Automated Data Processing •• Trinet

Core FSI processors •• Broadridge •• CDK Global •• Fiserv

2. Deloitte Consulting Banking and Payments team, July 2011.

Our global payments

Doug Zercoe Jefferson Lopes Denti

Leon Lewis Canada

Richard Miller India

Italy Roeland Assenberg van Eysden

Mexico United Kingdom

José Luis Ruiz Stephen Ley

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