THE FUTURE OF BANKING WINNING THE DIGITAL RACE

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1 THE FUTURE OF BANKING WINNING THE DIGITAL RACE Dr. Christoph Samwer Co-Founder, Lendico

2 Disclaimer The information contained in this presentation has been researched by us with due care and all and any evaluations or assessments stated herein represent our personal opinions. We advise you that some of the available information has been independently verified and may be based on statements by third persons, but no representation or warranty, expressed or implied, is made as to, and no reliance should be place on, the fairness, accuracy, completeness or correctness of this information or opinions contained herein. Certain statements contained herein may be statements of future expectations and other forward-looking statements that are based on our current personal views and assumptions and involve known and unknown risks and uncertainties that cause actual results, performance or events to differ materially from those expressed or implied in such statements. None of our team shall assume any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or the statements contained herein as to unverified third person statements, any statements of future expectations and other forward-looking statements, or the fairness, accuracy, completeness or correctness of statements contained herein, or otherwise arising in connection with this presentation. This presentation does not constitute an offer or invitation to purchase or subscribe for any investment and neither it nor any part of it shall form the basis of or be relied upon in connection with any commitment or contract whatsoever, and is solely intended to communicate a favorable impression of our team members and their business track-records. No one should base their investment decisions on this presentation, which principally constitutes an advertising message, as their main source of information or reliance but should form their personal opinions solely on the basis of further available information and evaluations and assumptions. The legal documentation held ready for any prospective investor shall be authorized as the sole source of relevant information and neither it nor any part of it shall constitute any representation, warranty or other undertaking, expressed or implied, as to the economic success of the offered investments.

3 Facing technological progress Technology is evolving rapidly

4 Facing technological progress and consumer adoption of new technology accelerates Aeroplane Telephone Radio Television PC Internet ipod Facebook Years Years Years Years Years Years Years Years

5 The digital competition Digital solutions fundamentally change the way we do business?

6 The digital competition Traditional differentiators evaporate Product Price Branches

7 The digital competition Clean sheet tech provides significant cost advantage TIER 1-2 BANK We have these lousy systems, very slow processes, a terrible inefficient internal organization percent of our entire hardware has come close to the end of its lifecycle or is already beyond that. JOHN CRYAN, DEUTSCHE BANK IT costs per user per year (USD) 200 7,4 3,8 3,4 Source: Fidor Bank

8 New competitors: Their product advantage New competitors cherry-pick from end-to-end banking value chain Currency Exchange Loan Payment Consumer Banking Investment management Infrastructure

9 Entire evolving ecosystem creates accelerating flywheel growth Source: paymentandbanking.com

10 What it takes to win Think the unthinkable

11 Marketplace lending disintermediates traditional banking Traditional Black Box Marketplace +0,25% interest rate +8% interest rate +5% interest rate interest rate Spread-based model Fee/ commission-based model

12 Why bother, this marketplace thing won t work anyhow The world s largest taxi company The world s largest accommodation provider The world s largest retailer The world s most popular media owner P2P lenders could eventually replace highstreet banks. At present, these companies are tiny, but so, a decade and a half ago, was Google." BANK OF ENGLAND

13 Why it works: Superior customer value proposition Cost Advantage User Experience -60% Technology and business model drive cost down Bank Marketplace Lending

14 Marketplaces don t do maturity transformation Composition of Northern Rock liabilities ABS Covered Bonds Retail Deposits Wholesale BoE Loans Jun 07 Dec Liabilities in tn

15 UX advantage: Customers love what we do Net promoter scores: Lendico vs. German banks Lowest bank Average bank Highest direct bank Source: Bain & Company Deutschland Lendico NPS = 82%

16 and they really don t like banks so much 53% 33% 71% 73% Don t think their bank offers anything different than other banks. Believe they won t need a bank at all. Would rather go to the dentist than listen to what banks are saying. Would be more excited about a new offering in financial services from Google, Amazon, Apple or PayPal. Source: The Millennial Disruption Index

17 What it takes to win No magic bullet just a right mindset #1 #2 #6 #5 #4 #3

18 #1 Plan, deploy fast, learn start over again.

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20 #2 Be focused excel in what you do best.

21 #3 Connect all the dots.

22 #4 Develop products you are excited about.

23 Mobile is not about miniaturization, it s about simplicity

24 #5 Innovation is everyone s duty.

25 #6 Seek outside opportunities.

26 Secrets of success old economy Leveraging strengths and history Optimization of procceses Risk identification and minimization Customer and capital base

27 Cooperate and don t try to be a startup!

28 Thank you Contact: Dr. Christoph Samwer