Transfer Wise Disruptor or Disrupted HEC Montreal CSC

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

Introduction Analysis Alternatives Strategy Implementation Conclusion The Problems facing Transfer. Wise How can Transfer. Wise: • Maintain its competitive edge and meet the challenges posed by new disruptive technologies • Become market leader in remittance industry • Achieve zero-fees

Introduction Analysis Alternatives Strategy Implementation Conclusion 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 longterm relationship with established banks 4. Grow sustainably towards zerotransaction fee

Introduction Analysis Alternatives Strategy Implementation Conclusion Transfer. Wise 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

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

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

Introduction Analysis Alternatives Strategy Implementation Conclusion 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 Transfer. Wise to a new crypto currency leveraging latest blockchain • Currency will traded on crypto markets • Transfer. Wise becomes digital wallet • Revenue through low transaction fees

Introduction Analysis Alternatives Strategy Implementation Conclusion 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

Introduction Analysis Alternatives Strategy Implementation Conclusion Decision Matrix Alternatives Reduce the risk of Mitigate threat from fraudulent blockchain activity 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 4 3 2 3. Offer new investment services 1 2 2 4 4. Re-focus on commercial clients 3 3 2 2

Introduction Analysis Alternatives Strategy Implementation Conclusion Decision Matrix Alternatives Reduce the risk of Mitigate threat from fraudulent blockchain activity 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 4 3 2 3. Offer new investment services 1 2 2 4 4. Re-focus on commercial clients 3 3 2 2

Introduction Analysis Alternatives Strategy Implementation Conclusion Decision Matrix Alternatives Reduce the risk of Mitigate threat from fraudulent blockchain activity 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 4 3 2 3. Offer new investment services 1 2 2 4 4. Re-focus on commercial clients 3 3 2 2

Introduction Analysis Alternatives Strategy Implementation Conclusion Decision Matrix Alternatives Reduce the risk of Mitigate threat from fraudulent blockchain activity 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 4 3 2 3. Offer new investment services 1 2 2 4 4. Re-focus on commercial clients 3 3 2 2

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

Introduction Analysis Alternatives Strategy Implementation Conclusion Transfer. Wise 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

Introduction Analysis Alternatives Strategy Implementation Conclusion 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 Transfer. Wise platform innovation, reduce operational costs • Push towards zero-fees • Become market innovation leader • Push-back against blockchain

Introduction Analysis Alternatives Strategy Implementation Conclusion 2. Reshape Bank Partnerships • Target Select banks in operating countries for partnerships to handle all remittance services • Mutually beneficial • For Transfer. Wise • 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

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

Introduction Analysis Alternatives Strategy Implementation Conclusion 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

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

Introduction Analysis Alternatives Strategy Implementation Conclusion Low-cost high impact marketing campaigns Expats and diaspora Travelers International students Businesses, sole traders, freelancers • 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

Introduction Analysis Alternatives Strategy Implementation Conclusion

Introduction Analysis Alternatives Strategy Implementation Conclusion

Introduction Analysis Alternatives Strategy Implementation Conclusion

Introduction Analysis Alternatives Strategy Implementation Conclusion

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

Introduction Analysis Alternatives Strategy Implementation Conclusion Take-away 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 nearzero 4. Partner with tap-to-pay providers Results Clear path to zero fees Increase user base Diversified revenue streams Become marketleader in remittance

Introduction Analysis Alternatives Strategy QUESTIONS Implementation Conclusion