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KILOMETRES OF INTERNET BROADBAND LINES > KILOMETRES OF COUNTRY BORDERS TransferWise Sustainable Disruptor in the Remittance Services industry? Presented to: Kristo Käärmann and Taavet Hinrikus, Co-Founders at TransferWise Presented by: Daniela, Minghao, Victor, Vishnu 10 January 2019 Agenda 1 Problem 2 Recommendation 3 Internal & External Analysis 4 Strategic Alternatives 5 Implementation 6 Financial Analysis 7 Contingency Plan 8 Conclusion Page 3 Problem: TransferWise is facing three key challenges that question whether it can remain the disruptor it is today Page 4 Problem Recommendation Analysis Alternatives Implementation Financials Contingencies Conclusion Imbalance of Outflow vs. Inflow Threat of Blockchain Getting to Zero How can you manage scalability when inflows and outflows of certain countries are imbalanced? How can you stay a disruptor despite rapid developments in Blockchain? How do you reach operational scale to reach the goal of zero transfer charges? Recommendation: Three strategies will enable TransferWise to tackle the key challenges it is facing Page 5 Problem Recommendation Analysis Alternatives Implementation Financials Contingencies Conclusion Student Customer Strategy Business Customer Strategy New Technologies Development Imbalance of Outflow vs. Inflow Threat of Blockchain Getting to Zero New Customers Customer Scale New Technologies Internal Analysis: TransferWise exhibits strong core competencies and an impressive growth story while being stretched for money Page 6 Problem Recommendation Analysis Alternatives Implementation Financials Contingencies Conclusion Strengths Weaknesses Cost efficiency Profitability since 2017 Strong partnerships with banks Large customer base (4 million) with $4 billion transactions per month Bank of England settlement Limited to bank account transfers No physical outlets No significant difference to competitor’s satisfaction rating External Analysis: TransferWise operates in a challenging environment with technology offering key opportunities Page 7 Problem Recommendation Analysis Alternatives Implementation Financials Contingencies Conclusion Opportunities Threats 10% international market share (2018) with 30% market share by 2026 $574 billion remittance market Technological advancements Increased globalization Urbanization and mobile connectivity Blockchain Loss of reputation due to partnerships Security, hacking Highly regulated market Competitor Analysis: The following table illustrates the competitive landscape in which TransferWise operates Page 8 Problem Recommendation Analysis Alternatives Implementation Financials Contingencies Conclusion Strategic Alternatives: Six strategies have been considered that tackle the challenges TransferWise is facing Page 9 Problem Recommendation Analysis Alternatives Implementation Financials Contingencies Conclusion Chosen strategies Implementation (1/3): Student Customer Strategy Page 10 Problem Recommendation Analysis Alternatives Implementation Financials Contingencies Conclusion What Target Chinese and Indian students in Europe (UK, Germany, Switzerland) and USA Why Large Chinese and Indian