Agenda Accra Ghana July 3 2019 1 The

Agenda, Accra Ghana, July 3 2019 1. The retirement savings system (SAR) evolution 2. PROCESAR: switch in México 3. Operational and technological model

1. The retirement savings system (SAR) evolution

SAR evolution The current system of individual accounts began in July 1997 and has been growing (in accounts and assets) ever since. Accounts 70 000 3 500 000, 0 60 000 3 000, 0 50 000 2 500 000, 0 40 000 2 000, 0 30 000 1 500 000, 0 20 000 1 000, 0 10 000 500 000, 0 183 millions USD) 0, 0 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 0 Assets (millions of pesos ü At first registration and enrollment of workers and self employees was given more importance. ü next, promoting competition in the system through transfers. ü Since 2012, speeding up the entrance flux of resources to PFAs. ü Finally, to the extent that the system is growing, the emphasis has been put on efficient processes and mechanisms for voluntary aportations and withdrawal. PROCESAR has been a key factor, for 24 years, in the instrumentation of public policy for the development of SAR.

2. PROCESAR: switch in México

Procesar, S. A. de C. V. is private company, owned equally by the Pension Funds Admnistrators in México (trustees) with a Federal Government concession since December 1996, to manage the National SAR Database (BDNSAR). Its main functions are: to concentrate, manage, operate, centralize and individualize the database information in terms of the SAR regulation. PROCESAR supports the consistency of SAR information and eases its flow through the operational processes in the back office of the PFA, that allow the exchange of information among SAR participants, the social security Insititutes and authorities with the BDNSAR.

PROCESAR, Operator Company of the BDNSAR The Retirement Savings System (SAR) manages the accounts and resources of workers with the main purpose of maximizing the amount of pensions. PROCESAR is a fundamental part of of the SAR as the operator company of the BDNSAR. It is related to several entities but the most intense relationship is with CONSAR (regulator), the Pension Fund Administrators (AFORES) and the Institutes of Social Security (private and public). As the Operating Company of the BDNSAR, Procesar has, among others the following executive functions: Process the enrollment and manage the information of the account (we don’t administrate funds). Manage the collection and distribution of resources until their arrival to each individual account. Certify and Coordinate account transfer of funds (switching) between Fund Administrators. Manage resource withdrawals from the accounts. Due to its central role, workers welfare in their retirement depend on the good performance and competitiveness of PROCESAR

PROCESAR’s impact on SAR 63 Million Accounts managed 996, 289 Employers Paying in an agile and safety way social security fees by using the PROCESAR Systems. 5. 8 Million Online transaction services average per month. 16 Millions Of biometric enrollments (electronic file and 10 fingerprints) 1 Million Of mobile appplication (APP) users with biometric enrollment (face)

Growth and evolution of services In the 2014 -2018 period, there was a 177% increase in the number of services provided by PROCESAR. In 2018, 78 new services were incorporated. Today we have deployed 609 services from which 346 are online services with daily coverage and 7 x 15/7 x 24 service windows. 263 are batch services. All over, the regulatory and additional services provided by PROCESAR involve more tan 610 million transactions only in 2018 Services Evolution BATCH and Online Services growth Batch and online catalogue services Dec. 2018 479 220 88 132 2014 376 157 219 2015 609 531 204 278 346 275 253 263 2016 Servicios en Línea 2017 Total 2018 Online Services. e-SAR (web page). Retail Networks for voluntry contributions. Information Products. Electronic File and Biometrics. Afore Mobile. SAR trainning.

Strategic Plan 2019 - 2023 Mission Values We operate services and develop quality solutions for SAR, in benefit of Mexican workers. Efficiency Innovation Leadership Team Work Vision 2023 Value Proposal Add value to the SAR operation by integrating solutions and services that exceed international standards of availability and security Integrity Services: High availability and immediate response capacity. Clients: Immediate attention, understanding of expectations and focus on the worker Automated Solutions: Simple, innovative, cost efficient, in time and complete. Value- Added information products. Provide security in solutions and services.

Certified Standards " ISO 9001 Quality Management System Certification" obtained since 2002, is currently valid with the new standard of ISO 9001: 2015. "ISO 27001 Information Security Management System Certification". SANS Methodology (Critical Security Controls for effective cyber defense) for the implementation of new security controls. Balanced Scorecard model for strategic management. PMBOK methodology for project management and monitoring. Acknowledgments July 2017, Innovation Week Magazine, 50 most innovative companies for the design, implementation and operation of the Electronic File and Biometric services. March 2015, "National Award of Technology and Innovation in its XVI edition" in recognition of our achievements in technological development and technology management in the country. National Council of Science and Technology (CONACYT), granted the recognition to our technology as an innovator through the Incentives for Scientific and Technological Innovation Program in the Technological Innovation for Competitiveness Mode in 2014. We are recognized by Deloitte Consulting and Citi as one of Best Mexican Companies for two consecutive years.

The role of PROCESAR as a switch In other pension systems, it is the Administrators who managed their own databases and all the back office process, however, the central position of an Operational Company (acting as a switch) allows: § Taking advantage of scale economies, which imply minimazing operative costs. § Counting with homogenous operational processes in the system, which makes easier the comprehension amongst workers and allow the administrators to focus in differentiated services. § Specialized resources to implement integral operative solutions as an answer to regulatory changes or needs from the Administrators. The Operational Company acts as a natural interlocutor with the Authority and institutions and a link between this and the Administrators. Not all of the operations in which the Operational Company is involved imply movement of resources or are direclty associated witht the investment thereof, but it definitely incides in the savings growth. §On avergae, the anual operation of Procesar surpasses 600 billion transactions. §The resurce movement asociated with this transactions averages near 700 billion pesos (35 billion dollars).

PROCESAR environment

Environmental diversity 1992, 1995 1997 2004 2008 2012 2015 2017 SAR 92 IMSS - ISSSTE 2019 Integrating a diversity of pension system and regimes IMSS: Law 73/ Law 97 Independent ISSSTE: Tenth transitory/ Ordinary regime Banks– ICEFAS [until 2006] (máx. 14 – mín. 5) / ER’s (máx. 11 – mín. 7) CONSAR / SHCP PFA (máx. 21 – mín. 11) Integrating a diversity of stakeholders IMSS / INFONAVIT ISSSTE / FOVISSSTE Portal users (SIRI, e-SAR, METI, SIAS) y SARTEL ISSEMYM / INFONACOT (aditional) SAR products(batch) Support tools (SICI – INFOSAR) Integrating a diversity of chanels and services Internet portals/ SARTEL Online services Informational products(BI) Electronic case files/ Biometrics PROCESAR begins operations IMSS reform Mobile PFA/ App’s. ISSSTE reform

SAR situation Nowadays the focus of Authority is located in the following aspects: ü Giving more security to the system through the strengthening of biometrics. ü Promoting self-management of the participants. üIncrease the amount of voluntary savings ü Fine-tuning the procedures of resource withdrawal. On the other hand, the PFAs are interested in: ü Being more efficient in their operational processes, lowering costs ü Consolidation of it´s market efficiency and focus in services at the front. The agenda for Social Security and Social Housing is more varied: ü Example: Housing portability: private-publicc. And in PROCESAR we are commited with: ü Elevating the quality of our services. ü Increasing the internal operative efficiency of the system. PROCESAR’s great onjective is to attend all kinds of needs from both authorities and clients in terms of full operational solutions in order to reconcile diferences between the participants.

Collection registry Online certification for retirements for unemployment Canase Emission IMSS 4 Safe payments Registry Collection registry Collection Registry E-SAR IMSS PATTERNS SIRI ISSSTE PAYMENT CENTER Retirements SIPARE SARTEL E-SAR SIDECO INFONAVIT AFORE MOVIL Biometric verification 4 fingerprints Facial Verification Housing amortizations BD Viv (Pa. VIS) T. of Accredited 43 Bis ISSSTE SHCP Registry Promotional agents CAP BIOMETRICS SICI E-SAR SIRI PORTABILITY INFONAVIT FOVISSSTE CASE FILES BRANCH OFFICE ELECTRONIC CASE FILE MOBILE AFORE Registro BANXICO Concentrating account SUA´s Payments ER´s (BANKS) Registers Collection Transactions Withdrawals Info. SAR Trans. Acred. 43 bis Cubes of information Standards Balance Score Card PMBok ISO 9001 ISO 27001 CMMI Nivel 3 Registro Información Circulares Title of Concesión Information Info. SAR Admón. Of images Informational cubes COMERCIAL NETS Diverse media Other services Quota calculations Transf to Federal Gob CONSAR Withdrawals BDNSAR Payment centers Movements Viv contributions ISSSTE bonuses Altas CURP movements Transfers Collection Payment centers Viv contributions Transferings RENAPO Procesar efficiency Voluntary contributions Scale economics contribute to the reduction of the operational cost of the system. Ejercicio de Derechos Portability of subaccounts of housing credits FOVISSSTE EMPLOYEES 50 Innovative companies PENSIÓNISSSTE AFORES SIEFORES INFONACOT MEM PRISMA PENSION System Certainty to the collection of quotas and contributions. Ensures the individualization and dispersión of the workers resources in their individual account. Enables tecnological solutions of SAR. Procesar has designed and built the operational processes of SAR, since the origin. Consistency on the flows of resources and information. Integrates a data base, state property, which gives consistency to the SAR information when facing each one of the entities that interact with BDNSAR. Technical assistance to the participants and authorities of the SAR. Employees consultation Acknowledgements National Award for Technology and Innovation Working center location PROSA Uniqueness of the account individual to the workers. ISSEMYM

Operational and technological model

Operational model PFA FRONT INFORMSTION FLOW BACK OFFICE PFA Differentiated services Worker and self employed On lline PROCESAR BATCH PROCESAR systems FPA SYSTEMS Electronic File and Biometric Accounting Collection Batch Enrollment transfers CRM database Investments Electronic channels Withdrawal Individual account Management Data, images and biometrics registration Others On line BDNSAR Data management PFA PROCESAR BACK

Value chain 609 Services (Online and Batch) 610 000 million Transactions per year Government Macro Processes Stakeholder’s Needs Outstanding Projects 2018: 29 Run the business 19 Transforming the business 3. Audit, Internal Control and Information Security 4. Risk Management, Continuity and Quality Business Core Macro Processes 5. Solutions proposal and development 6. Processes Operation 7. Client and Stakeholder’s Support Back Macro Processes 8. Finantial and Management 9. Legal and Regulation 10. Organizational Development 11. IT Management Interaction with: 27 SAR participants 600 Payment Offices 9 million workers requests through SARTEL and E-SAR Stakeholder’s Satisfaction 1. Corporate Governance 2. Strategic Planning and Management 99 information products 2, 558 deliverables More tan 4, 000 million records per year, 46 BI Information Models

Technological evolution First detaching level First architectural change Architectura 1. 0 Legacy Migration from DB 2 to Oracle begins Architecture 3. 0 Latest architecture versión in PROCESAR Architecture 2. 0 Empowerment of neutral services Monolithic Architecture Batch Operation Our Technological Platform has been transformed to increase operational capability: Scalability: ensures horizontal and vertical growth without SW dependencies Portability: the SW is agnostic to the HW. It can be installed in neutral HW. High Availability: It has a clustered configuration, allowing greater availability. Fault Tolerance: Exception handling allowing transactions reincorporation and traceability Interoperability: Service layer that allows any participant to connect.

Information interchange AFORES (FPA) • Connect Direct • Web. Services and APi Plattform Network FW WAN LAN FW Windows LINUX UNIX Co nne c t. D irec IPS t Social Security Institutes CD • Sistemas Operating Systems FW /DV D (c ifra dos en Con ting enc Applications CORE BDNSAR Central Database • Autentication ia) Active Directory Majordomo OID 3 P Data Center Connect Direct • Connect Direct • Web. Services FW API Retailers • Web. Services API CD/DVD (cifrados) Connect Direct IPS erv b. S We s ice • DRP and BCP

1 2 3 4 5 6 7 Segurity layers 1. Security framework and regulations Central database 2. Policys and training 3. Applications and services security 4. Arquitecture and platforms security 5. Network security 6. Physical security 7. Information security 8. Separated databases security