IBM Industry Solutions for BFSI Rajeev Narayanan Country

IBM Industry Solutions for BFSI Rajeev Narayanan Country Leader, Industry Products IBM India/SA V. 1. 0

2 A Smarter BFSI focuss on three key imperatives…. REINVENT THE BUSINESS MODEL DEVELOP NEW INTELLIGENCE FINANCIAL SERVICES IBM BSFI Industry Solutions Enabling speed, flexibility & choice in solution deployment Banking Performance Management Managing Security, Risk & Compliance in BFSI Securing Enterprise Data for Banks Managing Quality & Security of Banking Applications Unified Business Process Management for Collaborative Process Improvement Payment Systems: Evolution and Framework Better Customer Service Through Exceptional Web Experiences INTEGRATE RISK MANAGEMENT

What we are hearing from our Customers ? 1 Ability to respond to change and communicate well – with faster time to market 2 Banks more closely linked to ‘Value to Customer’, Improve Customer Profitability at the same time 3 Plan for Growth, Be Local with Global Best Practices 4 Ability to gauge, and interpret risks and take massive action 5 Simplicity – value for money, one face to the bank, integrated payments, safe and secure

What are Indian Banks doing … thinking ? • Retail Banking Deposits , have a 33% ROE for the Retail Banking Portfolio and have a significant influence on a banks growth in markets like India, Bangladesh, Srilanka, etc. • Banks have worked on revolutionizing service levels and convenience for their customers. Customers are redefining the rules of the game. • 24% of banks structured their Payments business on both product and channel lines; 42% structured their business on product lines while 34% structured their business on channel lines. Banks are looking towards moving to enterprise payments. • Treasury is a significant contributor to the banks earnings in India, and have worked towards using sophisticated Risk Management Techniques, while the public sector is still nascent just to comply to regulatory and compliance measures. • Banks in growth markets are increasingly leveraging IT to establish competitive advantage • Select growth market private and foreign banks are spending less than US $ 11 per account on IT systems and services, compared to an average spend of US $ 76 per account in European banks.

Emerging Themes Core banking transformation allows you to modernize and renovate the applications that support core banking functions while aligning with the changing needs of the business Payments and Securities helps you progressively transform your payments operations to become more flexible and efficient Core Banking Objective is to … • Extending Banking and pre-built solutions to Integration speed time to market. Customer care and insight Optimization Customer Payments Analytics helps you build a foundation for • Bring in best practices and Care and Collaboration creating a single view of the customer Insight Securities business- specific usage Security and enabling more effective and Resiliency patterns to lower risk efficient sales and service • Support for adoption of open and industry Integrated risk management Integrated Risk standards supports taking a holistic approach to Management managing financial risk, financial crimes, • A choice of business operational and IT risk, and compliance applications to best suit customer needs • An approach to align technology with business This gives you speed, flexibility and choice in deploying solutions while reducing cost and risk! needs

Banking Industry Framework Core Banking Transformation Projects Architecture Transformation Customer Care and Insight Core Banking Transformation Integration Optimization Analytics Collaboration Security Resiliency Integrated Risk Management Process Agility Payments and Securities Application Modernization Single View of Customer Integration Platform Infrastructure Scalability Model Driven Development Dynamic Relationship Pricing Bundled Offerings Product Agility Flexible Core Business Process Performance Monitoring Replace outdated legacy applications with best-of-the-breed application components Replace outdated legacy applications with packaged applications Develop next generation applications Renovate existing legacy applications

Core Banking Transformation Extensions and Accelerators Banking Vocabulary Banking Data/Message/Service Model A common vocabulary using Business Glossary and prepopulated with IFW terms Services Components Building Blocks A canonical data/message/service model based on IFW to simplify integration Extensions for MDM Server that include core banking specific concepts such as loan, credit card, and Banking Extensions for MDM deposits Server Common foundational IT services such auditing, logging, and security to Common Shared Services speed solution development and deployment Solution Templates Reusable application components (e. g. , interest rates, price optimization) plus composable building blocks (e. g. , arrangement, campaign) Specific solution accelerators (e. g. , product bundling, loan origination); includes architecture, design, and a reference implementation A collaborative integrated solution development platform for core banking that integrates transformation methods, tools, Banking Transformation and assets Workbench Design Rules Proven architectural design work products for core banking projects

Customer Care and Insight Framework Projects Customer Data Integration Common Data Warehousing and Models Enable Information as a Service Customer Analytics Business Insight Search & Discovery Analytics Threat & Fraud Intelligence Multi-Channel Transformation Marketing Sales Service Cross Sell / Up Sell Lending Optimization Dynamic Product Bundling Customer On-boarding (aka Account Opening) Case Management Contact Center Optimization Disputes Event-Based Decisions Customer Segmentation and Profitability Campaign Management Marketing Communication Customer Preferences Know Your Customer Information Insight Interaction Customer Care and Insight Sales Service Core Banking Transformation Integration Optimization Analytics Collaboration Security Resiliency Integrated Risk Management Marketing Compliance Payments and Securities

Customer Care and Insight - Extensions and Accelerators IFW / BDW Process & Data Models Banking Data Integration Accelerators Customer-oriented banking process and data models speed requirements definition and implementation Detailed design templates for accelerating data warehouse development Process and integration models provide a higher order composite services in relation Common Business Language to Master Data Management Services Accelerator Server Web. Sphere Banking Content Pack Web. Sphere Multichannel Bank Transformation Toolkit Account Opening Banking Performance Blueprints 10 Pre-defined data, process and policy models for enterprise planning, and financial management and control Provides services references templates for building dynamic customer care processes Proven pattern and capabilities to accelerate the creation of integrated retail delivery applications Best practice business and technical patterns for an account opening SOA-based solution …and more

Integrated Risk Management Holistically manage risk across the enterprise Get Your Risk Data in Order Risk Insight and Control Real Time Risk Insight and Control Risk Optimization Risk Modeling and Scenario Analysis Suspicious activity reporting Integrated Fraud and Financial Crimes platform Transaction Monitoring & Detection Integrated Case and Investigation Management Comprehensive Security Control, Enforcement, Mgmt Trusted Identity Management Configuration/Incident/Problem/Change/Release Management Continuous, comprehensive fault monitoring Data Protection Application Integrity and Security Operational Risk Platform Compliance Information Lifecycle Management Corporate Governance and Internal Control Sales and Market Conduct Compliance Regulatory Compliance Prudential Compliance Collaboration for Legal and Compliance 11 Financial Risk Financial Crimes Operational and IT risk Governance and Compliance Customer Care and Insight Core Banking Transformation Integration Optimization Analytics Collaboration Security Resiliency Integrated Risk Management Payments and Securities

Integrated Risk Management - Extensions and Accelerators COGNOS Banking Risk Performance – Credit Risk Provides industry-leading credit risk insight with specialized templates to create executive dashboards and reports Consolidates credit / underwriting, market, and operational risk COGNOS Finance & information into an Integrated Risk Management enterprise-wide view (FIRM) COGNOS Risk Adjusted Profitability Blueprint 12 Blueprint for integrating risk information with enterprise-wide, distributed profitability management Entity Analytics and Global Name Recognition IFW / BDW Process & Data Models Provides real time identity and relationship recognition and resolution Risk-specific banking process and data models speed requirements definition and implementation Access and identity management, change management, and fault monitoring capabilities simplify audits for IT IBM Service Management for governance, risk and IRM compliance regulations

Payments & Securities Projects SEPA Infrastructure SEPA Mandates Management SWIFT / SEPA Process Integration Regulatory Compliance Customer Care and Insight Core Banking Transformation SWIFTNet Modernization SWIFTNet Integration Optimization Analytics Collaboration Security Resiliency Integrated Risk Management Modernization Payments and Securities Retail Payments Process Efficiency Digital Payments Conversion 13 Corporate Financial Supply Chain Optimization Corporate Payments ESB Global Liquidity Management Corporate Services MERVA Modernization “Single Window” for SWIFT Processing Standards Management Retail Processing Payments Card Industry Compliance International ACH and Consumer Remittances Payments Process Renovation Least Cost Routing Payments Processing ESB Faster Mass / High Value Payments Account Validation IBM Payments Director Implementation Imaged Check Processing Duplication Detection

Payments & Securities - Framework Extensions and Accelerators Web. Sphere Business Integration for Financial Networks WTX Industry Packs 14 Provides a single window to SWIFTNet services and reliable processing of high volume messages Assets for building an enterprise payments services bus that provides transaction-level visibility to Financial Transaction payments Manager Enables data transformation to industry standards (e. g. , NACHA, SWIFT, FIX) Common banking process and data models speed requirements definition and IFW / BDW Process & implementation pure. XMLTM Payments Bundles Provides efficient XML data management to industry standards (e. g. , SWIFT, FIX, Fp. ML, TWIST ) Web. Sphere Banking Content Pack SOA-based templates for faster development of payments business services IBM Payments Best Practices Financial Transaction Manager Payments Integration Use Cases IFW-Based Data Model State Engine Reference Payments Process Models Timer Services Reference Payments Services Interfaces Flow Coordinator Payments Objects User Interface ISO 20022 -Based Internal Canonical Format FTM for Web. Sphere Message Broker Data Models Best practice business and technical patterns for implementing a corporate Corporate Payments payments solution Scenario …and more

Lack of Common landscape in financial services hinders innovation with information Channels Branches ATMs Customer Call Centers Internet Relationship Managers/ Agents Inconsistent View of Customer Silos of Information Business Units Retail Banking Corporate Banking Wealth Management Insurance Capital Markets Data Systems DB App DW CRM DB App DB CRM DB App DW CRM DB App Information Locked in Repositories Inconsistent Data Core Systems ERP Core Systems ODS Core Systems CIF Core Systems Partners Core Systems No Single Version of the Truth Poor Channel Communication

The gap between today’s capabilities and those needed in the future need to be addressed to create true competitive advantage Current State Complex Business and Technology Initiatives Information, business process logic are captive to applications, aligned to organization silos. Big Gap Deliver Enterprise Customer View Desired State Master information governed by an infrastructure that makes data available across the enterprise, when and where it’s needed Deliver Enterprise Insight Manage Risk and Compliance As a result…. • Consumes 40%+ of IT budget • Inhibits flexibility and competitiveness • Proliferation of point solutions or departmental silos Optimize Business Processes Control Threats and Fraud Improve Data Governance Big Gap As a result…. • Information management platform and strategy leveraged across business and IT initiatives • Information services feed a flexible SOA, separating information from process

IBM Brings a Variety of Capabilities to our Services Engagements At a minimum, world-class consultants armed with Processes, Methods and Tools That can be augmented with any or all of + Solution Guidance Overview of how the Solution should be built + + Sales Accelerators Delivery Accelerators Executive Briefing Assets to accelerate Solutioning and Delivery Client Presentations Thought Leadership Proposal Templates Demo’s Industry Process and Data Models Reference Architectures Project Estimating Tools Testing Guidance + Solution Building Blocks / Code Assets Differentiating Assets CBM, CBTM Integration Assets CIF Technology Assets AD Implementation Toolkit, Improved Revenue, Lower Cost, Optimised IT , Market Differentiation, Improved time to market

IBM will use its capabilities, assets and client experiences supported by a strategic partnership relationship to help realize these benefits Business Solutions needed to respond in an increasingly competitive and regulative landscape Respond to increasing regulation Respond to customer demand Increase agility and responsiveness Maintain among best C/I Innovate business model, products and services Our Solutions Offerings have been based on implementation with other industry leaders Core banking & payment transformation Front Office Optimization Back Office Optimization Trade process Transformation Risk, Compliance & Governance Workforce, collaboration & performance Based on Industry Frameworks & a mix of In-house and 3 rd party assets CBM IFW/IIA SOA Ref. Arch. Assets Insight Business performance management Service Mgt. /Outs. North America sites Canada Calgary Toronto Montreal United Atlanta. States (2) Ashburn Boulder Chicago Columbus Dallas Lexington Los Angeles Miami Copenhagen Europe sites Mechelen/Nossegem Montpelier Milan (2) Ehningen Frankfurt Kista/Solna Winterthur Portsmouth/The Nest Warwick Japan sites Haga Sagmino Kawasaki Makuhari Nanko Mitaka Mihama Brno Dublin London Paris Madrid Shenzhen Lisbon Sterling Forest Seoul India sites Bangalore Chennai Hyderabad Turin Gaithersburg Szekesfehervar Tokyo Shanghai Mexico City Taipei Caracas Hong Kong Dubai Bogotá Singapore Service Delivery Center e-business Hosting Services (e-b. HS) Santiago Business Continuity and Recovery Services (BCRS) EMEA Regional Global Delivery Center (GDC) Global Delivery Center Hortolandia Sydney Sao Paulo Montevideo Johannesburg Buenos Aires Ballarat Melbourne Canberra Auckland Wellington CEO and CIO studies Point of Views based on industry research Banking/Insurance competences & capabilities Industry reference maps Management Program management method WWPPM project management Business Case & Value realization management Functions, process, data and services models Data warehouse based on ISO 20010 Service oriented architectures Decoupling of applications and infrastructure IBM partners with all major ISV vendors IBM Websphere and hardware Supported by tailored Methodologies, Techniques & Tools Methods Techniques Strategy & Change methods Custom delivery methods for Business and IT projects SOMA Component Business modeling IFW Process modeling SOA modeling Global application and infrastructure services Global business process outsourcing Tools Rational Portfolio Manager M&A Accelerator Websphere process modeler