Internal How can Virtual Accounts solve corporate banking

Internal How can Virtual Accounts solve corporate banking challenges Micalea Vernmark Head of Consulting Payment Solutions, Tieto November 6, Baku IV International Banking Forum

About Micaela Vernmark Head of Consulting, Payment Solutions © Tieto Corporation Consultant Client coverage Investment banking, loan origination

Corporate challenges Visibility and control of liquidity Immediate and automated reconciliation High costs and lack of flexibility Decentralised liquidity makes it challenging to have a clear liquidity overview and forecasting capability Lack of standardisation and harmonisation and pressures from regulatory change. Account administration and transaction processing costs. © Tieto Corporation Ability to automatically allocate funds to the correct account Flexibility to define accounts reflecting business operations

Real-time imperative of the industry Banks need to address real-time ecosystems Key trends Business drivers Imperatives Growing commodisation New revenue streams Develop new B 2 B and B 2 C value-added services Connected commerce Integrated & automated payments Provide seamless user experience across value chain Enable real-time for liquidity, payments, FX and similar Real-time business Real-time information flows Analytics and data Compliance and data monetization Build-in compliance, security and data process Transaction cost pressure Legacy modernization and consolidation Impement open, scalable platform © Tieto Corporation

Virtual Accounts – value proposition Simplification Optimise number of accounts Standardization Centralisation Real-time centralised liquidity Multi-bank liquidity mgmt POBO/ COBO Inhouse bank, intercompany lending Visibility & Control & Risk management © Tieto Corporation Segregation Flexible reporting VAM Self-service virtual account structures Invoice matching and itemised reporting Account receivables reconciliation Invoice Matching Monitoring & Accounting

The general principle in Virtual Account Management is to reduce the number of real accounts by creating off-balance virtual accounts $ £ € Banks Core system BANK CORE SYSTEM TOP ACCOUNT € € Exception Sub entity 2 Sub entity 1 £ £ € Business 1 Virtual Account £ © Tieto Corporation $ Virtual Account £ Business 2 Business 1 Virtual Account € Virtual Account £ Business 2 Virtual Account $ ü ü ü ü Virtual overlay Client self-servicing Visibility & transparency Timely reporting Account administration Funds segregation Funds aggregation

Most typical use cases 7 © Tieto Corporation

Payment insourcing (e. g. PSP) Physical accounts $ £ € Shadow accounts $ £ € Exc Exc BANK ACCOUNTING SOLUTION PSP Client 1 Aggregation accounts £ 9 © Tieto Corporation Client 3 Client 4 € London £ Access to large global banking networks Client 2 IHB, interest allocation and inter-company lending Paris € Attractive FX sharing models to enhance PSP returns VIRTUAL ACCOUNTS Pre-funding options – automated payment and receipt of funds Attractive pricing models based on large transaction volumes

State-of-the-art user experience Intuitive interface External widgets Multi-bank view, single log-in Fully customisable File upload Multi-device support 10 © Tieto Corporation