collaboration: leveraging the power of community

Louis Hernandez, Jr.May 16, 2011

1

Collaboration: Leveraging the Power of Community

2

Accelerating Global Change

3

Housing starts at historic lows

Home values depressed

Foreclosures up 2%

4

3.2% GDP growth in 2011

Retail sales up 6.5%

Unemployment still high at 8.8%

The fastest distance between 2 points

A guy walking a tight rope

6

Margin Compression

7

Channel Proliferation

8

ExpandedMarketplace

9

52%

Operating Expense (Since 1995)

64%

Compliance (as of 2009)

208%

Loan Loss Provision(Since 1995)

Costs have Increased

10

Source: Raddon Financial Group, March 2011

Regulatory Compliance Burdens Small FIs

11

Industry Consolidation Continues

12

thereHave

Beenchallenges

13

Big Five Dominance

37% of U.S. Deposits

20% of Branches

60% of Assets

14

Consumers Prefer Community Banks and Credit Unions

15

Position To Win

Incr

ease

Rev

enue

Reduce Costs

Technology

Customer Intelligence

Manage Channel Proliferation

Mitigate Regulatory Burden

Increase Non-Interest Income

Diversify Revenue

Technology Impact

17

Now’s the Time forCollaboration

18

We’ve Seen the Enemy and it’s Not each other

19

Open Sourcing

Crowd Sourcing

Communities

Internal Sourcing

Shared Sourcing

Collaboration Alternatives

Controlled

Distributed

CO

ST

20

Collaboration in Technology

21

Collaboration in Technology

Collaboration in Technology

“Customers can get faster enhancements cheaper … competitors with legacy systems will have some

difficulty emulating, given the architecture of their systems.”

-- Bart Narter, CELENT

“About 70 applications have already been posted on the marketplace, called DNAappstore, most of them built by bankers and resellers.”

“…the technological innovation among its client

base and beyond can now be shared in ‘ways that are a

mind-bending change for our industry.’”

24

Embrace Your Opportunity

Follow Me:

www.facebook.com/toosmalltofail

www.linkedin.com/in/louishernandezjr

25

www.opensolutions.com