Delivering global technology solutions in Emerging Markets

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August 2010

Ken Janssens, Executive DirectorHead of Emerging Markets Technology for Latin America

!!J.P. Morgan in Emerging Markets

J.P. Morgan is a leader in Emerging Markets around the globe with an onshore trading presence in 18 Emerging Markets countries across Latin America, Eastern Europe, Middle East, Africa and Asia

We have had a presence in most of these countries for more than 40 years, e.g. we have been in Brazil since 1960

Emerging Markets is a key priority as J.P. Morgan looks to diversify revenue streams from the US and Europe

With more than $7 Billion of technology spend a year and 8,000 technologists J.P. Morgan clearly has a lot of scale and innovation at its disposal to deliver technology solutions around the world

However extending our technology platforms to Emerging Markets provides some challenges…

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Emerging Market Bond HouseInternational Financing Review, December 2009

Best Global Emerging Market Equity HouseBest Global Emerging Markets Corporate ResearchBest Global Emerging Markets Sovereign ResearchBest Debt House in Latin AmericaEuromoney, July 2010

Best Investment Bank in Latin AmericaLatin Finance, January 2010

#1 Latin America Equity Research HouseInstitutional Investor, December 2009

Best Foreign Investment Bank in China, Hong Kong, Singapore and TaiwanThe Asset, December 2009

Challenges around delivering global technology to Emerging Markets

Finding local resources that have experience dealing with globaltechnology teams in the US, Europe and Asia

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Challenges Recommended Approach

Our profile in the local market attract talent (particularly at the graduate level). We may be a big one of the biggest investment banks in the world but compared to local blue chip companies in Emerging Markets we are small

Global vendor solutions that work in places such as New York, London or Hong Kong tend to struggle when they are asked to “tropicalise” into Emerging Markets

Double/Triple regulatory pressures. We are regulated by the US, UK and EM local regulators

Getting our global technology teams to understand the intricacies of Emerging Markets, e.g. lunar calendars

Local vendor challenges: 1) the JPM global standards around security and data protection are quite often ahead of local markets standards

People

Type

People

Partnerships

Regulatory

People

Partnerships

Managing the global vs local matrix across many lines of business (Equities, Fixed Income, Foreign Exchange, Private Banking, Treasury Services)

Governance

Getting the balance right between what is done by local development teams (flexibility/time to market) and global development teams (technology re-use/scalability)

Have local development teams own the “first” (stock exchange/broker connections) and “final” mile of development (local clearing/settlement interfaces)

Architecture

Leverage global resource pools to find EM nationals who want to repatriate home and invest in training and foreign assignments for local talent

Make sure global technology teams spend time on the ground, particularly around the kick-off

Expand global graduate development programs into the larger Emerging Markets offices so that graduate talent can take advantage of NY/London training programs

Choose vendors with proven local EM experience and if not possible insist they set up local rep offices in Emerging Markets locations

Perform extensive due diligence on the local vendor (OSP, Financial health, look for customers beyond local banks)

Invest in a single data warehouse solution for all regulatory reporting with strong centralised data model management

Maintain cross-line of business local/regional forums as well as dedicated line of business regional/global forums

Putting EM on the map with global technology teams in terms of priorities can be a challenge, equally getting local business stakeholder bought into the merits of using global systems can be tough

Governance1) Make the right choice on what should be leveraged from global systems vs local/regional systems and involve the local business stakeholders in this decision process, 2) build and nurture strong relationships with NY and London peers

This material is provided for information only and is not intended as a recommendation or an offer or solicitation for the purchase or sale of any security or other financial instrument. In no event shall JPMorgan be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you in evaluating the merits of participating in any transaction. JPMorgan and its affiliates may have positions (long or short), effect transactions or make markets in securities or financial instruments mentioned herein, or provide advice or loans to, or participate in the underwriting or restructuring of the obligations of, issuers mentioned herein. Nothing in these materials constitutes a commitment by JPMorgan or any of its affiliates to enter into any transaction. Clients should contact their salesperson at, and execute transactions through, aJPMorgan entity qualified in their home jurisdiction unless governing law permits otherwise. JPMorgan is the marketing name for the investment banking activities of JPMorgan Chase & Co. and its subsidiaries and affiliates worldwide.Copyright © 2010 JPMorgan Chase & Co. All rights reserved.