Prepared for: Gartner FinTech Executive Summit (Orlando, FL)

By: Vin Malhotra

October 4 - 8, 2015

2

Todays Agenda

Context for strategic imperatives driving core banking and channel refresh

Understand market opportunity and how to create value

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Macro Drivers Shaping the Financial Services Industry

Governance / Risk / Fraud / Compliance

Customer Experience (CX)

Cost Efficiency

Revenue Growth

Manage regulatory and compliance mandates using a modern platform

Communicate with clients via their preferred channel building brand loyalty and ongoing engagement

Lower IT and operating costs for traditional run the bank activities

Drive revenue via context and lifecycle aligned products / services

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Strategic Drivers For Core Banking Refresh

Customer Experience

Operational/CostEfficiency

Regulations & Compliance

Operating Model

IT Slowing Down Business Innovation

Competitiveness

Risk Management

Enhance customer experience through customized, quality, real-time and consistent cross-channel product and services offerings

Achieve maximum availability, scalability and automation driving lower operating + IT costs while enhancing delivery efficiency

Meet challenges of increased regulations, money laundering, KYC / BSA / AML standards, financial controls and timely reporting

Upgrade the banks business strategy and execution to meet the demands of the digitally oriented landscape

Reconfiguration of existing architecture with the objective of supporting product and pricing innovation

Defend against competition from local and specialist banks /marketplace lenders through customized offerings and accelerated product launch / shortened time to market

Strengthen risk management practices with audit trails, automation and controls providing the right information at the right time

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Top Investment Areas

Source: BAI Retail Bank Executive SurveyBase: All Technology, Retail Marketing, and Payments respondentsQ13. Considering the various aspects of your institutions technology needs please select up to three areas where you think your institution will allocate the most investment dollars in the next year to two years?

Online and mobile platform upgrades are top overall investment areas followed by core banking enhancement

Under $2.5B in Assets(n=61)

$2.5B or more in Assets(n=58)

59% 60%

34% 29%

15% 43%

34% 17%

25% 26%

16% 29%

13% 22%

21% 12%

26% 5%

8% 16%

7% 12%

10% 9%

2% 3%

Chart1

0.025210084

0.0924369748

0.0924369748

0.1176470588

0.1596638655

0.1680672269

0.1764705882

0.2268907563

0.2521008403

0.2605042017

0.2857142857

0.3193277311

0.5966386555

Series 1

Sheet1

Series 1Series 2Series 3

Other3%10%5%

Specialty technology products (pricing, underwriting, etc.)9%20%10%

Other legacy systems replacement or upgrade9%30%15%

Legacy systems maintenance12%40%20%

Workflow management16%

ATM and self service network changes17%Other legacy systems replacement or upgrade

Core systems replacement18%

Integration of existing and emerging channels23%

CRM25%

Electronic document management26%

Analytics/ data warehousing29%

Core systems enhancement32%

Online and mobile platform changes60%

P2P payments31%

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Core Platform Renovation Enables The High Performing Bank

Comprehensive View of the Customer

Customer Offers

Common & Modular Manufacturing

Integrated Corporate Core

Single source of truth forcomprehensive set of customer information

Sub-segment model definition based on full set of customer information

Centralized customer attributes in customer (rather than product) systems

Roles, and processes redesigned to decrease tolerance for data inconsistency and poor data quality

Sales and Service

Corporate core

Business integration

Customer offer assemblyCo

mpr

ehen

sive

View

of C

usto

mer

&

Invo

lved

Party

Anal

ytics

Enterprise integration

Brand and marketing

ManufacturingCross product

Product

Integrated Multi-Channel Sales &

Service

Actionable Insight

Differentiated segment specific offerings such as customer life stage & needs

Multi-product propositions, personalization, speed to market & experimentation

Multi-product enabled origination and servicing processes

Product modularization to enable speed to market

Consistent sales and servicing across channels Unified sales and servicing platform supporting

cross-selling, proactive leads, paperless, simplified workflow,

Customer right-channeling, and front office right-tasking

New channel enablement such as kiosk, remote bankers, social media, extended mobile

Unified, service oriented, business aligned technology & operations capability across operating units, products and customer segments

Unified technology platform Modularized, real-time, once

& done processing Modern, fit-for-purpose, non-

overlapping application and infrastructure assets

Proactive customer risk mgmt: limit setting, pre-approvals,

Risk-prevention focused operating model, e.g., organization, compensation, automation, control, monitoring and rewards/incentives

Customer centric & business-oriented performance measures across operating units, customer segments and products

Enhanced customer and offer dimension for granular insights into customer needs

Actionable customer insights for next best offer, leads, sensitivity, and churn

Integrated across LoBs data mining capability leveraging new technologies such as big data, o/I CRM

Advanced analytics in decision making for profitability, enterprise risk, workforce and operations

Execution Excellence

Integrated Talent Management model including Competency-based approach to Recruiting, Learning and Development

Well defined operating model, procedures, methodology and monitoring to manage complexity on business issues, projects,

Specialized acquisition engine capabilities for M&As, international expansions,

Brand & Marketing Promise to customers is

consistent with the actual customer experience

Positioning is supported by the capabilities of the bank

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Key Questions FIs Should Address

Bank Strategy: What products and

capabilities are needed to support the Banks business strategy?

Core vs. Channel: Should the Bank focus

on core platform or channel / mobile upgrades first?

Remediate or Replace the Core:

Should the Bank work to remediate issues with

the current core banking platform or replace?

Core Banking Platform:

If the Bank decides to replace its core platform, how should it select the

approach?

Industry Leading

Traditional

Core

Channel

Remediate

Replace

Business Capabilities

Tech Capabilities

Strategy based on differentiated products / high touch service capabilities

Strategy based on other factors such as rates or service

Priority if current platform cannot support strategy or stability / reg issues

Priority if core is stable and meeting strategy; some rework acceptable

Core platform enables business strategy

Stability issues can be resolved

Core platform does not enable business strategy (M&A, new products, expansion)

Stability issues cant be resolved

Strategic products Speed to market Cross sell Sales effectiveness

Functionality Application Architecture Technology Maintenance & Support

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Executive Bio

My BrandI have ~30 year track record in advising clients on upgrading their technology infrastructure to improve sales, service and operational effectiveness. And have extensive experience in leading teams that deliver high impact and innovative projects:

Improving process effectiveness via platform upgrades / process automation

Enabling regulatory compliance and risk mandates Improving client satisfaction / net promoter scores Increasing mobile channel adoption Enabling wealth advisor sales / service fulfillment Attracting digitally enabled high net worth clients Launching mobile enabled context sensitive offers and loyalty

programs

Thought LeadershipPresented to leading Banks worldwide in workshops and briefing sessions on core banking refresh approaches, mobile app deployment and impact of digital transformation on their operating models. Speaker and panelist at leading industry conferences (BAI, CBA, Cognizant Community, CEB TowerGroup, SAP Sapphire and Oracle Open World). Published multiple research based white papers on industry themes, challenges and response strategies

Tier I Company Experience Highlights Accenture (Managing Director & Global Banking Practice Leader) Cognizant Deloitte Consulting LLP Fidelity (FIS) Citibank

Key Executive Level Positions Leader For Global Banking Transformation Practice (~$200 M

Revenue) Practice Leader for Global IT Services Company SVP & Corporate Strategy Lead for a Leading Financial Technology

Provider

Strategic thinker, thought leader, and execution focused executive with ~30 years of expertise focused on the intersection of the Financial Services and Technology industries. Demonstrated experience in digital strategy / business transformation leveraging core banking refresh to increase revenue / market share, lower risk and decrease operating cost for Global 1000 Banking clients

Todays AgendaMacro Drivers Shaping the Financial Services IndustryStrategic Drivers For Core Banking RefreshTop Investment AreasCore Platform Renovation Enables The High Performing BankKey Questions FIs Should Address Executive Bio