Misc.

1. WANT TO BE THE LUNCH
OR THE LION?
Hunting for Better Core, IT and FinTech Deals

2. 2
AARON SILVA
CEO of Paladin fs & The Golden Contract Coalition
Professional Negotiator & Industry Disrupter
$176 Million in Merger
Value Accretion
$386 Million in
Cost Reduction
238 Wins / 0 Losses
Paladin Blue Book
Launched June 2016
Group “Offensive”
Negotiations
200+ Institutions
Target $1B in Total Contract Revenue
$500 Billion + 30 years
IT Contract Negotiations

3. 3
The future of banking is here –
like it or not.
Why are we still dealing with
legacy cores and their one-sided
deals?
How can we prepare my bank for
fintech?
A CHANGING LANDSCAPE

4. 4
SMALL TO MIDSIZE BANKS ARE UNDER SEVERE PRESSURE
Smaller banks are being squeezed by big banks, big tech and fintech
In a Year of Tremendous Growth
Community Banks have Underperformed
Relative to Midsize and Large Banks
Large Banks Dominate FinTech Investment
8.74%
13.20%
15.75%
18.56%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Community Banks S&P 500 Midsize Banks Large Banks
HOW CAN COMMUNITY BANKS COMPETE AGAINST SCALE, CUSTOMERS AND TECHNOLOGY?

5. 5
9.15% 8.77%
10.71%
3.30% 3.75%
15.08%
13.75%
16.76%
12.78%
18.67%
2018 2019 2020 2021 2022
Percent
Increase
Total Non Interest Expense Data Processing Expense
TECHNOLOGY & RISING
Technology cost rising faster than other non-interest expenses
Source: Financial Information Systems
Core IT
Solution Market
Competitiveness

6. 6
ANTIQUE SOFTWARE AND INFRASTRUCTURE
5 Core IT suppliers own the banking technology industry.
Lack of innovation combined with
…are crippling smaller financial institutions.
Long implementation processes Ridiculously high fees Long term, one-sided contracts
Fintech companies have difficulties to integrate to the legacy stack This can be addressed without converting to a new core

7. 7
DEFINE “FINTECH"
Disruptive –
competing with banks
Collaborative
”friendly” - enhancing
banks
Legacy – Fiserv, FIS,
Jack Henry, etc.
Over 10,000
companies worldwide
Larger banks are actively
investing, incubating,
partnering
Smaller banks counting on the
core vendors to innovate
VC/PE investment
continues to grow

8. 8
2021 FINANCIAL CANTOR FITZGERALD, EVERCORE AND
CITADEL RESEARCH
FIS Fiserv Jack Henry
Free Cash Flow $1.5 Billion (+$37M) $1.2 Billion (-$20M) $230 Million (-$25M)
Capital Expenditures 1% of revenue 6% of revenue 4% of revenue
Product Development 6% of revenue 3% of revenue 8% of revenue
Focus • Data center consolidation
• Cloud strategy
• Modernization of
omnichannel and digital
banking solutions
• User experience updates
• Enhancements to platforms
• Payments integration
• Digital solutions
• Card Processing platform
migration
• Treasury management
• JHA Payments Hub
• Open banking strategy
Redacted to protect proprietary information
Access full presentation through Paladin fs
asilva@paladin-fs.com

9. 9
COMPETITIVE TECHNOLOGY “CHASM” IS LARGE
Friendly FinTech is moving to fill the IT CHASM created by Legacy Core & IT
Loan
Origination
Systems
Robot
Process
Automation
Online
Banking
Artificial
Intelligence
Advanced
Payments
Mobile
Banking
Decision
Intelligence
Block
Chain
Voice
Banking
Chat
BOTs
Crypto-
Currencies
IT CHASM

10. 10
LEGACY CORE IT TECHNOLOGY
INTENTIONALLY LIMIT FUTURE COMPETITIVENESS
RESULT:
SMALL INSTITUTIONS ARE UNABLE TO COMPETE
WITH LARGER COMPETITORS
N
O
O
P
E
N
A
P
I
s
Redacted to protect proprietary information
Access full presentation through Paladin fs
asilva@paladin-fs.com

11. 11
LEGACY CORE IT CONTRACTS
INTENTIONALLY LIMIT FUTURE COMPETITIVENESS
RESULT:
SMALL INSTITUTIONS ARE UNABLE TO COMPETE
WITH LARGER COMPETITORS
Alternative Competitive Suppliers
Fintech Suppliers & Solutions
Incentives for Innovation (The IT GAP)
Fair Market Pricing
Redacted to protect proprietary information
Access full presentation through Paladin fs
asilva@paladin-fs.com

12. 12
BARRIERS TO FINTECH ACCESS
Contractual and Financial Penalties designed by Legacy Core IT Suppliers
Your Data

13. 13
Your Data
BARRIERS TO FINTECH ACCESS
Contractual and Financial Penalties designed by Legacy Core IT Suppliers

14. 14
NO MESSIAH (YET)
14
CORE
1. Pent up demand
2. Lack of take-away capital
3. Risk of change

15. 15
In Market / Proven
In Market / Unproven Pre Market / Unproven
Pre Market / Proven*
NO MESSIAH (YET)
Cores
*Not proven in U.S. market.
Redacted to protect proprietary
information
Access full presentation through Paladin
fs
asilva@paladin-fs.com

16. 16
In Market / Proven
In Market / Unproven Pre Market / Unproven
Pre Market / Proven
NO MESSIAH (YET)
Online Banking
Redacted to protect proprietary
information
Access full presentation through Paladin
fs
asilva@paladin-fs.com

17. 17
In Market / Proven
In Market / Unproven Pre Market / Unproven
Pre Market / Proven
NO MESSIAH (YET)
Online Account
Opening
Redacted to protect proprietary
information
Access full presentation through Paladin
fs
asilva@paladin-fs.com

18. 18
WHERE CAN A BANK START THEIR FINTECH PLANNING?
Omnichannel Mobile-first Specialty / Niche Failure

19. 19
THE OMNICHANNEL VIEW
IoT Devices
Voice-Enabled (Alexa, Google, Siri, etc.)
Wearables
Mobile/Tablet
Desktop/Online
Social Media
ATM/ITM
Call Center
Messaging/Chat
Text/Chatbot
Relationship Manager
Branch Teller
Third-Party Partnerships

20. 20
THE MOBILE-FIRST VIEW
IoT Devices
Voice-Enabled
(Alexa, Google, Siri, etc.)
Wearables
Mobile/Tablet
Social Media
Desktop/Online
ATM/ITM
Call Center
Messaging/Chat
Text/Chatbot
Relationship Manager
Branch Teller
Third-Party Partnerships

21. 21
THE RISE OF CHATBOTS

22. 22
CONNECTING - UMPQUA

23. 23
PREPARE FOR FINTECH ADOPTION
Educate your executive team and board of
directors.
Assess your technology stack.
Determine where fintech can help.
Develop a 3-5 year fintech innovation plan.
DE-HANDCUFF FROM LEGACY CORE
Restructure Core & IT contracts to lower barriers
to access of competitive Fintech suppliers.
Repurpose cost savings toward Fintech initiatives.
Build / buy data warehouse to create abstraction layer.
Develop 3-year roadmap to migrate 80% of
customers to online and mobile.
TWO PRONGED FINTECH ATTACK

24. 24
BE THE LION
NOT THE LUNCH
NEVER let your trust for
a vendor get in the way
of your critical thinking,
business sense and
fiduciary responsibility.
Your vendor will NEVER
volunteer something that
benefits you more than
them – you have to
know what to ask for.
NEVER go into a
multi-year, multi-million
dollar negotiation
without doing your
research and having
hard market intelligence
in your pocket before the
negotiation!

25. 25
FREE, NO STRINGS ATTACHED CONTRACT RISK & COST ASSESSMENT
EMAIL US
Call Us: 877.746.4859
info@paladin-fs.com
3 Current Invoices
+ Contracts
Completely
Confidential
No Cost
No Obligation

26. paladin-fs.com goldencontract.com
THANK YOU
Aaron Silva
877-746-4859 x 704
asilva@paladin-fs.com
asilva@goldencontract.com