The document discusses the urgent need for transformation in the financial services industry, emphasizing the importance of embracing technology and innovation to address legacy issues and enhance customer-centric operations. It highlights the strategic approach of fins trans to optimize service delivery, reduce costs, and improve compliance in a rapidly changing market. The document outlines a vision for a 'green compliant' and efficient financial services environment that leverages collaboration and thin organizations to better meet customer needs and drive growth.

1. FIT FOR THE FUTURE. NOW. Neil A Buckley 2009 Transforming the Financial Services Industry

2. This Problem continues to get worse, but the Disruptive influence of ‘Going Green’ and competition from new players with no legacy should address these issues by Utilizing Smart Sourcing and refocusing the Financial Services organizations in their real areas of focus. Neil Buckley 2008 In 2008, 85 percent of financial services firms will continue to focus on "keeping the lights on" and will fail to redress the internal IT budget imbalance of 70 percent IT maintenance activity and 30 percent innovation. Source: Gartner 2007

3. Presentation Overview Introduction to Fins Trans and its people What does Fins Trans do? Current market situation / last 30 years’ legacy Why transform? Why now? How will businesses benefit Fins Trans Model Development timeline Review

4. Neil A. Buckley Strategist Thought Leadership Productivity Turnarounds Delivers Results Customer satisfaction Board confidence Past Employers CTO ING Group VP and CIO International Ops GMAC Director, Technology Merrill Lynch Bankers Trust Neil is a C-Level Information Technology & Business Solutions Executive and CEO of FinsTrans Directs business growth through the innovative use of traditional and new technology leading to enhanced productivity and client confidence The FinsTrans team is made up of experienced leaders and specialists in their fields who have ‘been there and done that’, they have executed major transformations and created and commercially constructed the innovative multi sourcing models that are now considered the industry standards.

5. Who are FinsTrans? Strategy and Execution Organisation which leverages with our partners a full service operation which enables “service orientation” from an end to end view of technology from applications through infrastructure and facilities. We help stabilise, address costs, talent management, develop the strategy for the new world, commercially construct, negotiate and Execute.

6. FinsTrans FinsTrans takes the strategic approach to optimise the delivery of the cost reductions, risk mitigation and compliance prerequisites combined with the efficient integration and delivery of “end to end” IT services in a controlled and transparent manner to Financial Services Organizations.

7. It is the planned transformation to a new Technology platform “end to end” in a controlled and transparent manner combined with a commercial model which enables financial services organisations to benefit from capacity on demand, managed services, non-ownership of assets for data centres and a fully hosted environment where ultimately the charges will be on a business transaction basis FinsTrans

8. FinsTrans enables financial services organisations to use technology in a smart way, to use IT as a true enabler and differentiator FinsTrans

9. It became clear to FinsTrans that data centre strategy for the ‘Green Agenda’ in isolation rather than a more holistic approach which included consideration of applications in combination to create a technology platform solution would be a failure, as this strategy would fail to resolve the underlying issues of legacy and number of applications, technology design and architecture, time to market, inability to absorb easily regulatory and compliance changes, lack of resilience and quality. FinsTrans

10. It is recognised in the market and in particular by the IT vendors that the approach including the multi vendor model is the correct one for the future and the Team at FinsTrans are credited with creating the future direction of commodity based services and is the direction the market is now taking. FinsTrans

11. State of the art data centres without migration of the applications will be futile as it fails to address the root causes of technology deficiencies, regulatory issues and would not address the complexity issues or the competitive issues of the organizations. FinsTrans

12. Current Market Situation Economic Climate Cost to Income High – pressure on Growth and Use of Capital. Legacy People, Operations and Technology, bespoke processes, complexity rife, legacy technology with minimal flexibility. Poorly defined business core competence and what is commodity No focus. No long-term strategy. Reacting not pro-acting. Minimal leverage or integration from M&A activity

13. Current Market Situation Customer Behaviour and Expectations Customer loyalty is changing. Customer service needs to be superior Convergence of channels Flexibility of products needed Time to market of new products MUST be FAST

14. Operations and Technology Extremely costly, minimal if any control between supply and demand, lack of strong governance and prioritisation between the front and backend. Silo mentality – “waterfall” method of working bureaucratic reactive and perceived to be “order takers”. Lack of control over assets, people and physical environment. Percentage baseline costs to new and innovation out of proportion

15. Operations and Technology Tactical approach, lacks strategic direction, Limited Vision. Skill sets out of date – “empire building” rather than creating “thin” organisation Way too many applications and minimal leverage, legacy operating systems, platforms, lack of life cycle management Physical facilities cannot cope with today’s demands let alone tomorrow Facilities do not cater for the “Green Agenda”

16. The future in Financial Services will be… Customer centricity – needs IT/IS to be a differentiator Time to market – in near real-time fashion Product flexibility – mass customerisation Which implies Commoditisation – back-end processes Standardisation – of processes, services and deliverables Simplification – of all deliverables and channels Due to the Complexity of Technology, Product and Distribution Channels The Chall e nge is to keep the Business Running while taking out complexity, integrating and commoditising to the New Simpler Service orientated world, the can only be done by setting a target ‘Green Compliant’ world and focus on transformation.

17. The five innovative forces in IT… IT on demand p Ability for business to select IT services, defined in business relevant terms, and pay for consumption Flexible, standardised IT services based on IT on demand model Example 1

18. The five innovative forces in IT… Distant collaboration p Ability to collaborate while at different locations through IT communication and knowledge tools Joint software development over multiple locations Examples Various meetings and trainings run through collaborative tools 2

19. The five innovative forces in IT… IT enabled business solutions p Creation of technology enabled business opportunities and quantum leaps Harmonization of value proposition with acquired Bank One through USD 600M IT investment Example 3

20. The five innovative forces in IT… Information company p Moving from physical to integrated data flow business IT enabled UPS to turn package delivery into global information business Examples Appointment of 'Head of Data management' reporting to CIO 4

21. The five innovative forces in IT… IT as an asset management organisation p IT organisation as a thin and highly skilled manager of outsourced/ offshored services Thin IT organisation managing external vendors for IT services Example 5

22. The Time to Transform is NOW Regulatory Pressure Green Agenda is here Regulation and Compliance will strengthen – becoming more costly and resource-intensive Instant access to reports and Instant transactions needed … IT TAKES YEARS TO TRANSFORM

23. The Time to Transform is NOW Competitive Market Changing New competitors with no complexity, no legacy and business models designed for leverage: Internet Telecoms India and China World is getting smaller and more complex – simplicity and strong governance needed to satisfy the global customer based in timely and cost-effective manner. Lack of internal skills to transform, the skills availability will be a major issues in the years to come. … IT TAKES YEARS TO TRANSFORM

24. Customer Centric Business Model High Net Worth Mass Market Affluent Student Time-poor Small Business Self-funded Retirees Etc... Family Price Sensitive Personal Service Security Feature-rich Applications Speed/ Timelines Etc... Relationship Borrow Money Invest Transact Manage Risk Branch Manager Telephone Mobile 3 rd Parties www Credit Transactions Deposits/ Savings Insurance Product Bundles Investment Channels Products Typical Customers Buyer Issues Financial Requirments Customer Requirements Bank Response Inquire Buy Use Inquire Inquire Inquire

25. From the Old World to the New World e.g. chain dependencies fully managed service vendor ownership of assets variable volumes full Life Cycle Management retained organisation: Fins Trans Green Compliant Predicable pricing New World Old World progressively managed down take advantage of any tactical benefit take out costs Legacy World Costly, high risk, not compliant Inject external mgt Standards, discipline New services Under development – Differentiators Tactical Benefits - Enablers

26. Fins Trans – the Evolutionary Step - Development of New World Strategy STEP ONE STEP TWO STEP THREE Mandate for change leading to Fins Trans strategy Identify legacy technology and processes Shared understanding of current performance gaps and need for significant change Outline of basic approach and key programme elements Orientation change of internal and external teams to pursue new approach Delivering the FinsTrans Strategy Recognition of balance required to support both change programme and keep the lights on Need to drive focus on fewest, highest, impact priorities Opportunity to make the strategy increasingly relevant to our people and partners through measurable improvement on most important areas across all our functions Reduce cost Objectives of this effort: Identify all performance gaps and ensure all gaps area addressed by Fins Trans (in partnership with the business) Focus our activities on truly delivering the critical aspects of Fins Trans vision (making the vision clear Create repeatable metrics framework for most important dimensions of FinsTrans improvements Execution and Refinement Clearly articulated priorites and objectives that drive an ambitious but manageable workload Implementation projects scoped and managed to deliver clear benefits and on schedule Rising pride and recognition in our accomplishments and confidence in our ability to make refinements “on the fly”

27. How would it impact the business p Innovative and fast moving Flexible Optimal value Business benefits from fast product development and delivery through new focus and management model for value-add services 'Thin IT' model enables flexibility for vendor to absorb/ divest activities and address high volume changes Business benefits from mix of low IT costs for commodity, non-differentiating services High IT effectiveness for value-add, differentiating services

28. Through 'thin IT', vendors will focus on core strategic activities while benefiting from cheaper and better commoditised services Demand Product portfolios Insourced Factory Outsourced By application A B C By location A B C By user group A B C Integrator Networks Service desk End-user computing Desktop hardware Server hardware Voice LAN Internal Organization with Finstrans

29. IT can help vendors benefit from competitive advantage in client service quality while reducing costs and risks IT enabling value proposition to be: Client focused Consistent horizontally across organisation and vertically across channels Global Front Office all vendors Back Office all vendors Customers Branches Direct Phone Mail ATM

30. IT must be transformed to enable and deliver more business value An End-to-end transformation programme will better enable the businesses through: Agreeing on one set of unique, non-overlapping products for the markets Supporting those with one common set of IT services and applications with a small number of standard service levels Rationalising the IT infrastructure by implementing “ruthless standardisation” in architectures, technologies and processes

31. Driving down IT complexity and cost will allow the IT spending mix to shift from a maintenance focus to improving business capabilities Reducing complexity will decrease the size and cost of IT while providing increased agility A simpler IT will allow more continuity in Business and facilitate quicker recovery in case of a disaster IT must be transformed to enable and deliver more business value

32. How we will get there Operating model Define 'operating model' by service segment Create common PMO for IT and Apps architecture, project management, performance steering Clean-up Infrastructure Outsource data centres activities and selected application development Standardise operational processes Create common IT Infra and Apps Account management group Enable flexible expansion and reduction of capacity Allocate pools of computing power and storage real time to meet demand Management processes Create financial and operational transparency Implement performance dashboards Tighten alignment between Infra/apps/ business Measure performance through business-centric SLAs (e.g., trade execution time) People Initiate performance based culture Further improve IT skills Improve business skills in order to create organization capable of achieving IT-enabled business value Merge IT Infra and Applications activities Manage 'thin IT' (apps and Infra) through single Head Improve cross-Infra and Apps skills with focus on business value STEP ONE STEP TWO STEP THREE STEP FOUR VENDOR SUCCESS

33. Business benefits in the New World Benefits on regulatory/legal environment Certified Service Providers Market proven IT Controls Implicit DR Improved change control Green Issues resolve

34. Business benefits in the New World Better time-to-market, flexibility, speed to adopt Use of standard components, best practices Innovation capability Capacity on demand, scalability Access to resources and skills Overcome limitations within Facilities More variable costing and pricing Capacity on demand Predictable TCO Better asset utilization

35. Business benefits in the New World More variable costing and pricing Capacity on demand Predictable TCO Better asset utilization

36. Toward the global Technology paradigm From To Silo view on IT Infra, Apps, businesses Optimizing IT and Apps cost base … Struggling with complexity (Architecture, governance)… Holistic and integrated view on Infra, Apps, businesses … Reducing unit cost of commodity services while focusing on true client added-value … Thin organization focused on added-value Changes in Operating model and risk Mgt processes People skills

37. The new role of Technology Task orientation Relationship orientation Management focus Leadership focus Control skills Influence skills IT knowledge Business knowledge Transactional Trusted-ally Functional Partnering

38. Where to with Technology Value generated by IT IT influence CIO moves to non-IT role, e.g. COO or CEO Business Leader At risk Trusted Ally Transactional Partnering

39. Business benefits from the New World Better time-to-market, flexibility, speed to adopt Use of standard components, best practices Innovation capability Resource Capacity on demand, scalability Access to the right level of competencies and and skills Overcome limitations due to growth within facilities

40. Benefits on regulatory/legal environment Certified Service Providers Market proven IT Controls Implicit Disaster Recovery and Business Continuity ITIL based controls like change control, configuration management, etc.. Green agenda satisfied Business benefits from the New World

41. More variable costing and pricing Capacity on demand Predictable TCO Better asset utilization Head to cost per business transaction Business benefits from the New World

42. Words of wisdom!! Progress is impossible without change, and those who cannot change their minds cannot change anything George Bernard Shaw