This document discusses how financial services firms are converging their finance, risk, compliance and treasury functions in response to regulatory pressures and market changes. It outlines trends driving this convergence, including increased complexity, competition and regulatory uncertainty. Firms must ensure financial and strategic decisions minimize risk exposure and consider impacts on customers, transactions and investments. The document also examines priorities firms are investing in, such as risk management and compliance, and how better integrating data and perspectives across divisions can help optimize goals around profitability and risk management. Examples of scenarios where converged information strategies could help with regulatory reporting and capital adequacy assessments are also provided.

1. Providing Value by Converging
Finance, Risk, Compliance & Treasury
(FRaCT) Information Initiatives
Sean O’Dowd
Capital Markets
July 31st, 2012

2. AGENDA
Topics discussed in this webinar include:
• Trends in converging finance, risk and compliance strategies
• Understanding why these intersections are needed
• How firms can begin to develop a cohesive information strategy for success
Financial services firms are reshaping how their finance, risk, compliance and
treasury department processes, information and infrastructures are aligned.
External mandates have established the requirements, and business
pressures have forced reaction:
• Does your firm understand the impacts of its financial and treasury decisions related to
customers, transactions, or asset investments?
• Are conventional accounting (ledger), financing (capital), and treasury (cash/liquidity)
practices yielding the desired outcomes while minimizing your firm's risk exposure?
These decisions are determining the course and success of strategies. Be it
banking, capital markets or insurance, all financial firms will need to rely on their best
information to make the best decision.

3. Financial Landscape Shifts
Forces Change
“Soul-searching is Job #1 at a lot of banks”
What is currently influencing the market and
putting pressure on financial service firms?
• Competition • Global economic instability
• Complexity • Regulatory uncertainty
• Demand (Securities) • Volatility
External Factors (Macro)
Internal Factors (Control)
• Complexity • Profitability (Margin) pressures
• Customer Mgmt. • Risk exposure (Credit, IR, FX)
• Managing Liquidity • Time to market
• Operational Improvement
8/2/2012

4. Change Alters Priorities for Financial Services Firms
What are your firms investment priority areas?
Compliance
Risk Management
Compliance IT Security
Customer Experience
Risk
Mobility
Analytics
Finance &
Profitability Opertational Excellence
Revenue Drivers
Busintess Intelligence
Cloud Computing
Virtualization
Social Media
Collaboration
Mobile Banking
Talent Management
Globalization
Manage File Transfer
Executive Search
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Within 12 Months Beyond 12 months
Source: IDC Financial Insights

5. Priorities Require Tighter Alignment to Optimize Goals
Finance & Profitability Risk
Evaluate & enhance financial Manage risks
performance • Measure and monitor risks
• Continued cost reduction to Divisions across across business
remain profitable groups remain lines, customers and
• Integration of balance securities
sheet and portfolio capital • Transparency & proof of
management
Culture process to regulators
Data
Treasury Compliance
Definitions
Maximize the firm's liquidity Ensure the firm adheres
• Need to hold more capital Perspectives mandates
that impacts profitability Tasks • Implement mandates &
(scare resource) monitor fraud/non-
compliance
• Streamline legal and audit
processes
Collaboration Between Business Units to Drive Synergies
Profitability Pressures & Ability to Forecast Results
Greater Cost of Regulation
Required Transparency
Increased Need to Respond Quickly

6. Market Response So Far….
Financial Institutions are taking action:
• Improved counterparty management
• Integration of regulatory and economic capital
• Daily/frequent stress testing with more complex
scenarios, more scenarios and more iterations
• Extension into earning variance and volatility
testing
• Greater operationalization of risk into
transactional decisions
Financial Institutions are developing more
flexible and agile processes to respond to
unknown and evolving requirements

7. Impact of Getting It Wrong?
The Task at Hand is Extremely Challenging, Complex & Imperfect
$5.8 billion and counting
To date, how much JPMorgan has lost on the trade put in place by the London Whale (aka Bruno Iskil)
"I think no matter how good you are, how competent people are, never get complacent in risk. Challenge
everything” Jamie Dimon, CEO JPMC
$7 billion and 10 Years
Amount HSBC’s Mexican bank shipped in bulk cash to the firm’s U.S. bank in 2007 and 2008 for
laundering. Further, HSBC issued a 335-page report describing a decade of compliance failures by
Europe’s biggest bank
David Bagley, HSBC’s head of group compliance, offers his resignation at HSBC’s Senate hearing
5,350 Jobs Shed
Recent announcement by three of the world’s largest banks due to industry struggles to adapt itself to
continuing economic woes and the advent of new regulation. More cuts anticipated.
“The whole industry faces structural change. The impact of OTC reform, Volcker and Basel III could lead
to a 15-20 per cent headwind on revenues over the next two to three years” Analyst
24 million man-hours and $22 billion
Number of man hours estimated to comply with the DFA and the total number of expenses or lost
revenue for the 23 largest banks in the US from just two parts of DFA
“While the promised benefits of Dodd-Frank are still illusory, the costs are beginning to become crystal
clear” Oversight and Investigations Subcommittee Chairman Randy Neugebauer

8. Impact of Information Overlaps
Improve Data Reuse, Question Depth & Analytical Insights
~70% of risk information can be reused for other business groups
Improve Short Optimize financial
Term Liquidity: decisions
ex. Cash calls,
exposures, Manage risk with
coverage greater financial
accuracy
Improve longer
term financial Financial reporting
planning, risk and performance
appetite & management
business
evaluation
Infrastructure Risk is moving from
struggles to deal an oversight function
with regulatory to one embedded in
agility everything
Unknown Siloed risk disciplines
requirements make it hard to bring
from forthcoming together data,
mandates systems, organization
Stricter polices to understand
requiring systemic risk
transparency &
proof of process Greater insights in
and data quality. positions and ability
to cover
8/2/2012

9. Example Scenarios
• Capital Adequacy & Regulatory Reporting: Basel III, Dodd-Frank &
CCAR (Comprehensive Capital Adequacy Review)
• Integration of balance sheet and portfolio capital management
• Go forward integrated capital plan
• B/S and I/S plans tied to risk portfolio loss, capital and stress test at lower levels
of granularity
• US FED to review go forward capital plans that must include stress testing and
capital to cover all material risks
• US FED can stop capital reducing activities like dividends and stock repurchases
• Requirement to provide detailed position level data used for stress tests
• Pre-trade scenario analysis
• Users call for trade, risk, liquidity data and would like to understand the impacts
to the G/L or balance sheet. The goal is to determine the merit of a trade with
greater insight into broader exposure limits, cash to cover, ledger impacts and
profitability.
• Onboarding
• Integrated data store helps clear KYC requirements once (reduce duplication),
with a common identifier understand any existing cross-business product and
service touch points. Then understand how profitable an existing customer is and
the costs typically associated with providing services.

10. The Roadmap to Data Reuse & Change
Business
Cultural
Driven Roadmap and
alignment and
Vision and Prioritization
governance
Strategy
Sustainability
Repeatable
Technology and
Incremental
Enablement Continuous
Program
Improvement

11. New Initiatives are Changing the Way the Work Has to
Be Done
Infrastructures are Typically Tangled and Complex
• Common Challenges
• More frequent and changing reporting increasingly requiring broader & more detailed data
• Not all required data is available in the Data Warehouse or ERP
• Modelling/Analytics engines source data from multiple locations
• Reports from multiple sources result in different answers and need to access multiple
systems
• Data quality problems
• Significant time spent on data validation and reconciliation

12. Build and fund one step at a time
Source Data
ORDER
ORDER NUMBER
ORDER DATE
Detailed,
STATUS
ORDER ITEM BACKORDERED
QUANTITY
CUSTOMER
Normalized Data
CUSTOMER NUMBER
CUSTOMER NAME
ORDER ITEM SHIPPED
CUSTOMER CITY
CUSTOMER POST QUANTITY
CUSTOMER ST SHIP DATE
CUSTOMER ADDR
CUSTOMER PHONE ITEM
CUSTOMER FAX ITEM NUMBER
QUANTITY
DESCRIPTION
Logical
View/Logical Data
Mart CRS
Business Users
Compliance

13. Add More Source Data… and Use It For Multiple
Purposes
Source Data
ORDER
ORDER NUMBER
ORDER DATE
Detailed,
STATUS
ORDER ITEM BACKORDERED
QUANTITY
CUSTOMER
Normalized Data
CUSTOMER NUMBER
CUSTOMER NAME
ORDER ITEM SHIPPED
CUSTOMER CITY
CUSTOMER POST QUANTITY
CUSTOMER ST SHIP DATE
CUSTOMER ADDR
CUSTOMER PHONE ITEM
CUSTOMER FAX ITEM NUMBER
QUANTITY
DESCRIPTION
Logical
View/Logical Data
Mart CRS
Compl
Fin
Business Users
Compliance Finance Risk

14. And so on…
Source Data
ORDER
ORDER NUMBER
ORDER DATE
Detailed,
STATUS
ORDER ITEM BACKORDERED
QUANTITY
CUSTOMER
Normalized Data
CUSTOMER NUMBER
CUSTOMER NAME
ORDER ITEM SHIPPED
CUSTOMER CITY
CUSTOMER POST QUANTITY
CUSTOMER ST SHIP DATE
CUSTOMER ADDR
CUSTOMER PHONE ITEM
CUSTOMER FAX ITEM NUMBER
QUANTITY
DESCRIPTION
Logical
View/Logical Data
Mart CRS
Compl Treas
Fin
Business Users
Compliance Finance Risk Treasury

15. Vision State
Simplification, Standardization, Consolidation
Next Generation Infrastructure
Financial Systems HR Calculation Reporting
Accounting
Engines & & Analytics
Hub
Applications
Operational Accounting Consolidation HR
Systems Rules
General Ledger Cash Financial Reporting
PR Planning Profitability
Flow
Card
Student Sub-Ledger AP Purch AR FA PA Other
Loans Management Reporting
ALM Risk Capital Alloc.
Member
Merchant
Regulatory Reporting
Call Operational
Center Operations Analytics
Data Warehouse
Pulse
Reference Data Management Tactical Info Delivery
Data
Customer Introduction & Life-Cycle Maintenance Process
System
Put customer
Set Status to
Upload Customers state to
Charge
ACTIVE
Logistics
Update logistics
information
yes
yes
Sales Rep/
DSD Rep
Update Customer
Profile Information
Overall Data
Finance /
Steward
Hierarchy,
Duplicate
Resolve Credit Approval Update Billing Update Hierarchy Channel,
Review Alerts resolution yes no
Duplicates Reqd? Information Information Address info
reqd? no
complete? Alert
respective role
no
Sales
Update Trade
Channel
Information
Hierarchy Security Metadata Data Quality Master Data
Management Management Management & Governance Management Workflow Management Rules Management
 All required data available from a single source
 Data is reconciled to GL and transactional systems
 All Analytic applications source and return enriched data to common DW
 Key reports and analysis produced from the DW with common portal, hierarchies and delivery
processes
 End-to-End data lineage and governance ensures quality, transparency and traceability
 Governance processes to ensure data quality and consistent use

16. Case Studies
Problem: Integrating different risk exposures across retail, commercial, capital markets, insurance and wealth
management
Top North Solution: Integrated active risk warehouse. Leverage of current Teradata platforms employed for risk
American management. Leverage of Teradata Financial Services Logical Data Model. Integration with risk
management functions
Bank
Benefits: Single name risk exposure system resulting in low losses during credit crunch
Problem: Create economic advantage with enterprise stress testing and influence regulatory requirement for
stress testing. Issues were: Frequency and latency for complete risk aggregation, Reduction of manual
intervention in process, Flexibility of risk aggregation and underlying process
Top 5 U.S.
Solution: Active integration with risk application: Rapid ingestion and standardization of data, aggregation of risk
Bank data. In warehouse risk calculations to minimize risk engine processing. Integration with risk engines
Benefits: Daily enterprise stress testing. More complex scenarios and more scenarios. No manual intervention in
stress testing
Problem: EDW with 60K daily reports; highly concurrent environment caused missed deadlines due to system
uptime & scalability limitations. System also had slow performance and weak data quality.
Top 3
Solution: Teradata financial data warehouse for core financial reporting on common platform Golden Gate Mover
Global
used for real time replication of data.
Investment
Bank Benefits: Reporting performance is approximately 2.5X faster than legacy environment; greater system stability
with no major outages; implementation of “swim lanes” to protect heavily used applications.
Problem: Difficulty getting a timely, reliable view of financial performance across 20 separate legal entities.
Metadata and metric definitions needed to be standardized across the enterprise.
Large
Solution: Teradata financial data warehouse was installed as the sole repository for all financial data reported by
European
the CFO.
Diversified
Bank Benefits: Key strategic business initiative support for compliance, cost reduction, and acquisitions. Subject areas
include asset & liability management, capital allocation, and planning & control.
8/2/2012

17. The Way to Success
• Focus on a data centric approach to be successful
• Provides lowest enterprise cost of ownership and greatest flexibility
• Treats data as an enterprise asset and not owned by the application
• Build in increments based on business drivers
• Technology
• Provider should be an ethical recognized leader in the Industry
• The platform must be flexible and has strong capabilities to deal with the
full spectrum of data (e.x . structured, semi-structured, unstructured)
• Allow for complete query freedom & complexity
• Strong workload management
• High concurrency
• Data model flexibility
• Experience is required
• Partner should solely be focused on Enterprise Analytics
• Solutions should be used for not only Finance, Risk and Compliance.
Leverage for the entire enterprise is a prerequisite (i.e.
Marketing, Customer Management)
• Resources should know how to do this and should have done this before
• Technologies, methods and tools have to insure firms success
• How strong are the data architects? Data strategies proposed and
strength of the logical data models?

18. TURNING DATA INTO AN ADVANTAGE
-Webinar link
- Replay Link needed
-White paper
- CFO Whitepaper
- Forthcoming Finance, Risk, Compliance and Treasury Convergence
Whitepaper
-Teradata Financial Services Solutions
- www.teradata.com/industry-expertise/financial-services/
Sean O’Dowd
Global Director, Capital Markets
PHONE: (707) 676-3693
EMAIL: Sean.ODowd@Teradata.com
SOCIAL: www.about.me/seanodowd
@SeanPODowd