In this session, Silva will take you through a history of how we [the industry] got into this mess with Core IT suppliers along with his plans - and those of his many community bank and industry partner followers - intended to disrupt the oligopoly of “the Big Three” and change the game once and for all by putting more power back into the hands of community financial institutions. Every banker in the country is affected by critical, complex and expensive relationships with Core IT suppliers. Anticipated competitive offerings promised by new fintech companies are threatened by the barriers and poison pills embedded in nearly every agreement held by a bank - assuring Core IT suppliers hold all the keys.

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 legacy cores still
obstructing fintech adoption?
Which fintechs are leading the
market?
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
DEFINE “FINTECH"
DISRUPTIVE
Competing with banks
COLLABORATIVE
”FRIENDLY”
Enhancing banks
LEGACY SUPPLIERS
Fiserv, FIS, Jack Henry, etc.

6. 6
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 Legacy
Market
Competitiveness

7. 7
Control of Major
Payment Rails &
Gateways
Proprietary
“Open” APIs
Pay to Sip
Data Access
Secret upstream
rates, markup and
junk fees
Monetizing Fintech Revolution
Disrupting Access to FMV
Interchange
(debit, merchant and credit)
Non-interest (fee) Income
from Interchange
Your Data Fintech
Solutions
Community
Financial
Institutions
WALLED OFF FROM COMPETIVENESS
Oligopoly Expands to Control Fintech Access & Payment Rails
Source: Evercore
Fiserv, FIS and Jack Henry Control 93% of Processing Market
and only spend 6% - 9% FCF on “Innovation”
Redacted due to confidential or proprietary information.
Please download full version online or contact Paladin.
info@paladin-fs.com

8. 8
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 due to confidential or proprietary information.
Please download full version online or contact Paladin.
info@paladin-fs.com

9. 9
IT CHASM
LACK OF INNOVATION CREATES A “CHASM”
Friendly FinTech is filling the Innovation CHASM
Loan
Origination
Systems
Robot
Process
Automation
Online
Banking
Artificial
Intelligence
Advanced
Payments
Mobile
Banking
Decision
Intelligence
Block
Chain
Voice
Banking
Chat
BOTs
Crypto-
Currencies

10. 10
LEGACY CORE TECHNOLOGY
WALLS OFF BANKS FROM COMPETITIVENESS
RESULT:
SMALL INSTITUTIONS ARE UNABLE TO COMPETE
WITH LARGER COMPETITORS
N
O
O
P
E
N
A
P
I
s
Redacted due to confidential or proprietary information.
Please download full version online or contact Paladin.
info@paladin-fs.com

11. 11
LEGACY CORE CONTRACTS
WALLS OFF BANKS FROM 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

12. 12
Your Data
BARRIERS TO FINTECH ACCESS
Penalties designed by Legacy Suppliers to Prevent Crossing the Chasm

13. HOPE IS ON THE WAY!
Fintechs show the light

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

15. 15
In Market & Proven
In Market /
Unproven
Pre Market /
Unproven
Pre Market / Proven*
NO FINTECH CORE MESSIAH (YET)
*Not proven in U.S. market or in smaller institutions.
Ineligible for rating:
Redacted due to confidential or proprietary information.
Please download full version online or contact Paladin.
info@paladin-fs.com

16. 16
In Market & Proven
In Market /
Unproven
Pre Market /
Unproven
Pre Market / Proven*
ONLINE BANKING PLAYERS
Ineligible for rating:
*Abiliti
*DigitalOne
Redacted due to confidential or proprietary information.
Please download full version online or contact Paladin.
info@paladin-fs.com

17. 17
In Market & Proven
In Market /
Unproven
Pre Market /
Unproven
Pre Market / Proven*
ONLINE ACCOUNT OPENING

18. 18
API Name Supplier True Open
Communicator Advantage / Open Fiserv No
Code Connect FIS No
J-Exchange / Connect Jack Henry Kinda
PLAID Plaid Yes
MX MX Yes
NXTSoft NXTSoft Yes
Many other API fintech players not shown – call me for advice.
CROSSING THE CHASM WITH API
Some vendors reward, some punish
Pay 2 Play
Yes
Yes
Yes
Yes
Yes
Yes
Pay Per Sip
(Toll Fee)
Yes
Yes
Kinda
No
No
No
Redacted due to confidential or proprietary information.
Please download full version online or contact Paladin.
info@paladin-fs.com

19. 19
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.
Restructure ALL Core & IT contracts and
pricing to lower or eliminate WALLS to
competitive Fintech suppliers.
Repurpose cost savings toward Fintech
initiatives, purchase APIs.
Build / buy data warehouse to create a Toll-free
BRIDGE to YOUR DATA.
TWO PRONGED FINTECH ATTACK
PREPARE FOR FINTECH ADOPTION
DE-HANDCUFF FROM LEGACY CORE

20. 20
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!

21. 21
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

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