The document outlines Microsoft's global strategic plan for 1994-1998, focusing on seizing opportunities in the financial services sector by disintermediating traditional financial service providers. It proposes a network that enables consumers to access various financial services online, utilizing a financial optimiser tool that matches customers with the best financial solutions based on their needs. The plan includes piloting in Australia and recommendations for strategic acquisitions and partnerships in the telecommunications and financial information sectors.

1. Microsoft Corporation Global Strategic Plan 1994 - 1998 Financial Information Services Division

2. Financial Services - the single biggest opportunity for Microsoft Every “small transaction” (potentially) has a financial services parallel transaction Banks and other financial services providers are struggling to see beyond their traditional “arena” Product focus of financial services providers has resulted in sophisticated “silos” of product information online Financial services industry is failing to recognise convergence of financial services, communications, media, entertainment and software industries as the Information Industry Lack of true customer focus and resultant customer disloyalty mean opportunity can be realised

3. Financial Services are essentially simple Five core financial needs exist Transacting Saving Investing Borrowing Protecting Assets Consumer purchase behaviour is highly predictable and motivated by a narrow set of identifiable variables Attitude to risk Desired Return Minimum cost to achieve risk & return preferences

4. Microsoft Network can facilitate all these needs by disintermediating financial service providers on a global basis

5. Disintermediating financial service providers on a global basis Microsoft will act as referral source to best performing financial service providers Customers will pay Microsoft a transaction fee Value added financial services information will generate incremental income The database that results will be the world’s most valuable CIF Intuit purchase will be integrated as key acquisition/information platform

6. An online Microsoft Network enrolment process will be used Financial Services questionnaire to be completed Scores risk preferences Determines return requirements Establishes degree of customer involvement Versus automation of decisions Information “agents” will support customer preferences Customer nominates any preferred suppliers Delivery will be through PC’s and ITV via copper, cable, fibre or satellite

7. Online Information requirements for financial services Stock prices and information Prices, Betas, PER’s, NTAB, Div Yield, etc Mutual Fund prices and performance information Prices, short & long term betas, etc Banking information interest rates, fees, functions Insurance information risk preferences, premiums, exclusions, etc Financial news Media releases, company performance updates, consumer advisory services

8. A Pilot Country is Recommended Australia meets Microsoft requirements National financial services industry, relatively few participants Electronic databases exist with online information Low population with good education in concentrated geographic areas Sophisticated communications networks High adoption rate of new technologies Financial Services industry still very traditional Product not customer focussed True vision not being exhibited Dysfunctional organisational structures/behaviours failing to harness technology Disintermediation starting to appear/gain acceptance Mortgage origination, auto finance, financial planning

9. Microsoft Trust Consumers Financial Optimiser (DSS) Financial Needs Analysis Financial Provider Performance Assessor Financial Service Providers The Financial Optimiser is a module that uses neural nets and behavioural scoring together with questionnaire answers to identify the optimal financial decision for any consumer online real time. It links to a global network of financial information databases that allows the best financial solution to be offerred for any individual.

10. Microsoft Trust Consumers Financial Adviser & Informer Financial Optimiser (DSS) Financial Needs Analysis Financial Provider Performance Assessor The Financial Adviser and Informer proactively support each customer by acting as their agents. The Informer keeps the customer informed of the status of their finances as often as the customer requests. The Adviser monitors the customers finances and constantly evaluates opportunites to improve their position. Opportunities are Advised for customer concurrence or enacted automatically if delegated

11. Microsoft Trust Consumers Financial Adviser & Informer Financial Optimiser (DSS) Financial Needs Analysis Financial Provider Performance Assessor Financial Service Providers The “back office” looks at all financial services linked to core financial needs as the database for the Optimiser Saving Transacting Investing Borrowing Protecting Stocks Insurances Banks Mutual Funds Credit Cards Mortgages Leasing

12. Microsoft Trust Consumers Financial Service Providers Saving Transacting Investing Borrowing Protecting Stocks Insurances Banks Mutual Funds Credit Cards Mortgages Leasing Financial Adviser & Informer Financial Optimiser (DSS) Financial Needs Analysis Financial Provider Performance Assessor

13. Implementation Software will be bundled with Windows 95 Rebundling for ITV will occur with Australis, Telecom & Optus PDA and Personal Communicator interface via digital and cellular networks by June 1996 Information providers have all signed “Heads of Agreement” A small Bank will enable further extensions of services such as credit cards Trust Bank Tasmania acquisition is recommended

14. Recommendations Approve Australia as pilot market Endorse recommended product information providers ASX, Assirt, Cannex, ACA Approve acquisition bid for Trust Bank Tasmania of up to $200m Approve plan to invite Telecom to be communications provider and News Limited to be financial news/information provider