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Sibos innotribe 3
This document discusses the need for a new investment accounting solution called BasisPoint to address shortcomings of legacy systems. It summarizes that (1) democratization of information, technology, and finance has created a real-time global trading environment that outdated solutions cannot manage. (2) Many financial crises over the past decades can be attributed to an inability to properly account for trades at the tax lot level. (3) Pendo sees an opportunity to disrupt the market and gain operating leverage in the $350 trillion financial services industry by offering a solution for transparency, regulatory compliance, and risk management.
Sibos innotribe 3
- 2. Not Just BigData : The Most Valuable Data Complete Eliminates need for Compliance Workflow: general reconciliation and ledgers, valuations, consolidation indicative data, Regulatory corporate actions Reporting Unquestioned data quality On demand Legal reporting Consistently Investment across Use technology Operations currencies, that’s available: assets classes, process in seconds, issuer and issue data storage in Front Office cloud – average of types… Capital Risk Investor Focused Systematic Tax Collection Protection Transparency Adequacy 2
- 3. The Problem Democratization of Information, Technology and Finance has created a worldwide, real-time trading environment that current investment accounting solutions were not designed to manage The 100’s of issues that have impacted financial services all All these boil down to one lowest (and others) common denominator – the inability to account for trades collapsed... at the tax lot level. Legacy systems, people and pivot tables support Wall Street’s back office, none of which can adhere to the regulatory and compliance procedures, to mitigate risk and ensure transparency. MF Global Saving & Loans Stanford Enron Freddie Mac Mr. Ponzi Stop the 1920 1980 1995 2001 2002 2007 2008 2009 2011 2012 madness! Barings WorldCom AIG, Olympus Madoff & Accounting JP Morgan 3 Lehman Scandal
- 4. When Will ItEnd? 4 Sources: http://www.huffingtonpost.com http://www.bloomberg.com and http://www.nytimes.com
- 5. All Pendo’s CompetitionLaunched in 1980’s… ₋ Polaroid wins the instant camera business, knocking Kodak out of the picture ₋ Pixar is launched ₋ Halley’s Comet returns ₋ Eric Thomas develops LISTSERV, the first email list management software ₋ Lady Gaga was born ₋ Nuclear Arms Treaty - Mikhail Gorbachev and Ronald Reagan signed an important agreement ₋ Japanese continue to buy up U.S. real estate ₋ Apple Computer releases the Macintosh personal computer. ₋ Where was wireless? ₋ Windows 1.0 is launched * 5
- 6. Pendo’s Opportunity Opportunity forOperating Leverage Pendo’s Operating Characteristics • Target - $350 + AUM trillion financial services • Low capex world: $3 billion of annual recurring revenue in a • AUM-based revenue model market on the verge of a major • Sticky customers transformation • High margin • Market drivers: • Positive cash flow Regulatory Economic • Attractive exit multiple Demographics Risk Management Cost Efficiency • Disruptive technology; cloud • Market very fragmented with competitive vendors Pamela Cytron Sam Eckelman Bill Hartnett Founder & CEO BasisPoint MD Board 25 years of financial Founder Member services industry 25+ years of - 30+ years experience includes experience in experience in successfully growing operations, financial services companies from consulting and industry start-up through to software - Conceived and lead operational development in development of efficiencies while financial services Microsoft’s Biz Talk consistently Accelerator for 6 increasing revenue SWIFT
- 7. The Solution: Transparency= BasisPoint 7
- 8. The Ask WE DON’T WANT TO BE CONSIDERED Through Collaboration with SWIFT, we want minimum of 2 banks to incubate BasisPoint and demonstrate by "TOO SMALL TO 2013, that achieving transparency is a thing of the SUCCEED" BY past. THOSE "TOO BIG Why: Legacy Accounting Systems are in impediment TO FAIL" to enterprise growth • It is the central role in the investment business • Risk management • Regulatory compliance • Day to day operation International accounting standards related to the • ALL = Revenue Generation need to find an agreed measure of ‘fair value’ Top area for G20 Focus SWIFT White Paper - Facing the unknown: Building a strategy for regulatory compliance in an uncertain landscape – March 2012 8
- 9. And We CloseBy Quoting Jamie Dimon 9
- 10. Thank You www.pendosystems.com Contact Us: (973) 735 – 5787 or pamela@pendosystems.com 10
Editor's Notes
- #4 The last 30 years have seen amazing advances in technology that have transformed the world – particularly the world of finance and investment. Moore’s Law and the Internet – the main forces underlying the Globalization Megatrend – have democratized Information, Technology, and Finance brining knowledge and power that was once the exclusive domain of a few “Masters of the Universe” to the masses. The power of these advances is hard to understand since humans are linear thinkers by nature and these the advances are exponential. To get a better idea what has happened in 30 short years, consider this: If the same forces were operating on the price of a $100,000 USD car bought 30 years ago – that same make a model brand new today would have a sticker price of about $1.50 – cheaper to abandon at the curb than pay for parking. In the world of financial technology, ALL of this power has been applied to develop more and more complex instruments – derivatives, swaps, CDO’s CDS’s - faster and faster trading platforms – “flash trading” and co-location – and risk analytics and trading models so complex a successful Wall Street exec is more likely to have a PhD in math than in finance.But – the ability to track and account for this explosion of trading vehicles and volumes is right were it was 30 years ago. As a result, we have seen a string of financial crises that have become more frequent and more damaging – all brought on by lack of transparency and inaccuracy of legacy accounting systems.