Core Banking System Survey 2008

Under non disclosure throu

www.capgemini.com Financial Services the way we see it

Core Banking Systems Survey

Survey results 2008 Core Banking Systems Survey Systems Banking Core

Capgemini Nederland B.V. Papendorpseweg 100 P.O. Box 2575 – 3500 GN Utrecht Tel. +31 (0)30 689 00 00 Fax +31 (0)30 689 99 99 Under non disclosure throu Financial Services the way we see it

Core Banking Systems Survey

Survey results 2008

Gert Jan van Dorsten André Spruit Arthur Barendsen

About the report

Capgemini has conducted a comprehensive study of current trends in core banking and the functionality of the major core banking systems available in the main financial markets in the world. This survey was written and compiled during the period from September to December 2007. The report is based on desk research and on a request for information sent out to the leading core banking system vendors. The authors selected the vendors and their products after consulting with Capgemini’s international Core Banking/Banking Packages network. The survey focused specifically on core banking solutions for top-tier banks having a strong position in the important financial markets in the world and offering the solution in more than one country. The Core Banking Systems Survey 2008 is the latest in a series of banking systems surveys. The ‘Asset Management Systems Survey’ and the ‘Treasury Systems Survey’ were published in 2007. The previous ‘Retail Banking Systems Survey’ was published in 2006.

About the authors

The authors of the Core Banking Systems Survey are Gert Jan van Dorsten, André Spruit and Arthur Barendsen. They are leading consultants within the core banking community of the Capgemini banking practice in the Netherlands. Gert Jan van Dorsten is a principal consultant specialized in banking packages in general, with a focus on the domain of core banking back-office solutions and selecting and implementing package-based solutions for financial institutions. Gert Jan is also expert group manager in the Netherlands for core banking and manager of the global FS Industry Packages Center of Excellence. André Spruit is a managing consultant specialized in selecting and implementing package-based solutions for financial institutions. André focuses on core banking packages and before joining Capgemini at the end of 2006 worked for one of the leading vendors in this domain and in the financial services industry itself. Arthur Barendsen is a consultant with experience in embedding packages in a global banking organization.

Gert Jan van Dorsten André Spruit Arthur Barendsen Principal Consultant Managing Consultant Consultant Capgemini Nederland B.V. Capgemini Nederland B.V. Capgemini Nederland B.V. Financial Services the way we see it

Preface

I am very proud to present the results ■ strategic and comprehensive of the 2008 Capgemini’s Core Banking services tailored to the individual- Systems Survey. The 2008 survey pro- ized need of each client; vides an in-depth and timely insight ■ global services and resources (pro- into the state of the package solution vided in the Rightshore® offers providers industry serving the core which combine on-, near and off- banking business in top-tier banks shore sourcing models), combined throughout the world. with strong regional teams with excellent local delivery capabilities. The main objective of this survey is to help you understand the various core Should you require any further infor- banking systems that are available in mation or assistance in this area, please the world. It gives you insights into contact the appropriate Capgemini rep- business trends, banks and vendors, resentative, whose details you can find package selection criteria, implementa- in the appendix, or contact our local tion methods and information concern offices. ing and provided by the solution vend ors. It should assist you in efficiently We welcome feedback and sugges- and fundamentally narrowing down tions for improvements to this survey. the search for the right solution provider and make it easy to connect with I would like to thank all the partici- the vendors on a well-informed basis. pating vendors and all colleagues involved for their efforts and contri- Capgemini can provide financial insti- butions, especially Martijn Rom tutions with considerable benefits in Colthoff, Maurice Vuijk, Pascal Breet the area of system selection and imple and Henk Dekker for their inputs for mentation, including: the chapter on trends. ■ a broad spectrum of services and in- depth experience of every phase of Yours sincerely, the system selection process; ■ an exceptional track record based on the successful implementation of Gert Jan van Dorsten many different types of package Principal Consultant solutions; Banking Practice, The Netherlands ■ different application maintenance Manager Global FS Industry Packages contracts on vendor solutions; Center of Excellence ■ leading-edge capabilities closely Capgemini Nederland B.V. attuned to current and future industry changes; Utrecht, February 2008

Contents

1 Background to the survey 7

2 Trends in core banking 9 2.1 Core banking replacement 9 2.2 The core banking market 10 2.3 The core banking clients 11 2.3.1 Retail/consumer banking 11 2.3.2 Wholesale/corporate banking 12 2.3.3 Others 12 2.4 The core banking domains 12 2.4.1 Payments & cash management 13 2.4.2 Savings 13 2.4.3 Loans and mortgages 14 2.4.4 Securities 15

3 Global banking overview 2006 - 2007 16 3.1 Banks worldwide 16 3.1.1 North America 16 3.1.2 Europe 16 3.1.3 Asia 16 3.1.4 Australia 16 3.1.5 South America 16 3.1.6 Africa 17 3.2 A changing landscape 17 3.3 Showcase: ABN AMRO acquisition 17

4 Vendor solutions 18 4.1 Introduction 18 4.2 History of core banking systems 18 4.3 Recent market developments 19 4.4 Recent developments in package solutions 21 4.5 Competitive landscape 22 4.6 Future of the market 22 4.7 Specialized ‘best of breed’ solutions 23

5 Package-based solutions 24 5.1 Integrated Architecture Framework 24 5.2 Stage 1: Make or buy 25 5.3 Stage 2: Selection 26 5.3.1 Methodology 26 5.3.2 Integrated or ‘best of breed’ 28 5.3.3 Selection criteria 29 5.4 Stage 3: Implementation 30 5.4.1 Methodology 30 5.5 Stage 4: Operation 33 5.5.1 Organization 33 5.5.2 Location 34 6 Capgemini in core banking 35

Appendix 1: Detailed systems overview 39

Appendix 2: Capgemini contacts 67

Reference List: The Banker - ‘Retail Banking Performance’ BCG - ‘Renewing core banking IT systems’, 2006 BCG - ‘Striving for organic growth in Retail Banking’ Capgemini/EFMA/ING - ‘World Retail Banking Report 2007’ Capgemini/EFMA/ING - ‘World Retail Banking Report 2008’ Capgemini/EFMA/ABN AMRO - ‘World Payments Report 2008’ Capgemini - ‘SOA and Retail Banking Industrialization: An amazing fit’ Datamonitor - ‘European Core Systems Strategies, 2007’ Forrester - ‘Banking Platform Renewal’, 2005 Forrester - ‘Banking Platform Wins 2005’: Vendors Forrester - ‘Banking Platform Wins 2006’: Vendors Forrester - ‘The wave of core banking suites 2007’ Gartner - Dataquest Insight - ‘Banking Industry Primer, 2006’ Gartner - ‘Magic Quadrant 2006 Retail Core Banking’ Gartner - ‘Hype Cycle for Emerging Back Office Technologies and Applications (Banking and Investments) 2007’ IBS - ‘Sales League Table 2006’ IBS - ‘Sales League Table 2007’ IBS - ‘Core Banking Systems - 30 case studies’ SAP/EFMA - ‘Retail Banking Study 2006’

Financial Services the way we see it

1 Background to the survey

The 2008 Core Banking Systems Survey is based on desk research and a survey sent out to a group of sixteen vendors of core banking solutions.

We feel it provides the reader with professionals from all over the world valuable insights into the trends and have provided valuable input for the solutions in the domain of core survey. Essential information was banking. gathered from current and previous assignments conducted by Capgemini This survey is the third edition and for core banking clients with package follows on from the 2003 and 2006 selections or implementations. Retail Banking Systems Surveys. It is the latest report in a series of Based on requested information, the Capgemini publications in the area of survey presents a practical overview of package-based solutions in the bank- the solutions currently available and ing domain. The other areas covered the capabilities of each system. The are asset management, private bank- main objective is to help users to ing, payments, treasury management understand the various products that and risk management. exist in the market and to narrow down the search and make it easy to The list of vendors requested for par- connect with the vendors on a well- ticipation was compiled after con informed basis. This is very important sulting the banking packages and in the initial phase(s) of the package core banking network of Capgemini selection process. It should always be and various publications. It includes kept in mind that package selection is all the important vendors for the main a challenging, complex process and markets in the world which operate that it also marks the start of a rela- globally or at least regionally in one tionship with one or more external continent (see figure 1). Capgemini suppliers.

Figure 1: Origination of systems

Europe-South 5% 15% Europe-West 10% Europe-Central

Europe-North 15% Asia 25% America

Australia 20% 10%

Background to the survey Figure 2: Participating vendors and solutions

Vendor Package Accenture Alnova Financial Solutions Callataÿ & Wouters S.A. Thaler Delta Informatique Delta-Bank Fidelity National Information Services (FIS) Corebank Profile Systematics Fiserv, Inc. ICBS i-flex solutions Flexcube Infosys Technologies Ltd Finacle Misys Equation Midas Nucleus Software FinnOne Polaris Software Lab Ltd Intellect Suite SAP AG SAP Transactional Banking Sungard System Access Symbols TCS Financial Solutions TCS BaNCS Temenos T24 TEMENOS™ CoreBanking (TCB) TietoEnator Corporation Core Banking Suite T-Systems Enterprise Services GmbH MBS banking suite; GEOS

The following core banking solution Finally, it should be noted that answers providers participated in the survey to survey questions are quite depend (in alphabetical order): see figure 2. ent on the individual perception of the There are several aspects that should question and cannot be fairly com- be considered when selecting a core pared on an individual level. Also, as a banking system, based on the compa- result of habitual vendor optimism, ny’s business vision. These range from system functionality on paper is not functionality, architecture and non- always the same as system functionality functional requirements to vendor sta- in a real setting. bility and implementation capabilities.

The answers to the vendor survey are published in unamended form as an appendix to this booklet.

Capgemini is an independent advisor and has no exclusive contracts with any of the participating vendors. Furthermore, Capgemini has not attributed opinions to any of the data or vendors.

Financial Services the way we see it

2 Trends in core banking

Almost all of the top retail banks in the world are still using old legacy systems (originating in the 1960s/1970s) for core banking (in the home markets).

2.1 Core banking replacement old-fashioned, outmoded and inade- Definition: we define core banking quate core systems. systems as those applications responsible for processing and posting trans- Risks: but more than anything else, actions in the domains of payments, two factors stand in the way: the risk current and saving accounts, loans and cost involved in carrying out a and securities (such as performing core banking replacement. The costs current and deposit accounting, main- as well as the risks are high, but the taining loan accounts, holding securi- benefits are far greater. Financial insti- ties positions, clearing payments). tutions that have already announced Today’s solutions are capable of com- plans to undertake such projects, will pleting these tasks in an integrated, quickly reap the benefits and set an browser-based environment across example for others in the industry. multiple delivery channels. They con- They will benefit from greater efficien- stitute a mission-critical element in cy, easier access to information, and the financial services industry. the ability to add new applications Without core banking applications, without the fear of system crashes. As IT globalization appears to be most banks would instantly come to financial institutions quickly realize the most important transfor a grinding halt. that their current, antiquated core sys- mation trend for the next tems are no longer adequately meet- five years, with more than Situation: replacing a core banking sys- ing their needs, many are beginning 90 percent of the banks we tem is often compared with replacing to consider replacement. Memories of interviewed willing to have the engine of a Boeing 747 in mid-air. failed attempts continue to haunt a common architecture and Experts consider core banking replace- many in the industry, however, mak- modular application suite and ment to be the most complex, risky ing progress slow (one of the largest a ‘ready-to-go’ approach to IT and expensive IT project that any bank banks in the world spent around implementation. can undertake. A core banking system $ 1 billion in the 1990s and still did forms the backbone of a bank’s IT not succeed!). Getting approval for infrastructure and contains records of projects of this scale is also very diffi- all customer transactions and the pro- cult because banks are currently try- cessing of those transactions. A minor ing to cut costs. error in this area can cause a bank’s entire system to crash, tarnishing its Costs: the project budgets required reputation in the process. for software and service are huge: up to € 250 million in extreme cases. Complex: technology is a key driver Software and services costs for of change, and application vendors European banks’ renewal initiatives, have long been preaching the virtues spread over at least ten years, will be of flexible development, speed to mar- in the € 100 billion range. The ket, real-time processing and a single European Central Bank estimates that view of the customer across all lines there are about 6,700 credit institu- of business. But, although many early tions in Europe. These can be broken adopter banks in Europe’s middle tier down into to tier-one, -two and have already embraced this new tech- -three banks. That does not take nology, it is surprising how many of account of all kinds of national par- the largest institutions are still battling ticularities, see figure 3. with the self-imposed handicap of

Trends in core banking each business line. But the ‘Dataquest Figure 3: Project sizes Insight 2006’ study by Gartner shows that, in core banking, survey respon- dents in Europe identify it as a key No. of Credit Project sizes (€ million) Tier Total assets opportunity, contrary to the US mar- Institutions Min. Typical Max. ket, in which large banks in particular 1 More than € 400 billion 20 60 110 200-250 are still reluctant to proceed, often waiting to implement new systems in 2 € 100 billion to € 400 billion 40 40 60 150 global divisions before tackling domes- 3 Less than € 100 billion 4,500 5 20 50 tic systems. In Australia, the big four started to based on Forrester research select and replace the old systems, and the same applies to Russia. There 2.2 The core banking market is a great deal of activity in the very The conclusion drawn in a Forrester large consumer markets of India and research study in October 2005 was China. India started a few years ago, that banks are racing to renew their while in China - especially in the last banking platforms. 46 percent of few years - banks have been very European banks had already started to actively implementing modern sys- renew their application landscape; a tems in their extremely fast-growing further 23 percent planned to do so. operations. A large number of legacy More than two-thirds of the 54 percent replacements are also being carried of banks that have not yet started their out in the rest of the APAC region. renewal initiative - about 37 percent of the total - state that they will start by While the bulk of sales are still within 2010 at the latest. tier-three and tier-four banks, there are signs of larger, more strategic deci- It is clear that the conclusion was cor- sions now being taken higher up the rect and that banks are indeed renew- pecking order, albeit by a still relative- ing their platforms. It can be seen from ly small number of top-tier players. the home markets and global roll outs Forrester believes (based on research that the top-tier banks are now starting into vendor deals in 2005 and 2006) to replace. The smaller banks began that the number of global banking earlier. Capgemini’s ‘World Retail platform deals grew by at least 15 per- Banking Report 2007’ endorses this cent from 2005 to 2006. viewpoint: ‘IT globalization appears to The major drivers in the sector for be the most important transformation core banking replacements are: trend for the next five years, with more ■ the severity of regulatory require- than 90 percent of the banks we inter- ments and penalties; viewed willing to have a common ■ the appeal of a component architecture and modular application approach (SOA - Service Oriented suite and a ‘ready-to-go’ approach to Architecture - and BPM - Business IT implementation.’ Process Management); ■ a strong focus on architecture for Most of the top-tier banks in Europe the industrialization of banking, are now busy replacing their legacy infrastructure and multi-channel systems with a single global system in enablement;

10 Financial Services the way we see it

■ availability of global resources to tackle back-office systems; Figure 4: Business trends from a vendor point of view ■ industrialization and the shift to transaction banking for core banking back-office systems; ■ new cross-border mergers and acquisitions wave in the European Mobile banking financial services industry. More stringent regulatory Beneath that there has been high environment growth in BPO and Outsourcing in general and in the last few years, with Core renewal a focus on deals of the Selective Application Outsourcing (SAO) type, see figure 4 and 5. Continued focus on BPO

2.3 The core banking clients Consolidation 2.3.1 Retail/consumer banking The most important issues in top-tier 0% 10% 20% 30% 40% retail banks are volume handling and mass products. Being able to manage large volumes of data is the main challenge for core banking software. Only recently, packaged solutions Figure 5: Technology trends from a vendor point of view have become available which have overcome the technical challenges in replacing the 30-year-old legacy solutions that are predominant in the SOA hearts of the top-tier banks.

Retail banking represents the most Mobile technology significant source of income for the global financial services industry. The key differentiator between market Web 2.0 leaders and poor performers will be profitable growth rather than cost cutting to improve profits in the long BPM run. Capgemini’s ‘World Retail Banking Report 2008’ shows that the Channels integration mature markets (North America, European Union - plus Norway and Switzerland -, Japan and Australia) SaaS represent 75 percent of the world retail banking market, which is valued at 0% 10% 20% 30% 40% 50% 60% 70% € 1.3 trillion (in 2006). Following the natural economic trend, the retail

Trends in core banking 11 market should grow at 4 percent per system is increasingly being chosen banking solutions for their finance annum to reach € 1.9 trillion in for both wholesale and retail opera- activities; 2017, barring unforeseen changes. tions. Another important trend is a ■ retailers are also offering retail bank- The expected CAGR in 2006-2017 in global roll out of a centralized system ing for their consumers in order to the mature markets is 2.5 percent and with central data. The corporate improve customer retention; in the remainder 6.4 percent. As a banks (and their clients) want an ■ major corporates are developing in- consequence, the relative financial integrated global view of the custom- house banking capabilities, often not power of the mature markets will er with the possibility for treasury only for their own company, but also weaken compared to the main high departments to have transparent for the outside world. growth markets such as India or online and daily insight to all accounts China, which are growing at more globally. 2.4 The core banking domains than 8 percent per year. Mature mar- There are a lot of drivers for renewing kets, which will still account for 2.3.3 Others the systems, as listed in the table 65 percent of total retail banking in There are some other interesting devel below. The characteristics of the lega- 2017, will nevertheless remain of key opments regarding core banking solu- cy systems and the new solutions are importance to large banks in the years tions: detailed for each area, see figure 6. ahead. ■ start-up of banking activities in new The general drivers are changing from The market has seen a tremendous (emerging) markets. Sometimes this cost reduction to growth. level of consolidation, especially in is carried out by existing banks from Europe. Of the list of leading European other countries, sometimes by other The paragraphs below describe the banks from fifteen years ago, only three companies. The internet is usually changes and developments in each remain! Core systems replacement has used as a delivery channel and busi- banking domain. This is especially rel- recently emerged as an issue. Banks ness can be conducted using a evant for the more Western economies. feel increasingly limited by the capa- bank-in-a-box solution (less risk); For the emerging markets, these trends bilities of their existing core banking ■ finance departments/subsidiaries of can be regarded as visions (with a lon- systems. The Datamonitor report enti- car companies often choose core ger time horizon) because sales forces tled ‘European Core System Strategies (April 2007)’ summarizes the key survey findings, which can be broadly Figure 6: Drivers for change characterized as follows: ■ lack of flexibility is causing the most pain in banks’ current core process- Area Legacy New solutions ing applications; Back-office Product-oriented Customer-oriented ■ technology influencers are still domi Front-office Fragmented/Siloed channels Integrated channels nated by cost considerations as the Services Sales/Efficiency-oriented Customer satisfaction-oriented total cost of ownership becomes increasingly important; Sales Reactive Proactive ■ complexity of implementation is a View (Risk) Local/Differentiated Global/Integrated key challenge for retail banks. Operations Per office Enterprise-wide Processing Batch, many manual actions Online/Real-time, STP 2.3.2 Wholesale/corporate banking The core banking market for whole- Architecture Product/Process-driven Service/Event-driven sale/corporate banking is not as large Budget Decentralized budget discretion Centralized budget discretion and as fast-changing as the core Alignment IT-driven Business-driven banking market for retail banking. Europe Many different countries One European Union However, some trends are interesting. One is that a single core banking # Banks Many different (small) banks Mergers and Acquisitions

12 Financial Services the way we see it

use very basic products to fulfill the The most important drivers are com- demanding targets in such growing pliance with all kinds of requirements, markets. Basic improvements to busi- often with specific business terms: ness processes with adequate platforms ■ many compliance initiatives, for are still crucial in banking operations example KYC, FATF7, SEPA and in these countries. Business issues and the PSD; legal and regulatory requirements are ■ infrastructure consolidation and forcing banks to maintain a large num- collaboration, for example EBA, ber of manual control steps which are TARGET2, EMV and SDD; no longer required in Central and ■ SWIFT is developing the ISO 20022 Western European countries. standard, and standard corporate data is likely to emerge with the 2.4.1 Payments & cash management drive for STP; Compliance, in particular SEPA - but ■ emerging standards for the also mergers and acquisitions - and CredEuro and SDD are not easily cost reduction are the main drivers for reconciled with domestic standards renewal of back-office systems. Leading (for example use of SWIFT MT103, banks, which previously saw payments paper or electronic signature and as a back-office issue, are now tending consumer protection standards), to bring payments much more to the and consistency in implementation forefront. The processing of payments, has yet to be achieved; domestic and cross-border, with clear- ■ Pan-European structures have ing houses and correspondents but emerged for cards (Visa & M/C) as also with strategic sourcing, is at the well as for high-value payments top of the board’s strategy agenda. The (TARGET2) and retail payments reason is very well stated in the ‘World (EBA STEP2); Payments Report 2007’ of Capgemini: ■ as consolidation towards emerging ‘SEPA will accelerate Payments standards for transport, messaging Industry Transformation. To be among and security gains momentum. the major players in SEPA, a bank will need to process at least five billion 2.4.2 Savings payments transactions a year. As in many other markets, the some- Successful banks will convert their what old and long-established savings delivery models into open architec- market is undergoing major change. tures, which will enhance their prod- Whereas previously banks could offer uct offerings and support their needed a simple and straightforward savings flexibility.’ product differentiated only on the basis of interest rate, now a dynamic Banks are looking to develop a unified and increasingly competitive market, and integrated payments infrastructure, combined with a more demanding which would essentially blur distinc- customer, is forcing banks to reinvent tions between various payment types: their savings product strategies. check, cash, debit, credit and e- and m-payments. Payments need to be seen Primarily, the financial legislation land as transparent both to the organization scape continues to change as many and the consumer. governments worldwide are revising laws to open up markets and meet the

Trends in core banking 13 current standards for integrity, trans- need for savings products is forcing parency, and duty of care. While on banks to cope with higher volumes the one hand this is causing banks to over a wider product range and revise their current products and requires a greater focus on product, hence increase cost and competition, process and system development and it is also creating opportunities for adaptation. them to create new (combined) savings products. Also, because barriers 2.4.3 Loans and mortgages to entry are being lowered, specialized Until recently, mortgage offers have niche players focused on a specific included a wide range of implicit area such as savings are rapidly gain- features, with no provision for the ing market share. In some cases these customer to decline them. The devel- niche players are subsidiaries of foreign opment of a price-driven market is banks, but an increasing number of leading mortgage providers to make banks are creating or acquiring them. these features more explicit and optio nal for the customer. In return for Additionally, and in part thanks to fewer features (and less flexibility), the Al Gore, worldwide media attention customer gets a lower rate. has created a trend towards banking with ‘ethical’ banks that differentiate A second trend in the mortgage market in terms of corporate social responsi- is the concentration in the intermedi- bility. Durable savings products have ary distribution channel, with resulting therefore shown strong, steady growth, complications for the banking systems. and banks are rushing to bring savings products to market to capitalize The third major trend in consumer on this trend. finance is a shift in the pricing strategy towards risk-based pricing. The Apart from the popular topic of dura- personal risk profile of a customer ble savings, combinations with security will be the main factor for the price of investments, bonus interest, pension a product. savings, and mutual fund savings are Finally, new legislation and regulation still common. And while the reduction are having an impact on the products in the number of branches is slowly offered in the mortgage and consumer continuing, preference for internet sav- finance domain. ings accounts is steadily increasing and people are moving their cash around All these trends require changes to the more easily to different accounts. supporting banking systems, such as: ■ more transparent and understand- All-in-all, leading banks are being able products due to national and forced to increase their range of savings international legislation and regula- products and place greater emphasis tion; on product development. Targeting ■ break-up of the mortgage product multiple, segmented parts of the mar- into elements that can be included ket with a high number of savings or excluded; products seems necessary in order to ■ straight-through processing to meet contend with the competition. In an the demands of the concentrated increasingly risk-averse market, the

14 Financial Services the way we see it

buying power of intermediary orga- ■ increasing number of trading houses nizations; trading globally 24x7 requiring ■ reintroduction of the personal loan. round-the-clock settlement; Flexible credit lines have proved to ■ consolidation of CSD and ICSDs; be too risky for some customers and ■ creation of BPO centers for securi- they want more controlled finance: ties operations activities; the personal loan; ■ increase in multiple listings of secu- ■ introduction of risk-based pricing. rities; Each customer is offered a price in ■ consolidation of stock exchanges line with his personal risk profile; (Euronext-NYSE, et cetera); ■ new products such as tax-friendly ■ banks outsourcing their securities bank savings, which enable banks operations activities; to compete with insurance compa- ■ growing interest in Eastern nies in tax-friendly products. European securities markets.

2.4.4 Securities Other drivers for change in the market There are a number of drivers of can be found in the following initia- change in the European securities tives: market. ■ Target II Securities from the European Central Bank. With this Regulatory changes, for example, will initiative the ECB creates a platform come from multiple initiatives (market, for the cross-border and domestic local government and EU) towards an settlement of securities against cen- efficient cross-border securities clearing tral bank money (€). The platform and settlement environment through will service the Central Securities the harmonization of: Depositories (CSDs) and will be run ■ market rules and practices; by the Eurosystem. ■ regulatory, legal and tax differences. ■ Euroclear group’s single platform. With this initiative Euroclear Group The impact of the globalization of the is consolidating the services pro- securities industry can also be seen in vided by the group onto a single the: platform and harmonizing the vari- ■ creation of electronic trading plat- ous practices for settlement, custo- forms (for example Turquoise and dy, payments, reference data and CHI-X); tax.

Trends in core banking 15 3 Global banking overview 2006 - 2007

In line with the current positive global economic environment, banks have generally done well over the past year.

This chapter gives an overview of the same positive trend with regards to biggest market players and the chang- profitability. ing landscape, illustrated by a showcase on mergers and acquisitions. 3.1.3 Asia Top-ranking banks in Asia: 3.1 Banks worldwide 6. Mitsubishi UFJ Financial Group The six sections below are based on (Japan) the rankings presented in the 2007 7. ICBC (China) edition of ‘The Banker’ magazine’s 9. Bank of China (China) renowned top 1.000 World Banks 14. China Construction Bank (based on strength of tier-one capital). Corporation (China) 15. Mizuho Financial Group (Japan) 3.1.1 North America Top-ranking banks in North America: The majority of banks in Asia are also 1. Bank of America (USA) showing healthy growth in profita 2. Citigroup (USA) bility. With two banks in the global 5. JPMorgan Chase & Co (USA) top 10, China is leading in the region. 16. Wachovia Corporation (USA) In parallel with the positive results in 18. Wells Fargo & Co (USA) China, other (new) successful banks are rapidly emerging in Asia. The best Although cracks are appearing in of the rest is the Kookmin Bank in North American banking, US banks Korea (62). remained very profitable in 2006 and 2007. However, Canadian banks 3.1.4 Australia showed a higher return on their bank- Top-ranking banks in Australia: ing capital than US banks. 38. National Australia Bank 59. ANZ Banking Group 3.1.2 Europe 60. Commonwealth Bank Group Top-ranking banks in Europe: 71. Westpac Banking Corporation 3. HSBC (United Kingdom) 4. Crédit Agricole (France) While China and Japan are home to 8. The Royal Bank of Scotland the largest tier-one capital banks in (United Kingdom) the APAC region, Australian banks 11. BNP Paribas (France) remain rock-solid regional players. 12. Barclays Bank (United Kingdom) 13. HBOS (United Kingdom) 3.1.5 South America 17. UniCredit (Italy) Top-ranking banks in South America: 19. Rabobank Group (Netherlands) 54. Banco Itaú Holding Financeira 20. ING Bank (Netherlands) (Brazil) 64. Banco Bradesco (Brazil) Compared to the banks in the United 73. Banco do Brasil (Brazil) States, the growth in Europe has been higher. Emerging Central and Eastern Banks in the South American region European banks differ from the large showed very positive profitability fig- established banks in Western Europe, ures in 2006 and 2007. although both sub-regions show the

16 Financial Services the way we see it

3.1.6 Africa necessary capital in order to offset offer, which at that time was worth The top-ranking bank in Africa is: big losses from mortgages and other approximately € 72 billion. 116. Standard Bank Group (South investments; A precondition of the offer was that Africa) ■ Chinese insurer Ping An acquired ABN AMRO would abandon its sale of 4.3 percent of the share capital of LaSalle Bank to Bank of America. Whilst African banks have consider- Fortis and appointed a member to However, during the shareholders’ ably less tier-one capital than the major the Supervisory Board. meeting on the following day a majori- global players, developments in Africa ty of the shareholders voted in favor of match up to the global trend in growth 3.3 Showcase: ABN AMRO the sale of LaSalle. over the past year. acquisition In July 2007, Barclays raised its offer The changing landscape referred to for ABN AMRO to € 67.5 billion. It 3.2 A changing landscape earlier applies very much to the did so after securing investments from Although very positive overall, the Netherlands. From 1991 to 2007, the governments of China and banking landscape seems to be chang- ABN AMRO was one of the largest Singapore. The offer remained below ing rapidly. The mergers and acquisi- banks in Europe and had operations the offer made by the consortium in tion (M&A) and consolidation trend, in about 63 countries around the the previous week. At the end of July both on a domestic and cross-border world. Originating in the Netherlands, 2007, the ABN AMRO board withdrew level, is generally expected to continue its history dated back to 1824. A con- its support for the Barclays offer, which in the near future. The M&A trend has sortium of three European banks, The was lower than the offer by the group materialized in a number of interesting Royal Bank of Scotland Group, Fortis led by RBS. The board stated that it deals completed in the last year, for and Banco Santander, announced on could no longer recommend the offer example: October 8, 2007, that an offer for from a financial point of view. ■ the acquisition of ABN AMRO Bank 86 percent of outstanding ABN AMRO At the beginning of October, Barclays by the consortium consisting of The stock had been accepted, paving the withdrew its bid for ABN AMRO and, Royal Bank of Scotland, Fortis Bank way for the largest ever bank takeover with 86 percent of the shareholders and Banco Santander; in history. accepting the consortium bid and ■ the acquisition of LaSalle Bank by Fortis completing its financing, the Bank of America from ABN AMRO; The dismantling of ABN AMRO has consortium was able to formalize its ■ the acquisition of BNL by BNP commenced after many months of offer and take control of ABN AMRO. Paribas; uncertainty about its future. Events ■ the acquisition of Capitalia by started when in February 2007 TCI UniCredit in Italy; hedge fund asked the ABN AMRO ■ the merger of Banca Intesa and Supervisory Board to actively investi- Sanpaolo IMI. gate a merger, acquisition or break-up of ABN AMRO, since, in its opinion, Interestingly, another trend is the the market capitalization of ABN investment of huge amounts of cash by AMRO did not reflect the value of the non-traditional, non-Western investors underlying assets. in the financial services industry of the In April 2007, ABN AMRO and Western world. The fourth quarter of Barclays announced the proposed 2007 saw a number of investments by acquisition of ABN AMRO by Barclays. Chinese and Middle Eastern entities in The deal was valued at € 67 billion European and North American finan- and included the sale of the LaSalle cial institutions, examples being: Bank to Bank of America for € 21 bil- ■ the Abu Dhabi Investment Authority lion. A few days after the joint announ invested $ 7.5 billion in Citigroup, cement by Barclays and ABN AMRO, offering the largest US bank the the consortium issued their indicative

Global banking overview 2006 - 2007 17 4 Vendor solutions

When did core banking become a market for vendor solutions, and what generations of solutions have there been?

4.1 Introduction tomized by top-tier banks, but these This chapter provides an overview of efforts consistently failed. the market for core banking systems. We begin by providing a brief history In the 1980s, we saw package solu- of the market. How was this market tions coming from other parts of the shaped? world, primarily Europe, Asia and Australia. Vendors with a different but We continue with the developments comparable background also entered since the previous version of this sur- the arena, for example the private bank vey, dating from 2006. What hap- ing solutions developed in countries pened in 2006 and 2007? What acqui such as Switzerland and Luxembourg. sitions and alliances took place? Because - due to the nature of their Which partnerships broke up? Who business - these were more customer- won the major deals and are there any focused than the transaction-oriented, new challengers emerging? transaction-crunching engines available before, they had a natural fit with Finally, we take a look into the future. the customer centricity that was com- What are the trends in vendor solu- ing increasingly into focus. Limitations tions, functionally and technically? of these systems mainly had to do with Where do we feel the market will go? the ability to handle large volumes.

4.2 History of core banking The 1990s saw new players emerging systems in India, benefiting from the opening The first core banking solutions up of the Indian economy, the avail- appeared in the 1970s in the United ability of English language skills, and States. Most of them ran on main- the huge pool of highly skilled engi- frame computers and were designed neers. i-flex solutions (and its legal by the banks themselves or by third predecessor CITIL) can be considered parties in conjunction with the large as the first successful software product US banks. Limitations to exporting company from India that managed to these systems outside the US were sell outside the Indian subcontinent. It that these were mainly single-currency- was followed by the likes of Infosys based as they were designed for the and Tata Consultancy Services (TCS) - US market only. In the 1980s, these companies that originally focused more solutions moved to all continents, on providing off-shoring, consulting mostly as a result of following the and outsourcing services but moved major US banks such as Citibank. into the software product business - and later by other product companies During the 1970s, 1980s and most of such as Polaris Labs and Nucleus. the 1990s, packaged banking solutions flourished in international operations. At the end of the 1990s, new players For domestic retail operations, howev- made their entry. ERP giants such as er, most large banks preferred to stay SAP and IBM started entering the mar- with the systems they had developed ket (following a strategy of organic in-house. Some brave top-tier institu- growth and development and with a tions did try replacing the in-house presence at the heart of the accounting systems with package solutions cus- domain in many banks), followed a

18 Financial Services the way we see it

few years later by Oracle (through the 4.3 Recent market developments opments in the core banking market acquisition of i-flex solutions and Increasingly, the core banking market from 2006 onwards: Siebel and aligning these to their tech- is ‘hot’, and since 2005 (our previous nology and application strategies). edition of this survey) the market has ■ Fiserv completed the acquisition of seen a great deal of movement. A lot NetEconomy, the global provider of In the overview in figure 7, the histo- of concentration has taken place, by technology solutions for anti-money ry of core banking solutions is given means of mergers, acquisitions, strate- laundering, fraud prevention, and in terms of decades, with details of gic alliances and cooperation agree- compliance, based in the the origination of core banking sys- ments, see figure 8. The following Netherlands. tems. gives an overview of the major devel-

Figure 7: Core banking solutions - history

1970s 1980s 1990s 2000s

Profile Fidelity Systematics Corebanking Midas Misys Equation Fiserv ICBS

TCS (TATA) Bancs Sungard System Access Symbols

Accenture Alnova T-Systems Callatay & Wouters Thaler Tietoenator Core Banking Suite T24 Temenos TCB

Delta Informatique Delta Bank SAP SAP Corebanking I-Flex Flexcube Infosys Finacle Nucleus Finnone Polaris Intellect suite

Source in the United States Move to all continents Take-overs/shake-out Important sources India First backoffice systems Booming business Entrance new players Replacing core banking Build in house, third party Follow banks oversea Replacing first systems Customer focus Evolved to first packages Failed to replace core Failed to replace core Outsourcing

Vendor solutions 19 ■ SAP and Accenture ended their stra- Figure 8: Vendor’s revenues tegic cooperation in the banking domain. ■ SAP acquired Business Objects. The companies believe that customers will gain significant business bene- > 10 billion Euro fits through the combination of new, innovative offerings of enterprise-wide business intelligence 1 - 9 billion Euro solutions along with embedded analytics in transactional applications. ■ SAP and Callataÿ & Wouters 100 - 999 million Euro announced collaboration between the companies to offer an end-to- 10 - 99 million Euro end core banking solution for mid- size banks to build a business process platform, based on SAP soft- 0% 10% 20% 30% 40% 50% ware and technology. ■ interestingly, Misys also announced a strategic alliance with SAP to ■ Fiserv also acquired Checkfree, a deliver an integrated banking sys- provider of financial electronic com- tem based on its BankFusion tech- merce services and products includ- nology, which will run on the Sap ing electronic bill payment and NetWeaver platform. internet banking. ■ Tata Consultancy Services (TCS) ■ Oracle completed the acquisition of consolidated its financial products Siebel Systems (customer relation- business into a new Strategic ship management solution provider) Business Unit, TCS Financial and Hyperion (performance man- Solutions. agement solution provider). It also ■ TCS also announced the completion raised its stake in i-flex to over of the acquisition of its Switzerland- 80 percent. based partner TKS-Teknosoft (TKS), ■ Oracle announced the formation of expanding its portfolio of banking its Financial Services Global products and consolidating its Business Unit, which would provide European operations. an integrated suite of standards- ■ Temenos and Metavante have based, industry-specific applications entered into an agreement whereby for banks, insurance companies and Metavante will distribute the capital market firms. The unit is led Temenos CoreBanking platform in by Rajesh Hukku, founder, former the US. Temenos will retain royal- CEO and now Chairman of the ties on license and maintenance Board of i-flex solutions. fees, outsourcing fees and profes- ■ i-flex solutions acquired Mantas, a sional services revenues. Metavante, US provider of anti-money launder- one of the three largest US bank ing and compliance technology. technology and payment-processing firms, will have exclusive US access to a co-developed global software

20 Financial Services the way we see it

platform for the US market that is Functionality based on TCB. On the functional side, we have not ■ T-Systems acquired MBS of Alldata seen any fundamental change in the and GEOS of SDS, but has not hith- functionality required from core bank- erto sold it outside the German- ing systems. This means that many speaking market. core banking system vendors have been able to bridge the functionality 4.4 Recent developments in gap between them and the leading package solutions platforms. Some vendors have been The core banking systems area is able to improve the volume-processing becoming more and more mature, capabilities of their functionally broad- with packaged solutions increasingly er or more advanced systems. attaining a functional richness that As a result, advanced functionality that was previously available only from was previously limited to private bank- Although the argument that core in-house legacy solutions. They are ing clientele, for example, is now avail- “ banking functionality is fast also attaining a technical and organi- able in core banking systems that are becoming a commodity is valid, zational level that meets the business able to handle the volumes commonly the means to support banking expectations in terms of agility, time arising in the mass retail banking mar- functionality in the back-office is to market and operational support. ket. changing. Business expectations for rapid time to market for “Although the argument that core Technology products, and the correspond banking functionality is fast becoming On the technical side, we have seen ing operational support, are a commodity is valid, the means to a move away from dependencies on quickly outstripping the capacity support banking functionality in the hardware platforms and operating sys- of development organizations to back-office is changing. Business tems. The vendor offerings conse- facilitate change. Most of this is expectations for rapid time to market quently have access to a larger mar- due to trapped, line-of-business for products, and the corresponding ketplace. Conversely, it has given logic buried in application- operational support, are quickly out- banks access to a much larger set of specific legacy environments. stripping the capacity of development vendors and solutions. Banks can ” organizations to facilitate change. operate core banking systems on their Don Free Most of this is due to trapped, platform of preference. Some banks Research Director Banking line-of-business logic buried in appli- prefer to stay on their well-embedded Gartner cation-specific legacy environments,” and reliable mainframe infrastructure. says Gartner’s Don Free. “The matura- Others move to highly scalable com- tion of middleware messaging archi- modity platforms, freeing them from a tectures, the evolutionary path to serv lock-in to an increasingly small set of ices and event-driven constructs and expensive mainframe specialists. new development techniques, such as service-oriented development, are Messaging, service orientation and simplifying maintenance and support architecture of products while reducing volatility With regard to business expectations, commonly associated with the intro- the expectations for rapid time to duction of new products and services. market for products and the corre- Some core banking vendors are sponding operational support are already progressing quickly to achieve quickly outstripping the capacity of componentization of their back-office development organizations to facilitate offerings.” change. This is leading to major devel

Vendor solutions 21 opments in the core banking area, namely messaging, service orientation Figure 9: Identified competitors and architecture. Messaging middleware has become a de facto standard. Service orientation and loose event- Vendor What are your major competitors? based coupling have become part of Accenture mainstream thinking. We have seen Callataÿ & Wouters Temenos i-flex solutions the arrival of the first business process Delta Informatique i-flex solutions frameworks for banking. Business Fidelity (Corebank) i-flex solutions process modeling and orchestration is TCS on the rise. All this will give banks a Fidelity (Profile) i-flex solutions great deal of freedom. A bank can buy Temenos the services that are available on the TCS Fiserv market from vendors, service-enable In-house development existing legacy systems or create its Fidelity (Systematics) Fiserv own services in areas where it feels Metavante this gives the bank an advantage in CSC the market. And it can outsource In-house development when it feels that a service is not its Fiserv Infosys i-flex solutions core competence! We have seen vend Misys ors coming up with strategies in this Temenos area in the last two years and we have SAP also seen the first resulting products. I-Flex Temenos Infosys 4.5 Competitive landscape Misys SAP As part of the survey, we asked the Infosys Temenos participating vendors to tell us which SAP vendors and solutions they consider i-flex solutions to be their main competitors. The fol- Misys Temenos lowing figure lists the answers to this i-flex solutions Nucleus question, see figure 9. Polaris Temenos i-flex solutions 4.6 Future of the market SAP AG i-flex solutions In the past, there were a large num- Temenos ber of specialized solutions in the In-house development market. Some were strong in account SunGard i-flex solutions Temenos handling, others strong in wholesale Path Solutions (Islamic Banking) or retail lending and finally there Misys were separate financial accounting TCS solutions. All these packages had Infosys their own, proprietary architectural TCS i-flex solutions Temenos footprints. Temenos Fidelity Infosys Nowadays there seems to be a move i-flex solutions towards alignment with the architec- TietoEnator ture stacks and frameworks of the ERP T-Systems Kordoba giants SAP and Oracle in this market. Fiducia

22 Financial Services the way we see it

Alongside the core banking offerings of The Indian pure players have so far the ERP giants (or subsidiaries), most chosen to remain agnostic in this independent vendors are aligning respect and have come up with SOA themselves to one of these platforms. and BPM stacks of their own.

This should deliver the additional bene 4.7 Specialized ‘best of breed’ fits promised in some of the initiatives solutions of these ERP giants: embedded busi- Besides the core banking solutions, ness intelligence, integrated customer there are also some very good special- relationship management, integrated ized solutions in specific domains. financial accounting and reporting and Figure 10 lists some of these in the integrated risk management, regulatory domains of Payments, Lending and compliance and fraud detection. Securities.

So far we have seen Misys and Callataÿ & Wouters deciding on a strategic cooperation with SAP. i-flex solutions obviously aligns itself to the Oracle stack.

Fiserv has integrated business intelligence, customer relationship management, and integrated risk management, regulatory compliance, and fraud detection, which can be combined with financial accounting and reporting capabilities from within the Fiserv group of companies.

Figure 10: Best of breed solutions

Domain Vendor Solution

Payments ACI Worldwide ACI Payments Framework Dovetail Systems Dovetail Systems Fundtech Global PayPlus CBA IBAS Clear2Pay OPF TietoEnator Global Payments Solution

Lending Fidelity ACBS Misys Loan IQ SS&C LMS Loan Suite BAI Component Banker AFS AFS Lending Solution Nucleus FinnOne

Securities T-Systems Geos ADP Gloss & Tarot DST HiPortfolio SS&C Different solutions Sungard Different solutions

Vendor solutions 23 5 Package-based solutions

For the successful implementation of package-based solutions, you can distinguish four main stages.

The four main stages are: by enterprise architecture in order to ■ Make or buy integrate business and information ■ Selection technology change. ■ Implementation ■ Operation IAF itself is a content framework that defines the possible deliverables with- In all this, architecture is one of the in an architecture engagement. The key elements. Capgemini’s Integrated framework is supported by reference Architecture Framework (IAF) is our architectures and patterns, which approach that addresses all the aspects serve as a solid foundation for fast and required by enterprise architecture in efficient elaboration of enterprise archi order to integrate business and infor- tectures. Within engagements, the mation technology change. In the next architect uses roadmaps to define how section, we give an overview of IAF, it is run and how the specific client after which we continue with the objectives are met. stages as defined above. Therefore, there is a separation in IAF 5.1 Integrated Architecture between the content and the approach Framework within an architecture engagement. The Integrated Architecture Frame The major structure of IAF can be work (IAF) is Capgemini’s approach outlined as follows in figure 11. that addresses all the aspects required

Figure 11: IAF - Integrated Architecture Framework

Contextual WHY?

Security Governance

Technology Business Information Information systems infrastructure

Conceptual Artifacts & views Artifacts & views Artifacts & views Artifacts & views WHAT?

Logical Artifacts & views Artifacts & views Artifacts & views Artifacts & views HOW?

Physical Artifacts & views Artifacts & views Artifacts & views Artifacts & views WITH WHAT?

24 Financial Services the way we see it

IAF addresses four architecture aspect ■ IAF reduces the risk of ‘losing areas: Business (B), Information (I), requirements’ between the phases. Information Systems (IS), and Techno ■ IAF provides an approach for Enter logy Infrastructure (TI). An aspect area prise Application Integration (EAI). looks at one system from a specific ■ IAF has proven consistency with the standpoint. The topics addressed in latest software delivery methods such each of the aspect areas may differ, as the Rational Unified Process (RUP). but there are strong interdependencies between each of the aspect areas. 5.2 Stage 1: Make or buy Ideally, all aspect areas must be incorporated in the architecture design to ensure its usability as a single system; omitting any of the aspect areas intro- Make or buy Selection Implementation Operation duces additional risk.

Developments in business and technology often require special attention A major consideration for banks with to the architecture design. Within IAF a demand for system replacement is this is translated into two specialized whether to build it in-house or buy an views: governance and security. Both off-the-shelf package. Most large banks specialized views emphasize the quali- have until recently preferred the in- ty aspect of the architecture and are house route, on the basis that core selected parts of the aspect areas. banking systems are responsible for the most critical tasks of bank opera- IAF recognizes four levels of abstrac- tions and require complete and ulti- tion: contextual, conceptual, logical, mate control by the bank. Therefore, and physical. The first, contextual, is they did not want to rely on vendor for answering the ‘why’ question and solutions for managing accounts and to provide context information and processing transactions. key principles that support the value Making a clear and strategic proposition for the architecture to be A bank has several options for its core choice in this phase is essential developed. banking systems, with the most appro before entering the package priate option being based on its drivers selection phase. The benefits of using IAF include: and the relative effect on its KPIs: ■ The architecture is defined by and justified in terms of business needs. ■ Do nothing but continue the nor- There is a direct link between the mal maintenance on the current business and its supporting IT. IAF system(s). is a key prerequisite for business-IT For the old legacy systems this alignment. means that maintenance costs and ■ The architecture is maintainable, risks will increase significantly as thus maximizing the original invest- time passes, so another decision will ment by the business. It can be used normally have to be made in the as a basis for capacity planning and next few years. control. ■ Develop a new system in-house. ■ IAF ensures completeness of the Although cost and risk may well rule design. this out, this is still the biggest com-

Package-based solutions 25 petitor, mostly because of the influ- 5.3 Stage 2: Selection ence of the IT department, and from the end-user perspective the number of changes will be limited. If this alternative is chosen, risks can be Make or buy Selection Implementation Operation mitigated by opting for approaches based on service-oriented architecture or model-driven architecture. 5.3.1 Methodology ■ Procure a packaged solution. Capgemini’s well-proven system selec- The challenge of this option is to tion methodology has been applied find a packaged solution that is suit- for leading customers in the financial ably scalable and that will integrate services industry around the world into the bank’s technical environ- and has minimized the risks involved ment. Plug-and-play packaged solu- in system selection. Selecting the right tions provide flexibility in product system can make an enormous differ- development and deployment and ence in terms of market offerings and enable lower cost development process efficiency. through buying commoditized development services from third-party In this section, we give a brief over- suppliers. Changes in the current view of Capgemini’s system selection processes are unavoidable in order to methodology, see figure 12. benefit from the strengths of a packaged solution. Choosing a packaged Figure 12: Delivery selection method solution makes it possible to take advantage of functionalities devel-

oped for other banks. This makes it Milestone possible to benefit from these functionalities within short timeframes. Phase 1 Start up Approved project plan

■ Outsource the service. Phase 2 Focus & direct Approved long list The challenges of this option are to integrate with and manage such a service. Outsourcing can offer ways Phase 3 Define short list Approved short list to defray capital costs and reduce risk. Outsourcing can be based on Phase 4 Evaluate Preliminary choice the company’s own solution or a (new) package. The size of the bank Validate Phase 5 Validated package is likely to influence which option is (optional) preferable. Alignment between own Confirm and Go/no go Phase 6 finalise preferred and outsourced processes is essen- solution tial and they are managed via serv ice level agreements. Implementation

Making a clear and strategic choice in this phase is essential before entering Time the package selection phase.

26 Financial Services the way we see it

It has been developed and continu- that there is sound management buy- ously refined over a number of years in to the project. as a refinement and adaptation of general system selection methodologies Focus and direct for the specific needs of the bank and The focus and direct phase scopes the other financial service institutions. package selection project, answering The package selection method is used the questions as to why the business to select a software package that best will start the project, what goals the matches the business needs of the cli- business will attain, what approach ent. The method supports and objec will be used by the project to attain the tifies decision making with respect to goals and what the limits of operation software selection and consists of of the project are. While the start-up seven streams and five phases. phase has a strong focus on preparing the - organizational - conditions for The starting point of the method is a conducting the project appropriately, business requirement to automate a the package selection project starts in business functionality by using a stan- earnest with the focus and direct dard software package. Standard soft- phase. The focus is business-oriented, ware is defined as a software package or one might say content-oriented. that is supplied by a software vendor and has 80 percent of the required Define shortlist functionality out of the box. A stan- In this phase the project team tries to dard software package may be highly deliver a shortlist of three to five parameterized. Therefore, a large set- packages which most closely match up may be necessary to achieve the the current and future requirements 80 percent of productive functionality. specified by the organization. After a The method can be used to select one long list of packages has been drawn or a combination of software packages. up, with the aid of the Capgemini packages database, a Request for The selection method is used to devise Information (RFI) is sent to these objective criteria so that the decision vendors. Based on the answers to the process is rationalized. Besides sup- RFI, a shortlist is drawn up which will porting the decision making process, serve as the basis for the remainder of the package selection method pre- the selection process. pares the organization for the implementation of the software package. Evaluate A properly executed package selection This phase provides the package eval- can save a lot of time during imple- uation process. During this package mentation of the package! selection phase, the project team will conduct a thorough review and analy- Start-up sis of several potential short-listed The purpose of the start-up effort is to software tools which meet the client’s ensure that sufficient resources are business requirements and enable the available to the project, so that a clear desired business processes. This phase plan with deadlines is in place, the ends with one preferred potential soft- members of the project team are ware tool which meets the client’s aware of their responsibilities, and business requirements.

Package-based solutions 27 Validate port in the future. It is essential to In the validate phase, the package select a system that not only supports solution will be tested in full practice. the current situation, but also allows The provider will have to install the the organization to respond to future system in a client’s test environment. market demands and change its value The reason for doing this is to elimi- proposition and customer experience nate the final uncertainties. accordingly. In the previous phase, a short valida- An important aspect is the choice of tion of the package is included as part an integrated system or a ‘best of breed’ of the package selection. This short infrastructure. Smaller institutions will validation may be a proof of concept often have a preference for integrated in which specific functionality is test- systems. A well-chosen system pro- The selection of a core banking ed. This test is included to ensure that vides all the necessary functionality, system is a strategic decision the package can be parameterized or causes not too much trouble with with long-term implications. extended to support the required interfacing and innovation, and is functionality. This short test is not supported by the vendor. Large and used to test all functions of the pack- sophisticated banks, however, will opt age. The validate phase is included for for a ‘best of breed’ infrastructure. No the checking of all functions. To start single system totally covers their this phase, the client signs a letter of requirements, so they have to choose intent. In this letter of intent he specific software components for spe- declares that he will purchase the cific functionalities. package subject to a positive validation in this phase. A solid architectural basis is key in these cases. These infrastructures intro This validation phase is optional. In duce the need for a middleware com- most situations, all the information ponent. This is vital, since it reduces gathered in combination with a short the interfacing issues to a minimum proof of concept in the evaluation and guarantees flexibility in a complex phase will be sufficient to reach a environment, see figure 13. decision. Figure 13: ‘Best of breed’ or integrated solution Confirm and finalize the preferred solution The objective of this phase is to get Best of breed Integrated solution the final sign-off of the package selec- (multiple systems) (one system) tion project. With this sign-off the cli- Pros Advanced functionality No interfaces in the transaction flow ent agrees to the solution as advised Switching parts of the systems architecture Makes reporting easier across the transaction by the project team. gives lower costs flow Less dependence on one vendor Easier maintenance of databases

5.3.2 Integrated or ‘best of breed’ Implementation and maintenance is Cons Does not cover all functionality requirements The selection of a core banking sys- complicated tem is a strategic decision with long- Multiple databases often cause Specialized systems outside transaction flow term implications. The future business inconsistent data might be inevitable Overall higher costs for licenses Replacing the complete system architecture vision needs to be established in order results in higher costs to determine what business setting the Vendors have to cooperate during new banking system will have to sup- implementation

28 Financial Services the way we see it

5.3.3 Selection criteria Implementation and migration System selection does not mean choos- One of the most compelling areas of a ing a system with the most extensive bank’s analysis lies in the implementa- functionality. It is a dynamic process tion practice of the vendor. Failure to in which different selection criteria perform due diligence regarding ven- must be matched with existing and dor project management capabilities future business processes and system has the potential to drive implementa- architectures. There should be a match tion costs exponentially and dispirit between the business processes, the bank staff. system and the organization. It is vital to talk with a vendor’s cus- The system selection process must be tomers to gain ‘real world’ experienc- driven primarily from a business per- es. Vendors will have their targeted spective, rather than being treated as a list of references for use in the sales choice between change and improve- cycle. It is important to talk with ment of the current state. Any emo- banks that have similar profiles - how tional bias towards an existing solu- they use the system and matching tion will introduce hidden variables scale - to gain a more balanced per- that influence the decision. spective. However, be aware that the banks on these lists often receive pref- Vendor erential treatment from the vendor. Selecting a core banking solution should not be a tactical, point-driven, Functional aspects decision making effort. It is entirely Functionality is the most important cri- strategic and vital to the long-term terion in the system selection process. health of the bank. The viability of a When evaluating a system’s functional- vendor is therefore a crucial element ity in relation to the needs of the in the search for a replacement sys- bank’s business, it is imperative to con- tem. Analyze a vendor’s viability, not sider not only the current needs and just in terms of financial stability, but functionality, but also future needs, as also by scrutinizing technical compe- well as the vendor’s policy towards tence, development capability, quality upgrades, changes, and additions. of support, marketing and sales reach, Functional aspects vary between finan- alliances and partnerships, and man- cial institutions with different strategies agement performance. and different commercial activities.

Support and Services Technical aspects Part of selecting the right vendor is The organization’s existing technical having a good understanding of the infrastructure and capabilities limit support and services a vendor pro- the choices. Adding new components vides during the implementation proj- to an existing technical architecture ect and once the solution is in produc can substantially influence operational tion. What is the release and upgrade and maintenance costs. Technical pre- strategy? How are new requirements conditions for the selection process, incorporated in the solution? What based on IT and business principles, types of consultants are available dur- can be defined in the terms as shown ing the implementation project? in figure 14.

Package-based solutions 29 Business value Return on investment (ROI) is an Figure 14: Principles important criterion, but does not solely define the true value of IT investments. A more practical measure is the busi- Business principles IT principles ness value of IT that takes ROI into Multi-language Scalability consideration as well as other impor- Multi-channel Technical platform, hardware, operating system tant factors, such as strategic alignment, Multi-brand (white labeling) Service and message architecture architecture, risk, and business process impact. Flexibility to product changes Flexibility to technology changes

Security age using current state processes and The assessment of a solution in terms ‘blank sheet’ innovation. of its fit with the bank’s internal security standards helps to prevent a lot of This method is intended to be used discussion during the implementation on projects where a significant degree project. By involving the departments of redesign around core/strategic pro- responsible for the security aspects, cesses is desired, with a package serv- any gaps can be properly identified. ing as a primary enabler of that effort. These gaps can either be filled by the At this point, the package has already vendor in its next release, or resolved been selected. The method includes by specific activities during the imple- comprehensive guidance to deal with mentation project. the organization design and change management issues inherent in a 5.4 Stage 3: Implementation package-based engagement.

Make or buy Selection Implementation Operation

5.4.1 Methodology RAPID strives to accelerate the speed To implement the package on To implement the package on a solid to value by focusing the redesign a solid basis, the best option is basis, the best option is to use a struc- effort on those processes that will to use a structured approach tured approach based on best practices. yield the greatest value to the organi- based on best practices. Capgemini offers an implementation zation while adopting the package method and a multi-site implementa- processes in non-core/strategic areas. tion framework, which can also be The business case serves as the combined. benchmark by which ‘value’ is measured. Key project decisions should RAPID be evaluated based on their quantita- The Redesign through Application tive benefit versus qualitative opin- Package Iterative Development ions on what is critical to the organi- (RAPID) method resides between the zation. extremes of just implementing a pack-

30 Financial Services the way we see it

RAPID draws on leading practices, linked directly with the project innovative deliverables, and lessons management method, see figure 15. learned from our most successful ERP projects to improve quality and accel- To conclude, through RAPID, erate results. There are several Capgemini offers the following key Capgemini differentiators that have benefits in implementing packaged been included in RAPID to ensure the solutions: solution provides speed, value, and ■ RAPID is a comprehensive and well- quality. Some of the major areas are tested route map covering all aspects noted below: of a large package implementation, ■ Accelerated Workshops: the method where the package is seen as an recommends the use of Accelerated ‘enabler’ of business change. Workshops to improve the speed ■ The main characteristic of RAPID is and quality of the project. These ses- its business-oriented approach sions provide a major differentiator towards large-scale IT projects, as compared to all our competitors, ensuring that business goals are and can accelerate the time to the used as a yardstick of success first go live. This unique approach throughout the engagement. dramatically accelerates the project, ■ RAPID integrates people, processes, compressing months of work into and technology aspects within its days of intensely focused effort. main phases of solution definition, ■ Development Centers: we strongly solution development, and imple- urge all projects to utilize our off- mentation. shore Delivery and Development ■ RAPID ensures process innovation Centers to accelerate our time to deliv and improvement and reduces ery. Using offshore centers also pro- delivery time and risk. vides a reduced cost for the project. ■ Project Management Method: our MIR project management method is a The objective of a Multi-site complete end-to-end project man- Implementation and Roll out (MIR) agement method. Within RAPID, all initiative is to enable an organization activities that have been identified to adopt a consistent approach to its as project management activities are business processes, by delivering real business benefits through the controlled implementation of a common Figure 15: The Capgemini methodology for a package implementation enterprise system to multiple locations within a business sphere of influence.

The Multi-site Implementation and Project management Roll out framework is used when a RAPID package or a specific solution needs to Post- be implemented at a number of sites Project Solution Solution Implemen- Implemen- initiation definition development tation tation (international or otherwise) within an support organization. MIR is Capgemini’s serv Build-to-run transition ice offering to manage such large-scale programs, regardless of the type of system implemented.

Package-based solutions 31 ■ Business changes will be involved: Figure 16: The Capgemini methodology for a roll out at multiple (local/global) they are not necessarily a business locations process re-design initiative, but are more than the traditional/simple alignments to allow the use of a new IT solution. ■ Implementation of an IT solution Business within the involved organization: this generally includes more than one company or legal entity, and IT can even be extended to suppliers or contractors involved in the cli- n

Support sion

Vi ent’s organization. ■ Need for an extended support struc-

Management ovement e Solutio ture at multi-site level: this includes ogramme Readiness

Business Solution Design Pr Cor Pilot Deployment Impr not only the traditional ‘IT support and maintenance’ organization, but also all human resources to be involved at the different levels from ‘global project office’ level to local MIR is specially developed for a roll implementation site. out of a solution at multiple locations ■ Need for ‘customization’ at the vari- (branches, countries, regions), see ous levels involved: this could figure 16. involve customization and adaptation from a ‘corporate’ or ‘coordina- The specific objectives of the MIR tion’ level to different ‘localized’ ver- framework are to: sions at the user’s site level. This also ■ provide a flexible delivery structure includes the needs related to ‘config- which can be easily tailored to suit uration management’ of the IT solu- any specific client situation; tion, as well as its ‘version manage- ■ help in delivering integrated services; ment’, and can also lead to a further ■ lower risk of failure; ‘application management’ effort. ■ provide a platform for operating ■ Training needs at various levels: this units to share and leverage best is not to be limited to the ‘new sys- practices to support the framework. tem’ training at IT level, but should An important part of this method is a include all types of ‘education and pilot in one location and, after training’ needs allowing harmonious improvement, a roll out to the other operation with the new organiza- locations. tion. Training should be extended Implementation features to define a to cover new organization and busi- MIR initiative include: ness processes. Training is necessary ■ Multi-site implementation: not nec- in the different steps of a program essarily international, but ten or and includes the training for the more sites at different levels from project teams, implementers, train- upper ‘global’ or ‘coordination’ level ers, end-users, et cetera. to ‘local’ or ‘user’s site’ level. ■ Change management in the broadest sense: this should include all aspects

32 Financial Services the way we see it

related to how to manage the chang- option is preferred if the application es in the organization at the various incorporates many tailor-made solu- levels. This includes the levels from tions and interfaces. ‘Global’ to ‘Site’, business-related aspects (such as organization, human Outsourcing resources, business processes, et In this option, the bank delegates the cetera), as well as IT-related aspects activities to a third-party entity that (change requests for the core solu- specializes in that operation. The tion, version and configuration man- activities can range from pure hard- agement, application management, et ware operations to complete business cetera), and support aspects. processes. There are some specialized forms of outsourcing companies: 5.5 Stage 4: Operation ■ Application outsourcing - Software as a Service (SaaS). The service provider manages and dis- Make or buy Selection Implementation Operation tributes software-based services and solutions to customers over a network. There are different types of SaaS constructions, After the implementation, the actual depending on the responsibilities operation starts. At the beginning, of each party. employees and management have very ■ Process outsourcing high expectations of the newly chosen - Shared Service Center (SSC). A solution. But these can easily be dam- shared service center is a profes- aged. Production problems will occur sional organization, executing and requirements will change over specific business functions for time. It relies on a well-thought-out (internal) clients. The same func- maintenance phase and support by tions are executed as in the first both supplier and internal experts. option, but now they are shared Production problems will occur Various options for maintenance are with one or more other depart- and requirements will change available. You can decide independent ments. The main objectives are over time. It relies on a well- ly on both the way in which the main- cost efficiency through economies thought-out maintenance phase tenance entity is organized and the of scale and improving quality. and support by both supplier location of this entity. Both elements Shared service centers are and internal experts. can be combined in all kinds of ways. accountable for the services supplied. The main disadvantage is 5.5.1 Organization the dependency on the other parties. In-house department - Transaction Bank. A specialized IT infrastructure, release management, company for processing specific testing and customer support are operations (for example payments managed within the company. This or securities processing) from a requires the availability of employees bank. Key words are automation with first-line technical and functional (replacement of labor-intensive expertise in the package. The supplier work), standardization (elimina- can provide second-line support. This tion of complexity costs), and

Package-based solutions 33 economies of scale (better leverage of fixed cost and R&D cost). Figure 17: The organization for an implemented package solution These are the same activities/processes in each financial institu- tion. The Transaction Bank is often a joint venture between an High In House IT company and a number of par- department ticipating banks. - Business Process Outsourcing SSC (BPO). BPO is the contracting out Shared Service Center of a specific business task to a true third-party service provider. Control, Stake Transaction Bank 5.5.2 Location Outsourcing Business Process Outsourcing Near shore SaaS, Near shore moves operations or jobs Software as a Service from internal production to an external entity in a nearby region of the Low world. Low Efficiency High Onshore Onshore moves operations or jobs from internal production to an exter- Figure 18: The location for a package solution nal entity within the same country.

Offshore (Far shore) Offshore moves operations or jobs from internal production to an external High entity in another region of the world. Rightshore®

On-site On-site On-site leaves part of the service with- Onshore in the client facilities. Complexity Risk Rightshore® Rightshore® is a Capgemini operating approach that leverages global deliv- Offshore ery in order to place processes, servic- Near shore es, and/or functions in the best location, that is, a blend of capabilities onshore (delivery on-site or within the Low same country), near shore (delivery Low Customer Interaction/Intimacy High from nearby regions), and/or offshore (delivery from different continents), tailored and coordinated to meet specific business goals.

34 Financial Services the way we see it

6 Capgemini in core banking

Capgemini is a leading global consulting firm with a very strong presence and headquarters in Europe.

We have worked closely with the and subject matter experts around the world’s most prominent and success- world. Within these structures you ful financial institutions and have total will find the FS Industry Packages worldwide revenues of more than Center of Excellence. In this center, all $ 1 billion in financial services. the knowledge is concentrated around a wide variety of package-based solu- Because of the acquisition of Kanbay tions in the financial services industry. in 2007, Capgemini had the strongest presence in India of the top-three It is not possible to draw a clear dis- consultancy companies in the world tinction between core- and non-core and became a very strong player in FS consultants, but most of the the financial services industry. knowledge and experience is in this Capgemini’s global FS Centers of area. The knowledge is captured in all Excellence drive global sales & deliv- kinds of ways, including process ery support, leveraging best practices models for each area.

Figure 19: Capgemini in financial services

Telecom, Media & Professional Consulting Networks Other Services Services 6,5% 9,6% Energy & 11% 15,9% Utilities Manufacturing, 13,1% Retail & 29,0% Distribution 34% Technology 14,0% Services Financial 39,1% Services 27,8% Outsourcing Services Government

North America 6.441 Asia Pacific Capgemini FY 2007 United (India 6,979) Kingdom 8.231 and Ireland � 8.7 bn A $ 13b Global Player 9% 12% 17,500 Professionals in Network 8.785 Benelux 13% Serving Financial Services 13% 9.014 Southern 7,000 Dedicated India FS 9% Platform Europe 8% 6.235 Central 20,000 Offshore headcount 5% 6 Major Indian Hubs 31% Europe 5.137 900+ Clients Worldwide Nordic Countries France 3.608 20.438

Capgemini in core banking 35 Capgemini’s world reports Each year Capgemini publishes World From benchmarks to best practices, Reports for Payments (together with global or local, Capgemini brings the EFMA and ABN AMRO), Retail Banking latest in industry innovation and (together with EFMA and ING), Wealth insights with four global reports to Management (together with Merrill help organizations be more competitive Lynch) and Insurance (together with and responsive to market demands. EFMA) with one of our globally lead- Download reports at ing clients. The reports describe the www.capgemini.com/financialservices trends in the specific areas.

Capgemini in Financial Services

From benchmarking to best practices, global or local, Capgemini brings the latest in industry innovation and insights with 4 global reports to help organisations be more competitive and responsive to market demands.

World Retail Banking Report World Wealth Report World Payments Report World Insurance Report

WORLD 2008 INSURANCE WORLD RETAIL REPORT world 2008 BANKING REPORT World Wealth Report payments REPORT 2007

2007

■ Annual price index of banking ■ Annual collaboration between ■ Annual report produced by ■ Annual report produced by services across national Merrill Lynch and Capgemini Capgemini and industry leaders Capgemini markets ■ Leading source of information ABN AMRO and EFMA ■ Leverages insurer client ■ Covers 194 banks in 26 on Wealth trends ■ Investigates the payments interviews and over 11,000 countries ■ Provides a deep understanding business and revenue and long proprietary customer surveys ■ Produced with ING and the of the investment needs of the term implications of the SEPA ■ Addresses markets in twelve European Financial Manage- world’s high net worth for users and providers of countries covering over 60 ment & Marketing Association individuals (HNWI’s) - and the payments services in the euro percent of the global insurance ■ Features - Driving profitable evolving implications for the zone premiums written growth in domestic markets wealth management industry ■ Features - Issues banks need to ■ Features - An examination of the address to adapt their payments evolving global insurance business to the new SEPA market environment

Download reports at www.capgemini.com/financialservices

36 FinancialServices thewayweseeit

Capgemini’s System Surveys Capgemini also frequently publishes Systems Surveys similar to this one. The ‘Treasury Systems Survey’ and the ‘Asset Management Systems Survey’ were released in 2007 and the latest ‘Retail Banking Systems Survey’ was published in 2006.

Systems Surveys (Retail Banking, Asset Management, Treasury)

Capgemini frequently publishes surveys for specific banking domains with the latest trends in that market and an overview of the most important vendors in the mature markets. It also describes the ways to select, implement and run the solutions.

Privatecg_15769_rapport_RBS_cv.qxd Banking 16-01-2006 11:10 Pagina(2005) 1 Retail Banking (2006) Asset Management (2007) Treasury (2007)

Financial Services the way we see it Financial Services the way we do it Financial Services the way we do it

Retail Banking European Asset Treasury Systems Systems Survey Management Report 2007 Survey 2007 Retail Banking Systems Survey Survey Systems Banking Retail

Survey Results 2006 Survey Results 2006 Results Survey

Capgemini Nederland B.V. Papendorpseweg 100 P.O. Box 2575 - 3500 GN Utrecht Tel. +31 30 689 00 00 Fax +31 30 689 99 99 The Netherlands

www.nl.capgemini.com Dr/8B-300.25/250

The insights given into business The insights given into business The European Asset Manage- Takes a look at trends and trends, package selection trends, vendor market and ment Report 2007 takes a look at developments in the Treasury criteria, methods and information selection and implementation trends and developments in the sector including the influence of provided by the solution vendors methods together with an high asset management sector, BPO, globalization and compli- should assist you in efficiently level overview of the main including the influence of ance legislation. and fundamentally narrowing solutions in the mature markets globalization and compliance down the search for the right assist you in efficiently legislation. solution provider and make it narrowing down the search for easy to connect with the vendors the right solution. on a well-informed basis.

Download reports at www.capgemini.com/financialservices

Capgemini in core banking 38 Financial Services the way we see it

Appendix 1: Detailed systems overview

Appendix: Detailed systems overview 39 Contact Raul González Antón Senior Executive Alnova Lead Diederik van der Linden Direct: +32 2 740 14 13 Georges AYOUB Michelle Kersch - SVP Marketing & Corporate Communications Michelle Kersch - SVP Marketing & Corporate Communications Michelle Kersch - SVP Marketing & Corporate Communications Joan Skimmons, Corporate VP, Fiserv Inc. Carol Cowan, VP Global Marketing, Fiserv CBS Worldwide Thomas Mathew Direct: +91 80 6659 7160 Girish Vishwanath Daniel Scott Simon Lord Gladwin Thomas UK:Ramesh Ramakrishnan India: Sarvasiddhi Venkatesh Simon Shores Mavis Marketing Liew, Director Website www.alnovatech.com, www.accenture.com/alnova www.callatay-wouters.com www.delta-bank.com www.fidelityinfoservices.com www.fidelityinfoservices.com www.fidelityinfoservices.com www.fiserv.com, www.fiservcbs.com www.iflexsolutions.com www.infosys.com/finacle/ www.misys.com/banking www.misys.com/banking www.nucleussoftware.com www.polaris.co.in www.sap.com www.sungard.com/ systemaccess E-mail address [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected], [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] www.sap.com [email protected] Telephone number Telephone +34 915 966 000 +32 2738 1700 +33 247 871 100 +1 904 854 5000 +1 904 854 5000 +1 904 854 5000 +1 262 879 5000 +1 407 299 5400 +91 226 718 5000 +91 804 105 7577 +44 208 879 1188 +44 208 879 1188 +91 120 240 4050 +91 442 852 4154 +49 622 774 7474 +65 6333 4533 Address Address of headquarters For Alnova FS related questions, our headquarter is: Accenture-Financial Services Solution Group (FSSG): 35, 5th Ramírez de floor Arellano 28043 Str., Madrid S de Deken 14 B Rue P. 1040 Brussels Belgium 97315 47, rue Christiaan Huygens B.P. Cedex 2 37073 France Tours 601 Riverside Ave. Jacksonville FL 32204 USA 601 Riverside Ave. Jacksonville FL 32204 USA 601 Riverside Ave. Jacksonville FL 32204 USA Fiserv Inc., 255 Fiserv Drive; Brookfield, WI 53045, USA Fiserv 600 CBS Colonial Worldwide, Center Parkway FL Lake 32746, Mary, USA 399 A-Subhash Road, Vile Parle (East) Mumbai, Maharashtra - 400 057, India Hosur #44 Road Electronic City, Bangalore - 560100 India Road, 1 Wimbledon, St SW19 George’s 4DR Road 1 Wimbledon, St SW19 George’s 4DR Pradesh, Uttar 201307 Noida Sector-62, A-39, India Polaris Software Lab ltd., Polaris House 244 Anna Salai, Chennai - 600008, India Dietmar Hoppe Allee, 16 69190 Walldorf Germany Boulevard Temasek 8 Access System SunGard 3 01 Singapore #28 0389988 Suntec Tower Solution Alnova Financial Solutions Thaler Delta-Bank Corebank Profile Systematics ICBS (International Comprehensive Banking System) Flexcube Finacle Equation Midas FinnOne Intellect Suite SAP Transactional Banking (TB) System Access Symbols Contact information Company name Accenture Callataÿ S.A. & Wouters Delta Informatique Fidelity National Information Services (FIS) Fidelity National Information Services (FIS) Fidelity National Information Services (FIS) Fiserv i-flex solutions limited Ltd. Infosys Technologies Misys Misys Nucleus Software Polaris Software Lab Ltd. SAP AG SunGard Company (part one)

40 Financial Services the way we see it Contact Dennis Roman Manjinder Jaul Manjinder Jaul Kjersti Breivik Revelsby Berthold Kaib Dr. Direct +49 170 912 7229 Website www.tcs.com/bancs www.temenos.com www.temenos.com www.tietoenator.com www.t-systems.com E-mail address [email protected] www.temenos.com www.temenos.com kjersti.b.revelsby@ tietoenator.com [email protected] Telephone number Telephone +91 226 778 9999/9974 +41 227 081 150 +41 227 081 150 +358 9862 6000 +49 696 6531 3050 Address Address of headquarters TCS House, Raveline Street Fort Mumbai, 400001, India Headquarters SA 18 Temenos Place des Philosphes CH -1205 Geneva Headquarters SA 18 Temenos Place des Philosphes CH -1205 Geneva Kutojantie 10, PL 33 02631 Espoo, FINLAND 50 Mainzer Landstr. 60325 Frankfurt, Germany Solution TCS BaNCS T24 TEMENOS™ CoreBanking (TCB) Core Banking Suite (CBS) MBS banking suite; GEOS Contact information Company name TCS Financial Solutions, SBU of Tata Consultancy Services Ltd. Temenos Temenos TietoEnator Corporation Enterprise Services GmbH T-Systems Company (part two)

Appendix: Detailed systems overview 41 Africa operations and offices has Accenture countries) (49 cities 150 than more in this in them of some word, the across area. geographic Dubai Algiers, Casablanca; Cameroon, Yaoundé; Senegal, Dakar; Gabon, Libreville UK, London India, Mumbai UAE, Dubai UAE, Dubai Nigeria, Lagos South Africa, Cape Town Switzerland, Geneva Switzerland, Geneva South Africa, Midrand APAC operations and offices has Accenture countries) (49 cities 150 than more in this in them of some word, the across area. geographic Singapore Thailand, Bangkok Thailand, Bangkok Thailand, Bangkok Singapore Australia, Sydney China, Beijing Singapore India, Bangalore Singapore Singapore Singapore Singapore Singapore Singapore Singapore Singapore Singapore Singapore Latin America operations and offices has Accenture countries) (49 cities 150 than more in this in them of some word, the across area. geographic Paolo Sao Brazil, Paolo Sao Brazil, Paolo Sao Brazil, Florida Mary, Lake USA, and LatAm (Canada, HQ); Caribbean City Mexico Mexico, Bogota Colombia, Miami USA, Aires Buenos Argentina, City Mexico Mexico, City Mexico Mexico, Santiago Chile, Santiago Chile, Orlando Florida, USA, Orlando Florida, USA, Paolo Sao Brazil, North America USA, Murray Hill (Financial Services Solution Group) Jacksonville, Florida, USA USA, Jacksonville, Florida USA, Jacksonville, Florida USA, Florida, Lake Mary, USA (NA and Fiserv CBS Worldwide HQ) USA, Arlington Heights, IL USA USA, New York USA, Fremont, CA USA, New York USA, New York USA, New Jersey USA, Iselin, NJ USA, Philadelphia USA, New York USA, Florida, Orlando USA, Florida, Orlando USA, New York Europe Spain, Madrid (Financial Services Solution Group) Belgium, Brussels France, Tours UK, London UK, London UK, London UK, London (EMEA HQ) Poland, Warsaw Russia, Moscow Netherlands, Amsterdam UK, London Luxembourg Luxembourg UK, London UK, London Walldorf Germany, Slovakia, Bratislava UK, London UK, London UK, London Finland, Helsinki. Sweden, Stockholm Frankfurt Germany, Regional offices Solution Alnova Thaler Delta-Bank Corebank Profile Systematics ICBS Flexcube Finacle Equation Midas FinnOne Intellect Suite SAP TB Symbols TCS BaNCS T24 TCB CBS MBS; GEOS Company Accenture Callataÿ & Wouters Delta Informatique Fidelity Fidelity Fidelity Fiserv i-flex solutions Infosys Misys Misys Nucleus Polaris SAP AG SunGard TCS Temenos Temenos TietoEnator T-Systems Company

42 Financial Services the way we see it No employees in Europe for core banking Not public 460 255 Not public Not public Not public 156 Not public 60 865 865 10 50 Not public 90 350 700 700 250 400 No employees in R&D for core banking Not public 120 120 Not public Not public Not public 4.700 Not public 1.018 877 877 200 75 Not public 72 1.200 535 535 Not public 300 No employees core banking Not public 500 270 Not public Not public Not public 19.700 Not public 2.900 2.682 2.682 500 2.500 Not public 436 3.000 2.200 2.200 250 400 No employees whole company 170.000 500 295 20.000 20.000 20.000 23.000 10.778 75.971 4.493 4.493 1.600 10.000 39.355 18.000 100.000 2.200 2.200 16.000 56.000 50.000.000 50.000.000 22.000.000 90.075.758 408.507.463 408.507.463 26.515.152 48.985.606 15.730.303 128.787.879 216.300.000 216.300.000 35.000.000 50.000.000 Revenues of core banking division public Not public Not public Not public Not public Not public Not public Not 14.921.071.212 50.000.000 24.000.000 3.181.818.182 3.181.818.182 3.181.818.182 3.340.909.091 354.265.152 2.340.909.091 840.000.000 840.000.000 37.878.788 171.280.303 9.400.000.000 3.275.000.000 3.257.575.758 216.300.000 216.300.000 1.647.000.000 12.600.000.000 Revenues whole company in EUR (2006) 50.000.000 24.000.000 9.400.000.000 216.300.000 216.300.000 1.647.000.000 12.600.000.000 Revenues whole company as reported (2006) $ 19.695.814.000 $ 4.200.000.000 $ 4.200.000.000 $ 4.200.000.000 $ 4.410.000.000 $ 467.630.000 $ 3.090.000.000 £ 562.800.000 £ 562.800.000 $ 50.000.000 $ 226.090.000 $ 4.323.000.000 $ 4.300.000.000 Size Solution Alnova Thaler Delta-Bank Corebank Profile Systematics ICBS Flexcube Finacle Equation Midas FinnOne Intellect Suite SAP TB Symbols TCS BaNCS T24 TCB CBS MBS; GEOS Company Accenture Callataÿ & Wouters Delta Informatique Fidelity Fidelity Fidelity Fiserv i-flex solutions Infosys Misys Misys Nucleus Polaris SAP AG SunGard TCS Temenos Temenos TietoEnator T-Systems Company Euro Euro $ 1,32 Euro £ 0,67

Appendix: Detailed systems overview 43 Annual maintenance fee 15% 15% 15% Not disclosed Not disclosed Not disclosed 18% Not disclosed 20% Not disclosed 18% 25% 22% 17% 18% 18%-22% 21% 21% 20% 20% Other Modules Flexible license, maintenance, hosted cost models Registered subscribers Flexible on usage ASP Modules Flexible on modular building blocks, nr or end-customers, transactions, etc. X X X X X X X X X assets under mgt - X X X X X X X X X actions trans X X X X X X X X X X X X X accounts X X X X X X X countries X X X X X X X X X entities X X X X X X X X X branches X X X X X X X X X X X X X users Description of costing model for example Year of Year release of this version 2007 2001 2005 2007 2007 2007 2006 2007 2007 2007 2006 2007 2007 2007 2006 2007 2007 2007 2007 2007

Current Current version number 8.1 Architectures 2 Version version 9 Release 4.4 V7.2 205.072 8.1 FLEXCUBE V.UM Release 10.0 FLEXCUBE V.CO Release 2.4 10 v3.8.2 Midas Plus 1.2.1 3.4 Intellect Core v9.5.1 Banking Services 5.0/ ERP 2005 8.3 V9.9 R.07 7.0.2 6.4 suite) banking (MBS 7.0 - Year Year of first instal lation 1988 1991 1994 1998 1975 1977 1984 1997 2000 1978 1977 2001 2002 1995 1988 1985 1993 1998 1992 1990 General solution information Company start to offer banking software? 1980 1991 1981 1969 1969 1969 1984 1991 1992 1977 1977 2000 1993 1995 1988 1985 1993 1993 1990 1995 Solution Alnova Thaler Delta-Bank Corebank Profile Systematics ICBS Flexcube Finacle Equation Midas FinnOne Intellect Suite SAP TB Symbols TCS BaNCS T24 TCB CBS MBS; GEOS Company Accenture Callataÿ & Wouters Delta Informatique Fidelity Fidelity Fidelity Fiserv i-flex solutions Infosys Misys Misys Nucleus Polaris SAP AG SunGard TCS Temenos Temenos TietoEnator T-Systems Solution

44 Financial Services the way we see it - spoke Application Application spoke e nance, Disaster Disaster nance, e Other AM - Applications Maintenance ITO - Hosting and System administration Outsourcing Trans Process Business Led Technology B Mining, Value formation, Engineering, Software BCP, and Recovery validation Independent Tuning, Performance SOA wrappers, Integration the trainer approach Train the trainer approach Train Development & Maint & Development X X X X X X X X X X X X X X X X X X X Training User X X X X X X X X X X X X X X X X X X X Imple- mentation Support X X X X X X X X X X X X X X X X X X X Help Desk X X X X X X X X X X X X X X X X X X X Con- sulting Services References - BAWAG - Imagine - ABN AMRO: credit services - Informació i Tecnología: joint venture between Caixa Catalunya and Accenture Ordina BPO, The Netherlands time. this at confidential names Client Fiserv provides BPO services for UK mortgage lenders and banks. Client names confidential. One of the top 5 non-prime lenders in US (Customer under NDA) Mortgage bank in the US. Leading Bank in India 3 Private Banking Customers, Client names confidential. X X X X X X X X X BPO - References Clearstream, Luxembourg Sparekassernes Datacenter (SDC), Denmark time. this at confidential names Client All solutions are on offered an out sourced or in-house basis. Currently 80 outsourced clients, European client names are confidential. Fullerton India Credit Company State Bank of Mauritius, India Ops Orbay Provider - Finaclear, In discussion with Prospects Ikanobanken, Sweden X X X X X X X X SaaS Services Solution Alnova Thaler Delta-Bank Corebank Profile ICBS Systematics Flexcube Finacle Equation Midas FinnOne Intellect Suite SAP TB Symbols TCS BaNCS T24 TCB CBS MBS; GEOS Company Accenture Callataÿ & Wouters Delta Informatique Fidelity Fidelity Fidelity Fiserv i-flex solutions Infosys Misys Misys Nucleus Polaris SAP AG SunGard TCS Temenos Temenos TietoEnator T-Systems Solution

Appendix: Detailed systems overview 45 46

Europe Number of different clients Numbers of largest reference Most important references

Company Solution Benelux UK North Central South East Europe # clients # accts # trxs per Reference 1 Reference 2 Reference 3 (Nordic; (D, A, (Es, P, F, (rest) Overall day Baltic) CH) I, Cr, Se, Gr, Tu)

Accenture Alnova 0 3 0 1 75 4 83 8.000.000 17.000.000 10.500.000 Alliance & Leicester PKO Bank Polski BAWAG (Austria) (UK) (Poland)

Callataÿ & Wouters Thaler 35 2 0 0 1 0 38 40.000.000 40.000.000 15.000.000 National Savings & Rabobank BNP Paribas (France) Investment Bank (UK) (Netherlands)

Delta Informatique Delta-Bank 2 0 0 0 5 2 9 30 Société Generale Cooperative Bank SGEB (Bulgaria), (France) Cyprus (Cyprus) SGVB (Russia)

Fidelity Corebank 0 0 152 0 1 0 153 3.500.000 5.500.000 SDC (Denmark) Terra Gruppen (Norway)

Fidelity Profile 0 4 0 4 4 15 27 ING Direct (UK)

Fidelity Systematics 0 3 1 1 3 12 20 Barclays Citibank NAGE

Fiserv ICBS 4 12 0 1 11 9 37 4.740.707 2.237.520 ING Bank Slaski BM Solutions Bank Zachodni WBK i-flex solutions Flexcube ------69 2.000.000 3.500.000 890.000 BAWAG UniCredit Bulbank DNB Nord

Infosys Finacle 1 3 0 1 3 2 10 5.500.000 6.000.000 5.000.000 Zurich FS (UK) Uralsib (Russia) HPB (Croatia)

Misys Equation 4 27 1 7 21 22 82 1.125.000

Misys Midas 27 61 30 33 56 39 246

Nucleus FinnOne 1 1 0 1 1 0 4 25 200.000 200 General Motors

Polaris Intellect Suite 0 4 1 1 0 0 6 280 30.000 2.000

SAP AG SAP TB 3 2 6 50 2 8 71 12.000.000 30.000.000 10.000.000 Deutsche Postbank UBS (Switzerland) ABN AMRO (Germany) (Netherlands)

SunGard Symbols 0 0 1 0 0 7 8 3.500.000 4.500.000 3.000.000 SEB Unibanka Erste Bank (Hungary) Slovenska Sporitelna (Latvia) (Slovakia)

TCS TCS BaNCS 4 7 12 15 3 11 52 1.700.000 2.800.000 1.000.000 Societe Generale Nova Ljubljanska BIN Bank (Russia) (France) Banka (Slovania)

Temenos T24 23 41 10 52 157 21 304

Temenos TCB 0 0 0 0 2 0 2 6.855.718 14.625.267 7.000.000

TietoEnator CBS 2 2 15 0 1 0 20 9.450.000 9.000.000 12.000.000 Nordea (Nordic) Rabobank (NL) Barclays

T-Systems MBS; GEOS 0 0 0 30 0 0 30 3.500.000 6.000.000 9.000.000 Sparda-Banken BMW Bank (Germany) Sal. Oppenheim & Cie (Germany) (Germany) Financial Services the way we see it Reference Reference 3 Santander Serfin (Mexico) Citizens Financial Group York New of Bank Loan Home Federal ProMutual Canada Reference Reference 2 Banco Azteca (Mexico) Bank of America International Monetary Fund Epargne Placements Quebec Reference Reference 1 Bancomer BBVA (Mexico) ING Direct (USA) Citibank CIBC Amicus Citibank State Bank of India, US Farm Credit Canada SEI Investments (USA) Most important references # trxs per day 18.000.000 500.000 260.000 # accts 15.000.000 2.215.780 3.000.000 15.000 100.000 3.260.000 # clients 13.700.000 1.200.000 50.000 2.580.000 Numbers of largest reference Number of clients different 5 0 0 0 29 62 11 12 1 18 56 0 0 6 0 2 21 1 0 0 Solution Alnova Thaler Delta-Bank Corebank Profile Systematics ICBS Flexcube Finacle Equation Midas FinnOne Intellect Suite SAP TB Symbols TCS BaNCS T24 TCB CBS MBS; GEOS Company Accenture Callataÿ & Wouters Delta Informatique Fidelity Fidelity Fidelity Fiserv i-flex solutions Infosys Misys Misys Nucleus Polaris SAP AG SunGard TCS Temenos Temenos TietoEnator T-Systems North America

Appendix: Detailed systems overview 47 48

South America Numbers of largest reference Most important references

Company Solution Number of # clients # accts # trxs per day Reference 1 Reference 2 Reference 3 different clients

Accenture Alnova 25 BBVA Banco Francés (Argentina) Itaú (Chile) Banco Santander Brasil (Brazil)

Callataÿ & Wouters Thaler 0

Delta Informatique Delta-Bank 0

Fidelity Corebank 0

Fidelity Profile 1

Fidelity Systematics 6 13 13.000.000 Banco de Credito del Peru Banco de Bogota INFONAVIT

Fiserv ICBS 31 4.000.000 Banco Popular Dominicano CoopDeSarrollo SCL de CV Caja Popular Mexicana i-flex solutions Flexcube 16 2.300.000 3.000.000 600.000 Banco De Chile (Chile) Inverunion Banco Comercial C.A. First Caribbean International Bank (Vezezuela) (Barbados)

Infosys Finacle 4 1.338.582 1.627.650 240.000 National Commercial Bank Jamaica Bank in Bermuda Bank in Panama

Misys Equation 8

Misys Midas 19

Nucleus FinnOne 0

Polaris Intellect Suite 1

SAP AG SAP TB 10 Banco Itau Unicred Brasil Montepio Luz Savinon

SunGard Symbols 0

TCS TCS BaNCS 3 10.580.000 18.840.000 430.000 Banco Pichincha (Chile) Large Retail Bank (Chile) Private Bank (Chile)

Temenos T24 76

Temenos TCB 0

TietoEnator CBS 0

T-Systems MBS; GEOS 0 Financial Services the way we see it Reference Reference 3 Sarasin (Singapore) Ka Bank Wah HDFC Bank (India) ABN AMRO Bank (Greater China) ACOM Financials City Bank Vietnam International Bank (Vietnam) National Bank of Dubai (Dubai) Reference Reference 2 Bank (South Woori Korea) Rabobank (New Zealand + Australia) Commerce Bank CITIC Banco de Oro Shinsei Bank(Japan) DBS Bank (Singapore) Shinsei Bank Shinsei Bank ZentrInvest Muslim Commercial Bank (Pakistan) Bank Negara Indonesia (Indonesia) Reference Reference 1 Bank of East Asia (Hong Kong) Commonwealth Bank of Australia (Indonesia) SBI Krung Thai Bank Citibank Bumiputra Bank of Ceylon Chong Bank Ta (Taiwan) ICICI Bank (India) ICICI Bank ICICI Bank China Mingsheng Bank Corporation China Development Bank (China) State Bank of India (India) Most important references # trxs per day 3.000.000 13.000.000 2.000 600.000 400.000 17.500.000 9.600.000 # accts 1.000.000 6.000.000 13.400.000 36.000.000 575.000 12.000.000 264.000 11.000.000 3.500.000 120.000.000 10.546.900 # clients 30.000 5.800.000 17.600.000 34.000.000 3.000 1.800 3.000.000 90.000.000 4.806.000 Numbers of largest reference APAC Overall 2 4 2 1 4 35 40 63 9 64 125 24 8 1 17 99 104 1 0 0 Other 1 2 2 0 3 30 20 0 1 34 82 0 1 0 11 30 86 1 0 0 India 0 0 0 0 1 0 0 0 4 4 3 20 4 0 2 45 2 0 0 0 China 1 0 0 0 0 2 7 0 1 14 19 1 0 1 4 10 6 0 0 0 Japan 0 0 0 1 0 1 0 0 1 6 11 3 1 0 0 0 5 0 0 0 Australia; New Zealand 0 2 0 0 0 2 13 0 2 6 10 0 2 0 0 14 5 0 0 0 Number of clients different Solution Alnova Thaler Delta-Bank Corebank Profile Systematics ICBS Flexcube Finacle Equation Midas FinnOne Intellect Suite SAP TB Symbols TCS BaNCS T24 TCB CBS MBS; GEOS Company Accenture Callataÿ & Wouters Delta Informatique Fidelity Fidelity Fidelity Fiserv i-flex solutions Infosys Misys Misys Nucleus Polaris SAP AG SunGard TCS Temenos Temenos TietoEnator T-Systems Asia Pacific

Appendix: Detailed systems overview 49 50

Africa Numbers of largest reference Most important references

Company Solution Number of # clients # accts # trxs per day Reference 1 Reference 2 Reference 3 different clients

Accenture Alnova

Callataÿ & Wouters Thaler 0

Delta Informatique Delta-Bank 80 30 Attijariwafa Bank Société Générale Fortis Belgolaise

Fidelity Corebank 0

Fidelity Profile

Fidelity Systematics 1

Fiserv ICBS 2 200.000 Millennium BCP Mozambique Millennium BCP Angola i-flex solutions Flexcube 75 1.500.000 1.650.000 150.000 South African Post Office Old Mutual Investment Bank Misr Administrators

Infosys Finacle 30 3.400.000 4.600.000 1.100.000 United Bank for Africa (Nigeria) First Bank Nigeria (Nigeria) Bank of Alexandria (Egypt)

Misys Equation 91 280.000

Misys Midas 41

Nucleus FinnOne 3 3 100.000 1.000 UBN (Nigeria)

Polaris Intellect Suite 0

SAP AG SAP TB 6 11.000.000 Standard Bank of South Africa Nedbank Corporate Landbank SA

SunGard Symbols 4 Postbank (Kenya) ABC (Tunis) ABC (Egypt)

TCS TCS BaNCS 7 1.000.000 3.000.000 330.000 First National Bank (South Africa)

Temenos T24 93

Temenos TCB 0

TietoEnator CBS 1 Co-operative Bank of Kenya

T-Systems MBS; GEOS 0 Financial Services the way we see it Deferred Deferred Debit Cards Partial Full Full Partial No No No No No Full 3rd Party 3rd Party Full No Full Full No Partial Full Full Debit Cards Full Full Full Full Full Full Full Full Partial Full 3rd Party 3rd Party Full Full Full Full Full Partial Full Full Collection of Cheques Full Full Full Full Full Full No Full Full Partial Full Full Full Full Full Full Full Full No Full Standing Orders Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Partial Full International Direct Debits Full Full Full Full Full Full Full Full No No Partial 3rd Party No Full Full Full Full Full Partial Full Domestic Direct Debits Full Full Full Full Full Full Full Full Full Partial Partial 3rd Party No Full Full Full Full Full No Full Incoming Payments Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Full Partial Full Outgoing International Transfers Full Full Full Full Full Full Full Full Full Full Full 3rd Party Full Full Full Full Full Full Partial Full Outgoing Domestic Credit Transfers Full Full Full Full Full Full Full Full Full Full Full 3rd Party Full Full Full Full Full Full Partial Full Payments Solution Alnova Thaler Delta-Bank Corebank Profile Systematics ICBS Flexcube Finacle Equation Midas FinnOne Intellect Suite SAP TB Symbols TCS BaNCS T24 TCB CBS MBS; GEOS third third party processing no processing full processing partial processing = = = = Company Accenture Callataÿ & Wouters Delta Informatique Fidelity Fidelity Fidelity Fiserv i-flex solutions Infosys Misys Misys Nucleus Polaris SAP AG SunGard TCS Temenos Temenos TietoEnator T-Systems Functional coverage No Full Partial 3rd Party

Appendix: Detailed systems overview 51 52

Functional coverage Account & cash management

Company Solution Current Saving Term Cash FX in Cash Bank Travellers Zero Zero Notional Notional Accounts Accounts Deposits Withdraw/ Cheques Cheques Balancing - Balancing - Pooling - Pooling - Deposits Cross Border Cross Border Cross Border Cross Border Single Cross Single Cross Currency Currency Currency Currency

Accenture Alnova Full Full Full Full Full Full Full No No No No

Callataÿ & Wouters Thaler Full Full Full Full Full Full Full Full Full Full Full

Delta Informatique Delta-Bank Full Full Full Full Full Full Full Full Full Full Full

Fidelity Corebank Full Full Full Full Full Full Full Partial Partial Partial Partial

Fidelity Profile Full Full Full Full Full Full Full Full No No No

Fidelity Systematics Full Full Full Full No Full Full No No No No

Fiserv ICBS Full Full Full Full Full Full Full Full Full Full Full i-flex solutions Flexcube Full Full Full Full Full Full Full Partial No Partial No

Infosys Finacle Full Full Full Full Full Full Full Full Full Full Full

Misys Equation Full Full Full Full Full Full Full No No No No

Misys Midas Full Full Full Full Full Full Partial Full Full Full Full

Nucleus FinnOne Full Full Full Full 3rd Party 3rd Party 3rd Party Partial Partial Full Full

Polaris Intellect Suite Full Full Full Full No Full Full Full Full Full Full

SAP AG SAP TB Full Full Full Full 3rd Party Full 3rd Party Full Full Full Full

SunGard Symbols Full Full Full Full Full Full Full No No No No

TCS TCS BaNCS Full Full Full Full Full Full Full Full Full Partial Partial

Temenos T24 Full Full Full Full Full Full Full Full Full Full No

Temenos TCB Full Full Full Full Full Full Full Partial No Partial No

TietoEnator CBS Full Full Full Partial Partial Partial No Full Full Full Full

T-Systems MBS; GEOS Full Full Full Full Full Full Full Full Full Full Full

Full = full processing Partial = partial processing 3rd Party = third party processing No = no processing Financial Services the way we see it Settlement Full Full Full Partial Full Full 3rd Party Full No 3rd Party Full Partial Partial 3rd Party Full Full Full Partial Partial Full Position Management Full Full Full Partial Full No 3rd Party Partial No 3rd Party Full 3rd Party No 3rd Party Full Full Full Partial Partial Full Order Order Management Full Full Full Partial No No 3rd Party Full No 3rd Party Full 3rd Party Full 3rd Party Full Full Full Partial Partial Full Corporate Actions Full Full 3rd Party Partial No No 3rd Party Full No 3rd Party Full 3rd Party Full 3rd Party No Full Full No No Full Retail Full Full Full Full Full Full Full Full No 3rd Party Full Partial Full 3rd Party Full Full Full Partial Partial Full Wholesale Full Full Partial 3rd Party Full No 3rd Party Full No 3rd Party Full 3rd Party Full 3rd Party Full Full Full No No Full Mutual Funds Full Full 3rd Party Partial No No 3rd Party Full Full 3rd Party Full 3rd Party Full 3rd Party No Full Full Partial Partial Full Giro Giro Investment Services 3rd Party Full Full 3rd Party No No 3rd Party Full No 3rd Party Full 3rd Party No 3rd Party No Full Partial No No Full Securities Management Full Full Full No No No 3rd Party Full No 3rd Party Full 3rd Party Partial 3rd Party Full Full Full No Partial Full Securities Solution Alnova Thaler Delta-Bank Corebank Profile Systematics ICBS Flexcube Finacle Equation Midas FinnOne Intellect Suite SAP TB Symbols TCS BaNCS T24 TCB CBS MBS; GEOS full processing partial processing third party processing no processing = = = = Company Accenture Callataÿ & Wouters Delta Informatique Fidelity Fidelity Fidelity Fiserv i-flex solutions Infosys Misys Misys Nucleus Polaris SAP AG SunGard TCS Temenos Temenos TietoEnator T-Systems Functional coverage Full Partial 3rd Party No

Appendix: Detailed systems overview 53 54

Functional coverage Loans (incl. mortgages) Others

Company Solution Guarantees Overdraft Personal Revolving Mortgage Leasing Asset Insurance Trading Treasury Pensions Financial Workflow on Current Loans Facililty Loans Manage- Instruments Planning Manage- Account ment ment

Accenture Alnova Full Full Full Full Full Full 3rd Party Full Full Full Full No No

Callataÿ & Wouters Thaler Full Full Full Full Full 3rd Party Full Partial Full Full Full Full Full

Delta Informatique Delta-Bank Full Full Full Full Full Full Full Full Full Partial 3rd Party 3rd Party Full

Fidelity Corebank Full Full Full Full Full No 3rd Party 3rd Party 3rd Party 3rd Party 3rd Party No 3rd Party

Fidelity Profile Full Full Full Full Full Full No Full Full No No No No

Fidelity Systematics Full Full Full Full Full Full No No No No Full No No

Fiserv ICBS 3rd Party Full Full Full Full 3rd Party 3rd Party Partial 3rd Party 3rd Party 3rd Party Full Full i-flex solutions Flexcube Full Full Full Full Full Full Full Full Full Full Partial Partial Full

Infosys Finacle Full Full Full Full Full Partial No Full No Full No No Partial

Misys Equation Full Full Partial Full Full No 3rd Party No Full Full No No Partial

Misys Midas Full Full Full Full Full No No No Full Full No No No

Nucleus FinnOne Full Full Full Full Full No 3rd Party 3rd Party 3rd Party 3rd Party 3rd Party 3rd Party Full

Polaris Intellect Suite Full Full Full No Full Partial Partial Full Full Full No Full Full

SAP AG SAP TB Full Full Full Full Full Full 3rd Party 3rd Party 3rd Party 3rd Party 3rd Party No Full

SunGard Symbols Full Full Full Full Full Full No No Full Full No No Full

TCS TCS BaNCS Full Full Full Full Full Full Full Full Full Full Full Full Full

Temenos T24 Full Full Full Full Full Full Full No Full Full Partial 3rd Party Full

Temenos TCB Full Full Full Full Full Partial No Partial No No Partial No Partial

TietoEnator CBS Partial Partial Partial Partial Partial No Partial No No No No No Partial

T-Systems MBS; GEOS Full Full Full Full Full Partial Full No Full Full No Full Full

Full = full processing Partial = partial processing 3rd Party = third party processing No = no processing

Technical coverage Hardware platforms

Company Solution Intel/AMD IBM System i IBM System p IBM System z SUN AMD SUN SPARC HP Integrity Other

Accenture Alnova X

Callataÿ & Wouters Thaler X X X X X X

Delta Informatique Delta-Bank X X X X X X X

Fidelity Corebank X X X X X X Any J2EE-compliant platform

Fidelity Profile X X X X

Fidelity Systematics X

Fiserv ICBS X X i-flex solutions Flexcube X X X X X X X

Infosys Finacle X X X

Misys Equation X

Misys Midas X

Nucleus FinnOne X

Polaris Intellect Suite X X X X X

SAP AG SAP TB X X X X X X

SunGard Symbols X X X X X X X

TCS TCS BaNCS X X X X X X

Temenos T24 X X X X X X

Temenos TCB X X X X X X

TietoEnator CBS X X X X X X

T-Systems MBS; GEOS X X Financial Services the way we see it Other Any J2EE-compliant platform X X X X X X X X X X X X X HP Integrity X X X X X X X X X X X X X X X SUN SPARC X X X X X X X X X X SUN AMD X X X X X X X X X X X X X IBM System z X X X X X X X X X X X X X X IBM System p X X X X X X X IBM System i X X X X X X X X X X X X Intel/AMD Hardware platforms Hardware Solution Alnova Thaler Delta-Bank Corebank Profile Systematics ICBS Flexcube Finacle Equation Midas FinnOne Intellect Suite SAP TB Symbols TCS BaNCS T24 TCB CBS MBS; GEOS Company Accenture Callataÿ & Wouters Delta Informatique Fidelity Fidelity Fidelity Fiserv i-flex solutions Infosys Misys Misys Nucleus Polaris SAP AG SunGard TCS Temenos Temenos TietoEnator T-Systems Technical coverage Technical

Appendix: Detailed systems overview 55 56

Technical coverage Operating systems Database servers

Company Solution HP-UX SUN Solaris MS Windows Linux AIX IBM i5/OS IBM z/OS IBM DB2 Oracle MS SQL Other Server Universal Database Server Database

Accenture Alnova X X X X X X X X X

Callataÿ & Wouters Thaler X X X X X X X

Delta Informatique Delta-Bank X X X X X X X Informix

Fidelity Corebank X X X X X X

Fidelity Profile X X X X X X Profile/SQL

Fidelity Systematics X X X VSAM

Fiserv ICBS X X X i-flex solutions Flexcube X X X X X X X X

Infosys Finacle X X X X

Misys Equation X X X

Misys Midas X X

Nucleus FinnOne X X X X X X X

Polaris Intellect Suite X X X X X X JDBC

SAP AG SAP TB X X X X X X X X

SunGard Symbols X X X X X X X

TCS TCS BaNCS X X X X X X X X X

Temenos T24 X X X X X X X X X J4 (Temenos)

Temenos TCB X X X X X X X X Sybase

TietoEnator CBS X X X X X X X

T-Systems MBS; GEOS X X X X Financial Services the way we see it X Other Proprietary system IPS-Sendero Finance One, Emphasise etc. SUN Standard Interface X X X X X People- soft X X X X X X X Oracle E-Busi- ness Suite X X X X X X X X X X X X X X SAP Integration financial accounting systems Other FRS-FIRE Proprietary JasperServer Other StorQM Plus, IntelliMatch, Forms- Open DB, master, Jacana, Valet JASPER, Jreporter, Actuate Cognos Oracle Discoverer/ Business Intelligence Brio, Hyperion SQR Cognos Standard Interface Siron; Cognos Impromtu X X X X X X X X X X X Crystal Reports X X X X X X X X X X X X X Business Objects 3rd 3rd party report generators Other Netweaver Finacle proprietary application server Netweaver MS BizTalk X X X X X X X BEA Weblogic X X X X Jboss - i X X X X X X Oracle Appl cation Server X X X X X X X X X X X X X X X X IBM Web- sphere Application servers Solution Alnova Thaler Delta-Bank Corebank Profile Systematics ICBS Flexcube Finacle Equation Midas FinnOne Intellect Suite SAP TB Symbols TCS BaNCS T24 TCB CBS MBS; GEOS Company Accenture Callataÿ & Wouters Delta Informatique Fidelity Fidelity Fidelity Fiserv i-flex solutions Infosys Misys Misys Nucleus Polaris SAP AG SunGard TCS Temenos Temenos TietoEnator T-Systems Technical coverage Technical

Appendix: Detailed systems overview 57 58

The 5 most important strengths of your system? (part one)

Company Solution

Accenture Alnova 1. Customer-centric 2. Anytime (7x24x365 realtime processing), anywhere (servicing from any selling point) 3. Multi-concepts: channel, currency, language, company 4. Parameter driven 5. Business process and Serviced Architecture Oriented.

Callataÿ & Wouters Thaler 1. Ease of integration through SOA 2. Broad modular functionality 3. Scalability, performance 4. Flexibility through parameter setting & product factory 5. Operational excellence (Customer centric & full STP).

Delta Informatique Delta-Bank 1. Comprehensive functional coverage 2. Robust to support 12.000 concurrent users and fifteen million accounts 3. Modular yet integrated 4. Evolutive technology 5. Open standards, Java, XML, GMS etc.

Fidelity Corebank 1. Corebank J2EE is a true real-time, event-oriented, fully J2EE compliant core banking system. This platform independence makes Corebank capable of adapting to cutting-edge global IT standards while delivering Corebank’s proven business functionality. Corebank does not use any proprietary tools or technologies. 2. Corebank’s structured, documented data model is based on IBM’s Information Framework (IFW) Financial Services Data Model (FSDM), and improves development efficiencies and decreases ongoing maintenance costs, while providing ease of user access to data. 3. Corebank’s service-oriented architecture approach enables consistent processing across various delivery channels and facilitates integration of Corebank business components and third-party applications. 4. Corebank is a customer-centric application with customer data stored only once in a robust operational customer database. Corebank can also be integrated with external customer systems as necessary. All Corebank components are fully integrated without siloed applications for lending, deposits etc. 5. Corebank’s Product Build component provides a robust product factory that will allow banks to build banking products and product packages in real-time without IT intervention using an extensive array of parameters and processing conditions. Corebank has a comprehensive list of predefined product components, including pricing and interest profiles that are used and re-used in the definition and release of new products within the product portfolio.

Fidelity Profile 1. Lower total cost of ownership 2. Improved time to market 3. Increased reliability and unlimited scalability 4. Eased integration 5. Improved customer experience.

Fidelity Systematics 1. Feature rich functionality 2. Unrivaled market share, global install base amongst top tier banks 3. Nearly fourty years of development and implementation expertise 4. Proven in-house and outsourced deployment options.

Fiserv ICBS 1. ICBS is a flexible, parameter driven, solution which enables users to launch and create new products quickly (including multiple products in a day) to respond to changing market demand. 2. Real-time retail banking and consumer finance core processing in a single core system for banks that want to offer consumer finance and vice versa. 3. SOA-based for integration with Fiserv and third party cores and home grown banking host systems and applications. Integration proven in production with over sixty clients worldwide. 4. ICBS is robust and scalable to meet business growth from de novos to clients running eight million accounts. 5. Integrated suite of products for multi-country, and multi-currency core processing, smart client tellering, customer interaction management/BPM and business intelligence for global financial services institutions. Business process oriented with business process created and delivered across multiple banking channels via integrated customer interaction management solution: Fiserv Aperio. i-flex solutions Flexcube 1. Rich functional footprint covering the needs of wide variety of banking models and niche segments like virtual banks, central banks, retail and commercial banks. 2. Strong SOA capabilities with Process Orchestration, webservices, open standard based technology 3. Rich functionality and compliance to regional requirements, with deployments in over 120 countries 4. Ability to integrate and co-exist with diverse application landscapes 5. Ability to scale from needs of small green field deployments to addressing needs of tier one institutions.

Infosys Finacle 1. Differentiated Product Spread - Finacle core banking solution offers an unlimited palette of features for banks to design and deploy products for varying market segments. The product bundling capabilities of the solution offers a wide range of possibilities for banks to create products with innovative features. The facilities provided for differential pricing, channel rules and customization through Finacle Studio - the scripting engine, empower banks to continuously innovate and extend their suite of products, across segments. 2. Agile Operations - The Service Oriented Architecture (SOA) enables the IT team at the bank to effect changes without touching the base code, ensuring lesser vendor dependency and faster adaptability to changing business conditions. 3. Robust Cross-sell Framework - The CIF and CRM capabilities in Finacle offer a unified view of the customer across the entire solution and across multiple back-end applications, enabling the bank to view the customer from a completely informed angle. This empowers banks to effectively manage customer relationships and aggressively explore cross-sell opportunities. 4. Increased Operational Efficiencies and Productivity - Finacle core banking solution supports business events automation and process orchestration, thus eliminating manual tasks and reducing process time. The elimination of error and data redundancies also results in increased branch productivity. Straight Through Processing (STP) abilities enhance reduction in turnaround and processing time, increasing output and enabling speedy completion of tasks. 5. Scalability - The Finacle core banking solution offers unparalleled scalablity demonstrated through lab benchmarks as well as its support for some of the largest retail banking live sites in the world. 6. Business process management capability - The solution includes business process management capability through the built-in PEAS framework which enables the orchestration of business processes and services. Financial Services the way we see it ------

1. Rock solid, proven reliability 2. Breadth and depth of functionality 3. Flexibility in terms of product design & reporting 4. Integrated branch automation applications (with full off-line capabilities) 5. Scalability (from single site to thousands of branches). 1. Breadth and depth 2. of Proven reliability functionality. with over 500 live sites across 85 countries. 3. Integration in record capabilities. delivery/implementations. 4. 5. Track Proven upgrade path. 1. A Specialist software vendor operating solely in the Banking & Financial Services domain. 2. Global recognition in the specialized domain of lending - FinnOne was ranked as the No. 1 selling Lending System in the world, in the calendar year 2006, by International Banking Systems, UK. 3. A single integrated (yet modular) platform for the processing of most types of loan products - with complete loan life-cycle coverage. 4. Proven scalability (volume processing) and extensibility (product coverage) in lending. 5. Experience with cash management projects and deployments at tier 1 banks like Citibank, ABN AMRO and Standard Chartered Bank. 6. Corporate and financial maturity of Been the in company. existence for 20+ years and has demonstrated year-on-year growth in customers, employees, revenues and profits. 7. Cost-effective delivery options, by optimally blending onsite and solution offshore delivery. 1. It is a ‘client Service Platform’ enabling fully integrated relationship management, allows customer to design their customer to experience Seller Fully 2. transformation inte Teller capability. grated, customer system attribute 3. based Modular Teller design and SOA backplane makes it unique in the market compared to place competing today, products. Built on open standards and modular design - highly modularized. This allows architecture for non disruptive modernization of legacy core banking systems in a measured and steeped approach. 4. Fully integrated workflow and highly effective operations management leading to straight through processing. 5. Single sign on, 24x7, scalable and secured system. SAP main value proposition is based on the delivery of more than just a piece of software that covers only the current features and functions Features requirements. and functions are important, but The a important commodity. value for a customer making a large investment in core banking software is how the software will meet the future business and technology which requirements today are not known. SAP stresses therefore the following topics in addition to functionality: 1. Standard software • SAP believes in the long term positive effects of using true standard software to cover standard/commodity processes, and to use the same basis to allow for innovate based on components, reuse and a strong technology framework. • Clear release upgrade cycles, with elaborate software logistics to protect customer investments, both in terms of own development, using release different stages of parts different of the SAP stack, and all configuration and date existing in one release • One code base, one product base without distinction of retail vs. thus corporate enabling functionality, future convergence of product and services offerings to both retail and corporate customers 2. stack SOA/technology separation: proposition • application Technology independence and decoupling from the underlying and hardware software platforms, be it operating system and database system. • Business application interfaces independent of technology and environment, enable applications in environments, different may it be zOS/Cobol, Java or .Net to access the same • business Open functionality. standards communication having .Net interoperability with and Websphere, other platforms. • Complete Service Orientation, in the internal development model, in the development of new services, in the deployment of services and in the industry interaction. 3. Integration/best of breed proposition SAP provides a broad portfolio of solutions ranging from basic ERP products through CRM through core banking back office to front end applications, price optimization, etc. The portfolio has been built organically, creating a consistent, integrated, componentized software and platform landscape. Each solution can Solution Equation Midas FinnOne Intellect Suite SAP TB Symbols Company Misys Misys Nucleus Polaris SAP AG SunGard The 5 most important strengths of your system? (part two)

Appendix: Detailed systems overview 59 -

1. Ease and speed of Implementation 2. Performance and Scalability 3. Breadth and Depth of Functionality and Extensibility 4. Reliability and Availability 5. Agility and flexibility of Architecture. 1. Breadth of functional coverage. 2. System agility for new deployment. product/channel/geography/process 3. Modern and wide technology support leading to scalability and resilience of deployment. 4. A depth of functionality which matches the breadth. This is driven by ongoing product investment. 5. The packaging of best practice example functionality Model in the Temenos Bank structure together with easier deployment tooling to help banks achieve their objectives in a faster and safer manner. 1. A data based architecture on the global IBM standard: Financial Services Data Model. 2. An N-tier application that architecture reduces development and maintance, and adapts to changing technology standards. 3. Modern development standards based on 4. componentization A and platform re-usability. independent technology built for any business scale. 5. Maximum flexibility through a Product Builder. core, parameter-based 1. Product Composition, allowing business product managers to create and customise new products (loans, saving, cards…) without the involvement of IT staff and a minimal launching time. 2. Service-oriented component architecture, based and event-driven accounting engine. Designed for sophisticated and complex tier 1 and tier 2 banks. 3. Multi-everything (channel, bank, cur processing). cross-border 4. A language, variety calendar, of rency, integration methods are supported by a connectivity framework for both on-line and background interfaces. 5. The modularity and flexibility of the is architecture specifically designed with low TCO (total cost of ownership) in mind. The cost for maintaining the core components could be shared across several institutions under a Low common processing product and strategy. operation cost - both regarding low and hardware software consumption resource and simplicity of operation. 1. Modular and modern design. 2. Excellent Fit for Retail/Automobile Banks. 3. High capacity 4. Volume and High security. actuality because of a practical relevant development (Usergroup). Solution TCS BaNCS T24 TCB CBS MBS; GEOS Company TCS Temenos Temenos TietoEnator T-Systems The 5 most important strengths of your system? (part three)

60 Financial Services the way we see it The technical design criteria of the Alnova solution are aligned with the basic principles of service oriented (SOA). architectures These principles are translated in a series of guides at the time of SOA implementation. The fundamental components that at provide these client capabilities and (AMTA) are Architecture Alnova middle-tier Alnova Architectures, level Multi-channel Technical at back-end level, (ASTA) and Architecture complemented Alnova by Server a Technical modular design of the Back-End. This design has been tested with success in multiple implementations, in which, the services provided by the back-end were integrated via the Multi-channel at architecture, times with of the Accenture, or Financial with Terminal the office channels of the client (integrated Services), via and Web with other alternative channels. Alnova is now in the road towards an evolution in order to current reinforce SOA capabilities of the Alnova Solution in accordance with a process-centric approach. A key challenge is the decoupling between logical model and implementation in order to align software solution to business need, and the Business Process has to be the key element for it. One of the main challenges is to find a rational approach for a suitable combination of assets and products in terms of economy and leveraging synergies. Suitable integration scenarios must be designed in order to get a rational usage of own capabilities together with third party expert products. Alnova is counting on IBM collaboration around the exploration of adequate integration paths. The objective is to manage it in the most standard way taking advantage of BPM capabilities of IT leader tools in the market. Alnova services of each business activity characterized by a GUI The flow. highest level on top of the activity is the Business Process and it is for required offering integrity of it like the joint of several Business Activities of types. different The objective is to manage it in the most standard way taking advantage of BPM capabilities of IT leader tools in the market. Our Thaler solution is full have SOA. a We BPM tool which allows to build your own process flows into our banking solution. It uses the Thaler different services to orchestrate the bank’s business processes. implement service We orientation through the usage of Java and do SOA. not We support business process orchestration and business process management. Corebank was designed to participate in a Service Oriented Corebank Architecture. is technologically very open, built and on can a participate variety in of SOA’s tools and styles. Corebank’s API structure is implemented as with approximately 150 well EJB’s over 1000 methods in total. Access classes also exist that encapsulate the logic to locate and call and the these EJB’s classes can be used as the façade for the system if desired. Both methods can coexist. Corebank does not have a built-in workflow mechanism, but instead has been designed to expose a clean, well-structured and technologically open interface that can work with various generic business process orchestration tools. Corebank API functions have been designed to be big enough that they don’t unnecessarily services, complicate but creating larger-grained small enough that they don’t cause problems API for structure workflow has tools Corebank’s evolved and specifically decrease to re-usability. make it easier to flexibly aggregate API functions into larger- grained services. ‘Micro-workflow’ tools can be used to assemble Corebank API functions into larger services, which can be highly reusable, while ‘macro workflow’ tools can be used at a higher level for Business Process Management. Corebank API functions, being Java method calls, can also be exposed Services, as if Web desired, by using tools provided with WAS to generate the necessary WSDL. Profile can be accessed via IFX messages via the Xpress It Enterprise can Services participate layer. in process orchestration via this Profile enterprise integrates services to layer. any business process management tool via the Xpress integration layer. Systematics is a services-enabled host system. It offers process orchestration via integration with FIS’ Xpress SOA integration layer and h Solution Alnova Thaler Delta-Bank Corebank Profile Systematics ICBS Company Accenture Callataÿ & Wouters Delta Informatique Fidelity Fidelity Fidelity Fiserv How do you act on the trend towards service orientation and business process management? (part one)

Appendix: Detailed systems overview 61 - i-flex sees SOA as the next evolution which of enables technology, financial institutions to take a process oriented view to their application landscape, and ease the ever increasing complexities of integration within the enterprise. As financial institutions look for achieving customer intimacy and competitive while differentiation maintaining compliance to regulation and keeping costs down, customers are taking a hard look at their business processes, to find areas of improvement. As a first step customers look for a ready repository of business processes to benchmark against. For this i-flex has brought together its experience in working with over 775 customers across 130 counties, in publishing i-flex Process Framework for Banking (iPFB), a rich repository of business processes built on global best practices across the entire array of banking functions. This repository is built on suite. Oracle As BPA a second step, i-flex has released the next genera tion of its application offerings which take advantage of the business processes documented in iPFB, and provides executable BPEL processes and underlying web services. i-flex has recently launched the SOA enabled release of FLEXCUBE with web services available for almost every business function in with the process suite. orchestration comes Thirdly, the need for having user interfaces which are task based, and are agnostic of business logic, which makes them more amenable for change in case of change in business processes. With this in mind, FLEXCUBE comes with Oriented a UI new which Task is based on industry standard Java, and XML. i-flex leverages the Oracle Fusion Middleware stack for Process Management. Processes are documented in Oracle Business suite, Process and Architect (BPA) are measurable via Oracle Activity Measurement (BAM) toolset. Additionally business processes documented in suite Oracle can BPA serve as critical input into the Oracle Governance, Risk and Compliance framework for enterprise wide Governance, Risk Management and Compliance initiatives. has architecture been Finacle’s designed using SOA principles. modular The allows architecture solution’s it to expose granular business functionality as services which process requests based on business parameters. Benefits include the capability to orchestrate services to create new functionality using These a services transaction are exposed coordinator. to other applications through the integration framework thereby separating application logic from the front end enabling addition of delivery channels without re-writing back end code. Current functionality supported through services can be classified into multiple areas like customer relationship management, demand deposit, loans, bill payment, teller operations, back office operations, limits & collateral management. Finacle provides process orchestration through its GUI based business process definition and deployment tool called PEAS using which the banks can parameterise and deploy the business processes that suit their environment. PEAS has the following components process - execution a engine, modeler, process monitoring and administration and lastly the process execution audit component. PEAS is based on the BPML specification. Using the above mentioned components banks can carry out the following steps in defining their processes: definition using deployment the and process execution automator, using the process deployment and execution engine. Finacle interfaces with Infosys’ Influx Business Process Management tool to provide business Finacle process management uses capabilty. the Process Execution Analysis and Simulation Engine (PEAS) in Influx based on BPML for modelling, and BPEL for execution, monitoring and administration of business processes. Misys has adopted a low risk, evolutionary approach to moving towards an SOA environment. Midas Plus and Equation are created extensively in a J2EE and environment for IBM WebSphere increased flexibility and simplified management. A large number of APIs provide excellent integration capabilities. Furthermore, new modules of Midas Plus and Equantion will be created through Misys’ new component-based Misys core banking BankFusion. technology, Misys BankFusion provides the tools for Misys to develop the nex Solution Flexcube Finacle Equation Midas FinnOne Intellect Suite Company i-flex solutions Infosys Misys Misys Nucleus Polaris How do you act on the trend towards service orientation and business process management? (part two)

62 Financial Services the way we see it - - - r Ad-hoc Workflow, which is Ad-hoc part Workflow, of the Portal Framework, to enable individuals to create light-weight ad hoc processes to optimize their day-to-day tasks and add transparency to what they are doing in relation to their team members. This is what delivers the people empowerment. the Application SAP Server Business Web workflow Workflow, tool, which is used to automate the busines processes taking place within an SAP component and integrate the SAP users with the business process. This is what delivers the workflow empowerment within the SAP components. Cross-Component BPM to automate the cross applications processes taking place in a heterogeneous system landscape. This delivers the total Business Process Empowerment in a system landscape. SAP’s Enterprise Service-Oriented SAP’s (SOA) Architecture addresses the business issue that most companies are facing - extending existing IT assets to support business change and innovation, while lowering total cost of ownership. Enabled by the platform, SAP Enterprise NetWeaver SOA provides an open outline for adaptive business solutions. Building on the benefits of Web services, it delivers on the promise of services-oriented enabling architectures, both flexibility and business efficiency without increasing costs. With Enterprise SOA, companies have a cost- effective blueprint for composing innovative new applications by extending existing systems, while maintaining a level of flexibility that makes future process changes cost-effective. SAP offers comprehensive, standards-based solutions for banks in its SAP for Banking solutions portfolio. This portfolio can include a business process platform (BPP) for banking that combines the power of the platform SAP with NetWeaver industry-specific business and banking solutions. Although Enterprise SOA provides a strong promise for banks and an attractive means for future develop ment of SAP partners’ businesses, neither SAP nor its customers and partners can to afford discard existing solutions and start again from scratch. The aim of the BPP for banking is not only to provide complete banking solutions but also to put banks on the fast track to an enterprise existing services solution SAP’s is architecture. architecture the starting point for the Enterprise SOA transition. During this transition process, SAP will open the solution by architecture harmonizing business processes, decoupling user interfaces, and making business objects and services accessible through open, standards-based access mechanisms. The transition process will ultimately lead to an that architecture offers maximum flexibility and powerful functions for building business processes and services on a scalable, high-performance IT infrastructure. Simultaneous, additional functional coverage, e.g. for corporate banking and cash management, will be implemented to meet customer requirements. Business SAP Process NetWeaver Management consists of three focuses to cater for the complete range of environments where this is needed. The three focuses are: - BPM covers the full process lifecycle: design, automation, execution, monitoring, analysis and optimization. System Access universal SunGard’s banking solution is built on an open platform and designed on SOA. Enterprise infrastructure integration is facilitated through our proven architecture. System Access universal SunGard’s banking solution includes System Access Customer Service Manager that provides Business Process Orchestration (BPO). This gives the ability to orches trate and control the execution of a business process across systems different System and Access organizational boundaries. Customer SunGard’s Service Manager has built-in BPM capabili ties. System Access Customer Service Manager is fully integrated with the System Access Symbols core banking solution. TCS BaNCS is SOA enabled across the entire Product Set which includes Commercial Banking, Capital Markets and Insurance. Over 2000 services are available and through Biztalk, Websphere adaptors. Weblogic TCS BaNCS incorporates a STP engine which manages orchestration of atomic level fine grain services at the application level, coarse grain services which are composed of multiple fine grain services are exposed via adapters and BPEL is used to orchestrate coarse grain services across one or more applications. Additionally TCS BaNCS Channels solution comes with a User Interaction Manager which allows user/customer interactions to be workflowed. This is an additional layer that sits above the BPEL orchestration layer. T24 has an inbuilt capacity to operate in an SOA environment since it exposes all of its functionality as web services which can be addressed by continues other to systems. monito Temenos industry initiatives and trends in this area to help to define how this technical system capacity can be best deployed by banks. technology Various proof of concept activities are underway accompanied by an ongoing engagement with clients, prospects, partners, analysts and other industry bodies. T24 can be addre - - Solution SAP TB Symbols TCS BaNCS T24 Company SAP AG SunGard TCS Temenos How do you act on the trend towards service orientation and business process management? (part three)

Appendix: Detailed systems overview 63 64

How do you act on the trend towards service orientation and business process management? (part four)

Company Solution

Temenos TCB TEMENOS™ CoreBanking currently supports most of the SOA standards and significant funding is being allocated in the development programs to expand the coverage of SOA standards and capabilities. The publication of Corebanking services is currently oriented to the integration of an overall banking solution. The development effort in this direction will also result in a higher usability of services in the orchestration of a process through BPEL or other standards. BPM tools are not included in CoreBanking.

TietoEnator CBS The Core Banking Suite is built using open standards and a modern Service-Oriented Architecture (SOA) combined with a processing engine built using an effective Event-Driven Architecture (EDA). TietoEnator’s strategy towards SOA, is firstly to divide SOA in two domains, Integration and Business Process Management (BPM). Our SOA Integration strategy is divided in sub-domains, such e.g. Client (MDM), General Ledger, etc. The sub-domains are implemented in the SOA integration strategy by Proof of Concept teams, which are guided by a general policy. Most of our systems rely on the ability to control the internal processing. For our Core Banking System, the focus is on accounting; for other systems it is usually around clearing, payment and settlement. We also support orchestration outside our system on the basis of the services that we provide. The BPM domain is to be implemented in our mortgage suite. The experience, knowledge and functional offers will then be implemented in full scale in all system domains. Currently we provide more than 1300 business services for use by potential subscribers of Core Banking. We also play an active role in the international arena related to SOA, i.e. OOPSLA07 on SOA with a focus on harvesting patterns and architectural design decisions to support the evolution of SOA in practice. We typically rely on external standardized BPM tools, such as BEA Aqualogic and Websphere Process Server as well as our own internal processing engines for the optimized processes close to Core Banking (i.e. the accounting engine).

T-Systems MBS; GEOS According to customer expectations/client working groups. Software is designed in a modular way to satisfy SOA requirements. We already provide Web Services. We support the process orchestration with our web configurator. This tool enables the operation of services according to the business process. Financial Services the way we see it - - Technological areas of evolution: - Technological Continuous SOA alignment for our technical Business architectures areas for evolution: - SOA business applications evolution aligned with our view of a High Performance Banking - Credit services evolution to support Credit BPO field Software vendor reliability: - Industrialization (Product development and Delivery center) - Packaging - Delivery Accelerators. Integration with SAP - Netweaver Java development - new user friendly WUI. Fully Java based solution - Flexible accounting scheme. The next release of Corebank, Release 4.5 is targeted for 1st quarter 2008. Below are listed some of the targeted enhancments: - Enhancements for combined statements - Enhancements to value-based authorisations - Enhancements to fee funds sufficiency check and retry - Enhancements to interest funds sufficiency check and retry - Enhancements to delinquency loan payment priorities - Additional options for days until first loan repayment - Additional options for loan/credit repayment date - Additional options for credit expiry date - Additional options for minimum wittdrawal amount and withdrawal units - New APIs for bank-specific follow-up events. Credit card funtionality - Building compilers for Java - Reverse mortgage functionality - Commercial cash management. Regulatory updates - Lending enhancements. Within core: additional functionality for enhanced control and product research, packaging, credit and payment management and auditing to enable banks to deliver better customer service, efficiency and risk profitability, management. Also fully integrated trade, treasury and capital markets functionality within ICBS (ongoing development post launch in October 2007). New releases of Fiserv Aperio with additional customer interaction and business process management including analytics. Fiserv is also set to offer a full front-to-back Islamic banking solution based on its ICBS and Fiserv Aperio products. In Europe, Fiserv will continue to offer BPO in financial services using ICBS core systems. Oracle and i-flex are investing in a broad range of areas to continuously enhance the value we provide to our customers. These investments include 1. Functional enhancements in the applica tions to meet the ever changing enhancements banking in environment 2. adoption Technology of additional components of Fusion Middleware 3. Pre-integration of our application assets with Oracle Application Integration (AIA) Architecture 4. Enhancement of our process framework to provide an industry model reference for banking. strategy continues Finacle’s to focus on delivering leadership & innovation in the banking solution see space. banking We solutions playing a role of enabling agents in business transformation programs that will make banks into responsive, high performance product strategy businesses. will Finacle’s thus continue to evolve towards: Delivering a componentised, maleable SOA archi tecture facilitating growth & expansion; Delivering a comprehensive product factory that uses intelligent business, process & technology building blocks for bundling and advanced relationship pricing capabilities; Delivering a reliable, high-performant information & knowledge store relating to customers, banks products & services; An integrated, IP enabled 24*7 scalable & open multi- channel platform; Enhance CRM in financial planning, loyalty mgmt, Integrated Channel Management; Delivering innovative productivity & efficiency features; Comprehensive support for modern IP enabled & wireless devices; Support for multi-entity capability; Delivering Management end-to-end solutions; Wealth Islamic banking. The Equation roadmap for the next 12 months will see a broad range of functional improvements in multiple areas, as well as the coexistence phase on the new Misys BankFusion platform. This will deliver Equation components on a J2EE-based core banking platform which will provide a common framework for all future banking development. Based around an SOA architecture, it is a highly flexible, interoperable and scalable platform. Enhancements to Global Processing such as local time and date stamp for transactions, automated back up and new restore; regulatory reporting; Global cash management engine enabling banks to deliver cash pooling services acros Solution Alnova Thaler Delta-Bank Corebank Profile Systematics ICBS Flexcube Finacle Equation Midas Company Accenture Callataÿ & Wouters Delta Informatique Fidelity Fidelity Fidelity Fiserv i-flex solutions Infosys Misys Misys What are the major developments that you are planning for your system during 2008? (part one)

Appendix: Detailed systems overview 65 66

What are the major developments that you are planning for your system during 2008? (part two)

Company Solution

Nucleus FinnOne Nucleus’ corporate vision is to be a leading global player in its specialty arena of Financial Lending - addressing all aspects of the assets business. Within the solutions portfolio, new and improved versions of Nucleus’ products - FinnOne Lending, FinnOne Collections and FinnOne Customer Acquisition System - are continuously being released. New system tools - a communication engine, single sign-on features and loan calculators are also being released. Two new business segments are being addressed by new products that have recently come into our solutions portfolio - FinnOne Forecaster (for enhanced Business Analytics) and FinnOne Operational Risk (addressing Basel II requirements for Operational Risk management).

Product Roadmap (2008): - FinnOne Customer Acquisition System (CAS): Committee Approval in CAS-SME, Quote Management, Value Added Products - FinnOne Loans Management System (LMS): Bill Discounting, Operating Lease & VAT handling - FinnOne Collections: Workflow based legal Module, Recovery Management System, Time Zone Handling

Polaris Intellect Suite Development phase is more or less completed during 2002-2005. Currently we are in the go to market phase and will be refining the product based on localized requirements such as regulations etc.

SAP AG SAP TB Further enhancements in terms of the business process platform for banking concerning functionality (based on customer requirements).

SunGard Symbols SYMBOLS core banking next 12 months initiatives: - Islamic Banking version of SYMBOLS core banking; - XML API of common banking business logic for delivery channels, branch front- end solution and co-existence with other legacy applciations - Multi purpose lines products enabling banks to configure unique credit lines and products for each client, SME and Corporates - Common Fee module across all banking core banking products and service offerings - SEPA support CSM Related Enhancements: SOA based Complaince Framework: The compliance framework is envisaged to provide adherence to Regulatory and Complaince norms and provide Risk Management in the Banks through a set of policies and procedures that can be defined and managed by the using various controls like Criteria definitions, Limits management, Collateral management, Rules governing Basel accords, SOX and AML controls which will be orchestrated via Business rules and process flows. This framework is evisaged to provide Real-time • Monitoring and control of Risk exposures with respect to products, services, transactions and customer demographics üComparison, analysis, decision-making and prevention or initiation of corrective business/operational transactions/ actions. Enhancements to Deposits Management system based on SOA supporting in the areas: • Overdraft management • Cheque processing - inward and outward clearing For each of these deposit products Banks can provide flexible Interest, fee, tax and service charge computations plans • Liquidation and unutilised deposit processing Enhancements to Payments System supporting: Complete support for Domestic payments including flexible payment formats • Mass payments • Direct debit mandates • Support for RTGS, ACH, Interbank clearing • Queuing & Repair features • SWIFT Support. All of the above features will leverage on the Sungard System Access’s SOA Framework for Banking and the related fundamental (existing) building blocks like Unified Customer Insight, Customer Relationship Management (CRM), Origination Framework, Pricing engine. Card Management Related Enhancements: SOA Based Card Center (Front-office): Leveraging on Sungard System Access’s SOA Framework for Banking and its fundamental building blocks, the front office features of Card Management system will be redefined to provide various Card services to support the front-office needs. A single unified Customer insight across banking services and Card services will provide dash board features to ehnace the Customer service across contact centers, Relationship Managers, elf-service channels and Product Managers. Card Origination processes: Card Orgination processes across customer on-boarding, Application processing and Account management will be made available using the CSM (Customer Service Manager) Origination framework.

TCS TCS BaNCS Cash Management cross border notional pooling and financial supply chain management - Product Bundling and Preferential Pricing - Mobile Banking - Mobile Payments.

Temenos T24 Some of these initiatives are not currently publicly disclosed and we cannot therefore discuss them here. Public ones include Structured Products Manufactured Further CRM enhancements.

Temenos TCB Global Processing - SOA - Enterprise Customer Information Management.

TietoEnator CBS Cash Management: - Financial messaging support enhancements such as XML-Swift messages based on the ISO20022 standard initiative to establish a Universal Financial Industry message scheme (UNIFI); - New solutions on platform: Cash forecasting and financial supply chain; - Product composer for business users on our Multi-Channel Platform (web-based); - More flexible and configurable event engine; - Possibly deployment support for Oracle. Release 6.4.1 will be released in January 2008. New and enhanced functionality are: - Non-Approval platform (for failed transactions and manual acceptance of certain transactions); - Additional Swift messages (XML format); - Bulk changes; - Retrospective changes; - Retrospective processing; - Prices up to 18 digits; - 2 or 3 decimals depending on currency; - Cash Management improvements. Releases after January 2008 have not been planned in detail yet. Some of the functionality currently being considered: - Extensive framework for verification of data; - Possibilities for 2nd author- ization; - Multiple base rates per product; - Maintenance of general services; - Calculation of costs based on boundaries.

T-Systems MBS; GEOS SEPA Direct Debit - flat rate withholding tax (Abgeltungssteuer) - pre-financing for retailers (Händlereinkaufsfinanzierung) - disclosure in relationshop to the ‘Solvabilitätsverordnung’ - controlling of interests (duration, rates) of the asset ledger - integration mortgage stock register. Financial Services the way we see it

Appendix 2: Capgemini contacts

Region Country Name E-mail address America Manjot Sohi [email protected] Karen Kenney [email protected] Asia China [email protected] India Ramakrishna Pulapaka [email protected] Other [email protected] Australia Christopher Bennet [email protected] Europe (Central) Austria Michael Bomer [email protected] Germany Sebastian Ostrowicz [email protected] Switzerland Boris Hohl [email protected] Europe (East) Czech Republic Patrik Horny [email protected] Poland Wlodzimierz Golebiowski [email protected] Other Michael Bomer [email protected] Europe (North) Norway Bjorn Miljeteig-Olssen [email protected] Sweden Roger Gullqvist [email protected] Other Roger Gullqvist [email protected] Europe (South) France Christophe Peltier [email protected] Portugal Fernando Maia [email protected] Italy Livio Palomba [email protected] Spain Julián Basurto Barbosa [email protected] Europe (West) Belgium Marc Jean Nootens [email protected] Netherlands Gert Jan van Dorsten [email protected] UK/Ireland Francis Hellawell [email protected] Other/Global [email protected]

Appendix: Capgemini contacts 67 Under non disclosure throu ure through March 25th 2008

www.capgemini.com Financial Services the way we see it

Core Banking Systems Survey

Survey results 2008

Capgemini Nederland B.V. Papendorpseweg 100 P.O. Box 2575 – 3500 GN Utrecht Tel. +31 (0)30 689 00 00 Fax +31 (0)30 689 99 99