Speaker Biography iPSL: A New Paradigm for Payments Processing
Wednesday, February 20, 2002 Round 6 - 10:20 am – 11:10 am
Session V
JANET RUSSELL Director and Chief Operating Officer IPSL
LINDA WALTON Director Sourced Service Delivery BARCLAYS BANK PLC
Learn: About a new blueprint for the payment services market that demonstrates the possibility for financial companies — indeed companies from any transaction heavy enterprise — to go to market with technology partners in a new business with potential for major growth.
Check volumes in the UK are in decline, unit costs are rising and the banks are reluctant to invest in new technology to drive process and product enhancements. Barclays and Lloyds TSB, two major UK clearing banks, have, as a result, outsourced their payments processing to iPSL, a Unisys company in which they each have a 24.5% share. iPSL has 50% of the UK check market and ambitious plans for operational and IT re-engineering, and for future growth.
There are some key learning points in terms of the way the business model is constructed, the challenges of working in partnership and the practicalities of building a single iPSL identity from the three partner operations.
Key topics to be discussed include:
The market context in the UK
The iPSL business model
CONTINUED Speaker Biography
CONTINUED
Session V
Operational capacity and business change program
Future growth plans
Combining the Unisys, Barclay’s and Lloyds TSB check processing operations under Unisys management has delivered both significant economies of scale and market leading opportunities, with the three companies sharing technology costs along the way. The presentation describes the drivers for the partners, the business model, the experiences of the first 12 months of trading and future growth plans. Speaker Biography
JANET RUSSELL Director and Chief Operating Officer IPSL
Janet Russell joined Unisys in November 1998 from Barclays Bank PLC, a major UK clearing bank.
Janet held a variety of management posts with Barclays primarily in corporate finance, risk management and retail banking before becoming Director of Clearing Services in 1993. In that role she lead a major change programme involving implementation of leading edge technology and rationalization of clearing operations. Janet led the industry group which implemented electronic data exchange in the UK cheque market.
Janet joined Unisys as Service Delivery Director for UPSL (Unisys Payment Services Ltd), a company delivering managed services in cheque, credit and back office processing to six UK banks. In the last 2 years, she has been heavily involved in the formation and growth of iPSL (Intelligent Processing Solutions Ltd) a new venture in payments processing between Unisys, Barclays, Lloyds TSB and HSBC. Janet is now a Director of iPSL and Chief Operating Officer. The company employs over 4,000 staff across 14 operations centres in the UK handling almost 70% of the UK cheque volume.
Janet holds an MBA from Warwick University in the UK. Speaker Biography
LINDA WALTON Director,Sourced Service Delivery BARLCYS BANK PLC
Linda joined Barclays in 1976 from university on the bank’s graduate training scheme. For ten years she undertook a variety of roles in retail and corporate domestic banking before moving into the Large Corporate Lending division. There she gained experience in marketing the bank’s money transmission and lending services to major multinationals in the food drink and pharmaceuticals sectors and worked with the investment bank division on a number of syndicated loans.
Keen to build on her growing interest in organisational design training and development and people motivation she moved in 1992 to Barclaycard, the group’s major credit card franchise as Director Operations. She had responsibility for the performance of all back office processing customer services call centres and premises and property services. Whilst there she led the first outsourcing deals that Barclays had undertaken for payment processing and stationery services . This was the start of a general trend in the group for developing alternative sourcing strategies for a variety of processing activity previously done in house
In 2000 Linda moved to the group central services division to set up the unit for managing all of the business operations outsourcing contracts and a number of the IT contracts. The focus of the unit is on continuous improvement of both the quality of services delivered and the cost at which they are sourced.
She is a member of the Institute of Bankers and the Chartered Institute of Purchasing Specialists.
Linda lives in Buckinghamshire, England. She has two stepsons and three grandchildren. A Unisys Company
iPSL : A New Paradigm in Payment Processing
Janet Russell Director and Chief Operating Officer
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
AGENDA
• The iPSL Business Model • Key Drivers for our Partners • Our Operational Capability & Business Change Programme • Our Plan for Business Growth • A Client Perspective on iPSL • Questions & Answers
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
1 Unisys Track Record in UK Payments
• September 1995 •Co-operative Bank •Girobank (Inclearing)
• April 1997 •Clydesdale Bank
• June 1997 • Yorkshire Bank
• November 1997 •Girobank Outclearing
• September 1998 • Barclays Positive Pay
• August 1999 •LTSB contingency
• December 1999 •AMEX remittance
• September 2000 •Northern Bank
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
iPSL : A Unique Venture
Company Created December 2000
Barclays 24.5% Unisys 51% Lloyds/TSB 24.5%
Processor for Processor for Own UPSL Clients Contracts
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
2 iPSL : A Unique Venture
Major Expansion December 2001 Barclays 19.5%
Lloyds/TSB Unisys 19.5% 51% HSBC 10.0%
Processor for Processor for Own UPSL Clients Contracts
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
UK Clearing Volumes : iPSL Market Share
70%
60%
50%
40%
est 30% W Nat 20%
Royal Bank of Scotland Halifax Bank of Scotland 10% Abbey NationwideBank of England 0% iPSL is the largest single processor in the UK, with 67% of clearing volume
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
3 Breadth of iPSL Clients
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
A Unisys Company
Business Drivers for our Partners
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
4 In the US, Electronic Payments are Gaining…
US Payments, 1990 and 1999
Electronic 12.3 billion Electronic 32.7 billion
Checks 55.3 billion Checks 67.6 billion
1990 1999
Source: The Tower Group
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
…But Will Not Overtake Paper Until 2006!!!
Transactions (Billions) 100 90 80 70 60 50 40 30 20 10
2003 2004 2005 2006 2007 2008 2009 2010
Checks Electronic Source: The Tower Group
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
5 UK Cheque, Plastic Card and Automated Transaction Volumes 1985 - 2008
Actual Forecast 18,000 16,000 14,000 12,000
10,000 8,000
6,000
4,000
2,000 0 1985 1990 1995 2000 2005 2008
Cheques Plastic card Automated Source : APACS
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
Key Drivers
• A mission critical process • Unit costs are rising as volumes fall • Ongoing investment required e.g Euro • Technological Advancement - new product and service opportunities • Further banking consolidation • Consumer pressure for value and certainty
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
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iPSL Operational Capability
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
iPSL operating sites
Clydebank Wigan (dedicated disaster recovery site)
Salford unisys
Bradford
Northampton
Bootle Romford Birmingham London Over 4500 Binley (Prescot St) staff London Bristol London (Park St) Camberley (Sampson Hse)
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
7 iPSL - End to End Services
• Full Cheque Processing - In/Out Clearing • Remittance and Lockbox - over 40m envelopes per year • Research and Adjustment • Unpaids In/Out • Technical checks, signature verification, fraud checks • Image services - e.g. Positive Pay • Sterling & Euro Settlement
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
Daily Volume Daily Value
13 Million Items £5 Billion
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
8 iPSL operating sites from 2004
Clydebank Wigan (dedicated disaster recovery site)
Bradford A Unisys Company
Northampton
Bootle
Approx. 2500 staff Bristol Camberley
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
iPSL New Technology
ONE clearing platform SIERRA- Alogent
ONE remittance system Visual E- Unisys Barclaystor ASI/15 CPCS ONE signature mandates ASI/17 database - Softpro IIPS HPTS CRI Legacy 3 Years Vector IPS ONE Research & Adjustments systems system : ASI/17- Carreker products Sierra RedwitherSoftware Earnings ONE All Items Database for data and images PIA - Unisys VisualE ONE Paying Bank Truncation Platform CBT - Unisys
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
9 Growing the Business
Beyond Cheque Back-Office Processing Remittance Processing New Check Processing Existing Check Processing
Volume Time
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
Our Key Challenges Going Forward
• Difficult staff issues to manage • Keeping the business change programme on track - while continuing to deliver excellent service • Making the business case! • Growth and diversification • Learning to work in partnership
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
10 A Unisys Company
iPSL : The Client Perspective
Linda Walton Director, Sourced Service Delivery
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
Barclays Bank – The Facts
• Major international bank focusing primarily on UK and European markets, but with a ‘global’ presence in Capital Markets, Cards and Offshore Services • Strategic Direction – to remain an integrated, diversified financial services franchise • Successful integration of The Woolwich 2000/2001 has delivered both cost and revenue benefits and provided a strengthened franchise in mortgage lending and financial planning • The Group adopts a vigorous ‘Value Based Management’ approach to identifying the key future investment opportunities
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
11 Barclays Bank – The Facts
We have: • 16 million customers who hold a ‘Barclays Product’ • The largest credit card franchise in the UK with 9.1m customers globally and 81,000 retailer relationships • 2,100 branches worldwide • 3,800 ATM machines – but our customers have access to 31,000 machines worldwide through reciprocal arrangements • 735,000 employees
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
A Unisys Company
Client Perspectives on iPSL (a short video)
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
12 Key Learning Points
• Knowledge Transfer • Governance • Communication & Interaction • Roles & Responsibilities
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
Moving Forward into 2002
• Barclays Strategy – optimise opportunities with iPSL • Governance • Leveraging the Relationship
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
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Any Questions?
2002 Outsourcing World Summit 18-20 February, 2002 A Unisys Company
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