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Microsoft in FSI: Because That’s Where They Keep the Money

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1 Microsoft in FSI: Because That’s Where They Keep the Money
SITO Summit 2005 4/13/ :19 AM Microsoft in FSI: Because That’s Where They Keep the Money ANZ Partner Conference 2-5 August 2006 Mark Pey FSI Industry Manager Microsoft Australia © 2005 Microsoft Corporation. All rights reserved. This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.

2 Agenda Microsoft Platform Update
Microsoft Approach to FSI Solutions & Partners Partner Opportunities in FSI Rude Q&A on Partnering Polite Q&A (final 15 minutes)

3 Microsoft Platform Update

4 People-Ready Business
PEOPLE DRIVE BUSINESS SUCCESS Amplify their impact and you improve business results. A business context that delivers important insight Develop and strengthen profitable customer relationships. Create innovative products and services. Improve operations and reduce costs. Build high- value connections with partners and suppliers. A strategy that responds to key business outcomes Widely used and supported by the world’s largest community of partners, developers, and support professionals. Familiar and easy to use, maximizing employee impact and minimizing complexity and cost Innovative software that continually evolves to meet your needs Easier to integrate and connect with what you have today and tomorrow With support points for the Microsoft Platform and Software

5 Enterprise Platform

6 Microsoft Integrated Platform
Interoperability Microsoft Integrated Platform Leverage All Enterprise Assets Gain Competitive Advantage Web Services Integration Unix AS400 Linux OS390

7 Connected by Design XML Web Services Networking UNIX Systems Data
Management XML Integration Identity Web Services Industry Standards Applications “Building software that is interoperable by design” Bill Gates Executive Feb 3, 2005, Languages “72% of IT decision makers ranked Microsoft No. 1 in interoperability“ Legacy Hosts

8 Committed to Open Standards
Financial Services Industry Standards Bodies Computing Industry Standards Bodies Actively participating with standards bodies:

9 Broadest Partner Ecosystem
2000+ systems and devices 2500+ Windows server apps 25,000 Certified Partners

10 .Net Momentum: The Trend is Your Friend
60+% Flat

11 Gartner Magic Quadrants
Challengers Leaders Visionaries Niche Players Ability to execute Completeness of vision Enterprise Application Server (May 2004) Application Integration Suites (May 2004) Host Integration Servers (Dec 2003) Relies on Microsoft and ClientSoft products Web Services (September 2004) Meta-Directory (September 2003) Directory Server (July 2003) Enterprise Application Integration (May 2003) Sell-side Commerce Server (October 2002) Microsoft in the Leaders Quadrant A magic quadrant is Gartner’s “snapshot” of a market segment. It identifies vendors active in the segment area and characterizes their roles in the industry. Vendors are positioned in one of four quadrants: Leaders, Visionaries, Challengers or Niche Players.

12 What is Microsoft’s Proposition?
Best TCO Fastest time-to-value Best cross-platform integration

13 Microsoft Approach to FSI Solutions & Partners

14 Microsoft in Financial Services
Vertical industry focus – Banking, Insurance, Capital Markets/Securities Global execution Focus on Industry Priority Solutions Scenarios – areas of high value for Microsoft, our partners, and our customers Partner with leading ISVs, SIs, OEMs who add their domain expertise to our platform Work with partners on engineered, repeatable solutions

15 Why FSI? It’s Where the Money Is…
20,000 40,000 60,000 80,000 100,000 120,000 140,000 Banking Consumer Automotive and Industrial Capital Markets/Securities Wireline High Tech and Electronics Distribution: Consumer Goods Insurance Defense Worldwide IT Spend USD $m Transportation Total FSI Opportunity Source: IDC

16 Total IT market for Financial Services: $202 B (IDC)
FS Industry Opportunity is Huge Financial Services Industry Software Spend ($B) (1) The Great News Spending is Up in all three Verticals Investment growth in customer-facing new projects Huge migration opportunities: UNIX, Mainframe, Notes, Sybase….. People-Ready is a perfect fit for Financial Services CAGR 03-08 CAGR: 6.3% 45.1 42.3 39.9 Capital Markets 7.4% 37.5 35.2 33.2 Insurance 4.7% Banking 6.4% Total IT market for Financial Services: $202 B (IDC) Source: 1) Worldwide IT Spending by Vertical Market, , IDC, 2004 2) Enterprise Technology Trends (ETT) research program across 18 verticals and three company size segments, 2003 3) “Market Trends: Financial Services IT Spending, Worldwide, 2004,” Gartner 2004

17 Microsoft Today in Financial Services
Where can you find solutions implemented on the Microsoft Platform in FSI? Market Data Dissemination System (MDDS). 5K transactions /second, 100K queries / day, running on SQL Server 2005 Chooses .NET/Windows over J2EE, Integrates solution. Increased sales by providing the most current value-added price and trading data available, processing 500 messages a second with average latency of less than 300 milliseconds. End-to-end STP Solution for securities processing for a value chain of 80 Swiss Banks. Built with Visual Studio. Great example of “rewiring the financial value chain” through innovation. Built an automated trading system for European equities traders using the Microsoft .NET Framework and based it on the FIX.NET solution. The system was developed and delivered into production in under four months. Margin Trading, Counterparty Risk, Mergers & Acquisition, Pitch Book, Proposal Generation, Corporate Finance, Equity Research, Proposal Generation, XBRL, Work Flow Tools, Trade Messaging, Algorithmic Trading, Business Process Automation, Trade Exception Processing, Pre-Trade Analysis, Market Data, Portfolio Management, Order Management, Clearing & Settlement, SWIFT Connectivity, Messaging Protocols (Fix, Swift, Twist Etc) Asset Allocation, Sales & Distribution, Performance Attribution, Portfolio Management, Separate Managed Accounts (SMA), Security Master, Reference Data Management, Corporate Actions, and Reconciliation. Implemented a Microsoft Windows-based grid-analytics architecture for trading room real time risk management in mark-to-market calculations. Performance, security, reliability and integration with other IT assets were selection factors. Next generation Trade and Positioning System (TAPS) Core Systems replacement for fixed income trading and securities processing based on .NET. 30% performance increase, capacity to process 1,000 trades / second

18 Microsoft Today in Financial Services
Where can you find the Windows Platform and .NET in the Insurance Industry? Enabling and the Customer Care Center to work together while maintaining them as autonomous applications linked by Web services advances Allstate toward its strategic goal of a service-oriented architecture. Leveraging .NET connection software, Chubb added a new billing feature to its broker site and developed a new Web application to improve the way it does business with third-party appraisal companies. Litigation Management, Claims Processing, Fraud Analysis, Adjusters & Appraisers Mobility Tools, Loss Adjustment, Workflow and Process Management, Agency Management, Multi-Channel Distribution, Advisor Desktop / Portal, Company Services for Advisors, Self-Service, Knowledge Management, Workflow, Compensation, Documentation, Collection & Billing, Underwriting Systems, Policy Administration, Regulatory Compliance Insurance Knowledge Management, Policy Administration, Regulatory Compliance, Risk Engineering, Risk Management Advisor Tools & Services, Actuarial / Predictive Analysis, Rating and Quoting, Insurance Product Development, Geographical Systems, Insurance Exchanging, Automatic/Treaty, and Facultative Placement. Balboa Insurance Group selected Windows Platform, .NET and Biztalk Server to manage over 100,000 documents daily and track information on over 14 million loans. Automated, Web-based solution gives Farmers the ability to remotely monitor repair facilities, eliminate manual handoffs, reduce cycle time, and make the claims settlement process more satisfactory for customers.. Upgraded an integrated title and escrow system that unified disparate systems into a centralized database hosted on a 64-bit Platform. The centrally hosted SQL Server database, with more than 1 terabyte of information, supports 12,000 users in 1,300 offices. Created a smart client application that brings together an inclusive view of products, reinsurance treaties, and rate tables. The in-house developers used Visual Studio 2005 and Microsoft .NET Framework 2.0 to speed the development and implementation.

19 Simplest view of an FSI company

20 5 Microsoft Industry Priority Solutions
1. Channel Renewal 2. Advisor Platforms 3. Risk & Compliance 4. Insurance Value Chain 5. Payments

21 5 Microsoft Industry Priority Solutions
1. Channel Renewal 2. Advisor Platforms 3. Risk & Compliance 4. Insurance Value Chain 5. Payments

22 Industry Priority Solutions
Channel Renewal Risk Management & Compliance Insurance Value Chain Payments Advisor Platforms Core Banking Addresses organization’s complex web of compliance, privacy, regulatory needs, credit management, fraud controls and operational risk A strategic approach to renewing core systems in a phased manner. Enabling reduced risk, leverage component based architecture and best of breed partners Enables development of re-usable business services across more than one channel to provide consistent customer experience Consolidate payment processing, financial messaging and archiving operations Enables all participants in the insurance process to connect with each other including end customer Streamline end-to-end process from client prospecting thru ongoing relationship management Solution Areas Branch Seller Branch Teller ATMs Internet IVR Call Centers Customer Knowledge Mobile Solution Areas Audit & Controls Document Management and Records Retention Corporate Governance Privacy & Security Reporting / Business Intelligence CIP / KYC Certification Documentation Solution Areas Channel Sales Underwriting Product Development & Configuration Core Policy Systems Claims Processing Re-Insurance Solution Areas ATM Payment Switch Corporate to Bank Check Processing SWIFT Connectivity Treasury / Cash Management EBPP Mobile payments High and Low Value payments Security Settlement Fraud Management Solution Areas Advisor Desktop / Portal Company & Industry Provided Services Advisory Management Solution Areas Client Data File Deposit Products Lending Products Corporate and Wholesale banking Pricing Statement Production Credit Decisioning

23 Microsoft Priority Solution #1: Channel Renewal

24 Old channels don’t die…they just need to work better together
13.5 12.4 8.3 2.4 13.8 12.7 9.3 4.0 14.0 13.0 10.2 5.6 14.2 13.3 11.3 7.3 14.3 13.6 12.5 9.1 5 10 15 20 25 30 35 40 45 50 2001 2002 2003 2004 2005 Online Banking Call Center Branch ATM Source: TowerGroup US Annual Transaction Volume (billions)

25 Microsoft Priority Solution: Channel Renewal
What is Branch Renewal Technology Opportunity New Business Models Recognising the role of the branch From service to sales From cashiering to advice Risk mitigation Value Richer customer experience Sales effectiveness Operational efficiency Risk Mitigation Service Efficiency Examples Wachovia: 2600 Retail banking centers integrating multiple back end systems for single customer view across all channels (Argo Data Systems) Bank of Montreal: 18,000 users on .NET Smart Client for Branch (.NET Framework) Standard Chartered: Unisys Transaction Manager Citizens Bank – Getronics Global FS, 1800 branches Argo Data Systems CIBC: CCF Pilot Accenture: Alnova front end Commonwealth Bank – CommSee intiative “Updating branch platforms will make your bank branches more efficient. However, this "blinkered" approach to branch renewal does nothing to differentiate a bank and make customers eager to do business with you” – Gartner August 2003

26 Microsoft Priority Solution #2: Advisor Platform

27 Advisor’s Present vs. Desired Future State

28 Microsoft Priority Solution : Advisor Platform
What is opportunity? Large market opportunity Integrated processes for sales Risk Management and Compliance Collaborative work environments Monitoring & management Improved customer experience What is the value Increased up-sell / cross sell Improved customer experience Increased revenue Agent satisfaction and retention Examples Citigroup – AdvisorVision, 1000 Financial Advisors and soon to branches HSBC – Impact Technologies CBA – COIN Westpac – COIN Charles Schwab – broker desktop New York Life Bank of America Wells Fargo

29 Microsoft Priority Solution #3: Risk Management & Compliance

30 Microsoft Priority Solution : Risk Management
Value Reduced Cost Customer experience Basel II capital relief Enables early detection and management of potential exposure Assists in compliance What is Risk Management? Real time information Ability to monitor, evaluate and report Capability to systematically reduce risk Compliance Data Management Strategy Examples Caixa Catalunya - SAP Bank Analyzer GMAC - Reduces Cost of Sarbanes-Oxley Compliance by 50 Percent Shanghai Pudong – SAP Bank Analyzer Citigroup: Risk Management Dashboard Nationwide Building Society UK: Data solution encompassing all product lines CBA: IT&E Monte Carlo Risk Management NASDAQ: tracks stock market events and issues alerts at the possibility of any abnormal market activity – 200tps Citigroup Risk Management Dashboard

31 Microsoft Priority Solution #4: Insurance Value Chain

32 Microsoft Priority Solution : Insurance Value Chain
What is the opportunity? Automate the process Seamless integration of data Improve speed Reduced errors and inaccuracy Compliance Data Management Strategy Value Reduced Cost Improve the Customer experience Improved risk profile Lower loss adjustment Assists in compliance Examples Zurich UK AIG Allstate Farmers – claims settlement 4 hours Nationwide – Tablet PC enables 15% increase in claims completed on site Chubb CNA

33 Microsoft Priority Solution #5: Payments

34 Microsoft Priority Solution : Payments
What are Payment Systems? Mechanisms for transmission of instructions between parties concerning intent to pay Mechanisms for settlement of payment instructions Value Enables the customer to utilize their money at the time and place of their choosing Permits ubiquitous exchange of value using convenient instruments Source of revenue to acquirers and originators Examples CheckFree – next gen platform 24% less TCO Sumitomo Mitsui – ATM Gateway, 6000 tpm, % ANZ – Payplus – interbank clearing Pan European ACH: Step 2 project requires integration of 80 banks Banco Central: Brazil Payment Backbone for RTGS with 120 banks Nordea: SwiftNET implementation Central Bank of Costa Rica – Inter-bank payments – 1,700 tps Banesto – Switftnet Unisys – Payments Utility Netherlands Open/N2 Electronic Funds Transfer Solution from S2

35 Partnering with Microsoft in FS I

36 Partners Are Joining Our Community
Fiserv CBS is focused on joint sales efforts in US, LATAM, EMEA and APAC to position Aperio, a .NET solution on Windows/SQL The first fully integrated suite of products on .NET for Insurance Commercial Intellisys (CI), WINS, Intellibank and Claims; over 100 existing customers Sungard is planning to make its Common Services Architecture (CSA) built on .NET available to customers in a hosted environment

37 The Partner Community How we help our partners
Resources: World wide and regional industry vertical teams offer: Business development resources to help partners access technical, sales and marketing and industry programs Technical resources to provide technical and architectural guidance for Microsoft products and technologies

38 The Partner Community How we help our partners
Joint Marketing Activities: Leverage Microsoft market presence: Access to industry marketing programs and initiatives Access to product marketing programs and initiatives Access to Industry Management team Alignment with Microsoft world wide industry solution programs e.g. IPSS and solution areas Cross vertical marketing opportunities

39 The Partner Community How we help our partners
Joint Sales Activities: Access to centralized industry team to help develop consistent industry sales strategy and messaging (IPSS) Access to Microsoft global sales account team and opportunities brokered through IPAM, SSPI, IBDM communities Joint sales planning and account identification

40 The Partner Community How our partners can help us
Develop joint technical and business plan Develop joint value proposition Microsoft technology stack and revenue Align solutions with industry initiatives (IPSS) Develop joint solution scenarios Provide insight into regional sales capabilities Develop POC for joint customers Customer References and Case Studies

41 Calls to action Align your solutions or services to sales priorities (and industry solution areas), and update PAM. Enterprise Resource Guide: Align your marketing and account planning with people-ready business. Tools available at: Profile your software or services offerings using the Partner Solution Profiler at:  Develop materials that will make your inclusion easier, and then work through PAM to integrate with relevant industry teams (joint value prop, PSP, battlecard, collateral, marketecture)

42 Partner Resources


44 Vertical Tools Snapshot
Solution Finder Customers search for vertical partner solutions Partner Vertical Resource Center December Release Channel Builder Partners search for vertical solutions & business partners Partners profile vertical software & services Partner Solution Profiles Solution Map Microsoft collaborates with partners to build & sell vertical solutions

45 Rude Q&A : Partnering with Microsoft

46 Rude Q&A Q: Microsoft is so spread out, how do I find out whom to talk to? A: Ask me. Or ask your Partner Account Manager.

47 Rude Q&A Q: OK, so we’re engaged. Now how do we get Microsoft’s endorsement? A: Make your case. State clearly what parts of your solution run on our platform, and which products are pulled through and how much when we succeed together. A: Indicate why you’re a strategic ally. Is your solution on SQL 2005? .NET? What about Linux? Best answer is: 100% Microsoft. A: Don’t flip. What happened the last time the customer asked “do you also run on Oracle?”

48 Rude Q&A Q: How come the Microsoft guy won’t return my messages?

49 Your challenge is to be heard amidst the chaos

50 This approach should get results…repeat as needed

51 Polite Q&A : Partnering with Microsoft Audience Questions

52 Resources Microsoft in Financial Services
Financial Services Developer Community Case Studies Web Services Developer Center .NET Connected Web Services solutions Windows in Financial Services publication

53 © 2006 Microsoft Corporation. All rights reserved.
SITO Summit 2005 4/13/ :19 AM © 2006 Microsoft Corporation. All rights reserved. This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary. 53 © 2005 Microsoft Corporation. All rights reserved. This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.

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