1. New Distribution Models For Financial Services Italian Banking and the Internet Monday, February 14, 2005 Scoba Rhodes Anthony Rowe John Stathatos Mario Suarez

2. Introduction Italian banking change indicators Deregulation Management of client portfolios New diversified needs Aggressive competition to offer new products New business models & redesign strategies Reorganize marketing & sales Define new office roles Create new distribution channels New services

3. Italian Market Analysis Retail market Bank offices still functioning as main sales channels Corporate market Proposed standard on information exchange Telepayment is heart of corporate services New multi-channel model Methods growing rapidly Places customer in focus Bank characterizations

4. Using the Net for Financial Services New distribution channel Financial transactions Access to the Internet Customer assistance / education Information supporting financial decisions Educational materials Advantages Transactions 24 hours-a-day Account accessibility High volume transactions during peak hours Low cost Access to information

5. Impact of Web-Based Technology Improved efficiency Competitive cost structure Economies of scale Flexibility Differentiation Customization Expansion

6. Strategic Analysis Suppliers Customers Substitutes New Entrants Competitors and Nature of Competition Industry Environment Key issue: Beneficial to offer financial services on the Internet? Porter’s Five Forces

7. Generic Strategies Cost leadership Differentiation Strong brand name recognition

8. Outsourcing the Service Key issue In-house vs. Outsourced Solutions Concentrate on banker’s core competencies Strategically outsource other activities e-Financial service outsourcing (e-FSO)

9. Reasons for Outsourcing Reduce operating costs Internal resources not available Strategies Improve bank focus Accelerate reengineering benefits Access to world-class capabilities Reduce risks Deploy internal resources elsewhere

10. Global Sourcing Cost minimization Competitive advantage Strategic asset

11. Marketplace Movement Italian institutions see the future Observing changes in US marketplace Italian customers want better returns Less fixed securities More international capital funds Minor successes with Internet Stock / bond quotes Stock sales through mobile network

12. Conclusion On-line explosion hasn’t hit…yet Customer focus Need for speed Watching US markets Staying ahead of competition Using the web for financial services Porter’s five forces Opportunities in technology Outsourcing as needed Building on successes