Misys Banking Division Ivan Martin CEO Misys Banking Division

Agenda Misys Banking Division Strategy Ivan Martin Business Drivers Steve Gowers Product Management Jerry Luckett Break Three Great Stories SummitFT Georges Bory MidasPlus Andrew White EquationPlus Andrew Derrer Summary Ivan Martin Questions and Answers All

Key messages 1. Banking is a large and growing software market 2. Misys is well positioned to benefit from this growth 4. Misys is growing its market share in key markets 3. Misys leads in functionality and technology 5. Retail is key growth sector going forward

Where were we? What did we do? Where are we now?

Where were we? What did we do? Where are we now?

What did we see in 2002? In 2002 you told me … “Products are old legacy back office systems” “Losing market share to competitors” “We see no product roadmap for the future” “There is a risk the business will not benefit from a recovery in spending”

What did we see in 2002? Banking Division ILF 150 100 Revenue £m 50 - ILF moving annual total - Smoothed ILF trend line 1996 1998 2000 2002

Where were we? What did we do? Where are we now?

What did we do? Portfolio Management Talent Management Columbus Product Management Services R&D investment

Banking software market Significant opportunities in target markets Securities US Retail Asset Mgmt Treasury International Retail Corporate Addressable market > $5bn

Misys Banking Division Healthcare Systems Division Financial Services Division Banking Division Misys Retail Banking Misys Wholesale Banking Systems Summit Systems Misys Risk Management Systems

What did we do? Portfolio Management Talent Management Columbus Product Management Services R&D investment

Misys and Banking Systems Market Private Banking Investment Retail Corporate Universal RISK GMS LOAN IQ SUMMIT Over $100 bn MIDAS OPICS EQUATION BANK MASTER Asset size of Bank Below $5 bn Boxes represent market coverage – not size of business

What did we do? Portfolio Management Talent Management Columbus Product Management Services R&D investment

What did we do? Portfolio Management Talent Management Columbus Product Management Services R&D investment

Competitor information Customer requirements Technology innovations Product management Lifecycle mgmt Introduction Growth Maturity Decline Evaluation Qualification Definition Operation Business as usual Launch Design Build Alpha & Beta Development “Build” Decision “General release” Market Understanding Market Engagement Competitor information Customer requirements Technology innovations Misys vision Market drivers “Go external” to beta Outline ‘Delivering the solutions our customers want, when they want them’

What did we do? Portfolio Management Talent Management Columbus Product Management Services R&D investment

What did we do? Portfolio Management Talent Management Columbus Product Management Services R&D investment

R&D + 55% R&D Man Days Increasing offshore capacity (,000) 140 Front-office 100 + 55% 60 Technology 20 Back-office 2003/4 2006/7 Increasing offshore capacity

Where were we? What did we do? Where are we now?

Banking market conditions Banking software markets are generally improving Conditions vary significantly between sectors Retail banking continues to show sustained growth Wholesale banking and capital markets have stabilised Marked regional differences; activity in emerging markets Underlying market drivers still apply Cost containment Regulation Rising consumer expectations Long term trends continue Move away from in-house software to third party packages

Market structure - banking software revenues Source: 2002 financial statements & Misys estimates Source: Annual Reports and Private Company estimates.

Global power – local knowledge Auckland Bahrain Bangalore Bangkok Beijing Brussels Dubai Dublin Frankfurt Hong Kong Jakarta Jo’burg Kuala Lumpur Lisbon London Lux’bourg Madrid Manila Mexico Miami Milan Moscow Munich New York Paris Riga Sao Paolo Seattle Singapore Slough Sofia Sydney Tokyo Utrecht Warsaw White Plains Zurich

Achievements in 2004 Portfolio moved to new areas of growth Increased investment in R&D Retail benefiting from market facing structure Increased Treasury & Capital Markets market share Strong evidence of traction in our installed base

Achievements in 2004 Best increase in H2 order intake in 3 years Closing order book up strongly Maintenance revenues stable H2 professional services grew by 20% Professional Services backlog grew by greater than 70%

Business Drivers Steve Gowers Business Development Director Misys Banking Division

Misys focus Misys is focused on providing business critical systems in specialist vertical markets Characteristics of vertical markets: Depth of industry knowledge Depth of software IPR Specialist skills able to rapidly deliver solutions Demand for mature and proven systems Long lead times Different drivers from ‘horizontal’ markets (e.g. ERP)

How do vendors compete in vertical markets? What drives growth in vertical markets?

How do vendors compete in vertical markets? What drives growth in vertical markets?

Competitive dynamics in vertical markets 1. Breadth of product portfolio 2. Depth of IPR 3. Size & quality of development capability 4. Breadth and depth of geographic network 5. Ability to sell into installed base

Breadth of product portfolio Private Banking Investment Retail Corporate Universal RISK GMS LOAN IQ SUMMIT Over $100 bn MIDAS OPICS EQUATION BANK MASTER Asset size of Bank Below $5 bn Boxes represent market coverage – not size of business

MidasPlus SummitFT Depth of IPR Midas represents 14 million lines of code in total, with 168 functional modules MidasPlus release was 3 years in the making, delivering 3 million lines of new software IAS Compliance was 50 man years of investment SummitFT Summit represents 6 million lines of code in total SummitFT release was 3 years in the making SummitFT and MUST alone represent an investment of over 75 man years

Size and quality of development 2,600 specialist staff F&A Support Services Sales and Marketing Software Development Product Management More than 1,000 software engineers

Breadth and depth of network Auckland Bahrain Bangalore Bangkok Beijing Brussels Dubai Dublin Frankfurt Hong Kong Jakarta Jo’burg Kuala Lumpur Lisbon London Lux’bourg Madrid Manila Mexico Miami Milan Moscow Munich New York Paris Riga Sao Paolo Seattle Singapore Slough Sofia Sydney Tokyo Utrecht Warsaw White Plains Zurich

Ability to sell into installed base 3 Core systems Midas 450 Wholesale and international banks Equation 270 Retail banks BankMaster 190 Retail and Universal banks 4 Departmental solutions Summit 110 treasury & capital markets operations Opics 130 treasury departments GMS 800 banks, funds and corporates Loan I/Q 30 banks Enterprise Risk Risk Vision 30 banks Count is number of discrete Banks Total = more than “1400 customers” because many clients have multiple systems

Ability to sell into installed base Contracts signed in FY03/04 45% of Misys contracts were for extensions of existing business Upgrades/Extensions Funded dev/Other Additional volume New customer 55% of Misys contracts were for new product and new customers New product Analysis based on numbers of contracts

How do vendors compete in vertical markets? What drives growth in vertical markets?

Drivers of growth in vertical markets 1. New technology cycles 2. Growth in underlying business volumes 3. Increasing burden of regulation/reporting 4. A return to IT spending for competitive advantage 5. Trend to use of third-party vendors

Growth drivers – technology cycles IT Spending Cycles Mini- computers Euro and Y2K Client- Server ISV’s Services Oriented Architecture 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 Source: Bureau of Economic Affairs

Growth drivers – underlying volume Transaction Volumes 2,007,551,750 messages 2.0 billion 1.8 billion 1.6 billion 1.4 billion 1.2 billion 1.0 billion 0.8 billion 0.6 billion 0.4 billion Swift estimate that Misys systems generate 15% of all transactions in their network. Misys is at the heart of banking 1994 1996 1998 2000 2002 2004

Growth drivers – underlying volume Global FX Volumes $1.4 trillion per day $1.50 trillion $1.25 trillion $1.00 trillion $0.75 trillion $0.50 trillion $0.25 trillion Misys GMS confirms approximately 7% of the world’s $1.4 trillion daily foreign exchange transactions This equates to $100 billion per day through Misys GMS ASP solution 1994 1996 1998 2000 2002 2004

Growth drivers – regulation/reporting 2004 Simple Lightly Regulated Old Boy Network Complex Highly Regulated Performance Culture 1984

Growth drivers – competitive advantage Cost Reduction Customer Service Cost Other Service Costs Service Quality 88% of CIO’s 70% of Customers

Growth drivers – quality imperative Fails/Million 1 3K 50K NatWest 100K

Growth drivers – shift to third-parties Fails/ Million Bank IT budget allocation New Projects Maintenance Maintenance v New Projects Internal v External Software Source: Celent – IT Spending Europe 2004

The new era and Misys Functionally rich Component based Engineered on Java & .NET With compliance built in ‘Delivering the solutions our customers want, when they want them’

Product Management and Development Process Jerry Luckett Product and Strategy Director Misys Wholesale Banking Systems

Product management objectives Target Market Market Requirements Solutions to Meet Requirements Internal Return Resource Allocation

Product management process Evaluation Qualification Definition “Build” Decision Market Understanding Competitor information Customer requirements Technology innovations Misys vision Market drivers Outline Operation Business as usual Market- Launch “General release” Decision Lifecycle mgmt Introduction Growth Maturity Decline Design Build Alpha & Beta Development “Go external” to beta Market Engagement

Customer involvement Strategic Development Partnerships Customer Advisory Boards Funded Development Market Research User Groups

Development process Quality Management Configuration Management Development Process – Development Standards – Quality Plan – Quality Audit – BMS / ISO Accreditation Configuration Management Doc Set Mgmt – Version Control – Collection – Packaging – Shipping – Dev Schedule – Dev Facility – Client Inventory Project Management Dev Plan – Test Plan – Deployment Plan – Dev Tracking Requirements Definition System Specification Design Construct Integration Test Quality Assurance Controlled Deployment Ongoing Fix

The move to offshore and outsourcing Misys has been creating offshore capacity for more than a decade What we gain from offshoring: Lower unit costs Increased capacity 24 hour development capability Access to wider skill pool Significant local market presence In addition outsourcing also provides a variable cost model

Moving to offshore cost base 2004 Getting It Right! Have an ambition, know your target Plan offshore/onshore mix You are moving, your customers are not Inject product skills through secondment Recruit and train Protect domain knowledge – realignment strategy Excellent communications 2007

Summary Know what you want to build Get the software factory working effectively and efficiently Result Focus on growth products and new markets Output that meets and exceeds industry quality standards Increase development capacity without increasing the R&D to revenue ratio

SummitFT Georges Bory Managing Director Summit Systems

Summit – a brief introduction Product Treasury & Capital markets solution 400+ staff in 8 countries world-wide 110 global customers Consistent management and technology strategy Loyal customer base Resources Core development in NY & Paris Outsourcing partner Support and local development New York, Paris, London, Frankfurt, Singapore, Seoul, Tokyo Sales – global resource Target Markets Primarily Tier 2 & 3 banks Some Tier 1 ASP solution for Tier 4 / corporates

Summit solution Derivatives One Solution front-to-back covering multiple asset classes Treasury Commercial Lending Fixed Income Derivatives Breadth & Depth of functionality – No. 1 Modular Technology that grows with clients needs Market leading tool for exotics & structured products Technological advantages - .NET and real time services ASP

Multi-asset class coverage Fixed Income Bonds MTNs MBS/ABS Repos Sec Lending GICs Emerging Mkt Treasury Loans & deposits Foreign Exchange Money Market securities Derivatives Interest Rate Credit Currency Equity Bonds Commodity Lending Syndicated Loans Bilateral Loans Exotics & Structured (MUST)

Product evolution 14 Years Track Record FT MS .NET 1990 2000 1998 1996 Client - Server C Unix Sybase 1990 2000 1998 1996 2001 2002 1993 2003 MARKETS RISK MANAGEMENT DERIVATIVES FRONT OFFICE MONEY MARKET and FIXED INCOME DERIVATIVES BACK OFFICE CREDIT DERIVATIVES TREASURY FRONT to BACK OFFICE REAL TIME FX COMMERCIAL LENDING REAL TIME STP DISTRIBUTED RISKS EQUITY DERIVATIVES WEB TRADING CASH MANAGEMENT Extendible Data Model Customizable GUI Pricing API C++ Native NT Oracle-Sybase Product Formula Excel Add-In 3 Tier Corba Orbix Gateway RT FX Position Server RT Event API eToolkit Excel / Java XML Credit Server Risk Server RT STP Framework Web Trading MS SQL Server FpML 2004 FT MS .NET Parallel Distributed architecture EXOTICS & STRUCTURED TRADES MUST Linux Grid Computing SOAP & Web Services

Investing ahead of the curve Increased R&D during downturn Ready with market leading technology for upturn Followed a consistent product strategy and vision Employed and retained product development and product marketing expertise 54,000 R&D man days over 5 years

Client examples Global Investment Banks International Wholesale Banks Regional & Large Local Banks Hedge Funds/Corporates

Our customers speak for us Our decision to pool all applications into one with Summit as the BLB core solution for investment banking, will help us achieve this goal. Replacing such a large number of systems will reduce costs in many areas by reducing system complexity and improving STP. The processing and managing of trades will be massively improved with Summit and I expect to see a quick return on our investment. I was impressed by Summit’s product knowledge and the capability of its solution. It will provide us with flexible pricing, integrated risk management and back-office tools that will enable us to establish and grow our business in this competitive and profitable market.

Market trends “Banks are looking to consolidate vendors” “ISDA has estimated that the credit derivatives market has doubled for each of the last six years - $3.58 trillion by the end of 2003 with 51% growth expected in 2004” “Treasury technology spend is now starting to see strong signs of recovery and positive growth rates, and Datamonitor predicts CAGRs of 3.2% and 2.9% from 2002 to 2006 in Europe and the US respectively. “ “the deadline for IAS39 compliance, together with overall pressures to centralize treasury technology in order to improve operational efficiency, is going to drive significant increases in year-on-year growth of investment until 2006 and beyond”

33 banks of the top 100 Banks use Summit The Summit advantage Breadth and depth Technological advantage Summit MUST Regulatory compliance Corporate strength Business specialists Worldwide customer base 14 years experience 33 banks of the top 100 Banks use Summit

Misys Wholesale Banking Systems MidasPlus Andrew White CEO Misys Wholesale Banking Systems

This is Midas! Most successful banking software package ever International branches and regional banks Unmatched corporate banking capabilities Global product, local features, local support Loyal customer base – TRUST

Source: Bureau of Economic Affairs 25 years of change IT Spending Cycles Mini- computers Euro and Y2K Client- Server ISV’s 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 Source: Bureau of Economic Affairs

Change again. Banks are under pressure. Competition: markets, products, price Risk Regulation Manual operations Rocketing customer expectations

Source: Bureau of Economic Affairs Next phase IT Spending Cycles Mini- computers Euro and Y2K Client- Server ISV’s Services Oriented Architecture 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 Source: Bureau of Economic Affairs

This is MidasPlus! Open architecture Global processing Straight Through Processing (STP) Head office solution Multi-channel eServices platform

MidasPlus – A whole new world

Deep functionality New solution - with pedigree Tightly integrated yet flexible Improved functionality Customer self service Strong support

Modern technology platform Deployment options Open Efficient Development tools Faster time to market

Delivering global processing solutions The Power of One Improved customer service Cost and credit control Reduced risk Agility Cross-selling opportunities

Roadmap – more to come! 25 Years Track Record 1996 2002 2000 1999 2003 Client Server GUI 1996 2002 2000 1999 2003 2004 1997 2005 Syndicated Lending Private Banking Euro Support Y2K IBAN Support Repo Processing Collaterals Register CLS Credit Risk management ISO15022 Profit Centre Accounting Overnight Index Swaps IAS 39 Cash Mgmt IAS 18, 32 Local Features Collateral Lending Management Limits KYC eServices Global Reporting Syndication Manager Messaging APIs iSeries Integration Toolkit MUI MQ Series J2EE 10 Digit Account Websphere Thin Client Web Services i5/OS 2006 Enhanced Front Office Enhanced Retail Revenue Analysis Full API support User Defined Forms SOAP Advanced Processing Component based solutions Business Routing

The MidasPlus effect Single biggest investment in Midas, ever Three years in the making Delivered on schedule 15 deliveries the day MidasPlus was launched First two customers in production before Dec

The global processing effect Banks will each select a single vendor solution All back offices in a bank will converge All Midas customers will upgrade over time Local features and local reporting are musts Misys is market leader and has first mover advantage

Why Misys and Why MidasPlus? Trust and expertise Integrated Global processing Best functionality Corporate strength Best local support Best technology 25 years experience

EquationPlus Andrew Derrer CEO Misys Retail Banking

Market leading foundation Brand new technology Market leading foundation More than just a product Elevates the entire market Wider opportunity Equation Plus

Market dynamics The largest market with the largest growth: Retail Banking to Bank Retailing Packages will be the norm Compliance deadlines Islamic Banking

Installed sites market share Installed base Source: IBS Market Report – International Retail Core Banking Software Market. Excludes North America

Addressing the market need Channel Teller Electronic B2B2C Merchandising Process Differentiation Transactional Complex Experience Product Efficiency Deposit/Loans Investment Wealth management Data Knowledge Transactional Customer-centric Real-time analytical

The challenge Delivering packaged software and related services to help financial institutions: Improve customer service Comply with regulatory requirements Reduce IT costs

EquationPlus Open technology Channels Process Business Process Product Branch Channels Internet Banking Call Centre IVR Customer Sales & Service B2B2C ATM POS Mobile & Kiosk Offline Channel platform Process Business Process Workflow Rules Data Propagation Management Product Reporting Consumer Banking Commercial Banking Treasury Analytics Customer Services Other Banking Services Data Misys Retail Banking Database Interfaces Product/ Transaction General Ledger Consolidated Information 3rd Party Information Existing New 3rd Party Open technology

The roadmap Efficiency + Merchandising + Knowledge + Differentiation Business Process Engine Q1 06 Platform Independent Back-Office 24 X 7 Q4 05 Platform Independent Front-Office Multi-channel Sales & marketing Q1 05 Complete retail system Today Efficiency + Merchandising + Knowledge + Differentiation Based on calendar year

The execution What convinces us that we can execute on the milestones? Experience - MidasPlus Partnerships Unique tools and utilities Talent

Founding principles for customers Bring every customer with us An attractive future for every Misys Retail Banking customer Easy, worthwhile upgrades Support commitment Technologies that meet the aspiration of banks, both large and small The right architecture Inclusive, not silo-based Right platforms

What the market thinks In migrating to Equation Plus, Misys has unveiled an expansive vision to combine the best elements of proven retail banking functionality, with the capabilities of leading edge architectures. Equation Plus, a complete new-generation, richly functional, highly-advanced retail banking system, will in our assessment, transform the fragmented retail banking market and competitive landscape. If Misys can deliver on this plan, it will mark a real renaissance for the Equation brand

Why we will be best in the market? Single customer view First truly open system Process automation leader CRM leader Functional leader Single point of accountability Company strength 20 years of experience

Misys Banking Division Summary Ivan Martin CEO Misys Banking Division

Growth opportunities SummitFT MidasPlus EquationPlus Market leading Treasury & Capital Markets solution World class functionality and technology Consistent growth up to and including last 3 years MidasPlus Most successful banking application ever Unmatched depth of corporate banking functionality Significant 3 year investment in new technology platform EquationPlus World class Retail functionality Clear leader in international markets First truly open front-to-back Retail solution

Customer satisfaction … today our customers tell us … “Very impressed by the improvement in Equation Support over the last six months.” “If the Customer Satisfaction Survey were to be repeated now, Misys would see a dramatic improvement in feedback from its customers.” “A most impressive display of solid technical expertise and great support. Best wishes from a satisfied customer.“

Market feedback Morgan Stanley/IBS Survey on behalf of Association “Our survey indicates that Misys’ customers are planning fewer system replacements than users of other systems The solutions rated more favourably than other vendors on flexibility and instrument coverage Misys’ product position versus the market remains strong ... with products perceived as offering above-average support for banks’ future needs” Morgan Stanley/IBS Survey on behalf of Association of Foreign Banks April 2004

Key messages 1. Banking is a large and growing software market 2. Misys is well positioned to benefit from this growth 3. Misys leads in functionality and technology 4. Misys is growing its market share in key markets 5. Retail is key growth sector going forward

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