Banking Industry Framework Industry solutions for a Smarter Bank

Banking Industry Framework Industry solutions for a Smarter Bank
Henrik Koch, Industry Solutions Executive, IBM Software Group

Agenda Introducing IBM Industry Framework for Banking
The market demand for Banking Industry Frameworks Definitions and key benefits Industry Framework and Industry Solutions for Banking Corebanking Modernisation Payments and Securities Customer care & Insight Integrated Risk Financial Markets Framework Closing remarks Where to get new collateral and information Who to contact Questions

Clients value IBM's ability to deliver integrated solutions
Client buying behaviors are shifting: Customers are looking for their business commitments to be met at market speed, or better Managing project costs into bite-sized bits is now a requirement Customers want to utilize the technology that best supports their strategy, independent of vendor Our Strategy: Combine industry assets and best practices into offerings focused on core and connected business problems Design for re-use Incubate an ecosystem of industry ISVs, pre-integrate Be prescriptive about a platform, emphasize best practices, better utilize our industry expertise Innovation for a Smarter Planet

The market has requested: More standardised
9/19/2019 Client buying behaviors are shifting towards an integrated solution which combines existing assets and new of the shelf-services Custom (Legacy) Environment Integrated Solutions ISV-dominated Environment Representative Industries Representative Industries Level of adoption Banking Healthcare Government Financial Markets Insurance Media & Entertainment Electronics Chemicals & Petroleum High-Tech Manufacturing Automotive Last year, we talked about how clients are moving from custom (legacy) environments and ISV-dominant environments as buying behaviors shift towards high-value, flexible, integrated environments. This adoption continues to accelerate. This is translating into market opportunity for IBM. Last year, we talked about how clients are moving from custom (legacy) environments and ISV-dominant environments as buying behaviors shift towards high-value, flexible, integrated environments. This adoption continues to accelerate. This is translating into market opportunity for IBM. The market has requested: More standardised solutions, easy to integrate and more service oriented Today Future 5

Increasing reuse and business agility along the way!
With a framework approach, organisations can progressively transform to a more simplified, strategic infrastructure 3 Achieve a simplified and agile strategic infrastructure 2 Build on the value of previous projects and reuse assets The framework supports progressive transformation by allowing you to simplify the infrastructure supporting your business, one project at a time. Framework projects are short in duration and deliver an ROI quickly, helping you gain momentum and build the business case for the next project. Over time you move to a more flexible and agile solutions infrastructure that is aligned with the needs of your business. Pick a framework project and start rationalizing to deliver a quick ROI 1 Increasing reuse and business agility along the way!

IBM Industry Frameworks - deliver the full power of IBM software to industry solutions

Industry Solutions Structure
B2B & Commerce Enterprise Content Management Enterprise Marketing Management Industry Order management Optimization & logistics Industry Frameworks & Industry Assets Commerce Essential Content Advanced Case Mgmt Content Analytics Information Lifecycle Marketing Process & Demand Generation Solutions Including: Energy and Utilities Retail Government/Defense Manufacturing Health Integration Media Commerce Physical Meets Digital Customer Care & Insight Workforce Optimization Financial Transaction Management Financial Operations IBM Payments Director IBM Electronic Payments Platform

IBM Banking Industry Framework
A Foundation for a Smarter Bank: Actionable Innovation Financial Risk Architecture Transformation Financial Crimes Process Agility Governance & Compliance Application Modernization Operational & IT risk Consumer Payments Information Framework projects are offered in four domains – each one helping you to address a set of common business issues your bank faces. Many framework projects have applicability across multiple domains – for example a project to centralize customer data can have big benefits for improved customer care and insight and also for integrated risk management. Software access and business model best practice: 4 investment agendas Data models Loose coupling of products around best practices Value proposition of BA in banking Functional challenge & capability pairing How the platform support the business imperatives Alignment Agility Start anywhere – value at every step The core banking transformation domain allows you to modernize and renovate the legacy applications that support core banking functions while aligning with the changing needs of the business The payments and securities domain helps you progressively transform your payments operations to become more flexible and efficient The integrated risk management domain supports taking a holistic approach to managing financial risk, financial crimes, operational and IT risk, and compliance The customer care and insight domain helps you build a foundation for creating a single view of the customer and enabling more effective and efficient sales and service Core Banking Transform IT Foundation Transformation: Transform your core banking platform, reduce operational cost and risk, and improve core banking process efficiency with projects addressing fundamental capabilities including a simplified IT infrastructure, platform scalability, enterprise-wide master data management for customer contract, and product data, and model driven development to build business service components Core Banking Process Agility: Improve profitability by expanding into new markets faster, bringing innovative products to market quickly, and differentiating pricing and terms for maximum customer satisfaction with flexible and efficient processes for account opening and management, product bundling, and dynamic relationship pricing Core Banking Application Modernization: Transition from existing core banking applications in a staged and modular way with near term payback and reduced risk and disruption; integrate best-of-breed application components, buy new packaged applications and integrate with enterprise systems, or build new SOA components for a customized, lower cost, and less risky approach Customer Care & Insight Customer Information Optimization: Create common data definitions, a common data warehouse, and integrate sources of disparate data to create an enterprise view of the customer Customer Insight Optimization: Use business analytics to optimize insight at the point of interaction and better understand customer needs and preferences Service Process Optimization: Leverage customer insight to optimize service processes including case management, dispute management, and event-based decision-making Sales Process Optimization: Leverage customer insight to optimize sales processes such as account opening, lending, cross/up-selling, and dynamic product bundling Marketing Process Optimization: Leverage customer insight for customer segmentation, targeted marketing communications and campaign management Compliance Process Optimization: Leverage customer insight for customer identification, and customer preference processes Multi-Channel Transformation: Transform your front office channels including branch, internet, call center, kiosk, ATM and mobile Payments & securities SEPA Compliance: Restructure payments operations to comply with the European SEPA Direct Debit and SEPA Credit Transfer schemes SWIFTNet Modernization: Modernize and upgrade your SWIFTNet operations for more efficient processing of high volume payments messages Payments Process Efficiency: Drive efficiency in payments processing with business process management Corporate Services: Integrate with your corporate customers’ treasury operations to reduce working capital requirements and improve supply chain management Retail Payments: Migrate to a modern, more secure platform for ATM, mobile, and card switch functionality Digital Payments Conversion: Migrate from paper-based to digital processing capabilities to reduce costs Integrated Risk Management Financial Risk Financial Crimes Governance & compliance Operational & IT Risk Management Commercial Payments Insight Compliance & Risk Interaction Payments Transaction Platform

Speed solution deployment with foundational and domain-specific software extensions and accelerators
Payments & Securities Reference Payments Services Interfaces Timer Services State Engine Payments Objects User Interface Flow Coordinator Core Banking Transformation IBM industry solutions WebSphere BI for FN EPP Assets WTX Industry Packs Banking Vocabulary Banking Message Model Banking Extensions for MDM Server Common Shared Services pureXMLTM Payments Bundles Corporate Payments Scenario Services Component Building Blocks Solution Templates Development Tools / Methodology Design Rules IBM Foundational IBM Banking Industry Framework WebSphere Banking Content Pack COGNOS Banking Performance Blueprints WebSphere Modeler with IFW Rational Software Architect with IFW Information FrameWork (IFW) & Banking Data Warehouse (BDW) Process and Data Models Integrated Risk Management SOA Banking Scenarios Integrated Risk Management Customer Care & Insight Solutions in each of the framework’s domains can be implemented faster and at lower cost and risk to the business because they take advantage of repeatable implementation patterns along with IBM software extensions and accelerators that have been built specifically for the banking industry. Some of these assets are foundational and will be used in projects from any one of the domains. For example, IBM IFW and BDW process and data models are commonly used to support solution deployment across different areas of the bank. Others – such as the enterprise payments platform assets or the COGNOS banking risk performance reporting templates – specifically support a domain like payments or risk. Deployed along with other IBM middleware, these offerings can significantly speed the deployment of solutions. COGNOS Banking Risk Performance – Credit Risk Banking Data Integration Accelerators Account Opening Scenario Customer Identification Solution COGNOS Risk Adjusted Profitability Blueprint IBM Service Management for IRM WebSphere Multichannel Bank Transformation Toolkit Common Business Language Services Accelerator Finance and Integrated Risk Management (FIRM) Entity Analytics and Global Name Recognition COGNOS Banking Performance Blueprints

Banking Industry Framework – Themes behind V2
Theme 1: A more unified framework Core Banking Transformation Customer Care and Insight Payments & Transaction Services Integrated Risk Management Theme 2: Shaped by industry software strategies and capabilities IT Systems and Operations BAO Theme 3: Incorporating key SW growth trends Store and Channels Merchandising and Product Management Theme 4: Acquisitions expand business value More unified through a common foundation Shaped by industry software strategies and capabilities Incorporating key SW growth trends Acquisitions extend business value Tuned for the LOB buyer Chief Marketing Officer (CMO) Theme 5: Tuned for LOB Buyer 11

Banking Industry Framework Benefits
A Foundation for a Smarter Bank: Actionable Innovation Mitigate Risk (De-Risk) Accelerate & Expedite a Successful Implementation using accellerators and competency centers Reduce cost Future Proofing Backed up by IBM’s long term commitment to industry standards and R&D 12

Banking Industry Framework - Core Banking Transformation Projects
Banking reference architecture Master data Management Process Integration Information Integration Infrastructure Management, Security & Scalability Core Banking Transformation Model Driven Development Business process transformation Business rules and logic management Solution Template Driven Transformation Performance Monitoring Simplification Componentization Integration Optimization Collaboration Security Resiliency Architecture Transformation Process Agility Legacy application modernization and renovation Develop next generation applications Replace legacy application with package solutions Data migration from legacy systems Application Modernization 14 14 14

Start transforming core banking capabilities with a framework Project
Core Banking Transformation Project Areas Business Partners Transform your core banking platform, reduce operational cost and risk, and improve core banking process efficiency with projects addressing fundamental capabilities including a simplified IT infrastructure, platform scalability, enterprise-wide master data management for customer contract, and product data, and model driven development to build business service components Architecture Transformation Content Validated on Framework Improve profitability by expanding into new markets faster, bringing innovative products to market quickly, and differentiating pricing and terms for maximum customer satisfaction with flexible and efficient processes for account opening and management, product bundling, and dynamic relationship pricing Process Agility Transition from existing core banking applications in a staged and modular way with near term payback and reduced risk and disruption; integrate best-of-breed application components, buy new packaged applications and integrate with enterprise systems, or build new SOA components for a customized, lower cost, and less risky approach Application Modernization

What are the key drivers for banks to modernize their core banking systems?
Banks are looking at core systems modernization in response to specific business, technology and regulatory drivers Revenue Growth Efficiency Improvement Product Innovation Customer Centricity Operating Cost Globalization Time To Market M&A Business Drivers Drivers for Core Systems Modernization Technology Drivers Regulatory Drivers Architectural Simplicity Enterprise Leverage Workforce Optimization Regulations Compliance EMEA Mix of renovate vs. buy Model-based approach to renovation Early POCs of addition MDM domains (product and account) by a few key institutions AP Package replacement LA Package replacement with SAP, Infosys, and Oracle; Temenos T24 in smaller banks; Case in point BBVA and Infosys in Paraguay US Struggling with credit portfolio; revenue stream from deposit fees, float, etc. is extremely important Looking for immediate cost reductions with considerations for long-term reductions Mass-marketers are focused on organic growth – how to keep ahead or up with competitors – Product Bundling & Dynamic Relationship pricing are the buzz words with early POCs Rewards & Loyalty systems around bundled products usage is high on the minds of several large FI MDM is becoming a forethought and a potential starting point beyond just the customer domain Modularity SOA Fading Skills SMEs Retiring Monitoring Auditing Reporting Asset Rationalization Shared Services

Solution Component Use: ‘Arrangement’ Service Model for Client Relationship and Offer Optimisation
Shared Service Center Business Advisors Mobile Banking Internet Group Business Dev IBM Industry Process & Service Models Extract & Analyse 4 MDM Server for PIM IBM ILog Bus Rules Engine InfoSphere MDM Server for PIM 3 2 3 CRM Systems Use/Consolidate Product Factory Role BIS System Role BIS System & Product Factory Role 1 InfoSphere MDM Server InfoSphere MDM Server

IBM Master Data Management Product Portfolio
Collaborative Authoring Create Maintain Update Govern Deliver InfoSphere MDM Server InfoSphere MDM Server for PIM Data Stewardship Collaborative Authoring Business Services Business Process workflow Pre-built Customizable MDM Domains IBM MDM’s portfolio covers end to end MDM across master data’s lifecycle. And it addresses use cases across all industries. MDM Server (includes MIH, a chargeable component) and MDM Server for PIM make up thje IBM MDM portfolio and are helping leading organization including retailers, manufacturers and Fin Serv companies accomplish a very wide set of business needs across use cases. NPI Catalog Mgt Multi-Commerce MDM Custom-Built Domains Party Account Product Custom Integration Product Location Supplier Others Content Data Analytics

Nordic Bank Financial Services
Challenge Growth through mergers and acquisitions had created a bank with multiple lines of business and countries that were operating with different processes and systems. Needed to streamline business Benefits A cross-enterprise transformation program that would ultimately streamline all business processes and integrate system An IT platform totally adaptive to changing business needs, embracing SOA strategy and master data management A cross-line of business customer view to continue to grow business and improve customer satisfaction A MDM solution to enable cross-selling and up-selling, M&A integration, compliance (Basel II, MiFID) and operational efficiency Solution IBM® InfoSphere MDM Server IBM InfoSphere QualityStage IBM Rational Application Developer IBM InfoSphere MDM Server for PIM IBM WebSphere Application Server SWG Lab Services for implementation 19 APPROVED FOR EXTERNAL USE 19

Banking Industry Framework – Customer Care and Insight Projects
Single View of Customer Customer Data Warehouse Information Customer Analytics Business Performance Analytics Insight Customer Care and Insight Core Banking Transformation Integration Optimization Analytics Collaboration Security Resiliency Multi-Channel Transformation Interactive Marketing Sales and Advisory Transformation Onboarding a nd Origination Optimization Customer Care and Servicing Interaction Integrated Risk Management Payments and Transaction Services

Get started with a Customer Care and Insight project
CC&I capabilities are the foundation for all front-office projects Customer Care and Insight Project Areas Understand customer data across all systems and build common customer data definitions Integrate operational customer data to achieve a enterprise single customer view Consolidate operational and historical customer data into a common data warehouse Information Business Partners Content Validated on Framework Extract valuable customer insight such as segmentation, value, needs, behavior, etc. from the integrated customer data to help business retain and grow its customer base Provide the business a real-time view of performance by channel, product, customer segments, geographies, campaign, etc. Insight Optimize marketing, sales and customer service processes; include single view of customer and deeper insight at the point of interaction across all channels Transform multiple channels for improved customer experience, consistency across different channels, more engaging customer dialogs, and ultimately better business results Interaction

Interactive Marketing bringing science to the art of marketing
REAL-TIME MARKETING software: Presents personalized messages in real-time during inbound interactions Personalization based on: Existing customer data and new information gained during the interaction Or, behavioral targeting of anonymous visitors Designed for easy deployment and management (“so easy a marketer can do it”) Meets the most rigorous performance requirements. Up to: 1,000s of transactions per second Half-second average response time 22

Delivering personalized offers across channels in real time
Interactive Marketing turns inbound interactions into profitable communications Business Need Outbound campaigns were ineffective – not taking advantage of customer initiated interactions Needed to create a single, cross-channel, relationship with each customer Disparate teams managed customer dialogs Needed to reduce marketing costs Real Results Relevant, real-time campaigns drive higher response rates 85M targeted offers served each day across 5 channels – direct mail, , web, call center, and branches €20M increase in earnings expected Lowered direct marketing cost 35% Faster campaign cycle times: from 26 weeks per campaign to just 4 weeks Last Updated: (r1) Unica Customer Overview: One of the largest financial services firms in Europe. Owns a number of Unica products, including: Campaign, Interact, Marketing Operations, PredictiveInsight, Optimize Challenges: Wanted to reduce marketing costs through optimization of marketing functions. Dutch bank ING’s marketing campaigns were losing effectiveness because many of them weren’t relevant to the bank’s customers. The bank’s organizational structure, processes, applications, and heavy reliance on direct mail were not meeting the needs of a multichannel bank with a strong Internet focus. Results: By implementing a centralized campaign management program that creates personalized offers in real time and can deliver them through multiple channels, ING increased average campaign response rates and expects to reduce its direct marketing costs by 35% per year. €20M increase in earnings expected. Faster campaign cycle times- From 26 weeks per campaign to 4 weeks. Resources: Material from 2009 23

Mobile Web Need Solutions
Portal Mobile Webkit Themes Available today for iPhone Coming soon for Android, Blackberry, iPad ...extend a Web experience to mobile devices for specific mobile browsers Web Experience Factory - Portal Mobile Webkit Themes - WAS 8.0 Dojo - Hybrid ..rapidly develop & deploy web & hybrid mobile applications that have a native smart phone, look and feel ..write once, run on many devices – tablets, kiosks, web, PDA and more ...mobile Web applications or content for virtually any mobile device browser Mobile Portal Accelerator 8,400 Devices

Supporting smartphone and multi-channel application capabilities
WebSphere Experience Factory Desktop Browsers ...and generate applications for multiple client devices Use one common set of tools, techniques, application code (models)... Smartphones Sharepoint (CMIS / REST) Tablets Legacy (WS / REST) ...deploy to multipleplatforms... WebSphere Application Server WebSphere Portal CRM & SQL

IBM has a broad portfolio of Mobile Enablement offerings
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Operational and IT risk
Banking Industry Framework - Integrated Risk Management Projects Get Your Risk Data in Order Risk Insight and Control Real Time Risk Insight and Control Risk Optimization Risk Modeling and Scenario Analysis Financial Risk Customer Care and Insight Core Banking Transformation Customer Screening and watch-list filtering Transaction monitoring for Suspicious Activity Case Management, Transaction blocking & Suspicious Activity Reporting Integration Optimization Analytics Collaboration Security Resiliency Financial Crimes Operational Risk Platform Comprehensive Security Control, Enforcement, Management Trusted Identity Management Configuration/Incident/Problem/Change/Release Management Continuous, comprehensive fault monitoring Data Protection Application Integrity and Security Integrated Risk Management Payments and Transaction Services Operational and IT risk Data in Order Information Sources, Discovery, Integration & Consolidation, Trusted View Risk Calculators (Sophisticated risk models – internal or 3rd parties, simulations, etc.) Analysis & Reporting (monitoring, decision support, performance analysis) Analytics Container (Connectivity to advanced analytics - High-performance real-time processing, in memory processing) Links to business processes (- Loan origination/underwriting, etc.) Optimized End-to-end solution (metadata, governance) Compliance Information Lifecycle Management Corporate Governance and Internal Control Sales and Market Conduct Compliance Regulatory Compliance Prudential Compliance Collaboration for Legal and Compliance Governance and Compliance 27

Start small and grow with an Integrated Risk Management project
Integrated Risk Management Project Areas Business Partners Connect market, credit counter-party and liquidity risk to business and finance information systems Enable risk reporting across and at different levels of the enterprise to enable better risk decision-making Financial Risk Content Validated on Framework Integrate disparate fraud platforms to move towards real-time and proactive monitoring and improve investigations Leverage tools to identify fraudulent activity before it happens Automate fraud prevention to reduce costs Financial Crimes Enable monitoring of internal processes, people and systems for improve operational risk management Implement early warning systems, IT and crises management processes and business recovery planning Operational & IT Risk Open Pages, Algorithmics, SPSS, Cognos, IFW, DB2 Improve your ability to respond to regulatory scrutiny Accurately report risk exposure Standardize and automate compliance processes Get the flexibility to respond dynamically to changing regulatory requirements Governance & Compliance

Putting IBM’s Proposed Architecture into the Context of Our Recommended Target Operating Model
Financial Crimes Integrated Financial Crimes Center of Excellence Implements top down policy based on organization risk tolerance Consolidates accountability and direction of resources Prioritizes and manages initiatives Collaborates with other stakeholders to drive a safer business Generates improved business intelligence for executives, benefiting tactical functions and enables strategic thinking Consolidated and integrated operational organization (where feasible) addresses customer-based alerts and enhances efficiency Consolidates alerts across channels Conducts cross-LOB analytics Automates, standardizes, and documents analysis and investigation Flexible model leverages the strengths of leading technologies by adopting best of breed systems and processes 29

Solution Overview Financial Crimes Sanctions Screening and Transactions Filtering: A regulatory requirement to stop activity in real time financial transactions (wire activity) or to block opening an account, the sanctions list details the blocked entities and is updated daily. Know Your Customer: A regulatory requirement for better customer identification and knowledge at the account opening phase. Helps preventing possible threats of AML / Fraud. Enhanced Due Diligence for High-Risk Customers: For customers deemed to pose a high-risk, the financial institute “should consider” obtaining, both at account opening and throughout the relationship. Suspicious Behavior Monitoring (AML): A regulatory requirement to detect suspicious AML transaction patterns and report it to the central bank. Case Management: Investigation tools and case management to support multiple levels of review, investigation, approvals, filing, reporting of above cases. FACTA: A US regulatory requirement 30

Major North American Bank Financial Services
Challenge Benefits Create robust, streamlined and scaleable infrastructure that provides an enterprise client view, impacts the quality of the enterprise data and enables the assessment of operational and credit risk Reduce IT costs Build a consolidated reporting infrastructure supported by a 360-degree view of customer BASEL II and management reporting requirements satisfied within tight management timelines, while improving data quality using an enterprise data infrastructure Solution Used IBM Information FrameWork (IFW), Banking Data Warehouse (BDW) and InfoSphere™ MDM Server as focal points for information consolidation and governance of data across thirty systems. The data models enabled development standard- ization and identified project reuse opportunities. Used InfoSphere DataStage to form a common ETL hub for MDM Server and BDW to create a single view of customers across the enterprise and accurate data for satisfying Basel II, and management reporting requirements. 31 31

Banking Framework for Payments and Transaction Services Projects
Consumer Payments Check Processing Payments online Mobile Payments Low Value high volume (i.e., cards) Customer Care and Insight Core Banking Transformation High Value low volume Cross border Corporate services / Payment factory / Cash Management Commercial Payments CARD / Durbin / Regulation E (US based), Basel III, PSD, SEPA Payment Transparency, Liquidity,, AML, CTF, Embargo Check, Adaptive Risk / Regulation capable Payments & Transaction Services Integrated Risk Management Compliance and Risk Channel Integration Banking data Warehouse Financial Network Gateways Managed File Transfers Bulk de-bulk, Transformation and Entry / Repair Payments transaction Platform

Payments and transaction services projects – address business needs across the enterprise
project areas Business Partners Consumer Payments Process, manage, measure and monitor high volume low value payments from individual consumers including check / check images, online payments, mobile or smart phone payments; digital signatures for online applications, and payments from credit / debit cards, ATMs, etc. Content Validated on Framework Commercial Payments Process payments, serve corporate customers and manage internal treasury services; manage payments bank to bank, bank to clearing house or central bank, or country to country Restructure payments operations to comply with regulations and schemes: e.g. SEPA Direct Debit, SEPA Credit Transfer, card regulations, payments reporting and transparency, liquidity, AML, CTF, and embargo check. Adapts to address new risks and regulations Compliance and Risk Here is how IBM defines each area of payments and transaction services segment. <please read through each area with the examples listed> These projects use industry leading applications from business partners to round out the full solutions that IBM and our partners offer the industry. Each of these listed partners have validated their offerings with the IBM technology offerings. Integrated, horizontal, and reusable payments and treasury capabilities relevant across all payment products within a bank. Core payment processing functions and integrated toolset. Transaction warehouse and analytics for all LOBs Payments Transaction Platform 33 33

Financial Transaction Manager in Payments Transaction Platform
3434 Financial Transaction Manager in Payments Transaction Platform IBM FTM in payments transaction platform projects: Provides the common integration capabilities to be reused for managing financial transactions Built on the industry standard of ISO that aids the integration with new and existing back-office processing Creates a commonly defined runtime environment which standardized integration to regulatory, checking, AML, reporting, and other needs Operational database holds status and integrates with enterprise data management solutions for archival Sample processes on which to build include SWIFTNet Funds, corporate payments and others – allowing a standard definition for orchestration "We've chosen ... the adoption of SOA into the core of our business. It’s given us a clear advantage in the kinds of attributes ... to excel –speed, flexibility and efficiency.“ -- Wells Fargo The ultimate goal for projects is to create a payments transaction platform that provides for common integration capabilities focused on re-using these functions as projects evolve. Also, we introduce the industry standard ISO as the basis for a common representation of data and a common method for calling into the back-office systems. This is a commonly defined runtime environment with standardized integration to regulatory, checking, AML, reporting and other enterprise needs where the payments platform is the source of the data. Operationally, IBM FTM holds data for status and the common representation of the data which cooperates with enterprise data management solutions and archival. In addition, IBM FTM offers sample processes for SWIFTNet Funds, corporate payments and others – allowing for a standard definition for orchestration of the enterprise process. There is business benefit in re-use and common services reducing duplication which is part of adopting SOA. For example, Wells Fargo summarized the value in this quote: "We've chosen ... the adoption of SOA into the core of our business. It’s given us a clear advantage in the kinds of attributes ... to excel –speed, flexibility and efficiency.“ 34 34

Financial Transaction Manager -- direction
9/19/2019 Financial Transaction Manager -- direction Financial Business Solutions Risk & Regulation Payment Schemes &Types Origination Systems Cash Management NOSTRO Trade Finance Global Disbursement Transaction Analytics Invoice Presentment Mobile Solutions ... Anti-Money Laundering OFAC Liquidity Management SWIFT CHIPS TARGET2 SEPA Credit Transfer SEPA Direct Debit ACH: NACHA Checks Credit & Debit Cards Contactless E-Commerce ... Internal Banking Systems Corporate Payment Systems Exception & Investigations External Payment Networks Consumer Channels Gateway Adapters Financial Transactions Integration Financial Transaction Manager Gateway Services Message Functions: Message Translation, : Channel Management Monitoring & Logging Lifecycle Management Message mapping & Validation Transaction Warehouse Reporting & Dashboards Network Adapters IBM 3rd Party Legend Core Services Object Model Interface Flow Coordinator State Engine Data Model Printing & Validation Configuration System Adapters Customer Profile Management, Security, Auditing IBM Confidential 35 35

Project Use Case – DnB NOR
Client Challenges The bank needed a payments message hub that could send and receive SEPA Credit Transfers from the European Bankers Association Solution Implemented a payments mediation, monitoring and management infrastructure across the DnB NOR SEPA payments business The solution has a base common product with industry specific SEPA processing engine Business Challenge DnB NOR needed to: Design and build a message hub that can send and receive SEPA Credit Transfers from the European Bankers Association Build functionality for bulking / de-bulking of SEPA Credit Transfers Integrate the message hub with existing payment solutions. (ProSwitch, ILM and WBI-FN) Provide orchestration for international SWIFT payments with AML, market and liquidity systems Solution Implemented payments mediation, monitoring and management across the DnBNOR SEPA payments business Components of the solution included: IBM enterprise payments platform assets ILOG BRMS for intelligent decisioning and validation IBM Information FrameWork models WebSphere BI for FN WebSphere Message Broker WebSphere TX DB2 Tivoli CAM for SOA Rational Software Architect Benefits Common data & service definitions allow for phased, component-based development; enables re-use and consistency DnB NOR back-end payments applications are shielded from changes at the payments network and gateway product levels Enhanced the level of monitoring with thorough visibility of the deployed business processes Smarter Business Outcomes Ability to accommodate payments network / gateway changes without costly changes to back-end applications Enhanced monitoring of payments processes Transparent payments rules that business users can comprehend; rules can be changed in hours or days vs. weeks or months

How we can help: Sterling Integrator in banking
Proprietary & Confidential September 19, 2019 How we can help: Sterling Integrator in banking Content-based routing Translation Mailbox Bulking / de-bulking Business rules processing Validation Websphere MQ SAP Connect:Direct Back office File system SWIFT NACHA Domestic Standards libraries Visibility EBA STEP2 TARGET2 TSU 37 © 2005 Sterling Commerce 37

Sterling Integrator – Features
Proprietary & Confidential Sterling Integrator – Features September 19, 2019 Content-based routing Translation Mailbox Bulking / de-bulking Business rules processing Validation Websphere MQ SAP Connect:Direct RTGS Back office File system SWIFT NACHA Domestic Standards libraries Visibility EBA STEP2 TARGET2 TSU Community Management Registration and activation Change management Self service Support Visibility Management Monitoring and management Notifications and alerts Audit and reporting Secure Exchange Perimeter security Authentication & encryption Mail boxing Process Automation Process modelling File and message routing Automated exception handling Translation and Integration Adapters Mapping Financial services standards Translation services 38 September 19, 2019 © 2005 Sterling Commerce 38

Banking Framework for Payments and Securities – Nordic Reference examples
Customer name Value proposition Solution content Platform Dansk Bank Solution for SWIFT and Peyments Gateway WBI FN DB2, WAS, MQSeries Websphere Message broker SW Services and PM Z/OS DnB NOR Solution for SEPA Credit Transfer and Corporate B2B Payments Liquidity Manager EPP using DB2, WAS, MQSeries Websphere Message broker, SW Services and PM SWIFT Gateway Merva Using WBI FN at EDB BP EDB BP WBI FN VPS Solution for Funds and new SWTFT formats for securities Websphere Message broker, SW Services Intel VP Websphere Message Broker, Swedbank UNIX

WebSphere BI for FN – Structure
Business Application Financial Transaction Manager Data model, message model, state machine, configuration and administrative interface, … Message Management Message Entry and Repair GUI, Printing, Routing, … FIN Financial Message Transfer Messaging Services for SWIFTNet InterAct and FileAct Timer Service DB2, WebSphere MQ, WebSphere Application Server Centralized Operating Event handling Accounting Message Warehouse Configuration Monitoring Message Validation New Security / Access Control Auditing SAG AddOn WebSphere BI for FN - Base Relationship Management Application What is new? RMA as part of Base SN 7 enhancements in MSIF MER enhancements Support for SWIFTNet InterAct (DIAS and EIAS): will not be supported for WMB 7 or SN 7 on tape just for migration purposes WebSphere BI for FN V3.1.1 WebSphere Message Broker SWIFTAlliance Gateway (SAG)

IBM Financial Markets Framework
Market Data Solution * Algorithmic Trading * Portfolio Optimization and Trade Analytics Next Generation Trading Infrastructure * Market Surveillance and Trade Monitoring Front Office Front Office Trade Process Transformation Back Office Back Office Back Office Post Trade Infrastructure Buy Side Sell Side Market Infrastructure Financial Risk Management Put Details in speaker notes Risk Risk Settlement Risk Management Risk Risk * Project includes WebSphere Front Office

Market Data Distribution WebSphere MQ Low Latency Messaging
Exchanges, ATS, ECN Data Feed (IDC) Simulated Venue for Order execution Data Feed (NASDAQ) Data Feeds (NYSE) Gateway Market Data Distribution Monitor Desktop Gateway Front Office v3.0 Feed Handlers Market Data Distribution Platform WebSphere MQ Low Latency Messaging Streams IDS Market Book and Market History Routing Engine Processing Rules FIX Engine Order Generation Analytics eXtreme Scale Reference data Market Data Analytics Analysis, Pricing and Order Generation Execution Strategy and Order Routing

IBM Offerings for Financial Markets
Low Latency and High Performance Computing Ultra-low Latency Transport Wire speed Transformation Maximum security Low Latency Market Data Platform MQ Low Latency Messaging DataPower Appliances WebSphere Front Office for Financial Markets Stream Processing In-memory Database Business Activity Monitoring Solid DB Infosphere Streams Cognos Now! 44

Banking Industry Frameworks and Industry Solutions
IBM Industry Solutions: Smarter Commerce: Banking Industry Frameworks:

Questions?

IBM Software Group, Nordic 2800 Lyngby Mobile: + 45 28803658
4848 Henrik Koch IBM Software Group, Nordic 2800 Lyngby Mobile: 48

Primary target buyers and usage scenarios for CC&I
Head of Retail Banking Head of Retail Banking (or Chief Retail Banking Officer, EVP of Consumer Banking, Head of Retail and Small Business Banking) Lead and direct retail banking including consumer current accounts (checking), cards (credit and debit), savings, consumer lending – installment (i.e., auto loans, student loans, etc.), home loans (mortgages) and home equity loans as well as various investment products such as annuities, mutual funds, insurance etc. Activities are coordinated over all channels including branches, call centers, ATMs, web and mobile. Head of Commercial Banking (or Chief of Commercial Banking, EVP of Wholesale Banking, Lending and Treasury Mgmt) Responsible for managing relationships and servicing large corporate clients, mid-sized companies, real estate developers and investors, international trade finance businesses, institutional customers (such as pension funds and government entities/agencies), and services offered to other banks or other financial institutions. Services include lending, treasury management, correspondent services, dealer commercial services, foreign exchange, government banking, mutual funds, asset-based lending, financing and leasing, commercial real estate, corporate and institutional trust services, and investment banking. Head of Private Banking, Head of Wealth Management Oversee all aspects of banking activities targeted at high net-worth customer segments to provide investment management, retail banking, estate planning, legal and trust resources and tax advise all to build deposits, fee income, and overall asset growth through cross sales of bank products and services, retention, relationship management and community involvement. Work closely with all other business line leaders to facilitate the development of new relationships as well as provide bank wide financial solutions to higher net worth clients by acting as a portal across the bank bringing together the right resources, providing convenience to clients, and providing bank wide solutions to clients. Head of Geographical Subsidiary (or EVP of Banking in a geography, President for a Region, VP of a Branch or Branches) Responsible for all facets of performance of regional and branch offices for a designated geographic area. Develops policies, objectives, initiatives for region and is responsible for making sure the region meets its goals and objectives across all products and services of the organization. Chief Marketing Officer (or SVP of Marketing, Chief Marketing and Client Experience Officer, Head of Marketing) Design, operate and execute marketing plans aligned with business priorities to achieve the bank’s goals. Establish long-term marketing objectives, branding and strategies to ensure continued brand growth and differentiation, while collaborating directly with business lines and the executive management team. Head of Commercial Banking Head of Private Banking or Wealth Mgmt Head of Geographical Subsidiary Chief Marketing Officer

IBM Financial Crimes Reference Architecture
Risk Assessment Policy Management Procedures Training Control Anti-Money Laundering and Terrorist Finance Customer Authentication Risk-Based KYC, CDD, and EDD Fraud Profiling, Prevention and Detection AML Transaction Monitoring Large Cash Reporting Market Surveillance Suitability Watch Lists (Sanctions) Lifecycle Customer Scoring Initial Customer Scoring High Risk Monitoring EDD Processes Merchant / Device Identity / Online Products (card, deposit, mortgage, etc) Internal Investment Claims Application Device Profiling Identity Management Channels (ATM, POS, Branch, Online, Mobile, etc) Federation Compromise Surveillance Authentication Security Policy Management Cross Enterprise Analytics Integrated Alert & Case Management Platform Internal / External Lists Internal / External Scores Events Remediat-ion / Recovery Process Transaction Channels Alert Rollup Prioritization Corporate Security / Audit Process Events Cross Channel/ Product Analytics Workflow Customers and Accounts Product System Process Data Integration & Framework Technologies Events Mass Compro-mise Link Analysis / Data Visualization Account Applications Compliance Processes Credit/Risk Systems Entity Resolution Metrics, Reporting, Dashboards Operational Risk Systems Op. Risk Process Events Auto-Disposition Audit Branch / Field Referrals 51

Banking Industry Framework Industry solutions for a Smarter Bank

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Banking Industry Framework Industry solutions for a Smarter Bank

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