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					Financial Services

Mark Pey
mark.pey@microsoft.com
Agenda

• Momentum in FSI
• Industry Overview
• How to Differentiate with Microsoft
• FSI Industry Solutions & Campaigns
• The Market Opportunities for Partners
• How Partners can Capitalize
• Competition
• Q&A
Thanks to our Partners, we have Momentum in FSI !


       • Our FSI business globally is up 17% YOY

       • FSI in India – up 29.5%

       • FSI in Latin America – up 30.5%

       • FSI in UK – up 81.5%

       • FSI in ANZ – up 82.8%
Where the growth is happening –
thanks to our partners


            Office System – up 10% YOY

         Windows SharePoint System – up 12%

 Windows Client – up 20% (represents 10% of FSI business)

             SQL Server 2005 – up 27%

                 MS CRM – up 52%

                  BizTalk – up 92%
WW FSI Industry Spend in $million USD
 140,000

 120,000                     Total FSI Opportunity

 100,000

  80,000

  60,000

  40,000

  20,000

      0
 FSI Industry is growing in all sectors

Financial Services Industry Software Spend ($B) (1)                      The Great News
                                                       CAGR 03-08         Spending is Up in all
                                                                          three Verticals
                                                       Capital Markets    Investment growth in
                                                            7.4%          customer-facing new
                                                                          projects
                                                         Insurance
                                                           4.7%           Huge migration
                                                                          opportunities: UNIX,
                                                          Banking         Mainframe, Notes,
                                                           6.4%           Sybase…..
                                                                          People-Ready is a perfect
                                                                          fit for Financial Services




Total IT market for Financial Services: $202 B (IDC)
Trends in FSI



  Industrialization – Cost reduction; standards; commodity

  IT Sales & Service – Consumer-centered experiences

  Pricing – Bundling to compete with monoline competition

  Mergers & acquisitions – Scale & product diversity
The evolving world…
The evolving world…




                      Software +
                       Services
    The “Experience Ladder”

                                         Experiences                2-5 $ / cup




                                             Services              1-2 $ / cup




                                               Goods
                                                                  5-25 cents / cup



                                      Raw Materials
                                                                  1-2 cents / cup

Tom Peters, Re-Imagine! Business Excellence in a Disruptive Age
BAI Retail Delivery Conference,
November 2004
Experiences Differentiate the Brand
                    Results Of Brand Reviews Of 16 Major
                        Financial Services Web Sites




May 2006, Best Practices “Make The Most Of Your Financial Services Brand On The Web”
Differentiation via Experiences

• Being explicit with Customer Experiences
  • Capabilities across all channels
  • Consistency across all channels
  • Improving employee experiences directly improves a customers’
    experience
• Build brand equity and customer loyalty by improving the
  customer experience
Media Interfaces


                   • Across all channels:
                      •   High Res Displays
                      •   ATM
                      •   Self Service
                      •   Web
                      •   Seller Device
Consistent Banking Customer Experience

       Mobile                   Online/Web                        Branch                   Call Center           ATM




                                                 Contact            Account
Move Money         ACH           Bill Pay                                               Campaigns      Leads    Alerts   …
                                                 History            Opening




                                                                     Target



                                                           Grow               Attract




                                                           Retain             Acquire



                                                                    Service
                                                                      Feeds




                            Lending                                                             Payment Processing
      Retail (Mortgage, etc.)               Commercial                              Credit/Debit/ACH             SWIFT
Simplest view of an FSI company
5 Microsoft Industry Priority Solutions
                                          1. Channel Renewal
                                          2. Advisor Platforms
                                          3. Risk & Compliance
                                          4. Insurance Value Chain
                                                5. Payments
5 Microsoft Industry Priority Solutions
                                          1. Channel Renewal
                                          2. Advisor Platforms
                                          3. Risk & Compliance
                                          4. Insurance Value Chain
                                                 5. Payments
   Industry Solutions Focus

                        Risk
   Channel                                  Insurance                                         Advisor                         Investment
                    Management                                     Payments                               Core Banking
   Renewal                                 Value Chain                                       Platforms                       Management
                   and Compliance

    Branch          Doc Manage
                                          Channel Sales           Payments                Advisor                            Investment
  (Teller and       and Records                                                                          Lending Systems
                                           and Service         Services Factory        Desktop/Portal                         Analytics
    Seller)          Retention

                                                                 Treasury and            Company/
  Customer            Audit and              Claims                                                                            Trade
                                                                     Cash                 Industry        Client Data File
  Knowledge           Controls             Processing                                                                        Compliance
                                                                 Management            Provided Serv.

                                                                   Payments
                                                                                         Advisory            Deposit         Investment
Loan Origination    Risk Analytics         Underwriting             Delivery
                                                                                        Management           Systems          Services
                                                                   Channels
                    Security and                                                                          Corporate and
    Mobile                                 Core Policy            Clearing and                             Wholesale         Trade Floor
                      Privacy
                                            Systems                Settlement                               Banking           in-a-box
                    Management
                     Business
                                            Product                                                        Statement of
  Call Center        Continuity
                                          Development                                                       Production
                    Management

                                           Reinsurance                                                       Credit
    Internet
                                                                                                           Decisioning


     ATMs
                                     Priority focus areas for FY’08 programmatic build out

                                     Priority focus areas for FY’08 programmatic build our and execution as per WWSMM
So what is a solution?
In MSFT speak

                                             Partners
MSFT product                                 LOB Apps, AML app, portfolio
SQL, BTS, Office, Server etc                 pricing, OMS, Core Policy etc




                            Frameworks, Accelerators,
                           Adapters, Guidance, Bundles
                            “Assets that reduce project
                                   cycle times”
Top Partner Opportunities
Top Partner Solution Areas
Microsoft Priority Solution: Channel Renewal
•   What is Branch Renewal                                Value
•   Technology Opportunity                                •   Richer customer experience
•   New Business Models                                   •   Sales effectiveness
•   Recognising the role of the branch                    •   Operational efficiency
•   From service to sales                                 •   Risk Mitigation
•   From cashiering to advice                             •   Service Efficiency
•   Risk mitigation                                       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
              “Updating branch platforms will make your        branches
              bank branches more efficient. However,
              this "blinkered" approach to branch         •    Argo Data Systems
              renewal does nothing to differentiate a     •    CIBC: CCF Pilot
              bank and make customers eager to do
              business with you” – Gartner August 2003    •    Accenture: Alnova front end
                                                          •    Commonwealth Bank – CommSee intiative
Old channels don’t die…
they just need to work better together

US Annual Transaction Volume (billions)
                                                        Online
50                                                      Banking
45                                                9.1
                                           7.3
40                               5.6
                      4.0                               Call
           2.4                                   12.5
35                                        11.3          Center
                      9.3       10.2
30         8.3
25
                     12.7       13.0      13.3   13.6   Branch
20         12.4
15
10
           13.5      13.8       14.0      14.2   14.3   ATM
  5
  0
         2001        2002      2003       2004   2005

Source: TowerGroup
Advisor’s Present vs. Desired Future State


       Present                   Desired Future State
Microsoft Priority Solution : Advisor Platform
What is opportunity?                  What is the value
•   Large market opportunity          •   Increased up-sell / cross sell
•   Integrated processes for sales    •   Improved customer experience
•   Risk Management and Compliance    •   Increased revenue
•   Collaborative work environments   •   Agent satisfaction and retention
•   Monitoring & management           Examples
•   Improved customer experience      • 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
Unified Communications in FSI
Microsoft Priority Solution : Risk Management

What is Risk Management?                       Value
•   Real time information                      • Reduced Cost
•   Ability to monitor, evaluate and report    • Customer experience
•   Capability to systematically reduce risk   • Basel II capital relief
•   Compliance                                 • Enables early detection and management
•   Data Management Strategy                     of potential exposure
                                               • Assists in compliance
                                               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
Microsoft Priority Solution : Insurance Value Chain

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

• What are Payment Systems?                           Value
• Mechanisms for transmission of instructions         • Enables the customer to utilize their money
  between parties concerning intent to pay              at the time and place of their choosing
• Mechanisms for settlement of payment instructions   • 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,
                                                        99.999%
                                                      • 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
What is the market opportunity for Partners?

• Software products that leverage our platform
• Services that install those products
• Channel renewal – differentiate the brand
• Risk Management – capitalize on mandatory spend
• Advisor Platform – take advantage of industry growth
• Competition
  – Integrated stacks from other platform companies
  – Non-MS ISV solutions
  – Offshore development
How can Partners capitalise on the opportunity?
• MS Partner Program alignment: PSP, marketing
• MS Sales alignment – bring account opportunities
• Specialization in specific IPSA’s
• Funding for lighthouse customer opportunities
Partner resources

Sales                    ACT, NSW, QLD, NT                WA, SA, TAS, VIC
Enterprise customer      Michael Girdis                   Chris Ridd
                         jmgirdis@microsoft.com           Chris.ridd@microsoft.com
SMS&P customer           Tony Ward                        Steve Iatropoulos
                         tonyward@microsoft.com           siatro@microsoft.com
Mobility opportunities   Rick Anderson ricka@microsoft.com


Marketing campaign       Enterprise managed partners
engagement
Marketing campaigns      Your Partner account manager
IPSA training            Your Partner account manager
TechNet online           Online, webcasts and forums on
resources                Exchange 2007
Partner commitments to get involved

• Learn about Microsoft FSI Solution Areas and how your
  software or services leverage our approach
• Enterprise managed partners
  – Sign off your PSP with your PAM
• Other partners should engage FSI marketing campaigns
  with Angela Larkin
Financial Services
Mark Pey
mark.pey@microsoft.com

				
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