A global network for financial information – using ... · FY20 ID8 Investor Presentation June 2020 FINAL forlodgement 010620 Author: Clare Rhodes Created Date: 6/1/2020 3:18:25

Know Your Transaction

A global network for financial information –using existing systems

Investor presentationJune 2020 | Identitii Limited | ASX:ID8

ASX:ID8 | Investor presentation | June 2020

The information needed to process and report financial transactions is often incomplete,inaccurate or even missing

What problem do we solve?


How do we solve it?

Create a global network for financial information – using existing systems


96% increase1 in suspicious matter reports

What the landscape looks like

US $4.5T laundered2

every year

90% of the world’s data7

was created in the last two years 80% of enterprise data7

is unstructured

US $36B in global regulatory fines6

AML penalties doubled3 to $11.8B 7% increase4 in FinCrime

compliance costs (US $180.9B)

80% of IT budget5 spent maintaining legacy tech

Increasing: Crime

CostsFines

Data


A single institution can have hundreds of critical internal systems, all built in silos

and linked together, making it impossible to find a single source of truth

What causes the problem?

Payment systems

Datasystems

Customersystems

Backupsystems

Reporting systems

Cloud systems

Storage systems

Trading systems

SWIFT

Financial institution technology systems


Why not just fix it?

Huge cost & huge risk

Potential data leaks

Locked-out customers

Multi-year programs

Downtime means lost opportunities

Outages at Mizuho Bank in 2002 and 2012 were partly caused by the complexity of IT systems created by multiple M&A

activities8. The 2012 outage delayed US $10B worth of transactions, including the salaries of 620,000 people9. To fix

the problem, Mizuho decided to upgrade core systems. A project that cost US $3.57B over five years8

CBA’s10 core system replacement was expected to cost $580M over four years. The final cost was $1.3B over five

years

In 2015, Deutsche Bank11 announced a strategy to reduce its 45 operating systems to 4. In 2018, it still had 32

UK bank TSB12 suffered an investigation by the Financial Conduct Authority, when a catastrophic glitch in its effort to migrate from a legacy system at Lloyds, interrupted service

and compromised customer data


If information can’t be identified internally or needs to be collected from

customers, it is pushed into highly manual processes such as email, fax or excel

What it looks like today

The risk of manual information collection• Negative customer experience

•Multiple requests for the same information

• Error prone

• Increased operational cost

• Time intensive, causing settlement delays

• High opportunity costs

• Unauditable

• Unsecure

Manual collection

Customer

Institution

Customer Other Bank Regulator


Enhance existing systems, connecting the right people, to the right information,

quickly and easily

Introducing the Overlay+ platform

Key benefits for financial institutions• Enhanced customer experience

• No costly legacy technology upgrades

• Simplified regulatory reporting

• Greater trust between counterparties

• Auditable record of transaction information

• Improved data security and auditability

• Increased automation

• Reduced manual processes

Customer

Institution

Customer Other Bank Regulator


Where is Overlay+ being applied?

ISO 20022Maintain data

integrity regardless of system or

message format

Regulatory Reporting

Automate IFTI and TTR collection and

reporting

FX SettlementImprove FX

profitability and reduce settlement

risk

Client OutreachManage client onboarding

documents via Symphony chatbot

Counterparty Assurance

Enhance KYT and KYC processes for

counterparties

Overlay+ CORE PLATFORM


What's our long-term vision?

Connect hundreds of Overlay+ platforms to create a global network for financial information, backed by the Corda Enterprise blockchain network*

*Supported by R3


How do we generate revenue?TRANSACTION FEESFees per transaction$0.10 - $5.00 each

Recurring

Uncapped

PROFESSIONAL SERVICESOne-off charges

OVERLAY+ PLATFORM LICENCE$150k per year(core platform licence on which modules are deployed)

PER MODULE LICENCE$300k per year Up to ten per customer(ISO 20022, FX Settlement, Regulatory Reporting, etc)

Delivery


5 Customers 20 Customers

$7.2M

The opportunity – how big is big?

400 Customers

$72M

Not to scale. Example of potential opportunity only

$3M$1.5M$1.8M

Uncapped transaction fee

Module licence

Base licence


DirectSales strategy targeting

financial institutions and regulators

IndirectExpand reach by enabling strategic

partners to sell for us

How do we acquire customers?


The split – direct v. indirect sales

Partner revenue

Direct revenue

5 Customers 20 Customers 400 Customers

Not to scale. Example of potential opportunity only


The strategy – how do we get there?

Horizon One

Horizon Two

Horizon Three

Five new customers & strategic investment

20 new customers & scaled selling

400 new customers

• Sign five new customers to single module licences

• Shift Company to new organisational model • Secure strategic investment of $10-20m

• Sell new modules to existing customers, connecting them together

• Sign 20 new customers• Create a partner ecosystem for scaled selling • Transform into a cashflow positive business

• Network existing customers together across multiple use cases within the same institution

• Grow Identitii into a market leading distributed ledger technology (DLT) business with sustainable growth

How

Goa

l

How

How

Goa

l

Goa

l


Horizon one strategy generates direct customer demand and enables partnership program

Marketing strategy

Improve brand awarenessLeverage owned channels to remove barriers to sales. Website, SEO, PR/AR, Social, Content, Influencers

Generate direct opportunitiesDemand and lead generation to increase financial institution customers. ABM, InMails, Email marketing, webinars, case studies, thought leadership

Enable partner sales channelEquip partners with the tools to co-sell. Execute a program of joint GTM, co-branded activities, content, collateral and demos.


The competitive landscape differs per use case

Key competitors

ISO 20022

Maintain data integrity regardless of system or

message format

AUSTRAC Reporting

Automate reporting of IFTIs and TTRs for AUSTRAC

reporting

FX Settlement

Improve the profitability of existing FX products and

reduce settlement risk

Client Outreach

Manage client onboarding documents via Symphony

chatbot


Enhance KYT and KYC processes for counterparties

Internal Build

Volante

SWIFT

Internal Build

BAE NetReveal

Bottomline

Internal Build

FX multibank platforms

Internal Build

Fenergo

Pega

Internal Build

Refinitiv

Finastra IHS Markit


• The crisis caused by Covid-19 will mean banks have less time to implement critical projects like remedies to AUSTRAC reporting issues

• The pressure from regulators and consumers to have more information about every transaction will only continue to increase, regardless of the global financial situation

• Identitii’s platform enables faster changes at a much lower cost than other alternatives, meaning the Company is well-placed to help financial institutions, regulators and corporations respond, as they recover from this crisis

Impact of Covid-19


Ben BuckinghamStrategy & Partnerships

.

Margarita ClaringboldChief Financial Officer

James Andrew-SmithTechnology & Delivery

Clare RhodesMarketing & Communications

Nick ArmstrongCo-founder & Non-executive Director

Nick is an experienced technology entrepreneur and company director. He

previously founded and ran COzero (before a partial

exit to a strategic investor), a company which provides

energy management software linking IoT and

predictive analytics to help large power users save

money

Elissa HansenCompany Secretary

Martin BoticaSales

Board Management

John RaymentChief Executive Officer & Managing Director

John has supported many early-stage ventures

through sharp periods of growth. He has held board

and executive roles at Travelex across the globe and has proven success in helping businesses to scale

in line with rapidly expanding customer

demand.

Steve JamesIndependent Non-executive Chairman

Steve has held senior leadership and Board positions at public and private organisations including the CBA,

CommSec and Seer Asset Management. He

developed the first online stockbroking business for

financial planners, later sold to CommSec.

Leadership team


Creating a global network for financial information, using existing systems

Covid-19 crisis solidifies Identitii’s value proposition

Horizon 1, 2, 3 plan focused on closing

deals and new customers

Market leading technology live in a Tier One global bank, with

patent pending

Strong pipeline of late stage deals and

ongoing strategic investment

conversations

Partnership strategy is delivering late stage

deals

Land and expand strategy with HSBC resulted in second

licence sale

242% y-o-y revenue growth FY18-FY19

Experienced leadership with strong enterprise

sales and delivery expertise

Why invest


Capital structure

Share register composition

Top 20 72%

Mr Nicholas Armstrong (Co-founder) 11.5%

KTM Ventures 7.5%

Regal Funds Management Pty Ltd 7.2%

Gleneagle Securities Pty Ltd 6.1%

Holywell Ford Pty Ltd 5.7%

*At 28 May 2020

Capital structure

ASX ID8

Date listed 17 October 2018

Share price* A$0.105

Ordinary share on issue* 81.8m

Market capitalisation (undiluted)1 A$7.5m

Unlisted options 12.8m

Pro forma cash at 31 March 2020 A$3.1m


Improving the integrity of data as it moves around the global financial system

About Identitii

• Founded in 2014

• Listed on the ASX in October 2018 (ASX:ID8)

• Headquartered in Sydney

• Working with some of the world’s largest financial institutions and regulators

Helping some of the world’s largest institutions do more with existing technology systems

ISO 20022

Maintain data integrity regardless of system or

message format

AUSTRAC Reporting

Automate reporting of IFTIs and TTRs for

AUSTRAC reporting

Client Outreach

Manage client onboarding documents via Symphony chatbot


Enhance KYT and KYC processes for counterparties

FX Settlement

Improve the profitability of existing

FX products and reduce settlement risk

This presentation has been prepared by Identitii Limited (ABN 83 603 107 044) (Identitii, Company) based on information available to it as at the date of this presentation. The information in this presentation is provided in summary form and does not contain all information necessary to make an investment decision.

This presentation does not constitute an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any security in Identitii, nor does it constitute financial product advice or take into account any individual’s investment objectives, taxation situation, financial situation or needs. An investor must not act on the basis of any matter contained in this presentation but must make its own assessment of Identitii and conduct its own investigations. Before making an investment decision, investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs, and seek legal, taxation and financial advice appropriate to their jurisdiction and circumstances. Identitii is not licensed to provide financial product advice in respect of itssecurities or any other financial products. Cooling off rights do not apply to the acquisition of Identitii securities.

Although reasonable care has been taken to ensure that the facts stated in this presentation are accurate and that the opinions expressed are fair and reasonable, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of Identitii, its officers, directors, employees and agents, nor any other person, accepts any responsibility and liability for the content of this presentation including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of or reliance on any of the information contained in this presentation or otherwise arising in connection with it.

The information contained in this presentation is subject to change without notice and Identitii does not have any responsibility or obligation to inform you of any matter arising or coming to their notice, after the date of this presentation, which may affect any matter referred to in this presentation.

The distribution of this presentation may be restricted by law and you should observe any such restrictions.

This presentation contains certain forward looking statements that are based on the Company’s management’s beliefs, assumptions and expectations and on information currently available to management. Such forward looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results or performance of Identitii to be materially different from the results or performance expressed or implied by such forward looking statements. Such forward looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the political and economic environment in which Identitii will operate in the future, which are subject to change without notice. Past performance is not necessarily a guide to future performance andno representation or warranty is made as to the likelihood of achievement or reasonableness of any forward looking statements or other forecast.

To the full extent permitted by law, Identitii and its directors, officers, employees, advisers, agents and intermediaries disclaim any obligation or undertaking to release any updates or revisions to information to reflect any change in any of the information contained in this presentation (including, but not limited to, any assumptions or expectations set out in the presentation).

Disclaimer and important notice.


Know Your Transaction

Contact Information

Email: [email protected]: +61 2 8806 0438Web: www.Identitii.com

http://Identitii.com


01Appendix


1. AUSTRAC 2019 annual report

2. The potential total size of money laundering worldwide in 2020: The U.N.’s Office on Drugs and Crime estimates global money laundering to correspond to 2 to 5 percent of global GDP. https://www.politico.eu/article/the-world-dirty-money-by-the-numbers/

3. https://www.theaustralian.com.au/business/financial-services/penalties-double-to-118bn-in-global-war-on-money-laundering/news-story/2f86fa5a36366b3b49d9cb896688613c

4. https://risk.lexisnexis.com/insights-resources/research/true-cost-of-financial-crime-compliance-study-global-report

5. https://www.fnlondon.com/articles/banks-face-spiraling-costs-from-archaic-it-20170912

6. https://www.businessinsider.com/financial-institutions-hit-with-regulatory-fines-since-2008-2020-1?r=AU&IR=T

7. https://www.ibm.com/watson/infographic/discovery/big-data-challenge-opportunity/

8. http://www.theasianbanker.com/press-releases/japans-mizuho-bank-on-verge-of-replacing-crash-prone-system

9. https://www.banktech.com/channels/japanese-regulators-weigh-penalty-on-mizuho-bank-for-post-quake-atm-outage/d/d-id/1294589.html

10. https://www.theaustralian.com.au/business/technology/csc-questions-cba-core-banking-upgrade/news-story/3641617bd3640a35a570928d65d65402

11. https://news.efinancialcareers.com/au-en/313445/technology-at-deutsche-bank

12. https://www.protiviti.com/AU-en/insights/modernizing-legacy-systems-financial-institutions

Footnotes

https://www.unodc.org/unodc/en/money-laundering/globalization.html

https://www.politico.eu/article/the-world-dirty-money-by-the-numbers/

https://www.theaustralian.com.au/business/financial-services/penalties-double-to-118bn-in-global-war-on-money-laundering/news-story/2f86fa5a36366b3b49d9cb896688613c

https://risk.lexisnexis.com/insights-resources/research/true-cost-of-financial-crime-compliance-study-global-report

https://www.fnlondon.com/articles/banks-face-spiraling-costs-from-archaic-it-20170912

https://www.businessinsider.com/financial-institutions-hit-with-regulatory-fines-since-2008-2020-1%3Fr=AU&IR=T

https://www.ibm.com/watson/infographic/discovery/big-data-challenge-opportunity/

http://www.theasianbanker.com/press-releases/japans-mizuho-bank-on-verge-of-replacing-crash-prone-system

https://www.banktech.com/channels/japanese-regulators-weigh-penalty-on-mizuho-bank-for-post-quake-atm-outage/d/d-id/1294589.html

https://www.theaustralian.com.au/business/technology/csc-questions-cba-core-banking-upgrade/news-story/3641617bd3640a35a570928d65d65402

https://news.efinancialcareers.com/au-en/313445/technology-at-deutsche-bank

https://www.protiviti.com/AU-en/insights/modernizing-legacy-systems-financial-institutions

Documents

A global network for financial information – using ... · FY20 ID8 Investor Presentation June 2020 FINAL forlodgement 010620 Author: Clare Rhodes Created Date: 6/1/2020 3:18:25