®

IBM Software Group

© 2003 IBM Corporation

You can bank on IBM middleware technology Attract and retain more profitable customers

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Agenda

Banking in the on demand era1

2

3

Banking challenges and industry dynamics

Middleware matters

Solution recommendations and customer experiences4

5 Next steps

NOTE:Add Business Partner logo here

NOTE:Add Business Partner

logo here

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The new banker

The new on demand era

“U.S. banks will upgrade and renovate 30,000, or 26%, of their branches by 2006 and spend $1.4 billion on branch technology in 2006, up from $800 million last year. Most of this spending will go toward enabling branch personnel to view all of a customer's relationships with a bank, connecting the bank's multiple service channels, and boosting customer self-service capabilities.”

— Datamonitor

Information Week, April 2004

New on demand business

“An on demand business is an enterprise

whose business processes — integrated

end-to-end across the company and with key

partners, suppliers and customers — can

respond with speed to any customer

demand, market opportunity or external threat.”

— Sam Palmisano, October 2003

NOTE:Add Business Partner

value proposition

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Focused

Concentrate investment on core functions that add distinguishable value Target customers best suited to its operating model Access best-in-class capabilities; leverage scale efficiencies through partners Drive incremental revenue from in-sourcing strong components

Responsive Rapidly develop new products and integrate new capabilities and acquisitions Customize products to fit target customer needs, enabling a value premium Aggregate data across the organization, honing it into useful information

Supplement internal capabilities with outsourcing to achieve peak capacity Outsource non-core components completely Shift cost structure from predominantly fixed cost to predominantly variable

Variable

Know exposures to operational, market and credit risk in real time Effectively distribute risk with strategic partners Reduce capital requirements through robust risk management Build robust, self-healing organizational capabilities (processes and technology) Recover quickly from external disruptions to operations

Resilient

Business imperatives of an on demand bank

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Are well-educated customers demanding quality, selection and value?

Are you under pressure to cut costs, streamline operations and be more efficient?

Do you lack the ability to introduce new products and services in response to market needs and enhance customer service?

Is your customers’ loyalty is at risk?

Do competitors squeeze your margins?

Do these challenges sound familiar to you?

Do you feel regulatory stress—standards, security, disclosure?

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The on demand era meets opportunity

IBM has solutions specifically for midsize banks at a price lower than the competition.

Security is critically important. IBM Express Middleware is the safer choice.

IBM middleware solutions are available from thousands of local IBM Business Partners.

IBM middleware leverages existing IT investments, no rip and replace.

Midsize banking solutions are here

Operational costs

Changing needs

Open standards

Reliability

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What we’re hearing

Streamline core banking operations and link all branches and disparate legacy applications

Gain broader and deeper customer knowledge to offer products and services directed at the most valued customers

Optimize multichannel delivery of extended banking services in real time at the customer’s convenience

Enhance security and regulatory compliance; minimize risk and fraud

“Multichannel integration is garnering the attention of a growing number of banks. Although it is far from becoming a mainstream exercise, it is moving away from the early adopter phase to being a more feasible initiative for banks to undertake.”

— Alenka Grealish, manager, Banking Group, Celent Communications

Top business priorities of banking industry IT executives:

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Your Title Here

“Add Business Partner Customer quote here.”

— Source

Note:Add Business Partner logo here

Add Business Partner local trends

Add facts about the Business Partner

# of local engagements

Quote from BP president?

Facts that qualify the BP as a vendor of choice

Example is next slide

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IT investments are changing the way bankers compete

Greater customer-centricity (i.e., linking branch operations)

More bankers are turning data into insight

Shifting toward a boundary-less business model (i.e., Internet banking)

Currents of change of last year

“Banks around the world spent $5 billion on customer relationship management software last year and will spend $7 billion in 2008.”

— The Tower GroupInformation Week, April 2004

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Specific banking challenges and solutions

Business challenge Solution

Enhance security/minimize risk

Identify and manage internal controls and gaps; increase security, regulation compliance and disaster recovery measures

Streamline core operationsTurn branches into financial centers by integrating solutions to connect business information with people; extract value from existing investments; support new market strategies

Gain broader, deepercustomer knowledge

Unify business information; improve analysis and decision making for deeper customer data, targeted marketing and discovery of new business opportunities

Optimize multichannel delivery of extended services

Synchronize customer data with call center, ATMs, Internet; facilitate self-service and provide 24x7 availability

Run on IBM Express Middleware

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Improve customer experience – expand access, choice and satisfaction

Branch TransformationCustomer Insight

Customer InsightGain greater efficiencies

Document Management for Banking Risk and Compliance:

Sarbanes-Oxley/Regulatory ComplianceManage risk

Goal

Solutions are built on solid foundation of IBM Express Middleware portfolio

Solution

You have challenges. IBM and IBM Business Partners have affordable solutions.

NOTE:You may merge content above with Business Partner

local banking solutions. See next slide.

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IBM Business Partners applications and services

Brief solution summary here

Challenge Solution

Brief summary of customerpains here

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Reliable, industry-specific software solutions that create effective real-time linkages with customers, employees and partners

Improved profitability through reduced costs, improved efficiency and customer relationships, and integrated processes

Express Portfolio

What midsize banking firms want — at an affordable price

Business Partners

A complete solution

IBM Express Portfolio provides ease of installation, ease of integration, ease of use, ease of training, and affordability.

Easy as 1-2-3…

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Midsize banks need IBM Express Middleware

Builds, manages and secures your IT environment

Standardizes key housekeeping functions so that your applications can focus on solving your business problems

Provides open standards so clients are not tied to a proprietary vendor and single operating system

Provides scalability as your organization grows

Serves as the glue that tightly links the elements of your business internally and externally

“As competition among financial services firms continues to heighten, players in this space are expected to scratch and claw for differentiating products and services. Achieving such an end… will require the professional expertise of a third-party service firm that is well versed with the industry…and has the specific technologies that are most suited to address a business’s individual pain points.”

— IDC report on Credit Union of Texas transformation

Why middleware matters

NOTE:Add Business Partner customer quote

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Keep your options open. Protect your IT investments.“An enterprise that actively manages future risks should favor J2EE.”

Less risky than other vendors– Open IT environment; no IT lock-in; more than 25 platforms

supported; allows customers to take full advantage of future innovations.

Less costly– No rip and replace; lower prices

Helps companies become more responsive, resilient and focused

– Simplifies collaboration among employees, partners and customers

– Open standards facilitate communication across multiple IT environments worldwide

More secure

Deep industry expertise

Why IBM Express Middleware?

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Improve customer experiences

Gain greater efficiencies

Manage risk

Branch Transformation

Customer Insight

Document Management/Risk and Compliance

Improves productivity and collaboration of customer-facing employee team

Provides a single view of the customer

Deploys consistent multichannel transactions

Increases customer loyalty Improves customer service to

profitable customers Segments customers and more

intelligently targets them with additional tailored offerings

Key BenefitsSolution Challenge

Coordinates information among channels

Enables banks to manage and abide by records retention policies for regulatory compliance

Decreases risk of improper filings and submissions

You have challenges. We have solutions.

NOTE:If you wish, modify content below with Business

Partner local banking application solutions

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Full-service financial centers

IBM Components WebSphere Application Server – Express

WebSphere MQ Express

WebSphere Portal Express

Tivoli Monitoring

Tivoli Storage Manager

Tivoli Configuration Manager

Tivoli Access Manager for e-business

Lotus Domino Express

Rational Suite

WebSphere Studio

How can you improve customer experiences?Branch Transformation

Improves productivity and collaboration of customer-facing employee team

Provides a single view of the customer across multiple channels

Deploys consistent multichannel transactions

Establishes a flexible, scalable and affordable infrastructure

IBM Express BranchTransformation

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With multiple distribution channels, this Spanish bank was managing several different applications on disparate platforms. The environment was complex, driving costs up and slowing the company's time to market for new financial offerings.

Redesigned branch office and ATM applications while integrating them into a multichannel architecture

Simplified bank’s development efforts by using of open standards

Brought new offerings to market more quickly and give it the flexibility to expand as business needs change

Reduced development costs by approximately 30%Upgraded an existing IBM eServer zSeries server and

assembled a group of IBM WebSphere products to serve as the consolidated, multi-channel architecture

Caja Cantabria: Establishing a multichannel architecture

Challenge Value

Solution

Note to IBM Business Partners: IBM SMB references follow each solution area. You can use these or substitute your own.

The best reference is the business down the street. If you choose to use your own, you can use this format. See “Backup” section for a blank template.

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How can you gain greater efficiencies andget to know your customers better?

Improve employee decision making and increase customer loyalty – increasing revenue

Improve customer service to profitable customers while shifting unprofitable customers to less costly service channels

Develop and deliver compelling marketing campaigns to potential customers

Segment customers and more intelligently target them with additional tailored offerings

Personalized services

IBM Components DB2 Universal Database (UDB) Express

DB2 Data Warehouse Standard Edition

DB2 Information Integrator

IBM Express Customer Insight

Customer Insight

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The Credit Union needed a competitive edge to understand new prospective members and tailor profitable products to meet their needs.

Increased lift on direct marketing campaigns from 1% to more than 8%

Created record lease volume via auto leasing campaign (in a slow auto market)

Targeted and expanded market from 250,000 to 2.5 million households

Exceeded yearly ROA (return on assets) objectives

Data warehousing of customer data, and Business Integration technology capabilities to turn that data into actionable information. Includes custom analytics (customer segmentation), spatial analysis (for locating new branches and automated teller machines or ATMs), and predictive modeling (to test the potential impact of proposed rate structures).

Challenge

Solution

Value

Credit Union of Texas: Expanding in a highly competitive market

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IBM Components DB2 Content Manager Express

DB2 Content Manager Entry Offering

DB2 CommonStore Entry Offering

DB2 Records Manager

WebSphere Application Server Express

WebSphere Studio

Tivoli Storage Manager

Tivoli Access Manager for e-business

Tivoli Privacy Manager

Rational Suite

How do you manage risk?

Coordinates information among marketing, sales, field support and customer service

Enables banks to manage and abide by records retention policies for regulatory compliance

Decreases risk of improper filings and submissions

Enables banks to digitally manage statements and other forms

Improves efficiency and enhances employee productivity by improving access to information

Reduced distribution and routing cost

IBM Express DocumentManagement/Risk and Compliance

Document Management/Risk and Compliance

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Four ways bankers can modernize their infrastructure

Use customer analytics and data mining to gain insight into what customers want, and when and how they want it.

Synchronize information at the branch with the call center, ATMs, and the Internet – 24x7 – by integrating business processes.

Differentiate with a branch transformation solution by turning branches into full-service financial centers.

Protect your business from security breaches and other service disruptions with risk management and regulatory compliance solutions.

1

2

3

4

NOTE:If you wish, merge content above with Business

Partner local banking solutions

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What are the benefits to your business?

Streamlined business processes and multichannel capabilities — saving time and money

Integration of customer data into a single, accessible viewto optimize face-to-face and self-service transactions

Analytics to help treat customers as individuals and deliver value on their terms for a more personalized experience — 24x7

Service levels mapped to customer profitability to ease introduction of new product and service offerings

Effective risk, fraud and disaster recovery management

NOTE:Business Partner

solution benefits here

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Assess your on demand needs

Map out your journey

Calculate your ROI and business value

Get started, start anywhere — small or a total solution

Go to URL or email xxx for next steps

Take action today

The never before possible becomes possible

NOTE:Business Partner Add contact info

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© Copyright IBM Corporation 2004. All rights reserved. The information contained in these materials is provided for informational purposes only, and is provided AS IS without warranty of any kind, express or implied. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, these materials. Nothing contained in these materials is intended to, nor shall have the effect of, creating any warranties or representations from IBM or its suppliers or licensors, or altering the terms and conditions of the applicable license agreement governing the use of IBM software.References in these materials to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. Product release dates and/or capabilities referenced in these materials may change at any time at IBM’s sole discretion based on market opportunities or other factors, and are not intended to be a commitment to future product or feature availability in any way.IBM, the IBM logo, the e-business logo and other IBM products and services are trademarks or registered trademarks of the International Business Machines Corporation, in the United States, other countries or both. Java and all Java-based trademarks are trademarks of Sun Microsystems, Inc. in the United States, other countries or both.Microsoft, Windows, Windows NT and the Windows logo are trademarks of Microsoft Corporation in the United States, other countries or both.All other trademarks, company, products or service names may be trademarks, registered trademarks or service marks of others

Disclaimer: NOTICE – BUSINESS VALUE INFORMATION IS PROVIDED TO YOU 'AS IS' WITH THE UNDERSTANDING THAT THERE ARE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND EITHER EXPRESS OR IMPLIED. IBM DISCLAIMS ALL WARRANTIES INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IBM DOES NOT WARRANT OR MAKE ANY REPRESENTATIONS REGARDING THE USE, VALIDITY, ACCURACY OR RELIABILITY OF THE BUSINESS BENEFITS SHOWN.. IN NO EVENT SHALL IBM BE LIABLE FOR ANY DAMAGES, INCLUDING THOSE ARISING AS A RESULT OF IBM'S NEGLIGENCE.WHETHER THOSE DAMAGES ARE DIRECT, CONSEQUENTIAL, INCIDENTAL, OR SPECIAL, FLOWING FROM YOUR USE OF OR INABILITY TO USE THE INFORMATION PROVIDED HEREWITH OR RESULTS EVEN IF IBM HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE ULTIMATE RESPONSIBILITY FOR ACHIEVING THE CALCULATED RESULTS REMAINS WITH YOU.

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Backup

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Is your branch infrastructure obsolete? Is there room for improvement?

Challenges

Operating systems approaching end of life

Technology infrastructure is inflexible, unmanageable and expensive to support

Inability to leverage single view of the customer in branch sales activities

Platform

Teller

Server

Devices

Inflexible

Obsolete operating systems

Poor collaboration

Limited view of customer

Traditional Process

Branch

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Solution: Transform branches into full-service financial centers – and expand customer access

Speeds time to value by: Improving productivity and

collaboration of customer facing employee team

Providing a single view of the customer

Reinventing the branch within a multichannel context

Reduces risk by: Deploying consistent,

multi-channel transactions

Establishing a flexible, scalable & affordable infrastructure

Deposits Loans Partners Partners XXXXXX

User Interface

Access Technology Business Functions / Process

Customer Information Integration

Business Integration

Information and Data (SQL)

Transformed Process

Teller

Platform

Devices

Server

FlexibleDeployment

Role-basedportals

Collaboration Integratedprocesses

Branch

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Challenges

Different sales channels refer to different bank data

Inability to assign sales and service resources to customers based profitability

Inability to drive effective marketing campaigns across multiple channels

Traditional Process

Are you finding it hard to attract and retain customers?

Customers want a consistent, high-quality experience

Only 48% know about a problem before a customer does

Only 43% alter service based on profitability

Only 20% know if a customer has visited a web site

Companies interact with customers inconsistently across channels

How well do you know your customers?

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+ + =

Speeds time to value by:

Driving customer satisfaction and customer-centricity

Automating personalized customer interactions and campaigns

Differentiating service based on profitability

Continuously manage and leverage customer information

Reduces risk by delivering multichannel service

Customer Insight

Bank-wide Customer InformationBank-wide Customer Information

Contact Management

Response Management

Response Analysis

Business IntegrationBusiness IntegrationP

ort

al

Po

rta

l

Security, Availability, Reliability Services

Transformed Process

Branch

Agent

Call Center

Internet

Solution: Channels that effectively serve and sell to customers – with reduced risk

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Why IBM? Experience counts for midsize banks

$1 billion annual investment in engineering $5 billion annual investment in technology

acquisition– Modeling– Process Integration– Software Development

More than 7,000 developers

10,000 customer sites rely on WebSphere MQ. 2,000 customers rely on WebSphere Business Integration. 2,000+ customers reply on WebSphere Portal since its introduction in 2000. WebSphere Commerce powers 6 of top 10 pharmaceuticals. IBM offers 48 industry-tailored business integration solutions that span 11 industries. IBM WebSphere customers included 91 of the top 100 global companies in 2003. 450K+ companies rely on IBM DB2 Information Management solutions.

“Express is proof that IBM is serious about the SMB market.”

– Wayne Scarano, SGA Business Systems

Nobody invests more

Experience really counts

IBM Express is affordably

priced.

IBM Express is affordably

priced.

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IBM Business Partner

Who and what skill sets matter from the customer’s point-of-view.

Business Partner experience, local background, etc…..

“Business Partner tagline or local customer quote.”

– Mr. Source,

Business Partner Staff

Experience really counts

IBM Express is affordably priced.

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Business Partner application or service hereExpand on the Business Partner local banking solutions or applications

XXXXXXXXXX

XXXXX

XXXXXXX

XXXXX

XXXXXXX

Business Partner application IBM and Business Partner components Placeholder

Placeholder

Placeholder

Business Partnerapplication

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2002 Share* 2001-02 Growth%

IBM 23.3% 17.5%

BEA Systems 17.3% 9.6%

Oracle Corp. 9.5% 8.0%

Tibco Inc. 4.9% -19.4%

webMethods 4.3% 6.3%

Sources: • IDC, “Application Deployment Platform Software Market, 2000-2002, with Leading Suppliers” June 2003 , Dennis Byron, Vice President, Business Process and Deployment Software Research • Gartner First Take "IBM Has Top Share in All Application Integration, Middleware Markets", J. Correia, Y. Natis, M. Pezzini, R. Schulte, 7 May 2003.

* Based on license revenue and license-related service fees

IBM "continued its long time lead of this market,“ IDC, June 2003

Application Deployment Platform Software Market

Application ServersIntegration Broker Suites

PortalsMessage-Oriented Middleware

Application Platform Suites Composite MarketTransaction Processing Monitors

Total Market

21

N/A1211

2131211

1111111

2000 2001 2002Worldwide IBM Market Share Position Based on New License Revenue

“IBM Has Top Share in All Application Integration Middleware Markets” Gartner Dataquest, May 2003

2000 2001 200219990

100

200

300

Ap

plic

atio

n In

teg

rati

on

Lic

ense

Rev

enu

e

IBM

TibcoWebMethods

SeeBeyondMercatorVitria

2003** Estimate based on 1H03 actual growth rates

The gap widens

Source: Wintergreen Research

Leading industry analysts acknowledge IBM market share dominance

Why IBM?Market leadership

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Why IBM? Industry standards leadership

1998 / 1999Java, XML and ebXML

Co-founder and lead architect for RosettaNet

Author of XML4J Chair OMG XML

Metadata Interch. Format

Co-author W3C Document Object Model

Founder XML.org Elected to Board

of Directors in OASIS

2000Web Services

and UDDI Co-author of

SOAP 1.1 and submission to W3C

Cofounder of UDDI.org and author of original UDDI specification

Co-author of WSDL

IBM contributes SOAP4J to Apache

2001Web Services

and Tools Led submission of

WSDL to the W3C Co-chaired W3

Web Services Workshop

Founder of Eclipse.org

Co-author of W3C XML Schema standard

Chair of Web Services Interactive Applications TC

2002Web Services and Security

Founder and chair, Web Services Interoperability Organization

Co-author of Web services bus process specification (BPEL, WS-TX, WS-TC)

Co-author for Web Services Security roadmap and specification

2003Web Services and Security

Submission of BPEL to OASIS Co-chair WSBPELTC in OASIS Submission of Common Base

Events to WSDM TC in OASIS Submission of WS-Manageability to

WSDM TC in OASIS Co-authored and published EPAL

specification to WC3 Co-chair WSDM TC in OASIS More than 1,000 developers

devoted to XML and more than 1,500 focused on Linux; over 200 software products running on Linux

Led workgroup responsible for finalization of SOAP 1.2

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Why IBM? Award-winning software brands

IBM is the leader in business automation.

— Aberdeen, September 2002

IBM is the leader in portal software in 2002.

— Gartner, 2003

IBM has widened lead as the leading and most question-free vendor in commerce servers.

— Giga, August 2003

IBM is the leader in application integration.

— Gartner, October 2002

Technology leadership “Best in Enterprise Integration”

— Intelligent Enterprise Readers Choice award 2002

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Award-winning Business Partner Applications here

The more local the award the better

Any local civic clubs or organization?

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Why IBM? Committed to the midsize marketplace

IBM Gets Serious About ExpressJanuary 21, 2004

Happy Together: IBM, Linux and Small BusinessesMay 30, 2003

IBM escalates SMB war with MicrosoftFebruary 25, 2004

Software giants think small: IBM, Microsoft move into niche markets December 11, 2004

IBM Expects SMB to rev up IT spending in 2004January 2, 2004

SMB Partners Eyeing WebSphere ExpressJune 6, 2003

NOTE:Any local press headlines?

Articles about the BP?

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Add key benefit customer

Challenge Value

Blank customer reference template

Solutions

“….quote goes here...l.” – attribution goes here

(Name, title, company)

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