Upload
brooke-strickland
View
219
Download
0
Tags:
Embed Size (px)
Citation preview
Ivan Martin
CEOMisys Banking Division
Misys Banking Division Strategy Ivan Martin
Business Drivers Steve Gowers
Product Management Jerry Luckett
Break
Three Great Stories
SummitFT Georges Bory
MidasPlus Andrew White
EquationPlus Andrew Derrer
Summary Ivan Martin
Questions and Answers All
Agenda
Key messages
1. Banking is a large and growing software market
2. Misys is well positioned to benefit from this growth
4. Misys is growing its market share in key markets
3. Misys leads in functionality and technology
5. Retail is key growth sector going forward
Where were we?
What did we do?
Where are we now?
Where were we?
What did we do?
Where are we now?
What did we see in 2002?
“Products are old legacy back office systems”
“We see no product roadmap for the future”
“There is a risk the business will not benefitfrom a recovery in spending”
In 2002 you told me …
“Losing market share to competitors”
What did we see in 2002?
Revenue£m
50
100
150
1996 1998 20022000
Banking Division ILF
- ILF moving annual total- Smoothed ILF trend line
Where were we?
What did we do?
Where are we now?
ColumbusPortfolio
ManagementTalent
Management
Services R&D investment
What did we do?
Product Management
Banking software market
Securities
Treasury
International Retail
Asset Mgmt
Corporate
Significant opportunities in target markets
Addressable market > $5bn
US Retail
BankingDivision
Healthcare Systems Division
Financial Services Division
Financial Services Division
Misys Retail Banking
Misys Risk Management Systems
Summit Systems
Misys Wholesale Banking Systems
Misys Banking Division
ColumbusPortfolio
ManagementTalent
Management
Services R&D investment
What did we do?
Product Management
Over$100 bn
Below$5 bn
Private
Banking
Investment
Banking
Retail
Banking
Corporate
Banking
UniversalBanking
Misys and Banking Systems Market
Ass
et s
ize
of
Ba
nk
EQUATION
BANKMASTER
RIS
KMIDAS
OPICS
SUMMIT
GMS
LOAN IQ
Boxes represent market coverage – not size of business
ColumbusPortfolio
ManagementTalent
Management
Services R&D investment
What did we do?
Product Management
ColumbusPortfolio
ManagementTalent
Management
Services R&D investment
What did we do?
Product Management
Product management
Lifecycle mgmtIntroductionGrowth
MaturityDecline
Evaluation
Qu
alif
icat
ion
Def
init
ion
Operation
Businessas usual
LaunchDesign
Build
Alpha & Beta
Development
“Build”Decision
“General release”Decision
Ma
rke
t U
nd
ers
tan
din
g Market Engagement
Competitor information
Customer requirements
Technology innovations
Misys vision
Market drivers
“Go external”to beta
Ou
tlin
e
‘Delivering the solutions our customers want, when they want them’
ColumbusPortfolio
ManagementTalent
Management
Services R&D investment
What did we do?
Product Management
ColumbusPortfolio
ManagementTalent
Management
Services R&D investment
What did we do?
Product Management
R&D Man Days
Back-office
Technology
Front-office
+ 55%
R&D
20
60
100
140
2003/4 2006/7
Increasing offshore capacity
(,000)
0
Where were we?
What did we do?
Where are we now?
• Banking software markets are generally improving
• Conditions vary significantly between sectors– Retail banking continues to show sustained growth– Wholesale banking and capital markets have stabilised– Marked regional differences; activity in emerging markets
• Underlying market drivers still apply– Cost containment– Regulation– Rising consumer expectations
• Long term trends continue– Move away from in-house software to third party packages
Banking market conditions
Source: Annual Reports and Private Company estimates. Source: 2002 financial statements & Misys estimates
Market structure - banking software revenues
Auckland Bahrain Bangalore Bangkok Beijing Brussels DubaiDublin Frankfurt Hong Kong Jakarta Jo’burg Kuala Lumpur Lisbon London Lux’bourg Madrid Manila Mexico Miami Milan Moscow Munich New York Paris Riga Sao Paolo Seattle Singapore Slough Sofia Sydney Tokyo Utrecht Warsaw White Plains Zurich
Global power – local knowledge
Portfolio moved to new areas of growth
Increased investment in R&D
Increased Treasury & Capital Markets market share
Strong evidence of traction in our installed base
Achievements in 2004
Retail benefiting from market facing structure
Best increase in H2 order intake in 3 years
Closing order book up strongly
H2 professional services grew by 20%
Professional Services backlog grew by greater than 70%
Achievements in 2004
Maintenance revenues stable
Business Drivers
Steve GowersBusiness Development Director
Misys Banking Division
Misys focus
• Misys is focused on providing business critical systems in specialist vertical markets
• Characteristics of vertical markets:– Depth of industry knowledge
– Depth of software IPR
– Specialist skills able to rapidly deliver solutions
– Demand for mature and proven systems
– Long lead times
• Different drivers from ‘horizontal’ markets (e.g. ERP)
What drives growth in vertical markets?
How do vendors compete in vertical markets?
What drives growth in vertical markets?
How do vendors compete in vertical markets?
1. Breadth of product portfolio
2. Depth of IPR
4. Breadth and depth of geographic network
3. Size & quality of development capability
5. Ability to sell into installed base
Competitive dynamics in vertical markets
Over$100 bn
Below$5 bn
Private
Banking
Investment
Banking
Retail
Banking
Corporate
Banking
UniversalBanking
Breadth of product portfolio
Ass
et s
ize
of
Ba
nk
EQUATION
BANKMASTER
RIS
KMIDAS
OPICS
SUMMIT
GMS
LOAN IQ
Boxes represent market coverage – not size of business
Depth of IPR
MidasPlus• Midas represents 14 million lines of code in total, with 168
functional modules
• MidasPlus release was 3 years in the making, delivering 3 million lines of new software
• IAS Compliance was 50 man years of investment
SummitFT• Summit represents 6 million lines of code in total
• SummitFT release was 3 years in the making
• SummitFT and MUST alone represent an investment of over 75 man years
Size and quality of development
Sales and MarketingSoftware
DevelopmentProduct Management
Support
Services
F&A
2,600 specialist staff
More than 1,000software engineers
Auckland Bahrain Bangalore Bangkok Beijing Brussels DubaiDublin Frankfurt Hong Kong Jakarta Jo’burg Kuala Lumpur Lisbon London Lux’bourg Madrid Manila Mexico Miami Milan Moscow Munich New York Paris Riga Sao Paolo Seattle Singapore Slough Sofia Sydney Tokyo Utrecht Warsaw White Plains Zurich
Breadth and depth of network
Ability to sell into installed base
3 Core systems• Midas 450 Wholesale and international banks• Equation 270 Retail banks• BankMaster 190 Retail and Universal banks
4 Departmental solutions• Summit 110 treasury & capital markets operations• Opics 130 treasury departments• GMS 800 banks, funds and corporates• Loan I/Q 30 banks
Enterprise Risk• Risk Vision 30 banks
Count is number of discrete BanksTotal = more than “1400 customers” because many clients have multiple systems
Ability to sell into installed base
Upgrades/Extensions
Contracts signed in FY03/04
New product
New customer
Funded dev/Other
55% of Misys contracts were for new product and new customers
45% of Misys contracts were for extensions of existing business
Additional volume
Analysis based on numbers of contracts
What drives growth in vertical markets?
How do vendors compete in vertical markets?
1. New technology cycles
2. Growth in underlying business volumes
4. A return to IT spending for competitive advantage
3. Increasing burden of regulation/reporting
5. Trend to use of third-party vendors
Drivers of growth in vertical markets
Growth drivers – technology cycles
IT Spending Cycles
74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04
Source: Bureau of Economic Affairs
ISV’s
Mini-computers
Client-Server
Euro andY2K
Services Oriented Architecture
Growth drivers – underlying volume
1994
2.0 billion
1.8 billion
1.6 billion
1.4 billion
1.2 billion
1.0 billion
0.8 billion
0.6 billion
0.4 billion
19981996 2000 20042002
2,007,551,750 messagesTransaction Volumes
Swift estimate that Misys systems generate 15% of all transactions in their network.
Misys is at the heart of banking
Growth drivers – underlying volume
1994
$1.50 trillion
$1.25 trillion
$1.00 trillion
$0.75 trillion
$0.50 trillion
$0.25 trillion
19981996 2000 20042002
Global FX Volumes$1.4 trillion per day
Misys GMS confirms approximately 7% of the world’s $1.4 trillion daily foreign exchange transactions
This equates to $100 billion per day through Misys GMS ASP solution
Growth drivers – regulation/reporting
SimpleLightly RegulatedOld Boy Network
ComplexHighly Regulated
Performance Culture1984
2004
Growth drivers – competitive advantage
Cost Reduction
88% of CIO’s
Customer Service
ServiceCosts
Service Quality
70% of Customers
Cost
Other
Growth drivers – quality imperative
NatWest
3K
1
100K
Fails/Million
50K
Fails/Million
Growth drivers – shift to third-parties
Source: Celent – IT Spending Europe 2004
Bank IT budget allocation
90%10%
New Projects
Maintenance
Maintenance v New Projects
91%76%
9%24%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2004
Internal v External Software
The new era and Misys
‘Delivering the solutions our customers want, when they want them’
Functionally rich
Component based
Engineered on Java & .NET
With compliance built in
Product Management and Development Process
Jerry LuckettProduct and Strategy Director
Misys Wholesale Banking Systems
Resource Allocation
Internal Return
Market Requirements
Target Market
Solutions to Meet Requirements
Product management objectives
Evaluation
Qu
alif
icat
ion
Def
init
ion
“Build”Decision
Ma
rke
t U
nd
ers
tan
din
g
Competitor information
Customer requirements
Technology innovations
Misys vision
Market drivers
Ou
tlin
e
Product management process
Operation
Businessas usual
Market- Launch
“General release”Decision
Lifecycle mgmtIntroductionGrowth
MaturityDecline
Design
Build
Alpha & Beta
Development
“Go external”to beta
Market Engagement
Customer involvement
Strategic Development Partnerships
Customer Advisory Boards
User Groups
Funded Development
Market Research
RequirementsDefinition
SystemSpecification
Design Construct Integration
TestQuality
AssuranceControlled
DeploymentOngoing Fix
Quality ManagementDevelopment Process – Development Standards – Quality Plan – Quality Audit – BMS / ISO Accreditation
Configuration ManagementDoc Set Mgmt – Version Control – Collection – Packaging – Shipping – Dev Schedule – Dev Facility – Client Inventory
Project ManagementDev Plan – Test Plan – Deployment Plan – Dev Tracking
Development process
The move to offshore and outsourcing
• Misys has been creating offshore capacity for more than a decade
• What we gain from offshoring:– Lower unit costs
– Increased capacity
– 24 hour development capability
– Access to wider skill pool
– Significant local market presence
• In addition outsourcing also provides a variable cost model
Lower Cost
Moving to offshore cost base
Getting It Right!• Have an ambition, know your
target• Plan offshore/onshore mix• You are moving, your
customers are not• Inject product skills through
secondment• Recruit and train• Protect domain knowledge –
realignment strategy• Excellent communications
2004
2007
Summary
• Know what you want to build
• Get the software factory working effectively and efficiently
• Result– Focus on growth products and new markets
– Output that meets and exceeds industry quality standards
• Increase development capacity without increasing the R&D to revenue ratio
SummitFT
Georges BoryManaging DirectorSummit Systems
Summit – a brief introduction
Product• Treasury & Capital markets
solution 400+ staff in 8 countries world-wide
• 110 global customers • Consistent management
and technology strategy• Loyal customer base
Resources• Core development in NY & Paris• Outsourcing partner• Support and local development
New York, Paris, London, Frankfurt, Singapore, Seoul, Tokyo
• Sales – global resource
Target Markets• Primarily Tier 2 & 3 banks• Some Tier 1• ASP solution for Tier 4 / corporates
Technological advantages - .NET and real time services
Market leading tool for exotics & structured products
Modular Technology that grows with clients needs
Breadth & Depth of functionality – No. 1
One Solution front-to-back covering multiple asset classes
ASP
Summit solutionDerivatives
Treasury
Commercial Lending
Fixed Income
Derivatives
Fixed Income
• Bonds
• MTNs
• MBS/ABS
• Repos
• Sec Lending
• GICs
• Emerging Mkt
Treasury
• Loans
& deposits
• Foreign
Exchange
• Money
Market
securities
Derivatives
• Interest Rate
• Credit
• Currency
• Equity
• Bonds
• Commodity
Lending
• Syndicated
Loans
• Bilateral
Loans
• Exotics & Structured (MUST)
Multi-asset class coverage
• Client - Server • C • Unix• Sybase
1990 200019981996 2001 20021993 2003
MARKETS RISK MANAGEMENTDERIVATIVES FRONT OFFICE
MONEY MARKET and FIXED INCOMEDERIVATIVES BACK OFFICE
CREDIT DERIVATIVESTREASURY FRONT to BACK OFFICE
REAL TIME FXCOMMERCIAL LENDING
REAL TIME STPDISTRIBUTED RISKS
EQUITY DERIVATIVESWEB TRADING
CASH MANAGEMENT
•Extendible Data Model• Customizable GUI• Pricing API
• C++• Native NT• Oracle-Sybase• Product Formula• Excel Add-In
• 3 Tier Corba Orbix • Gateway • RT FX Position Server• RT Event API
• eToolkit Excel / Java• XML• Credit Server• Risk Server
• RT STP Framework• Web Trading• MS SQL Server• FpML
2004
FT MS .NET• Parallel Distributed architecture EXOTICS &
STRUCTURED TRADES
• MUST• Linux• Grid Computing• SOAP & Web Services
14 Years Track Record
Product evolution
Investing ahead of the curve
• Increased R&D during downturn• Ready with market leading technology for upturn• Followed a consistent product strategy and vision• Employed and retained product development and product marketing expertise• 54,000 R&D man days over 5 years
Summit R&D vs Nasdaq
0
5,000
10,000
15,000
20,000
99/00 00/01 01/02 02/03 03/04
Year
R&
D m
an d
ays
0
1,000
2,000
3,000
4,000
5,000
R&D NASDAQ
Client examples
Global Investment Banks
International Wholesale Banks
Regional & Large Local Banks
Hedge Funds/Corporates
Our customers speak for us
The processing and managing of trades will be massively improved with Summit and I expect to see a quick return on our investment.
Our decision to pool all applications into one with Summit as the BLB core solution for investment banking, will help us achieve this goal. Replacing such a large number of systems will reduce costs in many areas by reducing system complexity and improving STP.
I was impressed by Summit’s product knowledge and the capability of its solution. It will provide us with flexible pricing, integrated risk management and back-office tools that will enable us to establish and grow our business in this competitive and profitable market.
Market trends
“Banks are looking to consolidate vendors”
“Treasury technology spend is now starting to see strong signs of recovery and positive growth rates, and Datamonitor predicts CAGRs of 3.2% and 2.9% from 2002 to 2006 in Europe and the US respectively. “
“the deadline for IAS39 compliance, together with overall pressures to centralize treasury technology in order to improve operational efficiency, is going to drive significant increases in year-on-year growth of investment until 2006 and beyond”
“ISDA has estimated that the credit derivatives market has doubled for each of the last six years - $3.58 trillion by the end of 2003 with 51% growth expected in 2004”
The Summit advantage
Breadth and depth
Regulatory compliance
Corporate strength
Business specialists
Technological advantage
14 years experience
33 banks of the top 100 Banks use Summit
Worldwide customer base
Summit MUST
MidasPlus
Andrew WhiteCEO
Misys Wholesale Banking Systems
This is Midas!
Loyal customer base – TRUST
Global product, local features, local support
Unmatched corporate banking capabilities
International branches and regional banks
Most successful banking software package ever
25 years of change
IT Spending Cycles
74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04
Source: Bureau of Economic Affairs
ISV’s
Mini-computers
Client-Server
Euro andY2K
Manual operations
Change again. Banks are under pressure.
Rocketing customer expectations
Regulation
Risk
Competition: markets, products, price
Next phase
IT Spending Cycles
74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04
Source: Bureau of Economic Affairs
ISV’s
Mini-computers
Client-Server
Euro andY2K
Services Oriented Architecture
This is MidasPlus!
Multi-channel eServices platform
Head office solution
Straight Through Processing (STP)
Global processing
Open architecture
MidasPlus – A whole new world
Deep functionality
Tightly integrated yet flexible
Improved functionality
Strong support
New solution - with pedigree
Customer self service
Modern technology platform
Deployment options
Open
Efficient
Faster time to market
Development tools
Delivering global processing solutions
Improved customer service
Cost and credit control
Reduced risk
Cross-selling opportunities
Agility
The Power of One
Roadmap – more to come!
• Client Server• GUI
1996 200220001999 2003 20041997 2005
Syndicated LendingPrivate BankingEuro Support
Y2KIBAN SupportRepo ProcessingCollaterals Register
CLSCredit Risk management
ISO15022Profit Centre AccountingOvernight Index Swaps
IAS 39Cash Mgmt
IAS 18, 32Local FeaturesCollateral LendingManagement Limits
KYCeServicesLocal FeaturesGlobal ReportingSyndication Manager
• Messaging• APIs
• iSeries• Integration Toolkit
• MUI• MQ Series
• J2EE• 10 Digit Account• Websphere
• Thin Client• Web Services• i5/OS
2006
Enhanced Front OfficePrivate BankingEnhanced RetailLocal FeaturesRevenue Analysis
• Full API support• User Defined Forms• SOAP
• Advanced Processing• Component based
solutions• Business Routing
25 Years Track Record
Single biggest investment in Midas, ever
First two customers in production before Dec
15 deliveries the day MidasPlus was launched
The MidasPlus effect
Delivered on schedule
Three years in the making
Banks will each select a single vendor solution
Misys is market leader and has first mover advantage
Local features and local reporting are musts
The global processing effect
All Midas customers will upgrade over time
All back offices in a bank will converge
Why Misys and Why MidasPlus?
Trust and expertise
Global processing
Best functionality
Corporate strength
Best local support
Integrated
Best technology
25 years experience
EquationPlus
Andrew DerrerCEO
Misys Retail Banking
Brand new technology
Market leading foundation
Wider opportunity Equation Plus
Elevates the entire market
More than just a product
• The largest market with the largest growth:
– Retail Banking to Bank Retailing
– Packages will be the norm
– Compliance deadlines
– Islamic Banking
Market dynamics
Installed sites market share
Source: IBS Market Report – International Retail Core Banking Software Market. Excludes North America
Installed base
Addressing the market need
ProcessProcess
DataData
ProductProduct
ChannelChannel
Teller Electronic B2B2C
Transactional Complex Experience
Deposit/Loans Investment Wealth management
Transactional Customer-centric Real-time analytical
Merchandising
Differentiation
Efficiency
Knowledge
• Delivering packaged software and related services to help financial institutions:
– Improve customer service
– Comply with regulatory requirements
– Reduce IT costs
The challenge
EquationPlusD
ata
Pro
du
ctP
roce
ssC
han
nel
s
Branch Channels Internet
BankingCall
CentreIVR
Customer Sales & Service
B2B2C ATM POSMobile &
Kiosk
Offline
ReportingConsumer Banking
Commercial Banking
Treasury AnalyticsCustomer Services
Other Banking Services
Business Process
Workflow
Rules
Data Propagation Management
Misys Retail Banking Database
InterfacesProduct/
TransactionGeneral Ledger
Consolidated Information
3rd Party Information
Channel platform
Open technologyExisting
New
3rd Party
The roadmap
Merchandising + DifferentiationEfficiency + Knowledge +
Business ProcessEngine
Q1 06
Complete retail system
Today
PlatformIndependentFront-Office
Multi-channel
Sales & marketing
Q1 05Platform IndependentBack-Office
24 X 7
Q4 05
Based on calendar year
• What convinces us that we can execute on the milestones?
– Experience - MidasPlus
– Partnerships
– Unique tools and utilities
– Talent
The execution
• Bring every customer with us– An attractive future for every Misys Retail Banking customer– Easy, worthwhile upgrades– Support commitment
• Technologies that meet the aspiration of banks, both large and small
• The right architecture– Inclusive, not silo-based– Right platforms
Founding principles for customers
What the market thinks
If Misys can deliver on this plan, it will mark a real renaissance for
the Equation brand
Equation Plus, a complete new-generation, richly functional, highly-advanced retail banking system, will in our assessment, transform the fragmented retail banking market and competitive landscape.
In migrating to Equation Plus, Misys has unveiled an expansive vision to combine the best elements of proven retail banking functionality, with the capabilities of leading edge architectures.
Why we will be best in the market?
First truly open system
Process automation leader
Single customer view
Functional leader
Company strength
Single point of accountability
CRM leader
20 years of experience
Summary
Ivan MartinCEO
Misys Banking Division
Growth opportunities
1. SummitFT• Market leading Treasury & Capital Markets solution• World class functionality and technology • Consistent growth up to and including last 3 years
2. MidasPlus• Most successful banking application ever• Unmatched depth of corporate banking functionality• Significant 3 year investment in new technology platform
3. EquationPlus• World class Retail functionality• Clear leader in international markets• First truly open front-to-back Retail solution
Customer satisfaction
… today our customers tell us …
“Very impressed by the improvement in Equation Support over the last six months.”
“If the Customer Satisfaction Survey were to be repeated now, Misys would see a dramatic improvement in feedback from its customers.”
“A most impressive display of solid technical expertise and great support. Best wishes from a satisfied customer.“
Market feedback
“Our survey indicates that Misys’ customers are planning fewer system replacements than users of other systems
The solutions rated more favourably than other vendors on flexibility and instrument coverage
Misys’ product position versus the market remains strong ... with products perceived as offering above-average support for banks’ future needs”
Morgan Stanley/IBSSurvey on behalf
of Associationof Foreign Banks
April 2004
1. Banking is a large and growing software market
2. Misys is well positioned to benefit from this growth
4. Misys is growing its market share in key markets
3. Misys leads in functionality and technology
Key messages
5. Retail is key growth sector going forward
Making things that really matter, work better