Strategies For Growth Post Sepa Deutsche Brendan Reilly

Strategies for Growth in aPost SEPA World

Brendan ReillyHead of Northern Europe Country Product Management

Brendan Reilly · 3 July 2008 · page 2

Deutsche Bank’s Approach22223333

1111 The Environment

4444 Questions

Case Studies


" If you are planning for one year, grow rice. If you are planning for 20 years grow trees. "

- Chinese Proverb


Economic challenges – Transaction Banking

Expenses Revenues

• High fixed costs• Legacy technology• Labour intensive operations• Operational risk• Inflexible product

• Commoditised products• Increasing competition• Pricing compression• SEPA – changing landscape• Seeking value-add products


Costlevel

High

LowLow HighTransaction Volumes

Sharing

Cost ReductionOutsourcing

Insourcing

Banks have a few real optionsMarket trends put pressure on strategic positioning


…resulting in New Business ModelsSplit between Distribution and Transaction Banks

Client interaction and relationship can be intactwithout ownership of full value chain

Customer Sales/Service Product Mgmt Processing Clearing

Customer Sales/ServiceDistributionBank

TransactionBank


Market Trends

• Equens wins contract to provide outsourced payments transaction services to OP Bank Group

• Barclays forms strategic partnership with Deutsche Bank

• HBoS selects Fortis as its prime Euro Partner Bank

• ING and Atos Origin launch a joint offering of end- to-end services

• What isn’t being seen ?


Wholesale Solutions Partner Banking, White-label & In-Sourcing Business

White Labelled Channels (db-di)

Partner BankingInfrastructure

Solutions

� Business Initiative established in 2004

� Established customer base, business relationship with close to 25 international banks

� Considerable track record with Implementing White-label and Partner Banking Solutions

� Global reach with offices in Frankfurt, London, Singapore and New York

� A Product Suite designed to meet requirements of clients from different segments:


Customer MessagingProcessing

Cheque Processing

Funds Transfer

Investigations

Messaging Customer

GMA MTNA CINQPRISMA

� 5 year vision & investment program� Systems designed & built to include 3rd party partners� White-labelled electronic banking solutions� Scalable operations across the globe� Business Continuity Plans & Systems� Market leading customer service model � Future-proofing payments environment

SEPA

db-Infrastructure SolutionsLeveraging DB’s significant Investments in Cash Management / Payments Technology


Case Study #1: European Bank - SEPA Direct Debits

� High volume

� 11 Software Vendors & 1 Bank

� Integration Layer being built

� Talks already started with another bank for same solution

� Natural extension in to SEPA Credit Transfer Processing


SEPA EngineInitiated

db direct Internet

Attended

PRISMA

Local back end

SystemLocal back end

SystemLocal back end

SystemLocal

Back-end Systems of Client

Deutsche Bank’s

SEPA Engine (Client’s instance)

EBA STEP 2

Recurrent DD

Access Channels

SEPA Direct Debit – European Bank

db direct Connect

Unattended

Customer DD Files

SEPA DD Integration

Layer

Pain008, Paymul

Pre-Authorization CheckAdvance MT103

Authorization CheckBooking MT103

Pre-Authorization CheckResponse

Authorization CheckResponse

Optional:Fees and BillingCustomer NotificationsStatus Fee Deutsche BankackTransaction DownloadCentral Bank ReportingDaily Operational Reports

Sanctions Checking

Non-funds Authorization

Cashflow/Liquidity

Notifications

Business Activity Monitor

Sanctions Checking

Non-funds Authorization

Funds Authorization

Cashflow/Liquidity

Business Activity Monitor

Pre-Authorization

Authorization

Country Specific EB Access (SAML) Creditors Direct A ccess

Conversion & Routing

SSO via SAML


Case Study #2 : Pan-European Payments Outsourcing

� Multi € million contract over 5 years

� High volume of high value transactions

� Client is challenged by a legacy of ageing technology & employees

� Technology & Operational play – leveraging India & other low cost locations

� Transformational deal


Transaction SourcesStatic Data Sources

Client Data Bank DataBilateral

AgreementsInternet Banking

File-based system

Internal Applications

SEPA Instruments

SWIFTInsourced

Clients

Bank Repository(CAAA)

Integration Layer

File Transfer(db-direct connect / SWIFTNet FileAct)

SWIFT(GMA)

Middleware(PRISMA)

High Value & SEPA Payment Processing Platforms (MTNA & SEPA Engine)

Dedicated line

Transactions

Static Data

European Bank - Payment Outsourcing


Questions

Economy & Finance

Strategies For Growth Post Sepa Deutsche Brendan Reilly