OPEN BANKING ARCHITECTURE

Architectural longevity (the changes in technology and fortune that the platform will undergo during the next three to five years) •Availability of skills (from lower cost of ownership as well as lower inertia point of view) •Level of integration required (the amount of system integration work the customer is required to do)

Open Banking Architecture Mayank Mishra Principal Banking Architect Oracle Asia Pacific                                                                                                                                                         Copyright (c) Oracle Corporation 2006 All rights re served Emerging Banking Trends New Areas of Opportunities Retail - Fee based Income (Mutual funds, Banc assurance) Mobile Banking Processing efficiency in Account Origination Financial Needs Analysis (life cycle driven) Payments Hub                                                                                                   The ‘Unbanked’ - Microfinance Initiatives - Distribution through Partnerships (postal, retailers) - Pre-paid cards to reduce the Risk                                                     - New segments – Farmers, Students, tourists   Corporate & SME - Maximize cross sell across verticals e.g Trade - Treasury, Cash - MM, Custody - Treasury - Vendor Financing – Converging Cash & Trade - Structuring custom Loans – Risk adjusted pricing - Liquidity management, Sweeping Copyright (c) Oracle Corporation 2006 All rights re served IT Reality - Without an Architecture ! Integration problems -> in-flexibility, high cost, high risk Customer Information System General Ledger Data Warehouse Current & Applications & Data  Fragmented Consumer Corporate Savings Banking Banking Accounts Business Processes, Visibility  Fragmented   Fragmented Security and Management  Complex, unmanageable environment Trade Treasury Private Insurance finance  Unscalable, Costly environment                                                                                                                                                       Banking Branch network Call centre ATM Network Copyright (c) Oracle Corporation 2006 All rights re served Internet Banking Framework for Customer Service Delivery Banking Eco System – Leveraging all m st ge Co ana M                                                                                                 Sales Unit E Pr En ffic oc ric ie ess Service Unit hmncy en & e plianc t                                                       Pe e rform a tMan nc ag Collaboration e m en Bank’s Product usiness Unit Customers t en   C u s t o mer S a t i s f actio n Partner nks & Agencies nue e v e R ation r e n Ge Com ess Readin Copyright (c) Oracle Corporation 2006 All rights re served Regulators Agenda – Banking Architecture • Business Demands & Trends • Architecture Approach • Ideal Banking Architecture                                                                                                                                                         Copyright (c) Oracle Corporation 2006 All rights re served Purpose of an architecture To allow IT strategy to align with the business strategy Regulators demanding greater transparency and accuracy Channel optimisation and profitability analysis IAS, Capital Adequacy requirements being adopted in varying degrees Administration and training costs; closing the strategyexecution gap Corporate Governance Customer Management Risk Management Human Capital Control and Customer focus while reducing the Cost and Complexity Optimize Maintenance costs; time to market, new products; multi-channel integration Core Systems Optimisation Copyright (c) Oracle Corporation 2006 All rights re served Key objectives from IT Investments!! Getting value from IT Better Cost allocation - Minimal Capital expenditure - To tie the costs to business value delivered - Leverage technology to minimize capital investment - Lower operations risk by reducing manual exception handling - Reduce cost of internal & external change                                                                                                   Competitive Advantage by Business Agility - Products & services innovation at affordable price - Easy Integration of partners into the banks portfolio - Reduce cost of change by configuring products & Services, no expensive IT delivery cycles - Support Business in BPR & automation initiatives - To enhance the customer service Technology Independence & Re - Use - Capability to enrich the satellite systems in the bank - Leverage on SOA to have shared services Infrastructure                                                     - Real time environment, reduce batch windows - Reduce Vendor Risk, go Open systems - Collaborate, promote Open finance initiatives   Copyright (c) Oracle Corporation 2006 All rights re served Architecture Selection Criteria Future Proof your Investments • Architectural longevity (the changes in technology and fortune that the platform will undergo during the next three to five years) • Availability of skills (from lower cost of ownership as well as lower inertia point of view)   • Level of integration required (the amount of system integration work the customer is required to do) • Manageability: Planning downtime, partitioning, capacity on demand, workload management • Market momentum: Independent software vendor (ISV) and channel enthusiasm, market share, demand creation                                                                                                                                                       Copyright (c) Oracle Corporation 2006 All rights re served Evolution of computing Infrastructure                                                                                                                                                         Copyright (c) Oracle Corporation 2006 All rights re served 10 Agenda – Banking Architecture • Business Demands & Trends • Architecture Approach • Ideal Banking Architecture                                                                                                                                                         Copyright (c) Oracle Corporation 2006 All rights re served 11 Moving Away from a product-focused design To a Reusable Design Legacy Business Model Deposits Loans Cash New Services based Business Model Treasury Product development Product development Product development Product development Reporting Reporting Reporting Reporting   Interest/Fees Interest/Fees Interest/Fees Interest/Fees                                                                                                 Deposits Cash Treasury Product Development Reporting Interest/Fees Accounts Accounts Accounts Accounts Accounts Facilities Facilities Facilities Facilities Facilities Payments Payments Payments Payments Payments limited flexibility and re-use with ever-increasing maintenance costs Loans                                                       provides business, process and data components that are re-useable across product lines Copyright (c) Oracle Corporation 2006 All rights re served 12 Processes Automation, Efficiency & Enrichment Gaining Business Agility Many advantages Automate mundane processes   Reconciliations Exception management                                                                                                 End to End Process Efficiency Loan origination Credit Card approvals collections Open Finance   BPEL is the future of the                                                     integration space in my view… Why? Because the value is so much higher when you provide not only a way to integrate applications, but also a way to create services from them and put them into business processes Collaborate to offer attractive products Copyright (c) Oracle Corporation 2006 All rights re served - John Rymer, Vice President, Forrester Research, Inc 13 Customer Centric Understanding the customer better Targeted Marketing for better results Readiness for compliance (KYC)                                                                                                     Understanding life-cycle requirements Understanding Customer – Customer relationship Siebel Chordiant                                                     BroadVision E.piphany PeopleSoft SAP Copyright (c) Oracle Corporation 2006 All rights re served Legacy 14 End-to-End Insight Siebel Analytics Integrated To Oracle FSI Analytics (OFSA) A banker asks  What products are most profitable to sell to whom?  How to better hit our targets?  How to improve wallet share?  Where are organizational bottlenecks?      What is our Risk Adjusted Return?                                                                                                                                                     Pervasive Insight from the Back office to the Front Profitability Analytics Multi Dimensional Profitability Activity Based Costing Transfer Pricing Risk Management Risk Assessment/ Quantification • Credit • Operational • Market Operational & Financial Analytics Performance Scorecards Operational Cost Analysis Bank Performance Analytics CRM Analytics Interaction History Customer Behavior Segment Migration Propensity to buy Regulatory Compliance Copyright (c) Oracle Corporation 2006 All rights re served 15 Cost Management Improve IT asset Utilization Centralize the Operations Simplify Support and Reduce Cost   Consolidate Hardware to a GRID  – on demand                                                                                                                                                     Bring Branch processing to the center Reduce hardware investment and software licenses Copyright (c) Oracle Corporation 2006 All rights re served 16 Well defined Architecture Call Center ATM Internet IVR Corporate Channel Branch Partner Channel Access Channels Collaborative Access Management Business Process Orchestration & Management Integration Management Lending, Deposits & Accts                                                                                                   Trade Finan ce Cash Mgmt Treas ury Cards & Switch Invst Mgmt   Partner Management Customer                                                     (Suppliers, Relationship Management Management counterparti es) Customer Information Transaction Functions Enterprise GL Management Information Risk Management Data Management Support Functions Copyright (c) Oracle Corporation 2006 All rights re served 17 Fusion Architecture - All encompassing Technology Superiority                                                                                                                                                         Copyright (c) Oracle Corporation 2006 All rights re served 18 Thank You Copyright (c) Oracle Corporation 2006 All rights re served 19 ... Corporation 2006 All rights re served Regulators Agenda – Banking Architecture • Business Demands & Trends • Architecture Approach • Ideal Banking Architecture                                                                                                  ... Oracle Corporation 2006 All rights re served 10 Agenda – Banking Architecture • Business Demands & Trends • Architecture Approach • Ideal Banking Architecture                                                                                                  ... batch windows - Reduce Vendor Risk, go Open systems - Collaborate, promote Open finance initiatives   Copyright (c) Oracle Corporation 2006 All rights re served Architecture Selection Criteria Future