IBM and ACI Worldwide – Providing Comprehensive, End-to-End Electronic Payments Solutions for Retail Banking As leading technology providers of financial services solutions, IBM and ACI Worldwide have helped financial institutions worldwide build some of the most sophisticated, comprehensive payment systems in use today. As competitive and regulatory pressures mount and institutions look to transform their payment system infrastructures to reduce risk, enhance ROI and improve time-to-market for new services, it is imperative that they choose technology partners with the necessary experience and expertise. ACI’s best-of-breed electronic payment solutions are optimized to operate on IBM hardware and take full advantage of IBM infrastructure components. Together we provide the solutions and services institutions need to transform their mission-critical payments business and meet the challenges of the ever-changing landscape of payments. For more than 30 years, ACI has supplied payment solutions to many of the world’s largest, most progressive financial institutions. Built to the highest standards, and continually shaped by a blue-chip customer base, ACI’s integrated set of retail banking applications provide a complete, end-to-end solution for electronic payments, including the following: • Customer acquisition and management • Payment origination and transaction acquisition • Authentication, authorization and routing • Risk management • Dispute management • Clearing and settlement By combining ACI solutions with industry-standard IBM servers and software components, institutions can consolidate multiple, disparate systems into a single, collaborative hardware IBM and ACI offer unparalleled expertise in designing and optimizing payment systems environment. This reduces the complexity of the processing infrastructure and the costs and risks associated with managing multiple legacy systems. Together, IBM and ACI provide unparalleled, integrated payment solutions designed to provide the best solutions available in the market. Unparalleled Services More than just gold-standard software and hardware solutions, the combination of IBM and ACI means that institutions can take advantage of decades worth of expertise in designing, implementing and optimizing payment systems. From upfront consultancy, through design and implementation, to optimization and ongoing support, the IBM/ACI team is dedicated to providing our clients with unsurpassed services and support. With this objective in mind, ACI and IBM have formed the payments transformation team. Why Now? • Continued pressure to control costs and improve margins • Increased competitive pressures from nonfinancial institutions • Innovation provides differentiation from other service providers • The need to rationalize business services to provide a consistent customer experience and enhance the ability to offer segmented services • Increased need to “know your customer” to provide targeted services and campaigns • Continued rise of electronic payment transaction volumes and displacement of cash as new payment techniques emerge • The need to keep pace with ever-changing regulations • Increasing need to protect information Drawing on the experiences of hundreds of migration projects, the payments transformation team is designed to provide complete support services and reduce the inherent risk involved in payment system migrations. The team uses a proven methodology based on a library of reference architectures to ensure customer projects are precisely managed and that the resulting systems meet their needs. The payment transformation team is involved in every aspect of the customer migration, including the following: • Strategy, assessment, scoping and planning • Development and customization • Installation, testing and training • Certification and tuning • Deployment and ongoing support Comprehensive, Best-of-Breed Payment Solutions ACI retail payment solutions provide the key processing components of an integrated, end-to-end electronic payment processing environment. These components can be implemented within an integrated processing environment, or they can be implemented as separate applications depending on an institution’s particular business needs. ACI’s retail payment solutions are optimized to operate on the IBM System z platform. System z can deliver the following benefits: • Provides the system attributes necessary for innovation and, in the process, makes institutions more competitive by improving efficiency and compressing time-to-market • Reduces complexity, putting institutions in a better position to simplify new product development processes • Helps meet compliance needs through its highly reliable, scalable, resilient and open environment • Allows the addition of processor capacity and storage in real time, without interruptions in response to changing business requirements ACI Proactive Risk Manager BASE24-eps ACI Payments Manager ACI Dispute Management System ACI Smart Chip Manager ACI Commerce Gateway Networks ACI Retail Payments Assets Retail Payment Channels IBM Payments Director WebSphere Partner Gateway Tivoli WebSphere Transformation Extender WebSphere Portal Server WebSphere Application Server System z & zOS WebSphere MQ Crypto Support System z / Cell BE Processor IBM Assets IBM Assets DB2 WebSphere Process Server WebSphere Message Broker IBM Payments Framework for Financial Services The diagram above represents a sampling of IBM and ACI payment capabilities which were available at the time of the alliance announcement December 17, 2007. Implementation will involve a subset of these capabilities and potentially other offerings & capabilities not represented in the diagram. Please ask your ACI and IBM Sales Representatives for a detailed configuration proposal. • Diminishes overall risk exposure, enabling a shift in focus and resources to market- and client-facing initiatives • Provides a strong enterprise-wide technology foundation on which institutions can build governance and risk management strategies through business continuity and service management. Customer Acquisition and Management. Often viewed as a back-office function, the ability to dynamically manage customer relationships has become vitally important within the financial industry. ACI’s solution allows issuers to manage the complete life cycle of both the customer and the associated card products, including the following: • Processing card applications • Embossing the card, as well as initiating PIN generation, PIN mailers, other card security numbers and card carriers • Generating personalization files • Maintaining customer card and account details • Managing replacement of damaged, lost and stolen cards • Managing the card renewal cycle For chip card implementations, ACI’s modular, highly configurable chip card component manages the entire life cycle of any chip card and its applications, including EMV applications. Finally, flexible account-level structures within ACI’s solution enables single transaction instruments for multiple accounts as well as multiple transaction instruments for a single account. Authentication, Authorization and Routing. The ACI solution provides an integrated payment engine to flexibly acquire, authenticate, route, switch and authorize financial transactions from traditional channels such as ATM and POS to more recent channels like mobile payments. The authorization functions can be scripted to support authorization parameters based on an institution’s business processes. The solution is triple DES (3DES) compliant, supports all leading payment cards, and offers standard interfaces to leading devices, switches and host systems. ACI’s fault-tolerant application software takes advantage of the best in IBM systems software for reliability, availability, scalability and high-performance transaction throughput. Risk Management. Supporting all payment channels within the e-payment environment, ACI’s system provides an enterprise-wide fraud detection and risk management solution that improves the ability to detect and respond to fraudulent activities. With the ability to proactively monitor transaction activity in a real time or near-real time environment, each transaction can be evaluated and scored based on real-life transaction activity. The system is designed to improve the point of detection and to reduce overall fraudulent activity while maintaining a satisfactory customer experience. Dispute and Case Management. ACI’s solution provides claims and adjustment processing that focuses on case management. Multiple disputed transactions and the associated processing can be combined in each case with the system providing queue management via parameterized system processes. The system manages and settles exception transactions — including chargebacks, partial chargebacks and re-presentments — while providing an audit trail of operator actions to ensure that staff members follow procedures. Settlement and Back-Office Processing. At the core of the e-payment environment is the ability to accurately clear and settle payments. The solution’s settlement component automates many of the crucial functions associated with validating and settling funds between cardholders and electronic funds transfer (EFT) networks. It provides automated reconciliation functions, fee processing, funds movement and posting file creation. Settlement functions also support the creation and settlement of all exception/ chargeback transactions. For audit, analysis and archive purposes, a full set of reporting options is available. About IBM and ACI IBM and ACI Worldwide have joined forces to create an end-to-end solution for electronic payments powered by IBM’s open technology. As part of the alliance, ACI will optimize a new generation of payment solutions on the IBM System z platform with crypto-chip technology and IBM DB2, WebSphere and Tivoli software. The optimization supports the convergence of retail and wholesale payments through the use of service oriented architecture (SOA), including IBM’s Payments Framework. ACI payments software running on System z provides an SOA foundation that opens up disparate payments information to be shared across the enterprise to support multiple software applications and lines of business. In addition to benefitting from the SOA approach, institutions that bring their payment transaction traffic to the System z platform can also take advantage of industry-leading security, reliability and availability, as well as help reduce power consumption and maintenance costs through server consolidation. • Reduced risk by selecting solutions from proven, global solution providers • Efficient project implementation drawing upon the expertise of industry leaders • Comprehensive electronic payment processing solutions • Improved ROI with the ability to leverage resources, both human and infrastructure, through system rationalization • Improved time-to-market with the ability to introduce new products quickly • Improved efficiencies with integrated, enterprise-wide solutions • Highly available solutions that can scale to meet increasing demands • Sophisticated, open design to allow ease of modification and uplift • Supports the full range of existing and future payment types • Holistic approach to fraud management within a single system Benefits of IBM and ACI Solutions © Copyright IBM Corporation 2008 IBM Corporation New Orchard Road Armonk, New York 10504 USA IBM and the IBM logo are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries or both. © Copyright ACI Worldwide 2008 ACI Worldwide 120 Broadway, Suite 3350 New York, NY 10271 USA ACI and the ACI logo are trademarks or registered trademarks of ACI Worldwide Corp. in the United States, other countries, or both. ® BKB03003-USEN-00 ABR4014 04 -08 . multiple, disparate systems into a single, collaborative hardware IBM and ACI offer unparalleled expertise in designing and optimizing payment systems environment processing infrastructure and the costs and risks associated with managing multiple legacy systems. Together, IBM and ACI provide unparalleled, integrated payment