Maximize Opportunity. Minimize Risk. Banking in the Flat World A View Point

Win in the flat world Banking in the Flat World Means… Hyper-informed and increasingly demanding customers Shifting competitive landscape and disruptive business models Leveraging technology for greater efficiency Lowering costs by leveraging global talent pools Emergence of more regulations and challenge of compliance

Win in the flat world Four Key Forces Flattening the Banking World

Win in the flat world Force # 1 Emerging Economies Banks increasing focus on BRIC economies as emerging ‘engines of growth’ Increasing cross border M&A’s Banks sighting opportunities to leverage global talent pools Reverse osmosis from BRIC nations - Emerging banks coming into the global market with leaner and disruptive business models

Win in the flat world Force # 2 Shifting Demographics Increasingly diverse but lucrative markets –Growing minorities –Migrant and mobile population –More bankable age groups –Mass affluent Increasing complexity –New solutions like Islamic banking address key growth –Cross border investments and borrowings –Banks forge global relationships with corporate customers

Win in the flat world Force # 3 Ubiquity of Technology New technologies emerging across the value chain –Stronger and improved capabilities for customer acquisition, operations and risk management –Increasingly being viewed as a differentiating tool Technology swiftly traversing the realms of operation to strategy –Collaborative platforms, analytics, workflows –SOA (Services oriented Architecture) –BPM (Business Process Management)

Win in the flat world Force # 4 Regulation and Compliance Not a choice but a mandate Opportunity to implement technology- enabled holistic enterprise risk management and compliance strategy Time-to-compliance increasingly critical Technology spend to achieve compliance is consistently on the rise

Win in the flat world The Sum Total of These 4 Forces? BANKS FIND THEMELVES COMPETING ON A PLAYING FIELD THAT’S LEVELLED

Win in the flat world Bank Must Shift to Win in the Flat World

Win in the flat world Set the Direction To Make The Strategic Shifts Leverage the six key enablers to win in the flat world

Win in the flat world Maximize Globalization New and qualitatively higher levels of globalization –Opening up of BRIC economies –Access to mature markets –Opportunity for consolidated global financial solutions Global regulatory convergence –Regulators converging on viewpoints and perceptions –Banks globally need to comply with same or similar regulation – Basel II, KYC, AML

Win in the flat world Maximize Innovation Innovate across product, service and channels Leverage technology to drive innovation Take innovation beyond channels into process and customer experience and drive customer loyalty Integrate innovation into the core business process,e.g –Bundling of products –Segmented service level agreements –Customized re-payment schedules –Relationship based pricing –Predictive banking Increase speed of innovation and lower cost of innovation – critical for success

Win in the flat world Maximize Diversity Cater to diverse customer requirements –New segmentation strategies –Advanced analytics and micro segmentation –Relationship-based pricing Managing customer convenience across channels and borders Opportunity to create new lines of business –Islamic banking –Wealth management Localize products and services for greater customer intimacy

Win in the flat world Maximize Agility Speed of response to competitive pressures and regulatory challenges Proactively identify and seize opportunities Assimilation of new generation technologies –SOA, BPM, Internet and mobile banking Agile technology foundation –Migrate from legacy systems to new generation technology platforms

Win in the flat world Minimize Risk Manage risks in the transformation eco-system –Compliance, market, currency, political, cultural and technology –Strategy, finance, process, transition and operations Evolve Enterprise Risk Management (ERM) strategies –Structure, process, people and technology Pick the right partner for the transformation journey –Impeccable credentials –Highest predictability and transparency –Long term stability Effective leadership for the transformation journey

Win in the flat world Minimize Cost Reinvent operating model for reduced complexity, greater standardization and lower costs Create lean operating model –Global sourcing –Product factories –Global and regional processing hubs –Process standardization Process Orchestration –Adopt enterprise BPM technologies –STP – higher productivity, streamlined operations and lowered costs