ERP For Payments Presented by: Greg Midtbo Oracle Corporation Industry Vice President Financial Services

Drivers for Transition to Enterprise Payments Cost to maintain Silo’s is high –Errors –Maintenance –Inconsistent data Payments are becoming a commodity –Not just about delivery… –The revenue is in the…information “Cause and Effect” –One silo not understanding effect on another – “Robbing Peter to pay Paul”

Drivers for Transition to Enterprise Payments Payments is the highest revenue producer –Represents between 40-60% of revenue –Issue: can’t get a total view of revenue sources Risk (credit & liquidity) –Bi-lateral & Multi-lateral Exposure Single institution Multi-institution Customers Have Options (Walmart)

The Market is Moving to an Enterprise Model Security Vertical applications Central security and access control Risk Management Enterprise versus Application Driven by regulatory requirements CRM (in process) Relationship vs. Product

Improve Operational Efficiency Improve Business Decision Support & Services Support Business Evolution and Growth Standardize Accounting Policies and Control Incorporate Flexibility to Address Changing Regulatory Requirements Build for the future Framework to be nimble & more efficient Adding Value not just number crunching Need for new Activity Based Management Systems to help manage unit costs Next in Transition to Enterprise Payments What we have heard…… Source: EIU Study and Customer Meetings

What a leading Bank is saying…..  Operates in a business or product silo  Difficult to get a holistic – Corporate View of payments  Difficult to get a global view of payments  Adopting a payments plank in the longer term strategic plan

Economist Intelligence Unit Study Summary

Enterprise Payment Strategy Value Proposition Control and reduce cost with gains in efficiency Efficient implementation of technology to create a common payment infrastructure Improve product discipline to improve revenue View product offerings across silos Improve customer experience leveraging payment relationships Respond to changing markets quickly Manage risk and reduce losses across all payment channels

Enterprise Payments Business Value The business value of an enterprise payments strategy is categorized in three organizational disciplines: Operations –Event driven banking – transaction disposition engine –Leverage technology to create transaction efficiencies –Understanding and measuring costs at the line of business level = better profitability analysis –Balanced scorecard to monitor performance against strategy Marketing –Revenue Generation with new products and bundling –Client Life Cycle Management – gain wallet-share –Payment Behavior – targeted marketing / mass customization Compliance –Internal Audit / reporting –Risk Management / Loss prevention –Incidence tracking –Regulatory

Enterprise Payments Operational Value Efficiency –Consolidate Data Base – Minimize support infrastructure and cost –Cross-silo solutions – Common infrastructure –Network gateway – common interface for clearing and settlement –Flexibility – responding to enterprise / market/ and customer behavior patterns Productivity –Streamline workflows –Customer Call center – access to all client transactional data –Research – simplify transaction research –Adjustments – reduce manual adjustments –Exceptions – automate exception processing –Returns – automate returns processing / improve quality Risk control –Double post – minimize impact to clients of trans-payment processing

Enterprise Payments Marketing Value Enterprise impact of product decisions –Structured reporting –Data for all payment transactions –Cross-enterprise and industry trends Targeted marketing –Payment behavior impact –Reduce fragmentation of customer information Life cycle management –Market segmentation –Customer retention –Increase wallet-share Manage customer profitability and risk across all payment products and services –Mass Customization –Self service –Seamless interface

Enterprise Payments Compliance Value Lower cost of compliance –Single OFAC compliance for multiple payment applications –Best of breed solution for all payments –Supports SEPA direction in Europe Lower cost to support new regulations –Enterprise infrastructure supports single implementation of new compliance applications Compliance requirements of SOX –Consolidated application access control and monitoring Operational Risk Assessment and Monitoring –Enterprise infrastructure support for consolidated risk reporting

ERP for Payments Greg Midtbo Industry Vice President Oracle Corporation

ERP for Enterprise Payments Issue –Trying to manage by silo Not efficient Not effective Becomes cost prohibitive High risk – make decisions in a vacuum

Next in Transition to Enterprise Payments Cost to maintain Silo’s is high –Errors –Maintenance –In consistent data Payments are becoming a commodity –Not just delivery –Need to provide services…information “Cause and Effect” –One silo not understanding effect on another

Next in Transition to Enterprise Payments Walmart PayPal Google Do not require –Account infrastructure –Large user base